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WHAT IS THE POTENTIAL OF AN INVESTMENT IN SMALL HYDRO POWER PLANTS IN REPUBLIC OF MACEDONIA

Sotir PANOVSKI

Gordana JANEVSKA

Faculty of Technical Sciences, Bitola, R. Macedonia

What is the Potential of an Investment in Small Hydro Power Plants in Republic of Macedonia

1. SHORT OVERVIEW ON HYDROENERGETIC SITUATION AND POSSIBILITIES FOR BUILDING SHPP

2. ACTUAL SITUATION – GIVING CONCESSIONS FOR BUILDING OF SHPP

3. TENDER DOCUMENTATION

4. SOME ADVANTAGES OF AN INVESTMENT IN SHPP

5. EXAMPLE OF AN INVESTMENT

6. CONCLUSION

CONTENTS

Republic of Macedonia, as a mountain country with continental climate, has a beneficial hydro stage

Present situation

8 large HPP - 495 MW

20 SHPP (up to 5MW) - 30 MW

Study about possible small and mini HPP in the Republic of Macedonia, 1982

406 SHPP - 258 MW


SHORT OVERVIEW ON HYDROENERGETIC SITUATION

AND POSSIBILITIES FOR BUILDING SHPP


ACTUAL SITUATION – GIVING

CONCESSIONS FOR BUILDING SHPP

1. Public tenders

I - February 2007 60 SHPP

II - July 2007 28 SHPP

About 40 firms with more than 160 bids applied on these tenders:

• domestic companies

• foreign companies (Austria, Germany, Slovenia, Luxembourg etc .)

• consortium (domestic and foreign companies )

Till now, Concessions for 41 locations were given


ACTUAL SITUATION – GIVING

CONCESSIONS FOR BUILDING SHPP

Some of the tender characteristics

model DBOT (Design, Build,

Operate and Transfer )

Design 1 year

Build 3 years

Operate (Transfer ) 20 years

Deadline for collecting

tender documentation 30 days

Deadline for submission of bids 90 days

Tendering procedure

Financial and economic capabilities of Bidder

Composition of the offer

Needed documents

Freedom of the technical solution

(technical data for the locations were given)


TENDER DOCUMENTATION

Needed Guarantees :

Tender Security

Bank Guarantee for the upfront fee

Performance Security


TENDER DOCUMENTATION


1. Minimal upfront fee MED

(61,3 MKD = 1 EUR)

2. U =? mark-up on the minimum upfront fee as offered by the Bidder (significant factor into the formula: ranking criterion )

Upfront concession fee EN: EN = MED + U

MED [MKD] = 4.500 [MKD/kW] x Pi [kW]

for SHPP with Pi up to 1000 kW

MED [MKD] = 2.700 [MKD/kW] x Pi [kW]

for SHPP with Pi > 1000 kW

Annual concession fee

2% of the annual production

PAYMENT OBLIGATIONS

Pi = 277 kW

MED= 4.500 x Pi = 4.500 x 277=

=1.246.000 MKD = 20.334 EUR

EN = MED + U = 20.334 EUR + U (?)

Present experience U = 500 - 20.000 EUR


EXAMPLE

C = 12.500 x Pi + U [MKD]

Pi [kW] - declared, in the Bid, value for the electricity generation capacity at the border of the HPP

U [MKD] - mark-up on the minimum upfront fee

EXAMPLE:

C = 12.500 x Pi + U == 12.500 x 277+ 81.529 = 3.544.029


RANKING CRITERION

Feed in tariffs

Market Operator guarantees the purchase of produced electrical energy

Table 1


Unit Monthly furnishedelectricity [kWh]

Annual furnishedelectricity [kWh]

Feed in tariffs[€ cents/kWh]

I 1-85000 1-1020000 12,00

II 85001-170000 1-2040000 8,00

III 170001-350000 2040001-4200000 6,00

IV 350001-700000 4200001-8400000 5,00

V above 700001 above 8400001 4,50

PURCHASE OF PRODUCED

ELECTRICAL ENERGY

IVR = 353.163 EUR - Investment value


EXAMPLE OF AN INVESTMENT IN SHPP

L k = 1.050 m D k = 800 mmL c = 187 m D c = 560 mm

H n = 45 m Q i = 0,583 m3/sP i = 277 kW E god = 932.963 kWh

Annual gross income (feed in tariffs) 94.605 €

Annual costs 18.921 €

Net income 75.684 €

Unity price 1.275 €/kW

Average price of

generated electricity 0,10 €/kWh


EXAMPLE OF AN INVESTMENT IN SHPP

Some advantages of an investment in SHPP in RM : There is guarantee purchase of produced electrical energy (feed in tariffs)

In RM, there are qualify engineers capable for efficient projecting,

supervision and building SHPPs

The civil works can be completely covered by the domestic resources. There is one factory for production of steel pipes and also there are two factories for production of plastic pipes in RM.

The prices of the civil works are relatively low.


CONCLUSION

In RM the first Concessionaires just have been chosen.According with the Development Programme, it is expected that every 6 months the Government of RM will announce calls for tender applications for 30-40 SHPPs

Our hope is that till next Hidroenergija 2010, i.e. in the next 2 years , the firs concessionaire SHPPs will be build, so then we will be able to present the firs experiences.

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