System Planning to Scale Up Renewables

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This webinar explores strategic energy planning approaches to resource adequacy, strategies and tools for renewable energy development; and methodologies for introducing the locational dimension of renewable energy and zones.

USAID hosted an hour-long webinar, System Planning to Scale Renewables, on May 27, 2021, that explored strategic energy planning approaches to resource adequacy, strategies and tools for renewable energy development, and methodologies for introducing the locational dimension of renewable energy and zones. Strategic energy planning practitioners discussed best practices that can help policymakers:

  • Improve capacity on strategic power sector planning in high renewable energy and energy efficiency scenarios;
  • Link strategic energy planning approaches to investment and implementation programs such as renewable energy competitive procurement programs; and
  • Encourage the private sector, including developers, prosumers, network operators, service providers, legislators, investors, and aggregators, to participate in energy planning.

This is the first in a series of USAID webinars on strategic energy planning. Visit the SURE Training and Events page for more info.

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Energy planning determines when, where, and how to invest. When done well, today’s decisions address tomorrow’s needs and challenges.
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SCALING UP RENEWABLE ENERGY PROGRAM – Energy planning determines when, where, and how to invest. When done well, today’s decisions address tomorrow’s needs and challenges.

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Through the Scaling Up Renewable Energy program, USAID helps partner countries power economies with renewable energy, meet international climate commitments, and open markets to private investment and competition.
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2017–ONGOING, GLOBAL – USAID’s Scaling Up Renewable Energy (SURE) program helps partner countries meet bold climate commitments by accelerating their transition to more affordable, reliable, and accessible energy that spurs growth, powers health systems, and reduces emissions.

Through SURE, USAID provides a variety of services to help policymakers, utilities, and regulators plan, procure, and integrate renewable energy, modernize energy sectors, and create policies that enable sustainable energy markets to flourish. As more countries aim to achieve net-zero emissions by 2050 and reduce hazardous waste, SURE’s Innovation Fund supports clean energy technology, energy efficiency innovation, and a circular economy for renewable energy equipment.

Video Transcript 
Yes it's now nine o'clock and we'd like to get started right away on this webinar. I see we have quite a few participants already signed in and so I think we'll get started and move through this as we only have one hour including the Q&A. So hello my name is Dorian Mead and I'm an energy reform and reconstruction advisor in the energy division at the United States Agency for International Development in Washington. I'm pleased to welcome you to this webinar by our program, Scaling Up Renewable Energy known as SURE. The title of this webinar is System Planning to Scale Up Renewables. This is the first in a series of webinars focused on strategic energy planning. SURE is a global mechanism that helps partner countries meet international climate commitments by increasing adoption of renewable energy technologies around the world. SURE's team of technical experts provides renewable energy planning, procurement, circular economy, and grid integration support services. SURE develops training tools and resources to help policy makers utilities and regulators modernize their energy sectors and create policies that enable renewable energy markets to flourish. Next slide please. During this webinar which is focused on strategic energy planning for renewable energy development we will explore the interconnected approaches and tools that make up the planning ecosystem including resource adequacy and methodologies for introducing the locational development or dimension of renewable energy and renewable energy zones. We will then take questions. Next slide please. USAID supports partner countries to transform their power sectors to be more green, reliable, and economic. One powerful way to work toward this goal is through strategic energy planning. We'll discuss best practices that can help policy makers improve capacity on strategic power sector planning and high renewable energy and energy efficiency scenarios, link strategic energy planning approaches to investment and implementation programs such as renewable energy competitive procurement programs and encourage wider participation in energy planning by the private sector including developers, consumers, generators, network operators, service providers, investors, and aggregators. Next slide please. A few housekeeping items to mention before we begin please write any questions you may have in the Q&A box at the bottom of the screen, not in the chat. Feel free to ask questions throughout the presentation and we will address them at the end during the Q&A session. This webinar will be recorded and available on the training and events section of the USAID.gov Scaling Up Renewable Energy website. Visit our site which can be found in the chat box for more information following this presentation. Today's webinar will include presentations from two speakers, Victor Bedoya, Energy Sector Senior Associate from Tetra Tech and Pramod Jain, President of Innovative Wind