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Feed-in Tariff Methodologies and Financing: Options for GMS Countries. 5 th Meeting of the GMS Subregional Energy Forum (SEF-5) 9-11 November 2011 Ho Chi Minh City, Vietnam Dr. Romeo Pacudan Senior Energy Specialist/Team Leader ADB TA 7679 Lahmeyer International GmbH.
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Feed-in Tariff Methodologies and Financing: Options for GMS Countries 5th Meeting of the GMS Subregional Energy Forum (SEF-5) 9-11 November 2011 Ho Chi Minh City, Vietnam Dr. Romeo Pacudan Senior Energy Specialist/Team Leader ADB TA 7679 Lahmeyer International GmbH
Structure of Presentation • RE Promotion Policies • Feed-in Tariff Design Options • Funding Options • Final Remarks test
1. RE Promotion Policiesfrom fiscal incentives to regulatory policies test
1. RE Promotion PoliciesRE Policy Evolution in Developed Countries: Shift to regulatory policies supported by fiscal incentives RD & D Investment Incentives Tax Measures Feed-in Tariffs Voluntary Programs Obligations Tradable Certificates 1970 1980 1990 2000 Source: IEA 2005
1. RE Promotion PoliciesRE Policy Evolution and Power Market Reforms In Europe, regulatory policies were introduced when power industries were liberalized test
1. RE Promotion PoliciesPower Industry Market Structure • power market reforms are slow in Asia • various variants exist for purchasing agency model • increasing role of the private sector in the generation segment
1. RE Promotion Policies (DEVELOPED COUNTRIES)Combination of Regulatory Policies Consistent with Market Structures TRADABLE CERTIFICATES OBLIGATIONS SWEDEN ROMANIA POLAND BELGIUM NETHERLANDS ITALY JAPAN AUSTRALIA US UK FINLAND FRANCE IRELAND SLOVENIA SPAIN CZECH DENMARK BULGARIAGERMANYLATVIA CYPRUSGREECE LITHUANIA ESTONIAHUNGARY LUXEMBOURG PORTUGAL SLOVAKIA Complex Market-Based Measures FEED-IN TARIFFS
1. RE Promotion Policies (DEVELOPING COUNTRIES)Combination of Regulatory Policies Consistent with Market Structures TRADABLE CERTIFICATES OBLIGATIONS CHILE URUGUAY INDIA PR CHINA PHILIPPINES ALGERIA ARGENTINADOMINICAN SOUTH AFRICA ECUADORINDONESIAKENYA UGANDA MALAYSIA MONGOLIA NICARAGUA TURKEY PAKISTAN SRI LANKA THAILAND Simpler Market-Based Instruments FEED-IN TARIFFS
2. Feed-in Tariff Design OptionsFeed-in Tariff as Guaranteed Price over Fixed Period of Time Guaranteed Access to the Grid • Purchase Obligation • Clear Interconnection Rules Stable and Long-term Purchase Agreement
2. Feed-in Tariff Design Options Payment differentiation and supplementary design options
2. Feed-in Tariff Design Options Evolution of Solar PV wholesale price US$/Wp
2. Feed-in Tariff Design Options Evolution of Wind Power Investment Costs
2. Feed-in Tariff Design Options Tariff Regime and Electricity Market Compatibility High Merchant RE-plants selling into Pool Renewable Portfolio Standard with RE Certificate Degree of conformity with market rules for liberalized electricity market Power Pool Price + Premium RE-Generator Selling Electricity to Retail Consumers Feed-In Tariff Benchmarked Against Retail Price + Premium Time of Day Dependent Feed-In Tariff Season Dependent Feed-In Tariff Fixed Feed-In Tariff /Lowest Tariff Tender for MW / Negotiated Tariff Low Type of Tariff Setting Regime Source: kfW 2005
3. Feed-in Tariff Funding OptionsDual objectives: funding stability and minimize consumer impacts Key Issue: consumer impacts Key Issue: politically sensitive Key Issue: Sufficiency of funding Key Issue: disagreements from constituencies
3. Feed-in Tariff Funding OptionsFIT Funding in Asian Countries