The regulatory machinery for the SPP program involves a number of documents. To minimize confusion, I have put these documents into a single table. The Guidelines for Developers is meant to be an overall roadmap for developers, a step-by-step guide to the approval process. It makes reference to all the other documents. The guidelines for grid interconnection focuses on the engineering side of things –what is required for a safe and reliable electrical connection so that power flows between the SPP and the buyer and no one gets hurt and no equipment gets burned up. You will notice that these documents are the same for the case of interconnection with the main national grid, and the case of interconnection with isolated mini-grids. Standardized Power Purchase Agreement or PPA is the legal agreement between the SPP and the utility. This document was written in 2007 and has already been through the approval process. (A check mark on the table indicates that the document has been approved). BT Comments 1. I don’t see any checkmarks on the table. 2. To avoid any confusion, you should say that the two PPAs and the associated tariffs cover wholesale sales (i.e., sales by an SPP to a buyer—so far just TANESCO, the national utility that will resell this electricity to its retail customers. The Tariff Methodology discusses the procedure or methodology by which tariffs will be determined for each year. The next document is the tariff calculations for 2009. This document applies the tariff methodology to current electrical and economic figures and prices to calculate the SPP tariff for year 2009. Finally, EWURA will soon issue a set of process rules and interconnection rules that have legal standing. These rules documents will tie in closely with the Guidelines documents (yellow). All approved documents will be available at the EWURA website shown.
The slide provides comparison of feed in Tariff in dollar terms between main grid and isolated grid connected SPPS. BT 1. Note that the feed-in tariffs for both grid and isolated mini-grids are based on variants of an avoided cost calculation rather than cost-based, technology specific tariffs which exists or has been proposed in other African countries (Kenya and Rwanda). The rationale for calculating feed-in tariffs based on avoided cost is to minimize the financial burden on TANESCO, the national utility. But obviously, there are many renewable technologies that are not feasible at the $.089 feed-in tariff that applies to main grid connected SPPs.
A challenge on how technology specific FiT will be financed is real but not mentioned here because not yet practical. BT—See the additional words that I am suggesting for #7 and 9 (Responses) and #7 (Problem) I think that you will have to use a smaller font to make the text fit on the page.
Ewura presentation at the Renewable energy day
Overview of Small Power Producers (SPPs) in Tanzania Renewable Energy Workshop TAREA 6th June, 2012 Eng. Anastas P. Mbawala Director of ElectricityEnergy and Water Utilities Regulatory Authority (EWURA), Tanzania 1
Outline Small Power Producer (SPP) – examples Overview of Tanzania SPP regulations Tanzania Legislative Framework Goals, Standardized Framework / Table of SPP documents Tariff Issues Main grid, mini grid, wholesale and retail sales Calculation process and Levels Required permissions and approvals, procedures for application; process rules Current situation: successes and challenges PPAs, generators in the pipeline Challenges 2
Tanzania SPP Legislative Framework National Energy Policy, 2003 Policy Statement No. 36 Energy and Water Utilities Regulatory Authority Act Establishing EWURA, Emphasis on Rural services, §6(d) Rural Energy Act (2005) Establishing REA & REF The Electricity Act, 2008 Defines SPPA & SPPT 4
