Final research -windCDM

Financial Wind Power projects EconomicAnalysis Analysis of of aselected Wind Power project in Vietnam in Vietnamunder under the Clean Development Mechanism Clean Development Mechanism Examination Committee: Prof Ram M Shrestha (Chairperson) Prof Sivanappan Kumar Dr Sunil Malla Trinh Quang Toan (101636) Energy Field of Study, AIT – May, 2006 Outline 1.1.Introduction Introduction 2 Literature Literature Review Review 3 Methodology Methodology 4 Results Results and and Analysis Analysis 5 Conclusion Conclusion and andRecommendation Recommendation Introduction 1.1 Background 1.2 Problem Statement 1.3 Objectives of the study 1.4 Scope and limitation 1.5 Organization of the study Background Economy of Vietnam has achieved remarkable, economic growth is projected to increase from 6-8% annual during period 2000-2020 Power sector in Vietnam have to build more power plants Consequently, the greenhouse gas (GHG) emission is expected to increase in the future Vietnam has a varied geography, with a coastline of more than 3000 kilometers, thousands of small islands These are advantage conditions to exploit wind energy sources Statement of Problems Electricity demand increase annual growth rate of 6-8 percent during the period 2000 –2020 Development of renewable energy must be based on the objectives of economy, society Government can provide financial assistance for renewable energy projects based on average income of rural and mountainous households Barriers for development High investment cost => high production cost Advanced technology Lack of capital Measures for development Removal of subsidy for fossil fuels Renewable portfolio standard Clean development mechanism Objectives To carry out financial analysis of selected wind power projects and assess their suitability for implementation as a CDM project To determine the break-even CERs price at MARR for each viable CDM wind power projects Scope and limitation This study concentrates on wind power This study covers seven wind potential sites in Vietnam Costs influence the viability of any project In this analysis, the emphasis was on finding out the order of magnitude of the costs and not on exact costs A number of simplifying assumptions were made regarding costs, which are indicated in the analysis chapter Literature Review 2.1 General literature on wind energy 2.2 Wind power project analysis with CDM 2.3 Wind Generator Turbine 2.4 Current status of wind energy application for generation in Vietnam electricity 2.5 Clean Development Mechanism (CDM) 10 2.4 Clean Development Mechanism (CDM)(2) The CDM would stimulate international investment and provide the essential resources for cleaner economic growth in developing countries The CDM provides opportunity to Annex I countries, including their private sector companies to reduce emissions in developing co untries and then count these reductions towards their reduction co mmitments * Certified emission reductions (CERs) * Administration * Participation * Project eligibility * Additionality * Sustainable development * Other criteria 19 2.6 Description of the RETScreen model RETScreen, a software tool to help evaluate the energy performance, cost and financial viability of implementing renewable energy technologies (RETs) Six worksheets (Energy Model, Equipment Data, Cost Analysis, Greenhouse Gas Emission, Reduction Analysis (GHG Analysis), Financial Summary) 20 Calculate energy curve work out unadjusted energy production Calculate gross energy production Calculate renewable energy collected Wind Energy Model Flowchart Calculate renewable energy delivered Calculate other auxiliary quantities 21 Methodology The RETScreen model running Methodology for objective Methodology for objective 22 START Equipment Energy data model Cost analysis Illustration running RETScreen model GHG analysis Financial Cash flow summary 23 Data assumption for objective Potential sites for wind power in Vietnam Technology characteristics Energy profile Service life of projects 24 Monthly and yearly average wind speeds for potential sites Site V(m/s) Ly Son Cua Tung Phu Quy Phuong Mai Bach Long Vy Con Co Co To Jan 4.84 5.62 7.14 7.56 5.12 5.45 5.85 Feb 4.61 4.32 7.35 7.64 5.24 6.16 6.12 Mar 5.00 6.25 6.68 6.82 4.22 5.23 6.65 Apr 4.23 6.05 5.83 7.00 4.60 4.48 5.90 May 3.14 4.58 6.12 6.65 3.87 4.34 5.68 Jun 3.74 4.25 6.35 6.87 3.75 5.12 6.84 Jul 3.64 3.62 5.76 6.15 4.06 4.78 7.88 Aus 3.90 4.98 6.48 7.04 4.65 6.2 7.62 Sep 3.55 5.05 7.23 8.42 5.01 6.45 6.97 Oct 5.40 5.43 7.56 8.65 5.19 7.00 8.12 Nov 5.54 6.84 8.98 8.21 5.02 7.14 8.36 Dec 6.33 6.58 8.34 6.59 4.54 6.21 7.45 4.4 5.25 7.12 7.3 4.58 5.71 6.95 Whole year (average) 25 3.1 Methodology for objective After running the RETscreen, N A n Check two types of the resultn that is NPV and RE production cost ∑ (1 + i ) n =0  If RE production cost is greater than Avoided cost  NPV Break even CER rate Input data Calculation of emission reduction Check financial viability at difference CER rate CER rate >break even CER No Project maybe developed when CER rate rises Yes Project is consider as CDM able 30 Work Plan and Research Budget Work Workplan plan Research Research Budget Budget 31 Budget Estimation Item Cost (Baht) Traveling (return air fare + airport tax + re-entry) 8,000 Data collection: - Domestic institutions - International institutions - Internet + email 6,000 Photocopy 1,000 Communication (telephone, fax etc…) 2000 Printing 1,000 CD/Diskettes/Film 2,000 Total 20,000 32 Thank you for your Attention 33 ... when CER rate rises Yes Project is consider as CDM able 30 Work Plan and Research Budget Work Workplan plan Research Research Budget Budget 31 Budget Estimation Item Cost (Baht) Traveling (return... of Energy, Ministry of Transport, Engineering Institute of Ministry of Defense, Renewable energy Research Centers of Hanoi and Ho Chi Minh City Universities One wind turbine with capacity of 30