VesBox

UK Government Tender – Refinements and updates to the Feed-in Tariffs (FITs) models.

Reference Number: 602/04/2013
Focus - Solar Photovoltaics
12.10.2019
Abstract
A UK Government tender released in 2013, addressed the need for a tool to deliver a range of formulas and algorithms to effectively calculate parameters surrounding solar photovoltaic technologies. This scheme was expected to deliver a range of benefits including business and employment opportunities in developing and deploying renewable energy. The VesBox Platform was used in this White Paper as the tool to address to address this issue.
Introduction
Climate change is not only a massive threat to the global environment, it is also perhaps the greatest economic challenge facing us in the twenty-first century. It demands an urgent and radical response across the developed and developing world.

At the same time, the UK needs to secure clean, safe, affordable energy to heat and power our homes and businesses. Creating a low carbon and resource efficient world means making major structural changes to the way we work and live, including how we source, manage and use our energy.

The UK Department of Energy and Climate Change (DECC) (now part of the UK Department for Business, Energy and Industrial Strategy (BEIS), exists to take the lead in tackling these challenges. BEIS reflects the fact that climate change and energy policies are inextricably linked – two thirds of our emissions come from the energy we use. Decisions in one field cannot be made without considering the impacts in the other.

Feed-in Tariffs are an important part of the policy framework to deliver small scale (sub 5MW) renewable generation to meet the UK renewable energy target.  BEIS has published projections and forecasts of the costs and uptake of FITs in its impact assessments accompanying Government consultations and announcements, based on its Feed-in Tariffs (FITs) models. For this project, BEIS is now looking for a supplier or suppliers to undertake a project to review and refine the two FITs models.
Tender Specification
The Feed-in Tariffs (FITs) scheme for Great Britain was introduced in April 2010 to encourage greater deployment of low carbon electricity generation particularly by those who would not have traditionally engaged with the energy market.  FITs are paid for by licensed electricity suppliers who in turn are expected to pass these costs on to their customers (i.e. end energy consumers).

The scheme is expected to deliver a range of benefits including: greater consumer engagement; public acceptance of alternative ways of delivering energy needs; diversified energy mix; reduced dependence on (imported) fossil fuels; greater energy security at the small scale; business and employment opportunities in developing and deploying renewable energy technologies; avoidance of reductions in losses through transmission/distribution networks through making better use of such infrastructure and realising the benefits of using electricity at the point that it is generated; innovation benefits; and potential reductions in technology costs as a result of roll-out.

In order to inform effective scheme design for FITs, DECC commissioned consultants Element Energy and Poyry to construct a single excel-based model that would enable modelling of alternative tariff designs and the impact of these on key outputs such as renewable energy generation, carbon emission reductions and scheme costs. The model has been used for the development of FITs as well as for on-going internal analysis.
FITs Model Structure
Project Description
This report was written for the sole purpose of drafting this White Paper. This document was not submitted to UK DECC and all intellectual property rights conducted for this study belongs solely to Vesbox Limited. Certain deliverables were changed to fit the purpose of the study.

This White Paper will use the renewable energy software tool, the VesBox Platform, to run all its analysis to derive the outputs required by this tender document. The only technology that will be considered for this study is Solar Photovoltaics (solar PV).
Schematic illustration of methodological approach
Case Study:
30 MW Sub-Saharan Solar Farm Located in Benue,Nigeria

Requirements
Conduct your analysis on a 400 kW off-grid Solar PV system located in Wales, United Kingdom. Using the following project inputs shown on table 1, deliver the following output data:

Deliver the following outputs:
1. renewable energy electricity generation MWh/year (Annual);
2. CO2 savings;
3. No of Households Supplied;
4. Project Payback;
5. Rates of Return;
6. Profitability;
7. Net Present Value;
8. Discount Rate;
9. 25 yr. Revenue forecast; and other.
Conduct your analysis on a 400 kW off-grid Solar PV system located in Wales, United Kingdom.

Deliver the following outputs:
1. Renewable energy electricity generation MWh/year (Annual);
2. CO2 savings;
3. No of Households Supplied;
4. Project Payback;
5. Rates of Return;
6. Profitability;
7. Net Present Value;
8. Discount Rate;
9. 25 yr. Revenue forecast; and other.
Table 1: Input Data

Case Study
Project Name
Project Status
Cost
Debt: Equity Split
Loan value
Equity value
Plant Capacity
PV Module
Degradation factor/year
Tariff Price
PPA Tenor
Expected delivery date
Project  Schedule
Project Lifecycle

Project Site information
Name of State/Country
Land Area Acquired
Land Type
Mounting System

2
UK BEIS (Tender)
N/A
$294,000 (USD)
70:30
$206,080 (USD)
$88,800 (USD)
400 kW
Mono Crystalline Modules
0.7%
$0.18/kWh (USD)
Nil
N/A
N/A
25 years


Wales/United Kingdom
0.88 Hectares
Flat Land
Ground Mounted

VesBox Platform Results Part 1
VesBox Platform Results Part 2A
VesBox Platform Results Part 2B
Table 2: Overview of main results for White Paper

Capacity
Renewable energy electricity generation MWh/year (Annual)
CO2 savings
No of Households Supplied
Project Payback
Rates of Return
Profitability
Net Present Value
Discount Rate
25 yr. Revenue forecast

400 kW
321.43 MWh/year (P90)
3,715.48 Tonnes/CO2
86 Households
10 years
17.43%
1.99
$ 341,670.74 (USD)
5.96%
$ 1,315,213.47 (USD)

Conclusion
The results presented confirm that the VesBox Platform is an effective tool for conducting complex calculations for solar photovoltaic technologies. The study also showed that the VesBox Platform has the potential to play a vital role in enabling decision-makers to effectively measure their projects technical, financial, social and environmental viability which in turn will contribute to the enhanced growth of solar photovoltaics installations.
Authors:
This case study was prepared by researchers from Imperial College London.
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