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Table 7: Summary of Risk Categories and Main Mitigation Measures for Lenders

Table 7 Summary of Risk Categories and Main Mitigation Measures for Lenders

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2.2 POLICIES AND REGULATION
2.2 POLICIES AND REGULATION
Table 2: The Four Most Likely SPP Cases The four most likely SPP cases are set out in table 2. A number of proposed SPPs would combine cases 1 and 3. Detailed information about the calculation of tariffs for each case can be found in the SPP section of the EWURA’s Web site (provided in section 2.3). Currently, the SPPT applies only to wholesale transactions by SPPs to a DNO, which is currently only TANESCO. It does not cover retail sales to final users (cases 3 and 4). The 2011 values for SPP sales were TSh 121.13 per kilowatt hour (kWh) for sales to TANESCO on its main grid (case 1) and TSh 380.22 per kWh for sales to TANESCO on its minigrid (case 2). For the year 2012, the proposed base tariffs are TSh 152.54 per kWh for the main grid and TSh 480.50 per kWh for the minigrid. ° The EWURA Web site provides detailed information (including guidelines, methodology, and calculation) for both the SPPT main grid and the isolated grid.
Table 2: The Four Most Likely SPP Cases The four most likely SPP cases are set out in table 2. A number of proposed SPPs would combine cases 1 and 3. Detailed information about the calculation of tariffs for each case can be found in the SPP section of the EWURA’s Web site (provided in section 2.3). Currently, the SPPT applies only to wholesale transactions by SPPs to a DNO, which is currently only TANESCO. It does not cover retail sales to final users (cases 3 and 4). The 2011 values for SPP sales were TSh 121.13 per kilowatt hour (kWh) for sales to TANESCO on its main grid (case 1) and TSh 380.22 per kWh for sales to TANESCO on its minigrid (case 2). For the year 2012, the proposed base tariffs are TSh 152.54 per kWh for the main grid and TSh 480.50 per kWh for the minigrid. ° The EWURA Web site provides detailed information (including guidelines, methodology, and calculation) for both the SPPT main grid and the isolated grid.
It should be noted that the SPPT, by definition, specifies tariffs for small RE power projects only (up to 10 MW). The tariffs for larger projects are subject to case-by-case negotiations between TANESCO and the supplier. The tariffs for both SPPs selling to the main grid and to isolated minigrids increased by more than 25 percent between 2011 and 2012. This reflects the fact that TANESCO’s avoided costs increased considerably because of very expensive emergency power purchases. The actual rates for sales to the main grid also depend on the season. During the dry season, for instance, rates tend to be higher to reflect the higher avoided cost, since output from lower-cost hydro plants decline in dry season. Table 3 shows how base, dry season, and wet season tariffs developed over 2009-12.
It should be noted that the SPPT, by definition, specifies tariffs for small RE power projects only (up to 10 MW). The tariffs for larger projects are subject to case-by-case negotiations between TANESCO and the supplier. The tariffs for both SPPs selling to the main grid and to isolated minigrids increased by more than 25 percent between 2011 and 2012. This reflects the fact that TANESCO’s avoided costs increased considerably because of very expensive emergency power purchases. The actual rates for sales to the main grid also depend on the season. During the dry season, for instance, rates tend to be higher to reflect the higher avoided cost, since output from lower-cost hydro plants decline in dry season. Table 3 shows how base, dry season, and wet season tariffs developed over 2009-12.