SPP Framework Documents Main grid Mini-gridStandardized Standardized Power Purchase Standardized Power PurchasePPA Agreement for Purchase of Grid- Agreement for Purchase of Off-Grid Connected Capacity and Associated Capacity and Associated Electric Electric Energy Between Buyer and a Energy Between Buyer and a Small Small Power Project Power ProjectTariff Standardized Tariff Methodology for Standardized Tariff Methodology formethodology the sale of Electricity to the Main Grid the Sale of Electricity to the Mini-grids in Tanzania Under the Standardized Under the Standardized Small Power Small Power Purchase Agreements. Purchase AgreementsProcess Guidelines for Developers of Small Power Projects (SPP) in Tanzania;Guidelines • Includes standardized forms(roadmap)Process rules Rules for Developers of Small Power Projects (SPP) in TanzaniaInterconnection Guidelines for Grid Interconnection of Small Power Projects in TanzaniaGuidelines (Parts A, B, C)Interconnection ◊ Rules for Grid Interconnection of Small Power Projects (Not Yet provided)rulesAnnual Tariff Detailed Tariff Calculations under the Detailed Tariff Calculations under thecalculations SPPA for the Main Grid for each year SPPA for the Mini-grids for each year
Salient Features Small Power Purchase Agreement (SPPA) A Must Take Plant Term – 15 years Seller may opt to join electricity trading / sell retail Isolated SPPA switches to Main grid SPPA upon interconnection with main grid Standardized Tariff Methodology Avoided Costs of the Utility Technology Neutral Floor and Cap Prices Calculated Annually / Reflect Seasonality (Main Grid) Local Currency Denomination 6 Adjustment for Transmission Losses
Necessary permits, clearances and procedures for application Land title or leaseResource Rights (e.g. water rights from River Basin Water Office) Letter of Intent (LOI) Sequence is important to Business license, tax registration, etc. avoid competing claims on Building Permit project sites Environmental and Social Clearance (NEMC) Power Purchase Agreement (PPA) EWURA licence 8
SPPs In Operation Project MW Type of Status ResourceACRA Tanzania 0.3 Hydro In Operation / Community based — Main gridTANWAT 2.34 Biomass -wood Selling 1 MW (2010)-Main GridTPC Co-Generation 15 Baggasse Contracted to Sell 9 MWe to TANESCO — Main gridKatani Power Plant 0.3 Biomass - In Operation – Pilot, not Waste connected to network—Isolated mini-gridChipole St. Agnes 0.4 Hydro Mini-Hydro for own use but canConvent be expanded to supply surrounding villages
SPPs in Preparation Project MW Resource StatusSao Hill Energy 15 Biomass Provisional Licence (Grid)Chipole – Own use & sell 3-5 Hydro additional 3MW on new siteto the grid planned (off-grid)Mwenga 3.36 Hydro PPA Signed with TANESCO (off- grid)Ngombeni Mafia 1.4 Biomass PPA Signed with TANESCO. Under construction (off-grid)Kilombero Sugar Co. 10.6 Bagasse Applied Licence (Grid)Tanzania Sisal Board 0.5+ Biogas Applied Licence intends to roll out in several sisal plantationsKitonga Mini Hydro 10 Hydro Applied Licence, may increase capacity (Grid)Andoya Hydro Electric Co. 0.5 Hydro Provisional Licence (Off-grid)Kilocha Hydro 12 Hydro In discussion with REA (Grid)Kilombero Mngeta 3 Hydro In discussion with REA (Grid)
ChallengesChallenge Response n Lack of Renewable Energy 1. Government needs to set Policy clear policy with targets, etc. n Inadequate financial 2. WB has established a loan resources to support the guarantee facility, engage initiative interest of other financial institutions n Inadequate private sector 3. Conducive Environment, rules participation in investment and publicize n High interest rates loans 5. Promote other sources mix from commercial banks grant and loans n Land ownership and water n Include land ownership & rights for SPPs projects water rights in RE Policy especially wind farms & mini-hydro plants
Challenges …..cont. 2Challenge Response1. Low, non-cost reflective tariffs n Government has directed & depreciating Currency, EWURA develop technology specific FiTs. But who will pay the premium?4. Lack of experience of key n Capacity building (REA) project promoters with skills in project management5. Lack of interest on the part of n Improving through regular potential Off-takers discussions with utility (TANESCO) n Introduce technology specific7. Isolated Grid SPPA changing FiT to some types or maintain into Main Grid SPPA upon the higher off-grid FiT interconnection
Conclusion Renewable Energy Sources are important in Tanzania Lack of Renewable Energy Policy stalls the development of RE Projects Non Reflective Tariff /FiT is one of the Key barriers to initiating RE Projects Small Power Projects can feel the Gap between projects, and a better solution for rural electrification 13