Wind Energy Developments in Emerging Market Countries

1
Wind Energy Developments in Emerging Market
Countries

• Global Challenges and Opportunities Session
• European Wind Energy Conference EWEC 2008
• Brussels, Belgium April 1, 2008
• Prepared by Dana R. Younger,
• International Finance Corporation
• and
• Soren Krohn, World Bank, ESMAP
• Presented by Soren Krohn

2
Outline

• Key wind energy drivers
• Market growth in the developing world
• How to accelerate wind energy?
• What is the World Bank Group doing?

3
Key Drivers

• Economic Growth Electricity Demand Growth
• Energy Security Rising Oil Prices
  Wind/Hydro/Geothermal as a Hedge
• Environmental Objectives
• Local
• Global
• Industrial Development
• International Pressure

4
Key Wind Energy Markets

• Giga Markets India 8,000MW China 6,050MW
• Large Markets Poland 280MW, Brazil 247MW, Egypt
  230MW, Turkey 192MW, Morocco 124MW, Czech R.
  116MW, Mexico 88MW, Ukraine 82MW, Costa Rica
  72MW, Hungary 65MW, Bulgaria 62MW, Estonia 58MW
  Lithuania 52MW, Argentina 30MW, Latvia 27MW,
  Philippines 25MW, Chile/Jamaica/Tunisia/Colombia
  20MW (each)
• Growth Leaders China, India, Poland, Brazil
• Poised for Growth Mexico, Turkey, Morocco, Chile
• Planned Projects e.g. Argentina, Bulgaria,
  Colombia, Costa Rica, Croatia, Dominican
  Republic, Egypt, Honduras, Jordan, Kazakhstan,
  Malaysia, Namibia, Kenya, Nicaragua, Pakistan,
  Panama, Peru, Philippines, Romania, Russia, South
  Africa, Sri Lanka, Tanzania, Tunisia, Ukraine,
  Uruguay, Vietnam, Yemen
• Uneven Market Growth except in China India

5
Mexico IPP Market

• Fully Developed IPP Market with gt20 projects,
  28GW of Conventional Generation (mainly,
  gas-fired CCGTs)
• Off-taker is National Utility CFE
• Committed Private Investment of US6B
• 22 of Mexicos Electricity from IPPs
• IFC has financed 5 conventional power IPPs since
  1996 with US247M in direct investment and
  US614M including B Loan participants
• IFC prepared to finance wind IPPs as market
  develops

6
Mexico Wind Market

• Wind technical potential of gt40GW (Oaxaca,
  Yucatan Baja California)
• Only 88MW installed in last 10 years 2MW is La
  Venta I plant of CFE in Isthmus of Tehuantepec in
  Oaxaca State
• 83.3MW La Venta II in operation for CFE by
  Gamesa/Iberdrola 850kW WTGs
• 101MW La Venta III First Wind IPP bid by CFE
  bid failed despite support of World Bank GEF
  production subsidy
• 404MW of Oaxaca CFE wind IPPs planned _at_ 101MW
  p.a.
• 7 private wind projects at 957MW have CFE
  permits as self-supply projects
• Additional 2,250MW of self-supply projects in
  Private Developer Pipelines
• Major Companies involved Acciona, EDF EN,
  Iberdrola, Union Fenosa, Gamesa, Clipper/Fuerza
  Eolica, Preneal
• Regulatory/transmission constraints with CRE
  (regulator) and CFE (utility) have limited
  private investments in self-supply market -
  new 145 km 400 kV T-line now planned
• Sempra Energy bought 250MW Baja project for US
  export

7
Turkey Wind Market

• New RE law with feed-in tariff for wind (5.2 Euro
  cents/kWh guaranteed for 10 years)
• Wind limited to 5 of grid or 5GW
• Power sector re-structuring underway
• Technical potential48 to 88GW wind atlas (02)
• 751 projects at 78GW presented for licenses in
  Nov 07 EMRA/EPDK reviewing now Up to 10GW
  may receive licenses from EMRA/EPDK
• 192MW installed Demirer, Bilgin, Zorlu, BEST,
  Aksa, Sanko are leading local developers
• Interest growing rapidly among local power firms,
  international developers and corporates
  Iberdrola, BP, Westwind, Epuron/Conergy, GE
• Enercon, Vestas, GE are major suppliers
• Sale of VERs possible despite non-ratification of
  Kyoto Protocol

