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.

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 .Objectives •  Obtain DEWA’s feedback on our technical concerns To provide the industry with a uniform understanding of the DEWA codes.

Suggestions .2.

5%.5% and 8. .Suggestion Overview The Dubai Shams programme opens exciting opportunities for MESIA’s stakeholders. investment returns for Shams Dubai would vary between 5. Considering the current regulations and costs of Solar installations. In order to get drive success of 150MW+ per year further technical clarifications and regulatory support are needed. Considering the long-term risks over commercial customers investors are expecting much more attractive returns. 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.

and it is generating solar power.Suggestion Summary Technical suggestions •  •  Regulatory suggestions Major inputs on LV and MV connection points. the new tenant shall assume the contract from the previous tenant to ensure security of investment. •  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. 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.

Financial Study .3.

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) .

12 0.00 0.10 0.00 0.22 1.00 0.00 1.00 0.1% 1.05 0.19 0.00 0.0% 0.0% 0.0% 0.00 0.11 0.31 $477 843 100.03 0.00 0.0% 0.00 0.010 0.13 0.01 0.Financial study MESIA  member  feedback   required   Solar PV equipment pricing depending on the installation size Capital Cost Item BASE PV SYSTEM COST Modules Inverters Mounting System Basic Monitoring System Installation BOS Electrical and Misc Duties & Taxes EPC Margin (range) SUBTOTAL BASE PRICE SPECIFIC DEWA COSTS DEWA Connection Fee Remote Control Provision Remote Monitoring Interface Protection MV Connection EPC Margin (range) SUBTOTAL BASE PRICE TOTAL PRICE 10 kW LV PV System 10 kW Price (USD) % of Total Price Per Watt ($/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% 0.2% 0.0% 0.00 0.00 0.04 $14 941 102.1% 0.00 $327 $58 $384 0.20 1.0% 0.10 0.04 0.52 0.00 0.00 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% 0.19 .20 0.00 0.005 0.2% 0.2 $196 337 % 400 kW MV PV System Price Per Watt (USD/ Wp) 400 kW Price (USD) % of Total Price Per Watt ($/Wp) 0.0% 0.6% 1.18 0.15 0.0% 0.54 0.17 0.18 1.00 0.0% 15% 2% 0.49 150 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 0.04 0.46 $327 $58 $384 2.12 0.0% $58 15% $384 0% 100.00 0.0% 15% 0% 0.0% 0.53 0.10 0.008 0.00 0.14 0.

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.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. 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% .

56 % Internal Rate of Return after 25 years •  11 yrs payback period •  7.09 % Internal Rate of Return after 25 years •  10 yrs payback period •  8.56 % Internal Rate of Return after 25 years .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.

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. 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 .

4. Regulatory Concerns .

can the new tenant assume the contract from the previous tenant? 2.  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.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. will DEWA: -  Purchase the power produced? -  Store credits for the power produced? .  If a building is vacant for a long period of time. and it is generating solar power.

  Can DEWA and a financier work together to collect missed payments from a customer? . 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 new tenant when they assume an existing meter? 2. close. change over the life of a solar plant. Given the long duration of payback (over 10 years).Regulatory concerns Concern 2 – Customer Default Customers are sure to move.

5. Technical Clarifications .

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

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

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

  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.  What is DEWAs involvement in the performance test ? .Technical clarifications •  Topic 8 – Inspections 1.  Does DEWA need to be present when the system is energized and connected to the grid? 4.

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