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Kazakhstan Projects: Tenders for the Tariff, Results & Plans

14.06.2018 — 0

Dear Community!

As you know, all of the successful projects live each week like a year. Almost all of the Solar DAO efforts was accumulated in the offline work. In addition to our main tasks of solar project selection, we’ve had time to start the new marketing campaigns, give a lecture about the Blockchain & Solar Energy to the children, and start a small green contest.

Aleksander Melekhavets lecturing about the Solar Energy | Solar DAO green contest

You may also remember the plan for Kazakhstan projects implementation which we started to follow. For the sake of profitable work and minimal risks, we were needed to participate in two stages of Tariff Bidding. We aimed to implement 1MW + 2MW + 5MW with different proportions of Equity and Debt financing.

The first Tender Fase on 28th of May was not held at all due to lack of bids.

According to the legal rules, it needs to be at least 3 participants bidding for the 150% of suggested quota.

On the second short period of time, we needed to prepare for the Tender on June 6.

Our team has succeeded with the financial partnership. The rule for Tender participation is to have enough funds to bid. In order to do it and to get the Power Purchase Agreement (PPA), we agreed to accept a $300’000 financial guarantee from our partner in return for the interest.

Thus, Solar DAO was to:

  • Provide our partner with a return of at least 20%
  • Save its share of 25%, required for goals and profitability. In other cases, we and community don’t need such a project.

Summed up this conditions, the minimal tariff advantageous for Solar DAO was $0,095/kWh.

The second Tariff Tender took 9 companies (92,9 MW in total) bidding for 20 MW quota. During the 3-hour session, the tariff was decreased from $0.105/kWh to $0.088/kWh. Finally,** such conditions were not suitable for our needs and the funds attracted for this bidding .**

Instead, we have collected the necessary partner contacts, passed all the stages getting experience, and did not waste the funds.

What’s next?

  • We continue our work in Kazakhstan. The next step is to attract the funds for this projects but with more loyal and comfortable conditions. We are sure about success, as we will have more time for negotiations and to be prepared.
  • The next Tender in Kazakhstan with 12,5 times bigger quota (250 MW) will take place in October. Solar DAO definitely going to take a part there.
  • We have already started to select the profitable opportunities for construction in Bulgaria, Asia, and the Middle East.
  • Within a few weeks, we plan to boost our marketing campaign in order to attract more financial partners for our projects.

Stay tuned!

https://solardao.me

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PV solar plants construction, as Solar DAO does

17.03.2018 — 0

In this article, we collected detailed information on the procedure for preliminary analysis and selection of promising solar power projects. Our attention will be focused on projects “from scratch” that require long-term research, and those projects that are already at the final stage of development or are put into operation — “turnkey”. It should be also noted that any project under our consideration passes through several stages of research and preparation.

Market analysis

The first and most important stage is the study of local legislation and conditions for the PVS construction. Main factors:

  • Rules for RES subsidizing. Such subsidies can be in the form of a fixed tariff and sometimes in the form of compensations, as well as hybrid schemes (such as Poland has).
  • Quotas for each type of generation.
  • Possible capacity.
  • Terms of connection and grid electricity sale. It is necessary to know in advance about the buyer, purchase terms and operator. If possible, the entire energy system with its existing lines is estimated.
  • Conditions for obtaining a tariff (single tariff for certain power or, for example, tendering and its conditions).
  • Tax burden (possible benefits for renewable energy generators).
  • The possibility of bonuses or benefits from the government on certain conditions (special economic zones, industrial parks, etc.).

Most often, all legislative documents are published in the local language, so we translate these documents when signing and providing audit. Thus, it is necessary to involve local lawyers and translators.

-> Analysis of past projects, tender results.
-> Potential economy estimation.
-> Assessment of requirements for equipment.
-> Identification of equipment supply possibilities (duties, bonuses for using local equipment, local manufacturers, etc.).

Land

If we see the market potential and the opportunity to work on it, we get acquainted with local companies, which will deal with land issues and registration of necessary documents.
We study the proposed land plots:

Remotely:

  • Study the general layout, location, proximity to roads and grids, determine possible risks.
  • Check the documents, the site data, owners.
  • Analyze the level of activity in a given place, as well as the climate.
  • Check the documents confirming the possibility of building a PVS on a particular plot of land, and, if necessary, obtain the remaining environmental permits.
  • Explore the grid connection (which power lines pass and how far).
  • Carry out preliminary negotiations on payment terms optimization, cost, and other financial aspects.

Locally:

We come, examine, check the documents personally.
After choosing the suitable land, we hire local lawyers, prepare documents, register the land purchase.