Energy, one of sure subcontractors in the Tetra Tech led consortium. Now Victor Bedoya has experienced in strategic energy planning, climate change policies, integrating renewable energy sources in power systems and preparing and supervising investment operations in the energy sector. Pramod Jain has expertise in renewable energy zones, wind and solar resource assessments, renewable energy grid integration studies, power markets, and digitalization of power systems. Now over to Victor. Okay, hello everyone. Thank you, Dorian for the introduction and then as you know I'm Victor Bedoya and let's start with the planning approaches for renewable development then I would like to start this topic with one question and also some background. And the question is what's affecting renewable energy development? And yes in first place we have one of the biggest threats facing humanity: climate change. In 2015 in Paris the United Nations celebrated with 196 representatives the 21st Conference of the Parties or COP21. At that time the main objective was to negotiate a global agreement on keeping global warming below 2 Celsius degrees with aspirations of 1.5 Celsius degrees comparing to pre-induced field levels. This limit indicates that sometimes between 2030 and 2050 or mid-century we should reach a net zero emissions to meet this goal. Every five years each country supporting the agreement should update its National Determined Contribution to reduce the greenhouse gas emissions. The latest update was last year at the end of last year but unfortunately the results were not as expected and this year in COP26 in Glasgow the UN will bring parties together to accelerate actions toward the goals of Paris agreement. In other words to move forward to net zero emissions accelerating the energy transition. This is a big challenge for humanity and renewables have a big contribution to solve these problems due to their amazingly low carbon footprint and that's exactly my next approach and the component in this case is the carbon footprint. The solar and wind technologies high life cycle emissions between 4 to 6 equivalent grams of co2 per kilowatt hour comparing with coal which is about 109 and gas which is about 78 and this is a very good case. We can say that renewables have a very good advantage thinking on energy transition also renewable prices are decreasing very quickly. Let me point out that options for large scale projects with solar technologies have reached 1.04 cents per kilowatt hour in the United Arab Emirates storage plus solar panels are now hitting between five to six cents per kilowatt hour. We should consider that in U.S. for example coal prices are about 4 cents and gas prices are about 4.5 cents then technology prices are also impacting renewable development due to renewable technology prices are decreasing and people is getting more conscious on all the climatic perspective. Grid modernization is a very important step forward to keep the electricity secure reliable because we need to accommodate all dropping technologies changes that we are going to expect and in degree. Another important factor is renewable capacity additions and of course is the impact that we are having for COVID-19 and its social consequences. Looking at the graphic on the right, I mean the one that I'm showing here. I know that this graphic maybe is not surprising for most of you but we can see here that the historical trend on renewable capacity additions was in fact in 2020 and because of course it was because the global situation with COVID-19 but according with the International Energy Agency, it is expected that as of 2021 will recover that historical trend then this is also a good news and something that is impacting renewable development. Another thing, the reason part in renewable development is electricity security. Renewable comes with variability and this is the main reason to adjust system planning methods and electricity markets and this also involves big political efforts to bring an adequate legislation facilitating renewable energy integration. During the post-market era it is suspected that the power system received their required improvements based on market signals, however based on system planning energy market must always be monitored to keep electricity security as standards. For that reason power system properties such as operational security, adequacy, reliability, resilience reviews, and stability are key to keeping the lights on. Well these are the current planning approaches or planning ecosystem to support renewable development and let's start with an energy transition strategy. Okay and I would like to start this one saying that everything starts with a necessity and in this case one of the most important is that we only have one planet and once we reach mars colonization with Elon Musk, maybe it will be a different story. But for now we only have one home planet after the world and I say after the world because most of the country support the Paris agreement then after the world reached a big consensus on global warming and climate change an energy transition according to a low carbon action plan is being required and implemented in several countries. Then everything starts from here. Of course as I mentioned before there are components in–there are another component impacting renewable development but this is the philosophy. This is the near future everybody is looking or is going to look at here at the beginning then we also have the green recovery of green action plans which is part of the integrated resilience planning and the objective to prioritize their sustainable goals and face all their energy challenge expected during the energy transition time