En Feasibility Study Wind Park Ashegoda 2006

Feasibility Study for Wind Park Development in Ethiopia and Capacity Building
Ashegoda Wind Park Site Final Report
LI/GE6 25 0447
August 2006
Feasibility Study for Windpark Development in Ethiopia and Capacity Building
August 2006, Final Report - page ii
Deutsche Gesellschaft fr Technische Zusammenarbeit (GTZ) GmbH Div. for Environment and Infrastructure TERNA Wind Energy Programme Dag-Hammarskjld-Weg 1 5 D-65760 Eschborn Telefon +49 (0) 61 96 79-0 Telefax +49 (0) 61 96 79-11 15 Contact partner: Co-financing: Tim-Patrick Meyer tim-patrick.meyer@gtz.de
Cooperation partner:
Ethiopian Electric Power Corporation P.O. Box 1233 Addis Ababa Ethiopia Telefon +251-11-5534949 Telefax +251-11-1574071
Contact partner:
Kebede Walelu Wind Power Study Project Coordinator Kebwal@ethionet.et
Consultant:
Lahmeyer International GmbH Friedberger Strasse 173 61118 Bad Vilbel Telefon +49 (0) 6101-55-1275 Telefax +49 (0) 6101-55-1826 Contact person: Martin Nietzer martin.nietzer@lahmeyer.de
LI / GE6 25 0477 final report ashegoda
August 2006, Final Report - page iii
Project team International experts Team leader Deputy team leader Electrical grid expert Wind turbine expert WindPro / Micrositing expert Road Survey expert Diesel expert Economist & CDM expert Institutional expert Local experts Environmental expert & local co-ordinator Socio economist Energy expert Backstopping KLIMM expert Grid connection expert Environmental expert Capacity Credit expert Windfarms O&M expert Quality assurance Richard Lawless Dr. Patric Kleineidam Tobias Leschinsky Approval Bungo Ezawa Bad Vilbel, August 2006 Dr. Oliver Heil Enrique Salazar Harald Kaschube Frank Umbach Dr. Patric Kleineidam Dejene Woldemariam Melessew Shanko Fitamo Mulugeta Sergawie Dr. Kris Drabik Martin Nietzer Ernesto Martnez-Telo Rdiger Kipke Michael Friedrich Jrgen Hoffmann Samuel Karres Rosa Tarrag Werner Meyer / Dr. Romeo Pacudan
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final report ashegoda
August 2006, Final Report - page 4
Executive Summary
The Deutsche Gesellschaft fr Technische Zusammenarbeit (GTZ) GmbH and their Cooperation partner Ethiopian Electric Power Corporation (EEPCo) are developing the first wind park projects in the central and northern parts of Ethiopia. After the wind measurement campaign with measurements at a height of 10 m a.g.l, carried out by the GTZ TERNA program, four sites with favourable wind conditions were pre-selected, and additional wind measurements with 40 m height are under progress. The total envisaged installation capacity of the projects is nominated to be approximately 40-60 MW at each site. Within this report, a complete technical and economical feasibility study for the site Ashegoda will be elaborated. The feasibility study comprises, besides a wind potential analysis, of a conceptual technical layout of the wind parks at the proposed sites Ashegoda and Mesobo-Harena including environmental impact assessment and an economic/financial analysis. The latter includes a Capacity Credit assessment, an Economic Analysis, a Clean Development Mechanism (CDM) assessment, a Financial Analysis and a Framework Analysis for Wind Energy in Ethiopia.
1.1 Approach
The feasibility study is based on available wind resource data from the wind measurements on site, LI s long term experience in the wind energy sector and in wind park planning, as well as on information obtained from the site visit during the first missions to Ethiopia in 2006. After first inquiries by international experienced turbines manufacturers with proven turbine technology and a pre-assessment of the results of the requested Expression of Interest, four turbines types were selected for the feasibility study. Several potential wind park layouts were developed for the project site Ashegoda:
Scenario 1: 86 x ENERCON E-48 ity of 68.8 MW Scenario 2: 86 x VESTAS V52 m of 73.1 MW Scenario 3: 86 x GAMESA G58 of 73.1 MW Scenario 4: 86 x ENERCON E-53 800 kW turbines, rotor diameter 53 m, hub height 57 m total capacity 800 kW turbines, rotor diameter 48 m, hub height 57 m; total capac-
850 kW turbines, rotor diameter 52 m, hub height 60 m; total capacity
850 kW turbines, rotor diameter 58 m, hub height 60m; total capacity
of 68.8 MW as a potential option for 2007, offered by Enercon-India. (The turbine type is currently in the planning stage, a first prototype will be erected in 2006).
The cost estimates were derived by LI with an internal cost databank and the relevant wind power project experience world wide.
1.2 Site Description Ashegoda

