02 ACWA Power Berlin-EWK Final

How to adapt an Industrial Policy with Renewable
Energy as its Core Element
1. What is the ideal industrial policy that shifts

the energy mix towards Renewable Energy?
2. Which specific industrial needs do Renewable

Energy already meet in a cost-efficient way?
Session 9: Market Developments and Free Trade

Friday, 27 March 2015, 11.30am – 1.00pm
1.1 What is the ideal industrial policy that shifts
the energy mix towards Renewable Energy?
• The objective should include increasing energy efficiency

• Both a move to renewable energy AND reduction in energy intensity in
all that we do will be needed to reduce carbon emission
• A policy of cost transparency will go a long way

to achieve both objective.
o Given where the cost of renewable energy is at (and where energy efficiency
solutions are at) the establishment of the "true cost" of energy for each of the
different fuel and renewable energy options for the different uses will
demonstrate the cost effectiveness of the carbon reducing options.
1.2 The principles of policy
• create an open market were supply and demand can interact
• Foster price transparency - Remove subsidies for fossil fuel at least
when selecting technology ort making choices
• Introduce transparent competitive procurement where possible where
free market approach can not be used
• Establish clear emission standards and apply penalties for violators
• Introduce demand management and smart metering
• Seed fund a few industrial scale pilots to accelerate certain markets
such as hybridization and renewable desalination
What we do not need is market distorting interventionist policies that
add cost or are redundant and distract from what can be achieved
• Feed in tariff or theoretically established tariff
• Minimum local content stipulation or requirements
1.3 An Example of Good Policy
• Dubai Water & Electricity Authority tendered a 100MW PV 25 year tenor off-take
contract on a transparent competitive basis
• A clear policy framework of procuring 1000MW in phases (and an invitation to
submit alternative offers for higher capacity with this phase 1 tender)
• All within a wider well articulated policy framework of moving the Dubai economy
towards reducing energy intensity and increasing renewable energy content (thus
indicating even more than 1000MW in time to come)
• A balanced contract with a minimum functional specification that focused on
ensuring reliability of supply rather than influencing or restricting choices
• When they received the lowest tariff ever seen in the world to date and
established that they could not deliver this energy using any alternative methods
for a lower cost; immediately decided:
o To double the procurement to 200MW
o Announced the acceleration of procurement of the next phase to be a 700MW plant;
o And increased all the renewable energy targets.
• A pragmatic, cost driven foresighted approach.

1.4 What Policy delivered 5.845 US Cents/kWh ?
How was this tariff achieved? – By taking advantage
Credit worthiness of DEWA + Stable business & private sector oriented

of each and every opportunity to drive down cost
policy environment of Dubai + The track record of delivery of ACWA

Power Combined to = 86% of project cost funded by 27 year debt @ all-
Finance
in interest rate < 4%
NOMAC, the wholly owned O&M Contracting subsidiary of ACWA Power

opex is operating a fleet of 18 plants in the region. 2000 people + a well
established supply chain = competitive Opex
Balance 50% is BOP – TSK; cost competitive EPC + Dubai has an excellent
industrial platform + competitive construction capability – While no
minimum local content was stipulated; the maximization of local content
capex at over 60% was also a contributor to this competitive tariff.
Aprox 50% panels + inverter – Using First Solar Panel : well recognized
technology (efficiency) leadership + cost leadership
DEWA’s clear policy on renewable energy targets and their track record on mainlining
a stable policy environment is what contributed significantly to achieve this tariff.
1.5 The Ability for renewable energy to be now cost competitive
will require a rethink on what relevant policies we should focus on?
3100
Considering true cost of generation; at this
city 350MW (12%) must be delivered by
3000
Solar PV TODAY. Alternative:
provide oil at US$ 28 per barrel each
2900
and every day for the next 25 years; or
gas at US$ 7 /MMBTU each and every
2800
day for the next 25 years
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2.1 Which specific industrial needs do Renewable Energy
already meet in a cost-efficient way?
• Solar-thermal steam for Enhanced Oil Recovery