Getting tariff

Nowadays, most countries use the tendering method of determining the electricity selling price. Therefore, the next step is to prepare for the tender:

  • Obtaining permits and licenses (depends on the country). Most often it is necessary to re-arrange the land for the construction of a generating facility and obtain an environmental certificate. In some countries, it is still required to obtain permits that the land does not have archaeological value.
  • Project registration with the indication of capacity, basic parameters and the point of connection to the grid. Inclusion in the power development plan for the region.
  • Preliminary economic calculations of the future project. Here we define acceptable scenarios for participating in a tender.
  • Tender participation. There are tenders where you can lower your bid online, depending on the behavior of the other participants. It can be a closed tender, where the price is set only once. There are also tenders with automatic bidding, when the initial price, the minimum price, and the price reduction threshold are set. Thus, the process is automatic.

As soon as the issue with the tariff was clarified, even before the conclusion of the agreement itself, we can make a full economic calculation of the future project, as well as prepare scenarios for its financing.
We are doing all the technical part of the project (described in our blog earlier), as well as pre-project and design work. We find local contractors for construction and commissioning.

After choosing the best option, we begin negotiations with banks and institutions on the project’s financing. We get loan financing, in order to improve the conditions for our investors.

Once all the documents have been signed, we have a fully prepared project and received funding, we proceed to implement it. However, there are still at least several months of hard work:

  • Land preparation for construction, landscape works
  • Ordering and delivery of equipment
  • Installation and commissioning
  • Final check and grid connection

We have only described the most important stages of project implementation, without going into details of all permits, contracts and other legal papers that need to be signed or received for this implementation.
On average, the whole process of building a turnkey station from scratch takes a 1–1,5, sometimes 2 years.

Of course, we are also working with projects in the RTB (ready-to-build) and advanced development stages, which shortens the time to several months.

For such projects:

  • We search and pre-select suitable projects depending on the country, location, tariff, etc.
  • Sign preliminary documents with the seller: NDA, MOU.
  • Request documents and conduct negotiations with the seller of the project.
  • Check the submitted information, documents (land, PPA, grid connection agreement, permits and licenses, data about the company and owners).
  • Perform a number of economic calculations in various scenarios to determine the optimal way for participation in the project (purchase of a company project, opening of a company and transfer of obligations, obtaining a stake in the company or other options)
  • Prepare the contract, agree on it, check with the lawyers and if everything is ok — once again we meet, recheck the documents and then sign it.

We summed up the main stages of preparation and construction of Solar Power Plants and tried to show all the possible problems that we may face. We hope for your understanding because our work must be done faultlessly to make our investors happy. 
Solar DAO team appreciates your support and is always ready to discuss topics that interest you in our Telegram chat.

Lets communicate in Telegram, we have an ice-cream 😀

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Life and efficiency of solar power stations

04.12.2017 — 0

When we decide to build a solar power station, the most common questions are: “How much solar panels cost?” Or “How much will construction cost?”.

This is normal, because a solar power station is not only about ecology and reduction of harmful emissions into the atmosphere, but also it is financial question that comes to the fore when it speak about investing.
Of course, it is important to calculate the economic nuances of our project and come to more or less accurate figures on the payback and profit that we can guarantee. And then the question arises: “How long will our solar power station work?” And “How effective?

On average, solar power stations lose about 10–15 percent of the initial capacity over 25 years of operation. Thus, we can talk about the real life of solar monocrystalline modules for 30 years or more. 
Solar modules usually degrade faster in the first 2 years of operation. About 90% of the market for photovoltaic modules is currently made up of crystalline silicon modules. Their degradation is much less, and the service life is longer than for other types of solar modules. In addition, the end of the warranty period of the solar panel does not mean that it immediately “dies” and will need to be replaced. It will also continue its work, but its effectiveness will decrease every year. In fact, some older models of solar panels have been producing electricity for more than 40 years and are not going to “die” in any way. At the same time, the expected period of their service is tens of years. (For reference: The world’s first solar panel continues to work for 60 years.)

A few years ago, the National Renewable Energy Laboratory (NREL) conducted research on the rate of “photovoltaic degradation” on a sample of 2,000 solar power stations. According to the results of the study, on average a year the solar panel loses about half of a percent (0.5%) of its efficiency. This means that at the end of the 25-year warranty period, your solar panel will work with a still high level of efficiency — 88% of the original. However, not every panel has to decrease its efficiency by 0.5% per year. As evidenced by the performance of some solar modules that have operated for more than 30 years under the sun, their effectiveness exceeds that indicated in their documentation.
These dozens of years of solar panels make the solar power industry even better, since most systems will pay off in the first couple of years and will continue to supply their owner with clean energy for many more years, so the question “How long solar panels serve?” may be simply not correct.

