Dubai Shams Program - MESIA Feedback - Participants (1)

8/18/2019 Dubai Shams Program - MESIA Feedback - Participants (1)

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DUBAI SHAMSPROGRAM

MESIA suggestions


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Agenda

1. Context & Objectives

2. Suggestions

3. Financial Study

4. Regulatory Concerns

5. Technical Clarifications


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1. Context & Objectives


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Context

•

Dubai Shams programme objective

•

Potential customers

Free standing residential

buildings

Long term owners and

tenants

Short term tenants

Support the diversification of Dubai’s energy mix by promoting the use of clean andrenewable energy sources to build a sustainable future for the Emirate.

!

Undefined presence!

Low financial leverage!

Low investment

potential (3rd party orself owned)

!

Long term presence!

Relevant financialleverage

! High investment potential

(3rd party or self owned)

!

Undefined presence!

Low financial leverage!

Low investment

potential (3rd party orself owned)


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Objectives

•

Obtain DEWA’s feedback on our technical concerns

• Sustainable growth of distributed solar PV in Dubai

To ease and streamlinethe communicationprocess with DEWA

Give Dubai-based

companies OPEXsavings to keep themcompetitive

Contribute in lowering

the peak load on theUAE grid

To provide the industry witha uniform understanding ofthe DEWA codes,regulations and processes


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2. Suggestions


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Suggestion Overview

The Dubai Shams programme opens exciting opportunities for MESIA’s stakeholders.

The following slides provide MESIA suggestions to DEWA to open the doors for asuccessful programme which has the potential to make of Dubai the worlds leadingmarket for Distributed Solar PV.

Considering the current regulations and costs of Solar installations, investment returnsfor Shams Dubai would vary between 5,5% and 8,5%. Considering the long-term risksover commercial customers investors are expecting much more attractive returns. Amarket enabling an addition of 50 MW per year is the most that can be expected.

In order to get drive success of 150MW+ per year further technical clarifications and

regulatory support are needed.


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Suggestion Summary

Technical suggestions Regulatory suggestions• Major inputs on LV and MV connection points,

on inverters sizing and on modules insulation areneeded to enable the right costing of the systemand avoid time loss when getting to the designapproval stage

•

Clarifications on the timeline for system designapproval and site inspection by DEWA areneeded for companies to frame project delivery

• If there is a tenant change, the new tenant shallassume the contract from the previous tenant toensure security of investment.

• If a building is vacant for a long period of time,and it is generating solar power, DEWA shall

either:- Purchase the power produced- Store credits for the power produced

• Solar financing lease should be registered on aDEWA account to enable its continuity with anew tenant when they assume an existing

meter.

• DEWA and a financier can work together tocollect missed payments from a customer.


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3. Financial Study


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Financial study

•

The financial study has been prepared based on thecurrent understanding of the DEWA regulations

•

The study presents the expected costs, prices and return

on investment for three sample PV system sizes – Residential: 10 kW connected on low voltage (LV)

–

Commercial: 150 kW connected on low voltage (LV)

–

Industrial: 400 kW connected on medium voltage (MV)


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Financial study

Solar PV equipment pricing depending on the installation size

Capital Cost 10 kW LV PV System 150 kW LV PV System 400 kW MV PV System

Item10 kWPrice(USD)

% of TotalPrice Per

Watt ($/Wp)

150 kWPrice(USD)

% of

Total

Price PerWatt (USD/

Wp)

400 kW Price

(USD)

% of

Total

Price Per

Watt ($/Wp)

BASE PV SYSTEM COST

Modules $5 400 37% 0,54 $79 500 41% 0,53 $208 000 44% 0,52

Inverters $1 800 12% 0,18 $19 500 10% 0,13 $40 000 8% 0,10

Mounting System $1 400 10% 0,14 $18 000 9% 0,12 $40 000 8% 0,10

Basic Monitoring System $100 1% 0,010 $1 125 1% 0,008 $2 000 0% 0,005

Installation $2 000 14% 0,20 $25 500 13% 0,17 $60 000 13% 0,15

BOS Electrical and Misc $1 200 8% 0,12 $16 500 8% 0,11 $40 000 8% 0,10

Duties & Taxes $473 3% 0,05 $6 435 3% 0,04 $15 840 3% 0,04

EPC Margin (range) $2 183 15% 0,22 $29 393 15% 0,20 $71 619 15% 0,18SUBTOTAL BASE PRICE $14 556 100% 1,46 $195 953 100% 1,31 $477 459 100% 1,19

SPECIFIC DEWA COSTS

DEWA Connection Fee $327 2,2% 0,03 $327 0,2% 0,00 $327 0,1% 0,00

Remote Control Provision 0,0% 0,00 0,0% 0,00 0,0% 0,00

Remote Monitoring 0,0% 0,00 0,0% 0,00 0,0% 0,00

Interface Protection 0,0% 0,00 0,0% 0,00 0,0% 0,00

MV Connection 0,0% 0,00 0,0% 0,00 0,0% 0,00

EPC Margin (range) $58 15% 0,01 $58 15% 0,00 $58 15% 0,00

SUBTOTAL BASE PRICE $384 2% 0,04 $384 0% 0,00 $384 0% 0,00

TOTAL PRICE $14 941 102,6% 1,49 $196 337 100,2%

1,31 $477 843 100,1% 1,19

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Financial study

General assumptions

Meteorologicaldata

Dubai

Angle of panels 5°

Azimuth of panels 0°

Estimated soilingloss

5%

PV systemproduction

1600 kWh/kWp

Site Parameters

Tariff$112,0/MWh

AED 411/MWh

AnnualProduction 15 MWh/year

PanelDegradation

0,7% / year

2,50% year 1

PerformanceRatio

80%

ProjectParameters

This study was made based on the customer leasing the equipmentfrom a financing company at 10% below DEWA peak tariff, andconsuming all of the power produced.