frame. This energy transition time frame–the green recovery and the integrated resource on resilience planning, the ones that you can see on the top of the slide are promoting renewable development. However every time countries will feel more and more peer pressure to meet the climate goals and it is expected that this condition boosts even more the renewable development. Then, technical studies to incorporate all the renewable technologies and green modernization plans will be more and more important every time. In this, in this case for example the grid modernization plan is what it's called the revolution for identifying the step-by-step investments. To move forward in that dream that once we call the smart grids and now is needed to manage a large renewable fleet and distributed energy resources in addition almost all technical studies are being adapted to incorporate renewable technologies and that's the main reason to have renewable energy procurement plans. Also to have a resource adequacy assessment in this case–this one is to evaluate the energy security supply. We also have development of renewable energy zones. In this case to identify the best opportunities to develop renewable projects we also have flexibility and research plan to deal with the variability of the renewable energy sources and network development plans oriented to high renewable energy penetration. Today I would like to share with you some cases studies and experiences for resource adequacy and the development of RE zones. The one that you can see here highlighted in red. Then let's talk about strategic energy planning and resource adequacy and I have a specific case here, Colombia. Let's start with a brief description of the Colombian power system. The current installed capacity is about 17, 532 Megawatts and as you can see the wind and solar penetration is not representative at this point. However the hydropower share is about 70 percent of the installed capacity this means a high dependency of water inflows which affect system reliability due to uncertainty and also means that Colombia has a large experience on variable power sources Colombia has a big demand of about 10 gigawatts and has an active interconnection with Ecuador. And also they have an– they have two interconnections with Venezuela which are not available because political issues and they have a plan in the in the long term for a future interconnection with Panama.This is something exciting in Colombia. Colombia has a big energy challenge called El Nino phenomena. El Nino is a climate change pattern that describes the unusual warming of the surface water in the insert tropical pacific ocean. The graphic on the left the one that I'm showing here shows the temperature in the surface water of the Pacific Ocean and the red color describes the unusual warming. We should take into account that this phenomenon doesn't have a standard periodicity and its prediction is complicate. There's a high correlation between the temperature of the surface water in the Pacific Ocean and the rainfall in Colombia. Then when high temperatures are measured on the surface water, Colombia experience a drop in its rainfall levels. This drop in its rainfall levels is a long fall its territory then for this reason and I'm just thinking that the big hydropower share that we have in the Colombian power system. Colombia has a esoteric energy planning to bring indicative and adequate signals to the electricity market and encourage the market participants of having an adequate management of the reservoir levels. Let me point out that in 1992 the Colombian power system fail in its planning management and the country faced almost one year of power shortages. The graphic on the right–the ones that you can see here–show the water inflows and the rates are good. The reservoir capacity during El Nino and of course this is for different scenarios but I would like that you focus on the yellow case which represent the years 1990 –between 1990 and 1992. Okay as you can see at that time they aggregated a reservoir capacity went below 10 percent for almost two months or maybe a little bit more two and a half months. That's very scary just try to imagine the social impact and political consequences of announced power cuts of up to nine hours in cities such as Bogota. Bogota is the capital of the country then after that situation in 1993 with El Nino phenomenon Colombia created an electricity market in 1994. Okay and currently this electricity market is composed by long and short-term transactions. For long term they have bilateral contracts and for short term they have a spot market and automatic generation control market to provide a secondary reserve due to uncertain in weather phenomenon predictions such as El Nino and the necessity of the system resilience Colombia create a reliability remuneration mechanism. This mechanism is called reliability charge and in order of being covered by this mechanism generators must participate in an energy auction process to be compensated for data availability during the awarded period. Then the research adequacy assessment in Colombia is provided by the mining on the energy planning unit which is UPME. UPME is responsible for the sustainable development of the country's energy sector. UPME provide a resource adequacy assessment based on least cost generation planning. Okay considering country resources officially registered projects power with connection requests and proposed development scenarios are developed based on resilience, CAPEX and OPEX sensitivities on green greenhouse gas emissions on a specific topological conditions such as generation and transmission project delays. It is suspected that the Colombian government