Obviously, the question “What are the expected costs of maintaining and replacing parts of a solar power station?” is more correct. But the situation with the inverter (a device that converts direct current from panels into an alternate one, which can be transmitted to a common network) is completely different. The average operating time of the inverter is 10–15 years. However, its effectiveness does not decrease gradually, as in the solar panel. One day he just stops working. This is usually the case with so-called central inverters. However, at the same time, there is a good alternative — micro-inverters, which can be installed on each individual solar panel. Their service life is longer than traditional inverters and can go up to 25 years.

Even with the replacement of the inverter (or several, if micro-inverters are used), the Solar industry is one of the most profitable objects for investment.


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Envisioning the Future: Four Mind Blowing Infographics about Renewable Energy

30.09.2017 — 0

Our choice from the excellent collection by Futurist.com

Even if we talk about certain events that are likely to occur within our lifetime, we need special tools to envision the unknown. Infographics can be of great help here. Look at the four great examples chosen by Solar DAO from the huge collection powered by Futurist.com

1. Fusion Energy

Fusion is the source of energy of the Sun and the stars. Theoretically, if reproduced here on Earth, it could provide us with a clean, cheap and potentially inexhaustible source of power. At the moment, there are a few research and development projects aiming to make it happen. For example, the International Thermonuclear Experimental Reactor is a collaborative research project that strives to create a 500 MW fusion power facility in France. Find out what is fusion, how to reproduce it on a small scale, and who is working hard to do that as you read this, in the beautiful infographic here:

https://futurism.com/images/fusion-energy-a-practical-guide-infographic/

2. Technological Fixes for Climate Change

We know climate change is ongoing and dangerous. Perhaps not in our lifetime, but it will certainly make life on Earth less pleasant for our children. Renewable energy projects, including Solar DAO, are not just making profits, but also intend to slow down the climate change by suggesting sustainable energy solutions. There are some more radical ways to do so, however. One of them is geoengineering — the act of making compensatory changes to the Earth’s climate to reverse the damage that has already been done. Find out what the climate change issues are, and how to reengineer the Earth’s climate by geoengineering here: https://futurism.com/images/technological-fixes-for-climate-change/

3. The Rise of Vertical Farms

In the early 20th century, utopian writers and artists predicted that in the future humans will live in vertical towns. That means, the human habitat will no longer be spread thinly across territories but, instead, as the Earth’s population will increase, we will live and work in huge skyscrapers far above the surface of the planet. Today, this vision is gradually becoming a reality. One of the signs of this process is the rise of the vertical farms, powered by solar panels located on the very top of them. Vertical farms are now working in Singapore, Japan, and the U.S. Vertical farms make agriculture renewable, allow for efficient use of the urban space, are weatherproof and increase water conservation, as well as increase yield and make it not dependent on seasons. Look how vertical farms look like: https://futurism.com/images/the-rise-of-vertical-farms-infographic/

4. The World’s Largest Floating Solar Farm

Picture from https://www.hexapolis.com/

Solar plants don’t need to be installed on ground only. Sometimes it is reasonable to use the huge open spaces of water — that is, to build floating solar plants. This is a rather expensive choice compared to traditional on-ground designs, but it pays off in many cases by greatly increasing useful area of solar panels exposed to the sun. In Netherlands, the Rotterdam port authority is working on such a project. However, the largest scale of floating solar plant construction projects is based in Japan, where, following the Fukushima disaster, Japan has turned attention to the most innovative options for renewable energy. The Yamakura Dam is the embodiment of Japan’s green ambition, scheduled to completion in 2018. Once commissioned, it will be the world’s largest floating solar farm. A joint venture of Kyocera TCL Solar Corporation and Century Tokyo Leasing Corporation, the construction of the Dam started in late 2015. Find out how it will look like and how huge the scale is here: https://futurism.com/images/the-worlds-largest-floating-solar-farm-infographic/

Let’s hope Solar DAO****will have its deserved place in such infographic collections someday. Meanwhile, stay tuned and help us make it truly legendary!

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Solar News, #1

19.09.2017 — 0

What’s going on in the solar industry now? Most important highlights in the dedicated digest by Solar DAO.

This week many interesting things happened in the solar industry worldwide: new PV plants auctions, policy initiatives, construction projects and more.

News and Events

Kazakhstan and Brazil remain at the forefront of PV solar industry support and development.

As PV-Tech.com reports, the Brazilian energy agency EPE has announced a new energy auction to be held in December. More than 574 PV solar projects of 18,352 MW total capacity have registered with the agency to participate in the auction, amounting to 34% of the 1676 projects submitted across all technologies combined, including biomass, hydro, and wing (the latter covering another 55.5% of the total number of projects).

