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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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Presentation Transcript
slide1

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

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