DUBAI SHAMS

PROGRAM  
MESIA suggestions

 

Annual  General  Mee+ng  
(AGM)  
 
 
DECEMBER  8,  2015    
The  Fairmont  Dubai  
 

Agenda
1.  Context & Objectives
2.  Suggestions
3.  Financial Study
4.  Regulatory Concerns
5.  Technical Clarifications

Context & Objectives .1.

•  Potential customers Free standing residential buildings §  Undefined presence §  Low financial leverage §  Low investment potential (3rd party or self owned) Long term owners and tenants §  Long term presence §  Relevant financial leverage §  High investment potential (3rd party or self owned) Short term tenants §  Undefined presence §  Low financial leverage §  Low investment potential (3rd party or self owned) .Context •  Dubai Shams programme objective Support the diversification of Dubai’s energy mix by promoting the use of clean and renewable energy sources to build a sustainable future for the Emirate.

Objectives •  Obtain DEWA’s feedback on our technical concerns To provide the industry with a uniform understanding of the DEWA codes. regulations and processes To ease and streamline the communication process with DEWA •  Sustainable growth of distributed solar PV in Dubai Give Dubai-based companies OPEX savings to keep them competitive Contribute in lowering the peak load on the UAE grid .

2. Suggestions .

Suggestion Overview The Dubai Shams programme opens exciting opportunities for MESIA’s stakeholders. In order to get drive success of 150MW+ per year further technical clarifications and regulatory support are needed.5% and 8. Considering the long-term risks over commercial customers investors are expecting much more attractive returns. Considering the current regulations and costs of Solar installations. .5%. investment returns for Shams Dubai would vary between 5. The following slides provide MESIA suggestions to DEWA to open the doors for a successful programme which has the potential to make of Dubai the worlds leading market for Distributed Solar PV. A market enabling an addition of 50 MW per year is the most that can be expected.

the new tenant shall assume the contract from the previous tenant to ensure security of investment. DEWA shall either: -  Purchase the power produced -  Store credits for the power produced •  Solar financing lease should be registered on a DEWA account to enable its continuity with a new tenant when they assume an existing meter. . If a building is vacant for a long period of time. and it is generating solar power.Suggestion Summary Technical suggestions •  •  Regulatory suggestions Major inputs on LV and MV connection points. •  DEWA and a financier can work together to collect missed payments from a customer. •  on inverters sizing and on modules insulation are needed to enable the right costing of the system and avoid time loss when getting to the design approval stage •  Clarifications on the timeline for system design approval and site inspection by DEWA are needed for companies to frame project delivery If there is a tenant change.

3. Financial Study .

Financial study •  The financial study has been prepared based on the current 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) .

49 150 kW LV PV System 150 kW Price (USD) % of Total $79 500 41% $19 500 10% $18 000 9% $1 125 1% $25 500 13% $16 500 8% $6 435 3% $29 393 15% $195 953 100% $327 0.6% 1.00 0.0% 0.52 0.00 0.0% 0.0% 0.31 $477 843 100.10 0.05 0.00 0.00 0.1% 1.12 0.10 0.04 0.2 $196 337 % 400 kW MV PV System Price Per Watt (USD/ Wp) 400 kW Price (USD) % of Total Price Per Watt ($/Wp) 0.00 0.Financial study MESIA  member  feedback   required   Solar PV equipment pricing depending on the installation size Capital Cost Item BASE PV SYSTEM COST Modules Inverters Mounting System Basic Monitoring System Installation BOS Electrical and Misc Duties & Taxes EPC Margin (range) SUBTOTAL BASE PRICE SPECIFIC DEWA COSTS DEWA Connection Fee Remote Control Provision Remote Monitoring Interface Protection MV Connection EPC Margin (range) SUBTOTAL BASE PRICE TOTAL PRICE 10 kW LV PV System 10 kW Price (USD) % of Total Price Per Watt ($/Wp) $5 400 $1 800 $1 400 $100 $2 000 $1 200 $473 $2 183 $14 556 37% 12% 10% 1% 14% 8% 3% 15% 100% 0.008 0.00 $327 $58 $384 0.00 0.00 0.00 0.01 0.17 0.18 1.2% 0.010 0.04 $14 941 102.0% 0.03 0.31 $208 000 $40 000 $40 000 $2 000 $60 000 $40 000 $15 840 $71 619 $477 459 44% 8% 8% 0% 13% 8% 3% 15% 100% 0.0% 15% 2% 0.46 $327 $58 $384 2.54 0.11 0.13 0.1% 0.00 0.15 0.04 0.00 0.18 0.0% 15% 0% 0.00 0.0% $58 15% $384 0% 100.00 0.0% 0.00 0.2% 0.0% 0.22 1.00 0.00 0.0% 0.005 0.19 .0% 0.20 1.53 0.00 1.0% 0.00 0.12 0.14 0.10 0.19 0.20 0.

