Richard Jones

Grid connections and selling the energy you produce

Transcript

1. Grid Connections and Selling the Energy you Produce Richard Jones Business Development Manager SmartestEnergy Ltd
2. Agenda • Review of SmartestEnergy • Exporting power – having the right connections • Understanding Power Purchase Agreements (PPAs) • Feed-in Tariffs • Maximising your relationship with your supplier
3. 3 Overview of SmartestEnergy • Established in 2001 on the back of deregulation • The UK’s leading purchaser and supplier of electricity from independent generators – Over 1,800MW installed capacity under contract1 – 200+ Customers contracted – Over 500 generation sites, 26% market share of renewable independent embedded sector – Responsible for almost 16% of total FiT payments in the first 2 years of the scheme. SmartestEnergy are FiT licensee for 30% of installed capacity. Payments of £30m to FiT generators to date2 • Committed to supporting independent generators, developers and landowners. • Our PPA and FiT product range from simple fixed priced arrangements to highly flexible contracts • Annual turnover £1 billion and profit after tax £10.7 million3 1Figures correct as of 1st January 2013 2As of June 2012 3Financial figures 2011/2012 audited accounts
4. 4 Exporting Power – Having the right Connections… • Connection agreement: – Apply for a physical connection to “grid” – Distribution Network Operator (DNO) works is largely non-contestable – Connection charges vary from low cost to “blow the budget” • Meter Operator Agreement (circa. 80-100kW level upwards) – Typically a 5-year agreement to provide a half hourly export meter • Power Purchase Agreement (PPA), or Feed-in-Tariff (FiT), or both – A licensed energy supplier has to provide this service – Will register your meter to their portfolio – Will set out the arrangement for purchasing power via PPA or FiT and any other benefits
5. 5 Understanding the Power Purchase Agreement… • Generator key obligations: – To provide assurance about the project and its accreditation – To operate and maintain the generation plant/equipment – To provide an output forecast • Supplier key obligations: – Commitment to purchase, invoice and pay generators • Pricing based on the following: – Wholesale price for power, or the FiT export rate 4.5/KWh* – Embedded Benefits – LECs – ROCs or FiT Generation Tariff *Current as of 01/08/2012
6. Wholesale Power Pricing Wholesale power price history 30 40 50 60 70 80 90 01/10/2007 24/10/2007 16/11/2007 11/12/2007 08/01/2008 31/01/2008 25/02/2008 19/03/2008 15/04/2008 09/05/2008 04/06/2008 27/06/2008 22/07/2008 14/08/2008 09/09/2008 02/10/2008 27/10/2008 19/11/2008 12/12/2008 09/01/2009 03/02/2009 26/02/2009 23/03/2009 20/04/2009 14/05/2009 09/06/2009 02/07/2009 27/07/2009 19/08/2009 14/09/2009 07/10/2009 30/10/2009 24/11/2009 17/12/2009 14/01/2010 08/02/2010 03/03/2010 26/03/2010 Date Price (£/MWh) 30 40 50 60 70 80 90 24/12/04 24/02/05 24/04/05 24/06/05 24/08/05 24/10/05 24/12/05 24/02/06 24/04/06 24/06/06 24/08/06 24/10/06 24/12/06 24/02/07 24/04/07 24/06/07 24/08/07 24/10/07 24/12/07 24/02/08 24/04/08 24/06/08 24/08/08 24/10/08 24/12/08 Annual 2008 Curve
7. 7 Wholesale Power Pricing £40 £42 £44 £46 £48 £50 £52 £54 £56 £58 £60 £62 £64 £66 28/09/2009 16/10/2009 05/11/2009 25/11/2009 15/12/2009 07/01/2010 27/01/2010 16/02/2010 08/03/2010 26/03/2010 19/04/2010 10/05/2010 28/05/2010 18/06/2010 08/07/2010 28/07/2010 17/08/2010 07/09/2010 27/09/2010 15/10/2010 04/11/2010 24/11/2010 14/12/2010 06/01/2011 26/01/2011 15/02/2011 07/03/2011 25/03/2011 14/04/2011 10/05/2011 31/05/2011 20/06/2011 08/07/2011 28/07/2011 17/08/2011 07/09/2011 27/09/2011 17/10/2011 04/11/2011 24/11/2011 14/12/2011 06/01/2012 26/01/2012 15/02/2012 06/03/2012 26/03/2012 17/04/2012 08/05/2012 28/05/2012 19/06/2012 09/07/2012 27/07/2012 £ / MWh Winter 12 Baseload Power
8. 8 The FiT export rate Can you opt-out of the FiT export rate? • At your energy supplier’s discretion… – Non-spill volumes of export – Non commissioning volumes of export i.e. consistent export (at a tradable volume size) What rate will you get? • Wholesale price of power – Less a risk premium – Less a service fee / margin • Current rate for wholesale power (annual contract from Oct 2012) £50/MWh* • If you opt-out of FiT export rate, power will be sold via a separate PPA * As of 28th September 2012
9. 9 Other benefits Embedded Benefits Benefits attributed to power which is exported – variety of small benefits amounting to an average of £1-5/MWh (0.5p/kWh). Paid as a percentage share. Levy Exemption Certificates (LECs) All renewable technologies and good quality CHP can apply for accreditation for LECs, which when purchased by the supplier will provide a percentage share of the published £5.09/MWh value (0.509p/kWh) Triad One of the methods that NGT recovers its costs – developed an incentive for consumers to consume less at peak winter half hours (4pm to 7pm, Nov to Feb), and for generators to be paid for generating. Benefit range £12-26/kW demand.
10. 10 FiT v ROC considerations… Long term ROC pricing Expected step change in volume of ROCs and therefore RO compliance by the “big 6” during the next 18 months. As a result a step change in ROC value. £0 £5 £10 £15 £20 £25 £30 £35 £40 £45 £50 £55 £60 CP1 CP2 CP3 CP4 CP5 CP6 CP7 CP8 CP9 CP10 CP11 CP12 CP13 CP14 £ / ROC Compliance Period ROC Outurn Prices *CP12 is based on 2.5% RPI *CP13 & 14 is based on 2%RPI
11. 11 Maximising the relationship with your supplier • Choose your supplier on the basis of a relationship • Project planning phases - Market pricing - Legislation and support - Contractual documentation - Contactable when you need them • Commissioning - A clear process in the contract; or clear understanding between you • Operational phase - Billing and payment on time - Provides you with additional basic performance information
12. SmartestEnergy Generation Sales team Mike Cave Business Development Manager Tel 0207 448 0954 mike-cave@smartestenergy.com Matt Neve Business Development Manager Tel 0207 448 0933 matt-neve@smartestenergy.com Stephen McInally Business Development Manager (Scotland) Tel 0141 206 3733 stephen-mcinally@smartestenergy.com Richard Jones Business Development Manager Tel 0207 448 0900 richard-jones@smartestenergy.com David Taylor Deputy Vice President Sales and Marketing & Head of Sales Tel 020 7448 0931 david-taylor@smartestenergy.com Iain Robertson Generation Sales Manager Tel 0141 206 3732 iain-robertson@smartestenergy.com Further market and product information available at www.smartestenergy.com