Most of the solar registrations are in the states of Bahia (4,758), Piaui (3,354), Rio Grande do Norte (2,978), and Ceara (1,575). The EPE will conduct extensive analysis of the projects submitted until November 15th, and the actual auction will take place on 18 December. Grid connection for the winners is expected to be completed by January 2021.

In Kazakhstan, **Astana hosted the First Summit of the Organization of Islamic Cooperation on science and technology “Science and technology, innovation and modernization in Islamic world” **that gathered participants from 56 Muslim majority states to discuss technological issues related to greener energy. The presidents of Turkey, Pakistan, Bangladesh, Uzbekistan and Afghanistan attended the event, as well as government ministers of other nations.

The attendees have pledged to introduce further greenhouse gas reductions by aiming at 10% renewable energy share in the national energy portfolios of the member countries of Organization of Islamic Cooperation by 2025. Other initiatives discussed at the Summit include the introduction of microgrids, support for distributed standalone energy systems for small communities, and designing new energy storage systems for small storage applications. The representatives of the member countries also reaffirmed their commitments to the goals set forth in OIC 2025: Plan of Action and the UN Sustainable Development Goals (SDGs 2030).

The Astana Declaration, collectively adopted by the participants, proposes to develop “a joint policy framework to facilitate movement and employment of professionals, mutual recognition of diplomas, the inflow of new technologies and projects. In this regard we welcome the initiative of the President of the Republic of Kazakhstan “The Islamic Infrastructure Integration” aimed at ensuring the integration of the infrastructure in the field of transport, energy, trade and investment.”

Earlier this year, Kazakhstan has hosted “Astana EXPO 2017”, an exhibition and a policy forum on sustainable development and renewable energy technologies and solutions.

PV Growth in Southeast Asia

Following the “Asian solar boom” trend set by China and Japan in the last three years, this September several large PV solar projects have been commissioned in India and Vietnam.

Vietnam has been an active arena for new PV solar construction projects since May, when Power Generation Corporation 3, a unit of the national utility company, Electricity of Vietnam, revealed plans to build 350 MW of solar plants in Ninh Thuan province. In June, the Vietnam’s TTC Group started the fundraising campaign to develop 1 GW of solar capacity at up to 20 regions throughout the country.

Later this year, in August, the Thien Tan Investment and Construction started building a 19.2 MW solar plant in Quang Nam province, and Hanhwa and BCG Band Duong announced plans to invest $100 million in a 100 MW solar project in Long An province. The construction is expected to begin next year. In September, the South Korean company Dohwa Engineering started construction of a 49.5 MW solar installation in central Vietnam, in Quang Binh province, to be completed by the end of 2018.

In April the Vietnamese government told the public that it plans to introduce a new FIT of $0.091 per kWh for the support of utility-scale PV projects, as the current FIT expires in April 2019. Before that, however, the World Bank has announced the plan to build new solar capacity projects with the floor price of $0.0935 for the trial auctions.

This month Vikram Solar, the Indian solar module manufacturer and EPC contractor commissioned the two solar projects of 40 MW each for Gujarat Industries Power. The area of the installations is 385 acres of land in the city of Charanka (Northwest). The projects were developed under the auspices of the National Solar Mission of India.

Vikram’s 250,429 solar modules will generate 1.89 million GWh of annual electricity supply. The Kolkata-based company will also provide O&M services to Gujarat Industries Power for 10 years since the date of commissioning. Earlier this year, in April, Vikram completed 130 MW of photovoltaic capacity in Rajasthan, building the two 65 MW solar arrays near the city of Bhadla for the NTPC, a power producer company based in New Delhi. This June, Vikram reached the annual capacity of 1 GW, and aims to increase its PV module output to 2 GW per year by 2020.

New Construction Projects in Europe and Russia

**Orsk Solar Power Plant, the largest solar plant of Russia, has increased its capacity from 25 MW to 40 MW **this August. The construction of additional modules started in October 2016. Now the plant operates 160,11 thousands of solar modules located on the area of 100 hectares of land. Since its commissioning in 2015, the plant has generated 55 million kWh of electricity, reaching a spectacular 100 tonnes of air pollution reduction.

In the Netherlands a new floating PV power farm is being tested in the western part of Rotterdam port area, according to the announcement made by Rijkswaterstaat, the Dutch water management agency and the Port of Rotterdam Authority.

The pilot project is now being installed at De Slufter, a depot for contaminated dredging spoil in the port area of Rotterdam. The agency announced plans to make water surfaces and other land it controls available for photovoltaic installations, as well as for other renewable energy power plants. The market for the floating solar panels was estimated at $1.5 billion in 2016 and is expected to reach $1.58 billion by 2022, growing 113.9% during 6 years.

**Read our next posts about solar stocks and photovoltaics value chain. **Stay tuned with Solar DAO.

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