Emergency / Interim Power Solutions Pre-conference workshop

Transcription

1 Emergency / Interim Power Solutions Pre-conference workshop Presented by Empower Mark Pickering & Nikhath Akhtar Tuesday, 19 May 2009 African Utility Week Cape Town, South Africa

2 Overview Introductions Participant expectations Why interim power? What system to select? Technical criteria Contracting considerations Cost drivers Wrap up

3 Interim Power Solutions Experience? Plans? Issues?

4 Why Interim Power? Africa s largest infrastructure deficit is to be found in the power sector. Whether measured in terms of generation capacity, electricity consumption, or security of supply, Africa s power infrastructure delivers only a fraction of the service found elsewhere in the developing world EBERHARD AND OTHERS, IN WORLD BANK, AFRICA INFRASTRUCTURE COUNTRY DIAGNOSTIC.

5 Why Interim Power? Africa s firms report losing 5 percent of their sales as a result of frequent power outages; this rises to 20 percent for informal sector firms unable to afford backup generation facilities. INTERNATIONAL MONETARY FUND, APRIL REGIONAL ECONOMIC OUTLOOK : SUB-SAH

6 HFO Genset MAN 18V28-32S genset: 4.2MW

7 12MW HFO Plant 55m 32m M3 Site Layout: Colchester Trial Assembly

8 Power Deficit in Sub-Saharan Africa Range of Utility Tariffs US$/kWh Sub-Saharan Africa Other developing regions WORLD BANK - AFRICA INFRASTRUCTURE COUNTRY DIAG

9 Power Deficit in Sub-Saharan Africa Generation capacity (MW per million population) Other low income countries Sub-Saharan Africa low income countries Electricity coverage (% population) Other low income countries Sub-Saharan Africa low income countries WORLD BANK, AFRICA INFRASTRUCTURE COUNTRY DIAG

10 Infrastructure Spending Requirements in Sub-Saharan Africa US$ billion per year Capital expenditure Operations and Maintenance Total spending ICT % Irrigation % Power % Transport % Water & Sanitation % Total WORLD BANK, AFRICA INFRASTRUCTURE COUNTRY DIAG

11 Power Solutions 30 Indicative all-in cost of new-build baseload Interim Power 25 Usc/kWh New-build IPP 5 0 Hydro Gas (CCGT) Coal Fuel oil Fuel oil Diesel

12 Diesel Cost vs. Deployment Time New Build / IPP Deployment time (Months) All-in Power cost US$ /bbl) HFO

13 Plant Size and PPA Term Plant size (MW) Diesel Fuel Oil New Build / IPP Term of Power Purchase Agreement (Years) 20

14 Liquid Fuel Generation Options Cost comparison $50/bbl, 85% load factor) Fuel Oil Diesel Fuel Variable O&M Capacity

15 Liquid Fuel Generation Options Global Liquid Fuel Prices US $/bbl Crude Oil Fuel Oil Diesel

16 What System to Choose? Technical criteria Commercial criteria Cost criteria

17 Technical Criteria Required capacity? Load profile/dispatch regime Baseload / Mid-merit / Peaker? Backup? Firmness of supply? Plant reliability and availability? Fuel availability? Plant availability? Time to deploy? Operations?

18 Commercial Criteria Commercial structure? Build (EPC) Build, lease, operate Build, lease, operate, sell Hybrids Allocate risks to the party best able to manage them Fuel supply Mobilisation

19 Commercial Criteria Bonuses and penalties Start dates reasons for contractor being late? poor management? Or delays in shipping due to adverse weather? Consequences of failure to deliver Non-payment is a penalty Estimate of loss needs to be reasonable. E.g. difference between gold mine and a utility Incentives Balance between LDs and bonuses Force majeure

20 Commercial Criteria Change in law / tax regime Generator held harmless Works both ways From which date? Small risk, big consequence Tariff Amount and structure Needs to cover fixed costs, including funding and return on equity Seasonal adjustments

21 Cost Criteria Total costs, based on Fuel costs Capacity fee (fixed per month) Mobilisation/demobilisation fee Variable fee (c/kwh) Heat rate Utilisation rate Length of contract

22 LFO vs. HFO at varying Plant Load Factors Crude oil: $60/bbl, 40% LFO-HFO price differential LFO HFO All in US c/kwh % 40% 50% 60% 70% 80% 90% 100% Plant Load Factor

23 LFO vs. HFO at varying Plant Load Factors Crude oil: $60/bbl, 15% LFO-HFO price differential 30 LFO HFO All in US c/kwh % 40% 50% 60% 70% 80% 90% 100% Plant Load Factor

24 LFO vs. HFO at varying Crude Price, $/bbl Plant Load Factor: 85%, 40% LFO-HFO price differential LFO HFO All in US c/kwh Crude Oil US $/bbl price

25 LFO vs. HFO for varying contract length Plant Load Factor: 85%, Crude Oil: $65/bbl, 40% LFO-HFO differential LFO HFO All in US c/kwh Contract Length (years)

26 LFO vs. HFO for varying contract length Plant Load Factor: 85%, Crude Oil: $65/bbl, 15% LFO-HFO differential LFO HFO All in US c/kwh Contract Length (years)

27 Last Thoughts?

28 Thank You

29 Notes Introduction and System Planning - Slides to be completed by Mark Decision Making Criteria (E.g. load profile, contract length, deployment time, MW size, commercial aspects of tech. specs such as heat rate and availability, ability to delivery) - Slides and model to be completed by Nikhath PPA, commercial considerations and risk allocation - Content prepared by Dan for Nikhath/Mark to turn into slides Country case studies - Luka to provide content (will ask Karlien to write up for us to turn into notes/slides) I will also ask Karlien to do some background research for us on the other organisations that are attending.

30 Brochure Session Pre-conference workshop: Emergency/On site power Workshop leaders: Dan Croft, Business Development Manager, Empower Introductions and Welcome Workshop objectives The context for Short and Medium term generation: when and why? Decision making criteria Short vs. medium term: what is the difference? What are the key decision criteria when selecting most appropriate generation option Summary of these criteria applied to short vs. medium term Available options Short term solutions (Aggreko and similar) Interim solutions (Empower) Analysis and comparison: Country case studies & scenarios