8
Morocco Wind Market

• ONEs Target of 1,000 MW by 2012
• 124 MW installed/140 MW being built
• 60 MW now in private operation
• EnergiePro Program allows private self-supply
  projects for high voltage costumers
• Developers Nareva, Endesa, Acciona, ONA, Asment,
  Avante, Italgen, Theolia, Lafarge, UPC, Ynna
  Steel 600-700 MW pipeline.
• ONEs Tarfaya 200-300 MW IPP out for bid 16
  bidders pre-qualified bids due 10/08
• Babcock Brown, CMS/Taqa, Endesa, Falck, Gamesa,
  Iberdrola, International Power, IVPC, Mitsui,
  Poweo/Gas Natural, Siemens/ProCME, Suez,
  Theolia/GE, Total/EDF, Union Fenosa,
  Urbaser/Compagnie du Vent (Acciona)

9
Chile Wind Market

• Strong Technical Potential (gt20GW?)
• Chile University Wind Atlas in preparation
• 2 MW Alto Baguales isolated wind farm in Region
  IX run since 2001 by Edelaysen/Grupo SAESA
• 18 MW Canela wind farm in Region IV by
  Centinela/EcoEndesa at Totoral site - 1st SIC
  interconnected wind project started 12/07
• Totoral site potential of 140 MW incl. 40-50 MW
  Norvind project of Centinela/SN Power
• Major developers Endesa, SN Power, Acciona,
  Pacific Hydro, Iberdrola, Seawind, Handels und
  Finanz
• Local Players Centinela, Chilquinta, Chilectra,
  Enorchile, Andes Energy, Nova Energy, Servicios
  Eolicos
• New RE Law provides incentives for wind via RE
  Portfolio Standard for all large generators
• gt450MW at advanced stage - still merchant risk
  due to absence of guaranteed feed-in tariff

10
Other Middle East Developments

• Jordan
• 4GW resource 7 m/sec
• Site Data wind atlases (89, 92, 06)
• 2 MW of small WTGs - operable since 1996
• MEMR 2002 bid for 75-90MW BOO Failed!
• New Target of 300MW of wind by 2012
• Current bid for 30MW Al Khamsah
• WB/GEF support for 50-70MW IPP
• Egypt
• 20GW Potential along Red Sea wind atlases
  (96,03,05)
• GOE NREA operates 230 MW of Donor-funded Projects
• 80 MW near completion 240 MW approved
• Transition from concessional funding to Private
  IPPs
• MOU Signed with Italgen for 120 MW private IPP
• 600 MW per year until 2020 as private IPPs
• Yemen
• 10GW Potential along Red Sea and inland
  Mesoscale Map
• 65MW Project to be tendered near Al-Mocha
• 1000 MW to be planned as private IPP of which
  200 MW by 2010-2011

11
Other World Bank Group Assistance for World Bank
Wind Development Preparation

• Mesoscale mapping (examples)
• Bolivia (IFC, in progress)
• Peru (WB, in progress)
• West Balkans (WB, in preparation)
• Policy Preparation (examples)
• Argentina (Chubut)
• Colombia
• Egypt
• Iran
• Morocco
• Yemen
• Technology Transfer
• China

12
What will it take for wind energy to grow in
emerging markets?

• A sound regulatory framework (e.g. solid PPA
  needs)
• Better resource mapping
• Better resource exploration
• Safeguarding quality (certification)
• Adapting technologies to local conditions
• Better policy environment (e.g. fuel subsidy
  issues)
• Planning for risks and regulators training
• Adapting institutions to new RE technologies
• Adapting grids to new RE technologies
• Supporting RE for the long haul
• Optimizing energy systems
• Project size problems
• Project financing
• Better off-grid models needed

13
The World Bank Group

• Working on the interfaces with poverty,
  macroeconomics, governance and environment
• Support for reform process and associated
  capacity building to regulate and develop
  competitive energy markets
• Facilitating transfer of knowledge among
  developing countries
• Catalyzing private investment flows to
  non-investment grade countries

14
The World Bank Group

• G8 Clean Energy Investment Framework (CEIF)
• Proposed Climate Investment Fund (CIF) and its
  Clean Technology Fund (CTF)
• Up to US10 billion for CIF led by UK, US Japan
• Policy Support for wind and other RE often with
  GEF funding support -- new RE laws in Mexico,
  China and Turkey
• gtUS11 billion for renewable energy and energy
  efficiency since 1990
• US1.4 billion for 63 projects in 32 developing
  countries in the last year alone
• Commitment to increase RE and EE portfolio by 20
  annually through 2010
• Leveraging of public and private resources
• Complementary roles of World Bank/IDA, IFC and
  MIGA
• Development of carbon finance market

15
Thank You !

• Contacts
• Soren Krohn, World Bank, ESMAP
  skrohn_at_worldbank.org
• Dana R. Younger, International Finance
  Corporation, dyounger_at_ifc.org