supports the highest score scenario according to the national goals. UPME uses as technical tools, they use PSR which is highly recognized in energy system with large hydropower share. They use from this tool they use two models. One of them is LCGP to support the long term planning simulations and the other one is the object which is used to define the future generation projects. For each case study they are also using Plexus and this tool is now incorporated to extend time resolution in short-term studies. Colombia considers the following features in its resource adequacy analysis then the country is moving forward to net zero emissions by 2050 and the government is evaluating carbon taxes to meet the climate goals. Colombia also consider as we mentioned before, also consider critical hydropower inflows to simulate a linear phenomenon and stochastic studies are considered to identify the more resilient generation mixes. Also emerging technologies are part of their study to add more resilience diversifying the generation mix. The country has recently auctioned and signed PPAs for more than 200 megawatts of renewable energy sources by the end of 2022 and they are procuring 50 megawatts in batteries to make to be commissioned in 2020 in 2022 as well. The country is studying new restrictions related to environmental flows or Eflows which impart water utilization and operational flexibility. It is expected that this kind of restriction affect future hydropower expansion finally. I would like to give you an idea on the future scenarios expected for the Colombian energy system. These are three different scenarios published by UPME in its latest version of the resource adequacy study. These two scenarios on the left show the generation by technology expected by 2034 under sensitivities considering carbon taxes and restrictions related to the inflows. Sensitivities present an increasing renewable energy component for wind and solar technologies. In this case we we can see wind in yellow and solar is the dark gray and in the right or the graphic that I'm showing here we can see an evolution of the generation profile to meet the demand until 2050. In this case there are not inflows or carbon taxes and we can see that even without restriction it is suspected that about 90 percent of the demand is made by renewable sources by 2050. Okay that's 20 percent that the 90 percent of course is adding hydropower generation, wind, solar, biomass, and the rest of renewable source. Okay let me show another example of a strategic energy planning and resource adequacy. This time we will travel to Eastern Europe and I would like to talk about a country who is working to join one of the most developing power system and electricity markets in the world, the one in the European Union. Let's talk about Ukraine. Also, I would like to start with a brief description of the Ukraine power system. Ukraine has an interconnection with seven countries. Okay one of them is not current available which is the interconnection with Poland but the country is working to recover this connection. Ukraine has two power systems separated one is called mainland which is interconnected with Russia, Belarus, and Moldova and the other one is Burshtyn Island which is interconnected with ENTSO-E countries such as Slovakia, Hungary and Romania. Ukraine has a big demand of about 18,500 megawatts and the installed capacity is about 55 gigawatts, and wind and solar share is almost 13 percent of the total installed capacity. This is a power system with a high thermal component, almost 75 percent of the installed capacity is composed by thermal generation and of course we are including nuclear power plants in that 75 percent. As I mentioned before, Ukraine is preparing its whole power system to be interconnected with ENTSO-E by 2023. Then let's talk a little bit about ENTSO-E. Well ENTSO-E is the European Network of Transmission System Operators for Electricity and it represents 42 electricity transmission systems operators from 35 countries. The Energy Security Project which is found by USAID and implemented by Tetra Tech is supporting Ukraine on its plan of joining the European Union and ENTSO-E by 2023. As part of the requirements of joining ENTSO-E, Ukraine restructured this wholesale electricity market in mid-2019, including bilateral contracts they have intra-day balancing and ancillary services markets. Also, Ukraine is preparing its power system to operate in island mode as one of the main steps before interconnection with ENTSO-E. We can see here in the graphic that Ukraine is the one with the red star and of course in the country are preparing to join the European Union. In addition, the electricity sector is preparing its energy planning studies according to the EU standards. And also Ukraine is aiming to get to net zero emissions by 2016. As you can see here what a great number of ingredients to prepare this cocktail called strategic energy planning in Ukraine. This is a challenging project with very ambitious goals and with a very high engineering component. Then as part of the process of joining the European Union and ENTSO-E the Energy Security Project is working with the Ukrainian energy sector to provide a resource adequacy assessment according to the European standards. I would like to clarify that this is an ongoing project in Ukraine. Then the methodology to provide the resource adequacy is well known as ERA, the European Resource Adequacy assessment and it has been developed with principles of the electricity market operation. This methodology has the following process. First ensure that all electricity market participants including safe and sustainable generation energy storage and demand