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Financial study

CAPEX and OPEX price comparison of PV system sizes

C o n s t r u c t i o n

p a r a m e

t e r s

Parameter10 kW LV PV

System150 kW LV PV

System400 kW MV PV

System

DC Size (kWp) 10 150 400

AC Size (kWac) 9 135 360

EPC Price ($) 14 900 196 500 476 000

O&M Price* ($) 260 3 900 10 400

Insurance* ($) 75 983 2 380 O p e

r a t i n g

c o s t s

* Value for first year and subject to an expected annual inflation rate of 3%


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Financial study

Investment Returns of PV system sizes

;


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Financial study

Conclusion

The values of the Internal rate of return and of the payback period imply thateither Solar PV will be only be a viable investment when:

•

Contracts are with long term owners or tenants that have a very low risk ofmoving or bankruptcy, Or

• Within a regulatory frame enabling the transfer of ownership of theinstallation which could open a the market to contracting with mid-termtenants


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4. Regulatory Concerns


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Regulatory concerns

Concern 1 – Continuity of Contract1. If there is a tenant change, can the new tenant assume the contract from the previous tenant?

2. If a building is vacant for a long period of time, and it is generating solar power, will DEWA:- Purchase the power produced?- Store credits for the power produced?

It is expected that most Owners and Tenants will choose to lease rather thanpurchase solar installations given the following:- Tight economic period of the region reduce the ability of many businesses to

invest- With high upfront costs for installing solar, businesses prefer to invest in their

core functions rather than solar-

Owners & tenants don’t want to be responsible for owning and operating the

systems and would rather have the risks on a 3rd

party

The following concerns are therefore related to financing solar:


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Regulatory concerns

Concern 2 – Customer DefaultCustomers are sure to move, close, change over the life of a solar plant. Given the long duration ofpayback (over 10 years), how can DEWA support with the continuity of revenue?

1. Can a Solar financing lease be registered on a DEWA account to enable it continuity with a newtenant when they assume an existing meter?

2.

Can DEWA and a financier work together to collect missed payments from a customer?


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5. Technical Clarifications


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Technical clarifications

•

Topic 1 – LV Connection point1. Is the point of connection, and metering, the Contractor’s choice or is it mandated by DEWA?

Connection at the MDB vs SMDB

2. Can a system have multiple LV connections to MBD/SMDBs? If so, are multiple DEWA metersrequired?

3.

Can multiple solar meters be assigned to a single consumption account?

4. What is the specification and communication protocol for the connection to the DEWA Outsation ?

• Topic 2 – MV Connection point1.

How can the Contractor/End User get substation information from DEWA prior to NOC issuance?

2. What is the DEWA’s scope in the MV works?o How to request a quote from DEWA?o When will a quote be provided?


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•

Topic 3 – Inverters1. Is it a requirement or recommendation from DEWA to oversize the inverter for reactive power

compensation?

2. Is it a requirement or recommendation for a motorized circuit breaker? Does the inverter meet thisrequirement with the anti islanding function?

•

Topic 4 – Cabling1. Does DEWA limit the routing of cabling (AC or DC) in the building or underground?

2. Is Aluminium allowed for DC, LV, or MV cables ?

•

Topic 5 – Modules & Grounding1. Is it a requirement or recommendation to have isolation between the modules and Mounting

system?

2. Is it a requirement or recommendation to have a minimum of 50mm between the modules androof ?


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•

Topic 6 – Mounting1. What is the design wind speed to use in sizing the mounting system?

2. Will DEWA accept using ASCI standards for mounting system design?

3. Is it a requirement or recommendation to have a minimum distance between the skylight and thearray?

4. Is it a requirement or recommendation to have walkways between the array?

• Topic 7 – Permits & Approvals1. What NOC is required from the Civil Aviation Authority of Dubai? What is the distance from the

airport where these approvals are not necessary?

2.

What is the required approvals from the Dubai Municipality ? Is there a contact person ordepartment that is familiar with the Shams Dubai program?

3. What is the required scope of the Grid Impact Study ?

4. What is the time required by DEWA to approve the system design?


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•

Topic 8 – Inspections1. Can the mechanical inspection happen after the electrical works have started?

2. What is the required notice period to book a site inspection with DEWA?

3. Does DEWA need to be present when the system is energized and connected to the grid?

4.

What is DEWAs involvement in the performance test ?


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For more information contact:Micheline Thienpont

[email protected]+971 55 77 19 456

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Dubai Shams Program - MESIA Feedback - Participants (1)