• Solar-thermal steam generation for mines
• CSP – Geothermal Hybrid power generation
• High temperature Process Steam for decarbonisation of methane and production of
Carbon Black
• Integrated Solar Combined Cycle delivering fully dispatchable reliable power supply
2.2 CSP Steam for Process Use - Examples
Minera El Tesoro, Sierra Gorda, Chile

Construction by November 2011
14 MWth, 6 ha
Process heating purpose to produce
copper trough a SX-EW process
1,280 collectors on a 7 hectares area
West Amal oil field, Oman, Steam for EOR

7 MWth CSP plant for PDO, Oman
Direct steam CSP, Lower steam temp as
usual for CSP
Replacing the use of gas in enhanced oil

recovery (EOR)
2.3 CSP Steam for Process Use -Examples
Stillwater Nevada CSP-Geothermal Hybrid Plant
Operational since November 2014
33 MW binary-cycle, medium-enthalpy geothermal power + 17 MWth CSP (+ 26
MW PV)
SkyFuel collectors; 21 acres
For High Temperature Chemical Reaction
Production of carbon black
Decarbonization of methane, which is used
in tire production
The reaction, CH4 → C + 2H2, requires
heat about 1,400°C
In a correctly modified CSP plant, which
generates about 5,500°C, the reaction
takes place in hundredths of a second,
emitting no carbon-dioxide [CO2] during
the process
2.3 CSP Steam for Process Use -Examples
Aïn Beni Mathar Integrated Solar Combined Cycle (ISCC), Morocco

• 472 MWe of which up to 20 MWe solar
energy
• 88 ha solar field
• Alstom gas turbines and steam turbine
(2x150MW+172MW)
• 183,200 m2 collector surface;
parabolic trough plant
• Commissioned 2011
www.acwapower.com
Riyadh | Dubai | Beijing | Istanbul |

Johannesburg | Rabat
2nd Floor | Building 5

Business Gate Office Complex | Airport Road
P.O. Box 22616
Riyadh 11416 | Saudi Arabia
T: +966 1 2835555
F: +966 1 2835500
22nd Floor | Nassima Tower

Sheikh Zayed Road
P.O. Box 30582
Paddy Padmanathan
Dubai | UAE
T: +971 4 5090555
F: +971 4 3859625
President & CEO

Tower B | Ping An International Financial Center
P.O. Box 2101
Beijing 010027 | China
T: +86 10 5979 2330
padmanathan@acwapower.com F: +86 10 8438 1078
Tesvikiye Palas | Tesvikiye Caddessi 23/2

Nisantasi 34365
Istanbul | Turkey
T: +90 2122593366
F: +90 2122593367
3rd Floor | Fredman Tower

13 Fredman Drive | 2196 Sandton
Johannesburg | South Africa
T: +27 765153412
Villa 6-G-7 | Angle Avenue Mehdi Ben Barka et

Atthuya | Hay Riad
Rabat 10100 | Morocco
Tel: +212537714164 | Fax: +212537714165 |
Mobile: +212613452004
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How to adapt an Industrial Policy with Renewable

Energy as its Core Element

1. What is the ideal industrial policy that shifts

2. Which specific industrial needs do Renewable

Session 9: Market Developments and Free Trade

• The objective should include increasing energy efficiency

• A policy of cost transparency will go a long way

o Announced the acceleration of procurement of the next phase to be a 700MW plant;

o And increased all the renewable energy targets.

• A pragmatic, cost driven foresighted approach.

Credit worthiness of DEWA + Stable business & private sector oriented

policy environment of Dubai + The track record of delivery of ACWA

NOMAC, the wholly owned O&M Contracting subsidiary of ACWA Power

• Solar-thermal steam for Enhanced Oil Recovery

Minera El Tesoro, Sierra Gorda, Chile

West Amal oil field, Oman, Steam for EOR

Replacing the use of gas in enhanced oil

Aïn Beni Mathar Integrated Solar Combined Cycle (ISCC), Morocco

Riyadh | Dubai | Beijing | Istanbul |

2nd Floor | Building 5

22nd Floor | Nassima Tower

President & CEO

Tesvikiye Palas | Tesvikiye Caddessi 23/2

3rd Floor | Fredman Tower

Villa 6-G-7 | Angle Avenue Mehdi Ben Barka et

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