response participate on equal footing in the electricity market. Second evaluate the appropriate central reference demand supply scenarios and consider economic assessment energy efficiency interconnection targets and system resilience. And the last one is the stop criteria which that the assessment is performed until the necessary level of security of supply or reliability as standard is fulfilled. If not, you feel a resource adequacy concern is identified and the regulator shall proceed with improvements to the market rules and with the introduction of a temporary capacity mechanism. Finally the reliability standard involves two more key concepts: one is the value of loads and the other one is the cost of unity. The value of lowest load is the consumer willingness to pay to avoid an electricity supply interruption for different circumstances. Okay this value of load is based on a national wide survey of statistically representative sum samples of each consumer category and the second one which is the cost of new entry, at its name says means that the fixed and variable cost of each new entry for generation storage or demand response for selected candidate technologies. Well this was a very high level description of the ERAA methodology and the strategic energy planning in Ukraine and now I would like to give you and I would like to invite you to continue with Dr. Pramod Jain on his overview on the development of renewable zones. Thank you, Victor. I would like to just make sure that my screen is visible to everyone. And yes it is visible okay thank you. So I am going to talk about renewable energy zones development and specifically talk about the methodology and tools used for creating renewable energy zones. To set the context for renewable energy zones let me start with a program in Texas that was called the Competitive Renewable Energy Zones for CREZ for short and the goal of CREZ was to increase the amount of renewable energy generation in Texas in a cost-effective manner. So on the left hand side you see a chart of wind speeds in Texas and the brighter colors are areas with higher wind speeds. On the right hand side you see a chart that is marked with these yellow regions. So these are the high resource density areas and hence this is the first step in developing a renewable energy zone is to identify these high renewable energy areas. So the renewable energy program was started in Texas, at the renewable energy zones program was started in Texas in 2005. When Texas realized that wind development would stop because power could not be evacuated from these high wind resource regions to load centers and the reason was that the transmission lines were congested because of past years of wind development. So the vision was to increase the amount of cheaper renewable energy that is available in these areas and how to develop how to develop them and how to deliver it to the load centers. So the regulator in the state of Texas along with the system operator ERCOT created the renewable energy zones program. So the regulator approved the building of 3862 kilometers of transmission lines from these areas to the load centers and in addition a variety of transmission upgrades were approved like series compensation, capacitor banks, statwars shunt reactors and so on for an investment of 6.9 billion . Now what this resulted in is 18.5 gigawatt of additional wind development and and this was as of 2016. And as you can imagine this is about 25 billion dollars in investment and about 2 billion dollars in income every year from the energy that is produced by these wind plants. So this was until 2016 and as you all may know that the real success story is the tariff for wind in Texas is below 2 cents per kilowatt hour and this started happening after 2016. Now this is an amazingly inexpensive source of power at two cents per kilowatt hour so clearly a success story of how renewable energy zones were defined and then taken to the next–to the next logical step. So I have been involved with projects for developing renewable energy zones in Sri Lanka, in Myanmar, Kazakhstan and Uzbekistan and we developed a methodology for developing the RE zones and I'm going to describe that next. Before I do that let me show you just some high level statistics. These are the most current statistics of wind development in Texas and as you can see this is close to 53 billion dollars worth of investments and it supports 25,000 jobs. So let's start with uh a simple definition of renewable energy zones and it's a geographic area that enables the development of profitable and cost-effective grid connected renewable energy. So the desirable properties meaning if I think of an ideal renewable energy zone definition, it would have these properties have high resource density, it would have a land area that could hold 500 to 1000 megawatts of projects, it would have a good grid and logistics infrastructure environmentally approved pre-approved licenses and land permits and ideally it would have clearly defined land parcels that can then be auctioned. So, renewable energy zone sort of changes the approach. It is an approach where you plan the development of renewable energy such that it is coordinated with grid development and it is like an invisible hand guiding investors to project in locations that are optimal for the grid. Ultimately what is important is not just the price at which renewable energy is procured but also the grid integration cost so Renewable Energy Zones is a way to bring these two things together. The items that I mentioned in terms of desirable properties as you can imagine this is very important to investors so what an auction participant really loves is a location specific