Economics of reaching year 2015 non-conventional renewable electricity generation target

Abstract

As per 2008 National Energy Policy, it is envisaged to reach I 0% of electricity energ) generation by end of year 2015 from Non-Conventional Renevvable Electricity (NCRE) generation sources. As per generation data, NCRE projects have generated around 525 GWh of electric energy during 2009. To reach this envisaged amount by end of year 2015, total annual NCRE contribution has to be increased to 1700 GWh as per year 2005 and 2008 Long-Term Generation Expansion Plan (L TGEP) demand predictionsTo encourage more private investments on NCRE resources for grid connected power generation, Sustainable Energy Authority (SEA) has introduced cost based and source specific tariff system. However. \\hen implementing this new tarifT structure. SEA has to subsidize this ne\\ tariff system since its tariff is higher than present CEB avoided cost tariff especially during initial years of operation. In this study. present CEB avoided cost calculation methodology has been reviewed to reflect more realistic avoided cost as per Small Power Purchase Agreement (SPPA) guidelines. With proposed modifications to the present methodology of avoided cost calculation, avoided cost of CEB has been forecasted for until year 2020 based on data available in L TGEPs. Also based on the identified potential NCRE sources. tariJT commitments of SEA has been calculated under constant terms for each year when reaching year 2015 NCRE generation endeavor. Here. analysis has been done under differentscenarios to analyze the return on overall investment with varying fossil fuel prices. Net rc\enue of SF/\ \\ill largely depend on fuel prices. plants implementation and retiring schedules as well as combination of NCRE power plants in operation. As per the considered scenarios, to breakcven the NCRE tariff investment. average crude oil pricesshould at least reach I 00- 120 US $ per barrel.