Financial study General assumptions Project Parameters Site Parameters Meteorological data Dubai Angle of panels 5° Azimuth of panels 0° Tariff Annual Production Estimated soiling loss 5% Panel Degradation PV system production 1600 kWh/kWp Performance Ratio $112.50% year 1 80% This study was made based on the customer leasing the equipment from a financing company at 10% below DEWA peak tariff.0/MWh AED 411/MWh 15 MWh/year 0.7% / year 2. and consuming all of the power produced. .

Financial study Operating costs Construction parameters CAPEX and OPEX price comparison of PV system sizes Parameter 10 kW LV PV System 150 kW LV PV System 400 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 * Value for first year and subject to an expected annual inflation rate of 3% .

Financial study Investment Returns of PV system sizes 10 kW installation Cumulated Free Cashflow over 25 years 150 kW installation Cumulated Free Cash flow over 25 years  $750  000      $250  000      $20  000      $150  000      $10  000     400 kW installation Cumulated Free Cashflow over 25 years  $250  000      $50  000      $-­‐     0   5   10   15   20   -­‐$10  000     -­‐$20  000     25   -­‐$50  000     0   5   10   15   20   25   -­‐$250  000     0   5   10   15   20   25   -­‐$150  000     -­‐$250  000     -­‐$750  000     For a 10 kW installation: For a 150 kW installation: For a 400 kW installation: •  13 yrs payback period •  5.56 % Internal Rate of Return after 25 years .09 % Internal Rate of Return after 25 years •  10 yrs payback period •  8.56 % Internal Rate of Return after 25 years •  11 yrs payback period •  7.

Or •  Within a regulatory frame enabling the transfer of ownership of the installation which could open a the market to contracting with mid-term tenants .Financial study Conclusion The values of the Internal rate of return and of the payback period imply that either Solar PV will be only be a viable investment when: •  Contracts are with long term owners or tenants that have a very low risk of moving or bankruptcy.

4. Regulatory Concerns .

  If a building is vacant for a long period of time. will DEWA: -  Purchase the power produced? -  Store credits for the power produced? .Regulatory concerns It is expected that most Owners and Tenants will choose to lease rather than purchase 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. and it is generating solar power.  If there is a tenant change. 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: Concern 1 – Continuity of Contract 1. can the new tenant assume the contract from the previous tenant? 2.

close.Regulatory concerns Concern 2 – Customer Default Customers are sure to move. how can DEWA support with the continuity of revenue? 1.  Can DEWA and a financier work together to collect missed payments from a customer? . change over the life of a solar plant. Given the long duration of payback (over 10 years).  Can a Solar financing lease be registered on a DEWA account to enable it continuity with a new tenant when they assume an existing meter? 2.

5. Technical Clarifications .

Technical clarifications •  Topic 1 – LV Connection point 1.  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? . and metering. the Contractor’s choice or is it mandated by DEWA? Connection at the MDB vs SMDB 2. are multiple DEWA meters required? 3.  What is the specification and communication protocol for the connection to the DEWA Outsation ? •  Topic 2 – MV Connection point 1.  How can the Contractor/End User get substation information from DEWA prior to NOC issuance? 2.  Can a system have multiple LV connections to MBD/SMDBs? If so.  Can multiple solar meters be assigned to a single consumption account? 4.  Is the point of connection.

  Is it a requirement or recommendation from DEWA to oversize the inverter for reactive power compensation? 2.Technical clarifications •  Topic 3 – Inverters 1.  Is it a requirement or recommendation to have isolation between the modules and Mounting system? 2. or MV cables ? •  Topic 5 – Modules & Grounding 1.  Does DEWA limit the routing of cabling (AC or DC) in the building or underground? 2. LV.  Is Aluminium allowed for DC.  Is it a requirement or recommendation for a motorized circuit breaker? Does the inverter meet this requirement with the anti islanding function? •  Topic 4 – Cabling 1.  Is it a requirement or recommendation to have a minimum of 50mm between the modules and roof ? .

Technical clarifications •  Topic 6 – Mounting 1.  What is the time required by DEWA to approve the system design? .  Will DEWA accept using ASCI standards for mounting system design? 3.  What is the required approvals from the Dubai Municipality ? Is there a contact person or department that is familiar with the Shams Dubai program? 3.  What is the design wind speed to use in sizing the mounting system? 2.  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.  Is it a requirement or recommendation to have walkways between the array? •  Topic 7 – Permits & Approvals 1.  What is the required scope of the Grid Impact Study ? 4.  Is it a requirement or recommendation to have a minimum distance between the skylight and the array? 4.

  What is the required notice period to book a site inspection with DEWA? 3.  What is DEWAs involvement in the performance test ? .  Does DEWA need to be present when the system is energized and connected to the grid? 4.Technical clarifications •  Topic 8 – Inspections 1.  Can the mechanical inspection happen after the electrical works have started? 2.

com +971 55 77 19 456   Annual  General  Mee+ng   (AGM)       THANK  YOU   The  Fairmont  Dubai     .For more information contact: Micheline Thienpont Micheline@mesia.