auction where land parcels are defined, transmission interconnection has been prepared, licenses are pre-approved, environmental assessment has been completed, and so on. The reason is simple: the project becomes less risky more predictable with very few contingencies. So no wonder we see a sharp reduction in the tariff that is realized in a renewable energy auction. Again not all these pre-development work is done in each case but when the key risks have been taken away we see low traffic lower tariffs. So let me now get into the actual methodology for renewable energy development and we we've divided it into four parts. And the first part is to identify the parameters that are of interest and these parameters are resource density, distance to transmission line, logistics cost, and environmental impact. The next step in the methodology is to rank zones based on these parameters and that is done by by defining bins for the parameters and then ranking the bins and and we will illustrate this in the next few slides. The third step is to score the zones based on these parameters and the last step is to then use the highest ranked renewable energy zones and do development on them or pre-development on these zones, like resource measurement, transmission upgrade, and auction preparation. To save time I won't delve into all the parameters but suffice it to say resource density is the main parameter of interest. So resource density we mean either wind resource density or solar radiation available in in specific areas and we want to have sufficient land available to be able to hold 500 megawatts, 1000 megawatts of project because there is a large amount of investment going into pre-development and it's and with scale this cost then gets spread to to all these projects. The other aspect is cost of construction in that area or what I call constructability and this is defined using two GIS parameters called slope and relative elevation. The third is distance to the nearest transmission node and and the fourth is environmentally sensitive areas. So if there is an overlap of RE zones with an environmentally sensitive area– if there is significant overlap then these zones are not considered as a part, are not considered as renewable energy. So they are discarded from this methodology. There is nothing to say that this is limited to four parameters. In some countries we've added five, six parameters for analysis of zones. Now let me take a case study for Uzbekistan and here we started with a GIS layer of the wind resource. A wind power density map and the solar power density map of Uzbekistan. So these maps were obtained from ESMAP. This is a world bank project that has developed wind power density and solar density maps. Using these maps we take them and import them into a GIS software and through GIS analysis we mark the highest density areas with certain criteria and the criteria are it should be of sufficient land mass. Second we overlay SRTM layers which is Shuttle Radar Topography Mission layers that give us elevation and slope. To eliminate areas that have extreme elevation and slope, next we get layers that have information about substation location and this is used to compute the closest distance to to these areas. And last we look at the world database of protected areas. They also provide layers that point out the environmentally sensitive areas in the country. So this is an illustration of how preliminary zones are identified. Now let me walk you through the methodology for ranking the zones. So the power density in this case, this is wind power density is put into five bins. So any zone which has an average power density of greater than 700 watts per meter square is assigned the rank one and and so on. Similarly for construction distance to transmission and for environment. Now for environment we use we don't use a ranking system, but just whether this zone is cleared or not cleared based on the overlap of this zone with environmentally sensitive areas. So with this kind of a ranking scheme where rank one is the most favorable property or the or the most favorable zone and five is the least favorable ranking of a zone we can then do a ranking and in this case, the RE zone one and RE zone two are ranked along these four parameters. Once we have these ranks, the next step is to then combine the scores and to develop a total rank and and this is done by looking at different weights for each of these parameters, meaning we have four parameters and we want to combine these parameters and come up with a total rank. So resource density is assigned a weight of 82.5 percent for wind project, 78.3 percent for a solar project. Construction costs are assigned a weight of five percent, distance to transmission twelve and a half percent or 16.5 - 16.7 percent. So with this kind of a ranking scheme now we are combining the individual ranks for the parameters and coming up with a total rank. And this is an example of the total rank that is computed. In this case zone 3 is not clear because it has significant overlap with environmentally sensitive area. So the total rank is also NC. So again smaller this number, the more favorable this zone is. Now this numerical methodology doesn't capture everything. So the next step is to consider other things that are important. One of the things that that became very important in Uzbekistan is geographical diversity because because of the geography of Uzbekistan, the highest resource density zones ended up in one province, or number one and number two ended up in in the same province and the country wanted geographical diversification of these zones. So there can be investment in other provinces as well. So in that case this became a