Source: Authors’ compilation. Table 4: Typical Items on the Investment Plan of a Hydropower Project
Source: Authors’ compilation. Table 4: Typical Items on the Investment Plan of a Hydropower Project
Source: Altprofits, http: For Tanzania, there is not a sufficient amount of reliable data on levelized cost of energy production available. More research is available on SV, with some studies quoting a value of US$0.25 to US$0.5 per kilowatt hour for local minigrid SV systems in Tanzania.'* Another study reports values of US$0.66 to over US$1.00 for SV systems in Kenya. The latter study also makes mentions of a levelized cost of production for wind energy of US$0.23 to US$0.29 per kilowatt hour.'® Table 6: Levelized Cost of Energy Production across Countries (in thousands of TSh/MWh) Table 6: Levelized Cost of Energy Production across Countries (in thousands o' TSh/MWh)
Source: Altprofits, http: For Tanzania, there is not a sufficient amount of reliable data on levelized cost of energy production available. More research is available on SV, with some studies quoting a value of US$0.25 to US$0.5 per kilowatt hour for local minigrid SV systems in Tanzania.'* Another study reports values of US$0.66 to over US$1.00 for SV systems in Kenya. The latter study also makes mentions of a levelized cost of production for wind energy of US$0.23 to US$0.29 per kilowatt hour.'® Table 6: Levelized Cost of Energy Production across Countries (in thousands of TSh/MWh) Table 6: Levelized Cost of Energy Production across Countries (in thousands o' TSh/MWh)
Source: Compiled by authors from various international studies. Note: Converted to Tanzanian shillings at January 1, 2012, exchange rates.
Source: Compiled by authors from various international studies. Note: Converted to Tanzanian shillings at January 1, 2012, exchange rates.
SUMMARY: RISK FACTORS AND MAIN MITIGATION MEASURES FOR FINANCERS
SUMMARY: RISK FACTORS AND MAIN MITIGATION MEASURES FOR FINANCERS
Source: http:/Awww.energysavers.gov Figure 2: Basic Components of a Run-of-the-River Hydro Scheme
Source: http:/Awww.energysavers.gov Figure 2: Basic Components of a Run-of-the-River Hydro Scheme
Table 10: Examples of Hydropower Projects in the REA Pipeline Note: Investments reflect total project cost minus distribution cost. SHP = small hydropower project
Table 10: Examples of Hydropower Projects in the REA Pipeline Note: Investments reflect total project cost minus distribution cost. SHP = small hydropower project
From 2012 onwards, annual operating costs (assuming a 5 percent inflation rate and a6 percent TSh depreciation) are as follows (amounts in TSh millions): Sawa’s income statement is necessary to calculate the tax expense. The consolidated income statement (in TSh millions) looks as follows:
From 2012 onwards, annual operating costs (assuming a 5 percent inflation rate and a6 percent TSh depreciation) are as follows (amounts in TSh millions): Sawa’s income statement is necessary to calculate the tax expense. The consolidated income statement (in TSh millions) looks as follows:
4.6 The table below provides an overview of the effect of a number of changes on key financials versus the baseline case. The figures clearly demonstrate the critica importance of reliable estimates for capacity factors, water flows, and constructior times. Box 11: Example—Sawa Hydro Project Sensitivity Analysis
4.6 The table below provides an overview of the effect of a number of changes on key financials versus the baseline case. The figures clearly demonstrate the critica importance of reliable estimates for capacity factors, water flows, and constructior times. Box 11: Example—Sawa Hydro Project Sensitivity Analysis
Table 11: Typical Biomass Fuel Characteristics Biomass refers to biological material from living or recently living organisms. There are many types of biomass that can be used as an RE resource, and each has different properties such as heating value, moisture content, and mineral content (table 11). These have an impact on the combustion (burning) process, so it is important that the technology chosen for a particular project is compatible with the biomass used. The most suitable technology for a project depends on many factors, such as availability and cost of biomass, alternative fuel cost, scale of operation, and type of energy (heat and/or electricity).
Table 11: Typical Biomass Fuel Characteristics Biomass refers to biological material from living or recently living organisms. There are many types of biomass that can be used as an RE resource, and each has different properties such as heating value, moisture content, and mineral content (table 11). These have an impact on the combustion (burning) process, so it is important that the technology chosen for a particular project is compatible with the biomass used. The most suitable technology for a project depends on many factors, such as availability and cost of biomass, alternative fuel cost, scale of operation, and type of energy (heat and/or electricity).
Source: Biomass for Electricity Generation, by U.S. Department of Energy Federal Energy Management Program (FEMP), http://www.wbdg.org/resources/biomasselectric.php.
