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Session ‘ Effect of FiT on small hydro ’ Adrian Loening Director: M ór Hydro Ltd PowerPoint PPT Presentation


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Session ‘ Effect of FiT on small hydro ’ Adrian Loening Director: M ór Hydro Ltd. M ór Hydro. Micro Hydro development; Investor Technical Design Project Management Due Diligence 2012 Workload 3 Schemes under construction 1 Scheme refurbishment 2 Schemes in development

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Session ‘ Effect of FiT on small hydro ’ Adrian Loening Director: M ór Hydro Ltd

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Session effect of fit on small hydro adrian loening director m r hydro ltd

Session

‘Effect of FiT on small hydro’

Adrian Loening

Director: Mór Hydro Ltd


M r hydro

Mór Hydro

  • Micro Hydro development;

    • Investor

    • Technical Design

    • Project Management

    • Due Diligence

  • 2012 Workload

    • 3 Schemes under construction

    • 1 Scheme refurbishment

    • 2 Schemes in development

  • Developed from Carbon Trade Ltd – 20 years experience in biogas and hydro development


Feed in tariff

Feed in Tariff

  • So far so good!


Feed in tariff1

Feed in Tariff

  • Degression

    • Proposal – 5% reduction on;

      • April 2014 OR when capacity is 55MW

      • April 2015 OR when capacity is 73MW

    • Descision

      • Baseline degression of 5% per year from 2014

      • Predicted Annual Deployment

      • Lower degression of 2.5% if less than 75% of Predicted

      • Higher degression of 10% if greater than 150% of Predicted

      • Even greater degression of 20% of greater than 300% of Predicted


Feed in tariff degression

Feed in Tariff - Degression

  • Predicted deployment is 16.66MW annually


Feed in tariff degression1

Feed in Tariff - Degression

  • When is Degression triggered?

    • For <50kW sum of DNC Recorded on MCS Database

    • For >50kW sum of TIC recorded on Renewables and CHP database

  • Note: in neither case is a project necessarily accredited for FiTs.

  • Early trigger also if deployment exceeds 2/3rds of annual predicted in first 6 months of each year

BHA Annual Conference, 2012


Feed in tariff pre accrediation

Feed in Tariff – Pre-accrediation

  • As promised Hydro schemes can be pre-accredited for FiTs

    • Requires;

      • Planning Consent

      • CAR Licence

      • Acceptance of a ‘Firm’ Grid connection offer

  • What is a ‘firm’ grid connection offer?

    • Without transmission constraints?

    • Paid the deposit?

  • Pre-accredited projects count towards degression triggers

BHA Annual Conference, Glasgow


Feed in tariff pre accreditation

Feed in Tariff – Pre-accreditation

  • Projects must pre-accredit by 1st Jan in any year

    • Pre-accreditation between 1st Jan and 31st Mar are given FiT rate for the following year (inc. any degresssion)

  • Do not yet know the exact process of pre-accreditation but assume ROO-FIT form minus.

  • Pre-accreditation lasts for 2 years

  • Pre-accreditation may be withdrawn

  • Decrease in capacity allowed – increase is not

  • Pre-accredited projects count towards degression triggers

BHA Annual Conference, 2012


Pre accrediation

Pre-accrediation

  • Page 108 para. 4

    “Tariff lifetimes will apply from the eligibility date.”

  • Page 108 para. 5

    “Tariff lifetimes will still apply from the installation’s commissioning date”

BHA Annual Conference, 2012


Is it a better fit

Is it a better FiT?

  • So has this made the FiT better or easier?

    • Yes and No!

    • More games to play!

    • Some certainty / some confusion

  • Pre-accreditation triggers degression

    • So we don’t want lots of pre-accredited projects

    • Do cancelled pre-accredited projects ‘un-trigger’ degression?

      Example:

BHA Annual Conference, Glasgow


Example

Example:

  • Year 2014

    • Installed capacity in year is at 22.6MW

    • ‘Abighydro’ project 3.5 MW additional is pre-accredited before 1st Jan 2015

  • Year 2015

    • Tariff reduced by 10% instead of 5%

    • A further 16MW Accredited / Pre-accredited during year

  • Year 2016

    • Tariff reduced by further 5%

BHA Annual Conference, 2012


Example1

Example

  • 2016 – ‘Abighydro’ is cancelled or pre-accreditation lapses

  • 16MW of ‘2015’ vintage hydro have lost 5% of FiT payments.

  • @40%load factor and £115/MWh FiT around £322K has been lost through no fault.

  • My guess is there will be no correction for this.

BHA Annual Conference, Glasgow


New questions new tricks

New Questions / New Tricks?

  • What happens if you pre-accredit in one band but final commissioned size is lower band?

    • Cancel pre-accreditation and re-accredit – lose the pre-accreditation benefit

  • What happens at two year limit without commissioning?

    • Cancel pre-accreditation and re-apply for pre-accreditation

    • Better still: Pre-accredit on 1st Jan, cancel and re-pre-accredit on 31st Dec

  • Both potentially adds to degression twice!

BHA Annual Conference, Glasgow


Old tricks

Old Tricks

  • Has the new FiT band stopped down-sizing?

    • Some projects >500kW are being downsized

    • No projects = 100kW have been upsized?

      • Unless you know better!

  • Is the new FiT band a good thing?

    • Broadly yes – it is what we have been asking for

  • Does the new FiT mechanism solve uncertainty?

    • Not for marginal projects

    • Not for ‘long development’ projects

BHA Annual Conference, 2012


Now for something completely different

Now for something completely different

  • Scottish Government targets for low carbon transport

  • Many Hydro projects are near public roads (typically at bridges)

  • The Energy Saving Trust will grant up to £10,000 to businesses installing Electric Vehicle Charging

  • Please consider applying for this.

  • See www.EVA-Scotland.Org or http://www.energysavingtrust.org.uk/scotland/

BHA Annual Conference, Glasgow


Thanks

Thanks

[email protected]


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