consideration that was then applied to the total ranking that was described before. The other thing that they were interested in is looking at hybrid zones which is zones that have both very high wind resource and solar resources and obviously the intention here is to use the transmission infrastructure that will be built for this zone to optimally so it can carry both wind and solar, a solar power and to utilize the transmission system to its maximum. The next consideration that we looked at are is substation capacity available. Substation capacity in those areas. The next one is actually it's not ordered is land ownership and this became very important in Myanmar where there are three categories of land owned by the government, private citizens, or the community community lands are typically owned by the indigenous population and we wanted to make sure that the zones had minimal overlap with lands owned by indigenous population or population that has gone through an involuntary resettlement. And this is to ensure that that those lands are still available to the indigenous population. So again these are additional considerations that were brought into the ranking scheme or that can be brought into the ranking scheme. So once we've identified at the top ranked zones the next step is as this graphic indicates is to go through resource measurement in these, on in these zones, do a power system analysis for the zones, do logistics studies, compute the logistics cost, do environmental impact assessment and so on. So with these steps, then we have a zone that is ready to be auctioned and the risks associated with sufficient resource availability, with power system, interconnection and so on have been minimized through this analysis. And this then goes into a auction package that is prepared for for investors. So this was a brief description of how RE zones are used and a methodology of how to assess RE zones, rank them and then to develop them. So I'll stop here and turn it over to Dorian. Thank you. Thank you very much, Pramod. That was an excellent presentation. Thanks to Victor for his presentation and I want to remind participants again that if you do have questions you could post those in the Q&A box now. While you were talking we received quite a few questions and I think some of these were touched on in your presentations. But I wanted to, I wanted to go first back to Pramod, just to address some of these ones that have come in on the issue of the REZ. One of them was the role of the investor. So the first one that came in on that was would the investors that are interested in RE zones still invest in a specific project where the zones set up to bundle investment across projects? Could you possibly touch on, you know, the different procurement approaches Pramod? Yes I'd be glad to do that. So the Renewable Energy Zones approach is to bundle projects is to is to spend in pre-development so the economies of scale can be achieved. So this would be for what I would call location specific projects where the location is defined. An alternate approach is where private investors go find the land, do the development and then propose that as a way to, in an auction for instance which is not location specific. So yes these are two different approaches and what we have observed is sharp drops in tariff when the risks have been taken out through this bundling because what bundling does is it gives a signal to the investors that the government is ready, the government has prepared this land or has prepared this project, with an interconnection study that has been done in different aspects that have been completed. So the proof is in in the lower tariffs that are achieved through this approach. Well Pramod, can you, before we go to the next question, can you highlight for us then the results from your work in Uzbekistan in recent auctions? Yes just this month or let's say between April and May of 2021, two projects have been auctioned. One was funded by the IFC, World Bank and they went with a Renewable Energy Zone approach and that has, it's a 220 megawatt project and it resulted in a tariff of less than 1.85 cents. It's close to 1.83 cents but extremely low tariff and this is a country that currently has no solar projects, no utility connected large-scale solar projects. The second example is a project that was managed by the ADB or the auction was managed by the ADB for there again it's a it's a 450 megawatt project and the tariff is below 2 cents, again in the range of 1.8 cents. So just stunningly low tariffs where the risks were taken out and we can see the result. Okay thank you. Now a lot of people concerned about this issue of land rights when assessing the zones. Now you did address this in your presentation but I wondered if you could be more detailed on how you looked at this in the Uzbekistan example, in terms of how you looked at potential, you know government land versus private land and community land. Yes in the in the case of Uzbekistan, this did not come up. So in Uzbekistan, government had identified plots of land where they had control over the land and they could build the project. So in Uzbekistan land considerations were not taken into account and by design in Myanmar. However land considerations were taken into account and that project at this point has been paused for a variety of reasons. But yes for Uzbekistan that was not a consideration. So what about the weightings? So the question is, you know, you talked a little bit about weightings but there's a question about how are the factor weightings determined relative to each other, e.g. constructability ranking is very low compared to resource potential. How would you answer that? Yes so this