Source: Biomass for Electricity Generation, by U.S. Department of Energy Federal Energy Management Program (FEMP), http://www.wbdg.org/resources/biomasselectric.php.
source: G. Sridhar, H. V. Sridhar, and M. S. Sudarshan, et al., “Case Studies on Small Scale 3iomass Gasifier Based Decentralized Energy Generation Systems,” Centre for Sustainable ‘echnologies, Indian Institute of Science, Bangalore (2006), ttp ://cgpl.iisc.ernet.in/site/Portals/0/Publications/NationalConf/CaseStudiesOnSmallScaleBiomassGasif df.
source: G. Sridhar, H. V. Sridhar, and M. S. Sudarshan, et al., “Case Studies on Small Scale 3iomass Gasifier Based Decentralized Energy Generation Systems,” Centre for Sustainable ‘echnologies, Indian Institute of Science, Bangalore (2006), ttp ://cgpl.iisc.ernet.in/site/Portals/0/Publications/NationalConf/CaseStudiesOnSmallScaleBiomassGasif df.
Interpreting the model The cash flow statement serves as input for the calculation of the major financial indicators (box 17), such as the IRR and ADSCR. As discussed in chapter 3, financial institutions typically have their own benchmarks for these ratios. The financial analysis of the base case of the Kuni project shows a fairly reasonable value for the equity IRR. The ADSCR, however, is on the low side. Further analysis is required to assess critical factors.
Interpreting the model The cash flow statement serves as input for the calculation of the major financial indicators (box 17), such as the IRR and ADSCR. As discussed in chapter 3, financial institutions typically have their own benchmarks for these ratios. The financial analysis of the base case of the Kuni project shows a fairly reasonable value for the equity IRR. The ADSCR, however, is on the low side. Further analysis is required to assess critical factors.
The sensitivity analysis for the Kuni project shows that all factors significantly affect project profitability and debt-service repayment capacity. Box 18: Example—Kuni Energy Sensitivity Analysis FURTHER INFORMATION
The sensitivity analysis for the Kuni project shows that all factors significantly affect project profitability and debt-service repayment capacity. Box 18: Example—Kuni Energy Sensitivity Analysis FURTHER INFORMATION
Figure5: Basic Design of a Fixed-Dome Biogas Digester DIGESTER DESIGNS: DOMESTIC AND INDUSTRIAL SYSTEMS
Figure5: Basic Design of a Fixed-Dome Biogas Digester DIGESTER DESIGNS: DOMESTIC AND INDUSTRIAL SYSTEMS
KEY CONSIDERATIONS FOR FINANCING BIOGAS PROJECTS
KEY CONSIDERATIONS FOR FINANCING BIOGAS PROJECTS
MEASUREMENTS: POTENTIAL CAPACITY AND ACTUAL ENERGY GENERATED
MEASUREMENTS: POTENTIAL CAPACITY AND ACTUAL ENERGY GENERATED
Source: http:/Awww.solarpower.org.in/ Solar modules: Solar modules convert sunrays into DC electricity. The most commor panels commercially available in Tanzania are crystalline SV modules and amorphous SV modules. Common brands of SV modules in East Africa include Suntech, Sharp Kyocera, Solar World, and Schott. Batteries: Batteries convert electrical energy into chemical energy and vice versa. The function of a battery in a SV system is to store energy, since the appliances (lights, radio TV) are generally used after sunset. Battery capacity is rated in ampere hours (Ah). The two main types of batteries are acidic and alkaline. For SV systems, deep dischargeable batteries, sometimes also labeled solar batteries, are most suitable. The battery is ofter the weakest spot in the SV system and needs to be replaced every two to five years.
Source: http:/Awww.solarpower.org.in/ Solar modules: Solar modules convert sunrays into DC electricity. The most commor panels commercially available in Tanzania are crystalline SV modules and amorphous SV modules. Common brands of SV modules in East Africa include Suntech, Sharp Kyocera, Solar World, and Schott. Batteries: Batteries convert electrical energy into chemical energy and vice versa. The function of a battery in a SV system is to store energy, since the appliances (lights, radio TV) are generally used after sunset. Battery capacity is rated in ampere hours (Ah). The two main types of batteries are acidic and alkaline. For SV systems, deep dischargeable batteries, sometimes also labeled solar batteries, are most suitable. The battery is ofter the weakest spot in the SV system and needs to be replaced every two to five years.