The proposed wind park site is situated in the northern Ethiopian highland at an altitude of 2400 m a.g.l close to the descent to the coastal plain. The whole area, foreseen for the construction of the wind park, is covered with small bushes and grass. The land is mainly used for extensive goat farming, and partly for agricultural use. The wind park consists of two main areas; the western area is located on two low ridges in an approximately north-south orientation while the eastern area is spread over a more distinct mountain range in north-south orientation with several branches. In between the two areas a lower plain area can be found. South-east of the eastern part of Ashegoda wind farm, the upper branches of a valley descending to the coastal plain are reaching the highland plain. The orographical terrain conditions can be classified as medium complex. The slopes of the ridges where the wind park has been proposed and the valley towards the coast are adding some complexity to the vicinity of the wind park site while the remaining area is flat or modestly hilly.
1.3 Wind Resource Assessment

A wind potential study has been performed in the course of the feasibility study, taking into account data from two measurement stations on-site. The first one of 10 m height, erected in January 2005 and the second one with anemometers at heights of 10 m and 40 m a.g.l, erected in mid-September 2005. Both masts had been equipped with THIES first class cup anemometers and a wind direction vane (at 10 m a.g.l.). To predict the long-term wind speed on site, long-term correlations using the MCP (Measure-Correlate-Predict) method have been performed, using NCEP (US-National Centers for Environmental Prediction) reanalysis wind data of a period of 25 years. The findings of this correlation were adapted to the measured wind speeds in order to make them longterm representative. The long term average wind speed for Ashegoda site at a height of 40 m a.g.l. is 8.11 m/s.
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1.4 Energy Production Estimation

The calculations of the expected energy yield for the proposed wind farm at Ashegoda, which is based on the long-term corrected measured wind data, are executed with the international standard wind park planning software combination WindPro/WAsP. The resulting energy yield for the different scenearios, displayed as Energy P 75 value which is a common value used by international banks financing wind parks, is displayed in Table 1-1.
Table 1-1: Summary of main estimation result for the different scenarios
Scenario Type of Turbine
Scenario 1 ENERCON E 48 800 86 68,800 57 48

2
Scenario 2
Scenario 3
Scenario 4 ENERCON E 53 800 86 68,800 57 53 2.76 261,271 5.7 95.0 2.0 0.1 227,278 1,198 3,303 37.7
VESTAS V 52 GAMESA G58 850 86 73,100 60 52 2.50 226,816 5.0 95.0 2.0 0.1 198,771 1,088 2,719 31.0 850 86 73,100 60 58 3.11 274,505 5.3 95.0 2.0 0.1 239,804 1,055 3,280 37.4
Turbine Capacity [kW] Number of WTG [-] Installed park capacity [kW] Hub Height [m] Rotor Diameter [m] Specific Rotor Area [m /kW] Gross energy [MWh/y] production P-75
2.26 227,155 5.8 95.0 2.0 0.1 197,392
Wind park array losses [%] Turbine availability [%] Electrical losses [%] Miscellaneous losses [%] Net Output [MWh/y] Specific Energy [kWh/y/m2] Full load hours [h/a] Capacity Factor [%] Production
1,268 2,869 32.8
Due to the favourable wind speeds on site, and the orientation of the wind park rows almost perpendicular to the main wind direction leading to array losses which are low for a wind park of the proposed size - a very good wind park performance, resulting in excellent full load hours, and capacity factors is achieved.
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1.5 Site Access

The turbines and the equipment will be shipped to the port of Djibouti. From here the turbines can be transported to the project site by road; the main road to Mekelle passes Ashegoda site at a distance of approximately 10 kilometres. The road from Djibouti via Mile, Chifra to Weldiya is a gravel road and the condition is predominantly good. For the road between Weldiya and Ashegoda no condition report was delivered. Nevertheless, it will be necessary for the turbine manufacturer or EPC contractor to further investigate the road condition of the section between Weldiya and Ashegoda in the next phase of the project development. At Ashegoda project site, a wide unpaved access road leads to the proposed western and eastern wind park site. No obstacles like trees or signposts exist. All of the internal access roads of the wind park have to be constructed newly. The existing access dirt road has to be reinforced. Additionally a road survey study covering the link Ashegoda - (Mekelle -) Djibouti was carried out by the consultant showing the possibility of transportation for wind turbines of the 800kW class in general. There are only two bottlenecks along the route which should be further investigated. In the mountainous terrain, between Alamata and Korem there are two sections where the gradient exceeds the limit for a transport with the weight of a 40 m long, Megawatt-class blade load. Furthermore, on these points the radii of the curves also do not allow the transport of these blades. These bottlenecks currently do not allow for the transportation of large wind turbines in the Megawatt-range. Besides this, it was stated in the report that the whole transport from Djibouti to the wind park site at the plateau will take approximately 11 days for a return trip per major component. The transportation of the components is a major obstacle in the project, as the hauIage for the entire wind turbines will take about one and a half years when using 10 seperate trucks. Moreover, the transport of the equipment is a major issue since for the turbine transport the national road has to be temporarily blocked.
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1.6 Environmental Impact Assessment