was specifically uh the case of Uzbekistan, where it is a relatively flat country and the constructability costs were dependent on certain mountainous areas and we were able to assess that. But the general methodology is to do a–let's call it a levelized cost of energy type calculation. By putting in the capital cost or the CAPEX cost based on each of these considerations. So capital equipment, construction cost, transmission interconnection costs, and so on so, based on the CAPEX and how the CAPEX is divided up into these three buckets. We are able to then determine the weights that are assigned to each of these parameters. So we have a question from Bangladesh, which as you know is a very densely populated country. And I guess the question was: is it possible to get–the question was: is it possible to get 500 to 1,000 Megawatts of renewable energy by reducing land? I believe the question is can it be further concentrated and so maybe you can address that? Absolutely so all these parameters are customizable and as you sort of get the drift of the methodology it is basically putting in a process for how we would rank, how we would choose parameters and so on. And as you mentioned in Bangladesh, 500 megawatts and the length of 500 megawatts is extremely large. So we could change that to say 50 megawatts, if that is important. So yes these are all customizable country specific parameters right. I wanted to know too just for the audience that this discussion is about large utility scale projects. We're not discussing here rooftop or distributed generation which could be done much smaller and locally. This is really focused on the issue of utility scale large-scale projects and how you could use this REZ approach. So another question was about the–you know we talked about Bangladesh but then the question comes up what about doing this in Africa? You know, can this approach be used there, you know, for example in West Africa which the questioner is saying has a poor grid network and transmission line coverage. In other words how do you see that taking that model from Texas or these other countries you've worked in. What's your view on that? I think you're muted. I understand sorry yes the same approach can be applied to areas with poor network connections and essentially the weighting or the weights that are assigned to transmission cost would increase significantly if long transmission lines have to be constructed to load centers. What does that mean that means if you have an area that has a extremely high solar resource and however the distance to a load center is very large. That project may not win over that may not get the highest ranking. You might instead choose a project closer to a load center with a little bit lower solar resource but a shorter transmission connection. So when we put these considerations into the levelized cost of energy for solar projects we can assign these weights in a in a rational or a logical manner. Thank you so I want to throw one to Victor. We have one that you know RE is good but how high a percentage of variable renewable energy is good in the system for stability of the system? So what's your view on that and maybe you could relate it back to these examples of Colombia, in the Ukraine? Yeah one of the most important things here that could be the flexibility that we can have our system. In the case of Colombia, I mean because the generation makes you have a lot of hydropower generation, you can think that the flexibility is pretty good in that system, then the renewable penetration, could be very high because it supposed that the hydropower is going to absorb all the viability of renewables. However something that is important here is right now for hydropower generation there is a lot of constraints–environmental constraints that are now applying to that kind of technology. Then that could be also an issue that we should be focused in the case that we evaluate the flexibility for our power system which has a high share of a hydropower generation. But yeah then flexibility is an important issue that should be evaluated in this case. We have Colombia with a high hydropower share and the other case is for example Ukraine when you have mostly 75 percent of the generation is thermal. Then is another case where you have to evaluate very careful what kind of generation you have in order to allow that renewable penetration. In this case if you have 40 percent of the penetration is coal then it is supposed that you're going to have some issues with the flexibility providing to the power system. Then flexibility is a key issue to evaluate in a power system in case that you want to define what is the maximum penetration that you can support in a power system. Thanks, Victor. Well to the audience we've received quite a lot of questions. We're not going to have time now to address all of them but what we will do is have written responses to those ones we did not address which will be provided along with this these materials on the SURE website and I think SURE will send those out to the participants. Thanks to all of the speakers for their insights: Victor and Pramod and for all of you who attended. Before we adjourn, I would like to ask that you complete a brief evaluation survey which you will find in the chat. Your responses will help to inform future webinars. After this webinar we'll also email you the evaluation survey as well as a link to the SIRE website where this recording will be housed. Our next webinar in the strategic energy planning series will be on grid modernization. Details on this event will be shared soon. Thank you very much.

Last updated: November 02, 2022

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