Source: United States’ prices are from Solarbuzz (http:/Avww.solarbuzz.com), Tanzania prices are from the Tanzania Traditional Energy Development Organization (TaTEDO; see chapter 2 fora description). The 0.213 per Wh price is an index price for solar batteries in general. Table 13: Comparison of Average Retail Prices of Solar Equipment in Tanzani. and the United States
Source: United States’ prices are from Solarbuzz (http:/Avww.solarbuzz.com), Tanzania prices are from the Tanzania Traditional Energy Development Organization (TaTEDO; see chapter 2 fora description). The 0.213 per Wh price is an index price for solar batteries in general. Table 13: Comparison of Average Retail Prices of Solar Equipment in Tanzani. and the United States
Table 14: Key Factors in Financing Stand-Alone SV Systems 7.4.3 A number of key factors need to be considered when financing stand-alone SV systems. Table 14 identifies these key factors and provides guidance on possible mitigation of these project risks.
Table 14: Key Factors in Financing Stand-Alone SV Systems 7.4.3 A number of key factors need to be considered when financing stand-alone SV systems. Table 14 identifies these key factors and provides guidance on possible mitigation of these project risks.
The majority of demand for larger capacity machines has been the offshore market, where placing turbines on the seabed demands the optimum use of each (expensive) foundation. For turbines used on land, however, the past few years have seen a leveling of turbine size in the 1.5 to 3 MW range (table 15). Nameplate capacity (measured in kW, MW, or GW)
The majority of demand for larger capacity machines has been the offshore market, where placing turbines on the seabed demands the optimum use of each (expensive) foundation. For turbines used on land, however, the past few years have seen a leveling of turbine size in the 1.5 to 3 MW range (table 15). Nameplate capacity (measured in kW, MW, or GW)
Wind speed distribution curve Wind speed (obviously) is a key input for calculating capacity and expected energy generation. Therefore, having reliable wind speed data is of paramount importance. At the very least, a year’s worth of wind speed data are required for this purpose. With this information, one can draw a wind speed distribution curve (figure 8) that shows the number of hours the wind is blowing (on the y axis) per level of wind speed (on the x axis). As shown in figure 7, at wind speeds between the cut-in speed and the rated speed. energy increases by the cube of wind speed. That is, if wind speed doubles from 6 to 12 m/s, power output increases eightfold. On the other hand, as also shown in figure 7. power does not significantly increase with wind speed after reaching the rated winc speed.
Wind speed distribution curve Wind speed (obviously) is a key input for calculating capacity and expected energy generation. Therefore, having reliable wind speed data is of paramount importance. At the very least, a year’s worth of wind speed data are required for this purpose. With this information, one can draw a wind speed distribution curve (figure 8) that shows the number of hours the wind is blowing (on the y axis) per level of wind speed (on the x axis). As shown in figure 7, at wind speeds between the cut-in speed and the rated speed. energy increases by the cube of wind speed. That is, if wind speed doubles from 6 to 12 m/s, power output increases eightfold. On the other hand, as also shown in figure 7. power does not significantly increase with wind speed after reaching the rated winc speed.
en ee, renee The energy eventually generated by < a » wind turbine is usually determined by its nameplate capacity (as explained earlier) and the number of hours the turbine is in operation. In theory, if a turbine with a nameplate capacity of 3 MW was used continuously at full capacity, an energy output of 3 MW x 8,760 hours = 26,280 MWh could be realized.
en ee, renee The energy eventually generated by < a » wind turbine is usually determined by its nameplate capacity (as explained earlier) and the number of hours the turbine is in operation. In theory, if a turbine with a nameplate capacity of 3 MW was used continuously at full capacity, an energy output of 3 MW x 8,760 hours = 26,280 MWh could be realized.
Related topics:
Climate ChangeRenewable EnergyAccountingRenewable energy resourcesCreditors' RightsExternal DebtInsuranceWireless Power Transmission SystemFinancial RisksRenewable power
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