Ahmad Hadri Haris - Feed-In Tariff Driving Innovation & Cost Reductions

8/6/2019 Ahmad Hadri Haris - Feed-In Tariff Driving Innovation & Cost Reductions

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Feed-in Tariff:

Driving Innovation & Cost Reductions?

Ir. Ahmad Hadri Harishadri(a)mbipv.net.my

Chief Technical Advisor (Renewable Energy)

Ministry of Energy, Green Technology & Water

21st June 2011


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DRAM Moores Law

2Source: Applied Materials


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Flat Panel Displays



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Photovoltaic (RE)



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RE Learning Curves & Cost Reduction

5


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What are the differences?

Consumer Goods Strategic Goods

Mobiles

Laptops

Flat panel displays Automobiles

Etc.

The way electricity is produced

The way transportation is done

The way people are living in urbanenvironment

Only need global trade fair Do need initial political and public support

In summary:

New technologies in the beginning always have high costs (prices)

Cost (price) can only reduce with large demands (Price Experience Curve)

Only market pull with technology drive (innovation) will create the Price

Experience Curve, not technology push by its own

Q: What is the best market pull mechanism for RE?6

because consumers want the newproducts


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Driver: Environment

& Energy Security

h)

Grid Parity

Years

E

lectricityPrices($/

k

GRID PARITY

Source: BP, RECEurope, USA, Japan Asia

2010 2020

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Market Pull Mechanism: Effectiveness Indicator

FiTs are more effective

and cost-efficient

Source: European Commission (2008): The support of electricity from renewable sources

Historically observed efficiency of support for onshore wind: Effectiveness indicator compared

to the expected profit for the year 20068


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FiT rates significantly influence market reaction (pull)

Conducive

FiT rates

92011


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FiT Degression

Promote prices reduction towards grid parity

Promote early commissioning and reward early birds

Point of control for high FiT rates10


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FiT is the best Market Pull for RE

Eg. Solar PV: Opportunity for Households

House type terrace semi-d bungalowElectricity bil l/month (RM/month) 80 350 800

BIPV capacity (kW) 3 6 14

BIPV space requirement (m2) 30 60 140

BIPV capital cost (RM) 54,000 102,000 224,000

Down-payment for BIPV - 10% (RM) 5,400 10,200 22,400

FiT rates (RM/kWh) 1.74 1.71 1.71

FiT revenue/month (RM) 522 1,026 2,394

Bank loan - 90% 48,600 91,800 201,600

Loan repayment/month: 3%, 9yrs (RM/month) 514 971 2,133



Balance: FiT revenue - loan repayment, 9 yrs (RM/month) 8 55 261

Balance: FiT revenue - loan repayment, 12 yrs (RM/month) 96 222 629Balance: FiT revenue - loan repayment, 15 yrs (RM/month) 138 300 799

Total revenue (21 years) - 15% total performance loss 111,812 219,769 512,795

Total repayment - 9 yrs (RM) 55,512 104,868 230,364




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Thank You

Ahmad Hadri Haris - Feed-In Tariff Driving Innovation & Cost Reductions

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