The most significant impact to local inhabitants will be the loss of approximately 20 hectares of farmland which is needed for construction of wind turbine towers, connecting roads and buildings and which has to be compensated to the affected people. The investigation of noise emission of the wind turbines shows no exceedance of the required threshold values for the surrounding settlements. According to the Environmental Study carried out by the Feasibility Study team of EEPCo, the project site is located outside of any state protection area nor is a serious impact on bird migration routes, flora and fauna to be expected. In this respect it has to be stressed that the wind park is located on 2300 to 2450m a.s.l. and consequently in a treeless and hostile environment to flora and fauna.
1.7 Capacity Credit Assessment

Within the Capacity Credit (CC) assessment it is relevant to evaluate the effects of the implementation of wind energy in large scale on the system, the results have been calculated for four scenarios defined as: Scenario I Scenario II Scenario III Scenario IV 48 MW installed at the Ashegoda site 68.8 MW installed at the Ashegoda site 116.8 MW installation of both wind parks 360 MW installation of wind energy in Ethiopia
The main outcomes of the CC, Economic Analysis, CDM Assessment, Financial Analysis and Framework Analysis are summarized in the following subsections. The Capacity Credit Assessment has provided comparatively very good results. In the Capacity Credit (CC) Assessment the power system capacity (or firm capacity) that can be replaced by wind power was calculated. Also, the influence of wind power on the Interconnected System was measured. Two approaches were used to calculate the Capacity Credit: Year-Round Capacity Credit Approach and Peak Load Capacity Credit Approach. The differentiation between year round and peak load capacity credit is especially valid for Ethiopia and other systems with large hydro storage capacities, as it is less important for the year round CC when the wind blows.
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The Year-Round Capacity Credit Approach has produced the following results: CC of 11.12 MW in respect to hydropower capacity, i.e., a 23 % for the Ashegoda Wind Park, a CC of 26.46 MW in respect to hydropower capacity, i.e., a 38 % for the Ashegoda site; a CC of 36.51 MW in respect to hydropower capacity, i.e., 31.69 % for both sites; a CC of 83.90 MW in respect to hydropower capacity, i.e., 23.31 % when considering two large sites of 180 MW each located at the Mesobo Harena and Ashegoda sites. The Peak Load Capacity Capacity Credit Approach has produced the CC results for the 30 %, 20 %, 10 %, 5 % and 1 % highest load hours. For reference, the CC for the 30 % highest load hours is: CC of 30.0 % for the Mesobo - Harena Wind Park, a CC of 47.2 % for the Ashegoda Wind Park, CC of 40.3 % for both sites; CC of 36.7 % when considering two large sites of 180 MW each located at the Mesobo - Harena and Ashegoda sites. Further, the influence of wind power on the Interconnected System was measured through changes on the Load Duration Curve (LDC) of ICS, Load Following and Spatial Smoothing Effect. The LDC reflects how the seasonal and daily wind distribution matches to the load pattern of the ICS. This is especially important to get an idea of the amount and capacity category (base, intermediate or peak capacity) that have to be installed within a system with a demand represented by a certain LDC. When comparing the LDC and a LDC reduced by the wind energy distributed to the system, an illustration of the wind influences on the system is obtained, showing when peak capacity, base load capacity is needed or when wind has to be dumped. Wind energy is highly required at peak load hours being the CC 68 MW. Load following indicates whether an additional effort has to be considered regarding power balancing when introducing wind energy to the Ethiopian system. The calculations have shown that no further effort has to be realized. Finally, the Spatial Smoothing Effect, which is the effect that numerous wind parks at different sites reduce the fluctuation of wind energy distributed to the grid, has been dealt. Fluctuation of wind power output is reduced the more dispersed the installed capacity. Because of this effect, the installation of more than one wind park is recommended.
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1.8 Economic Analysis

The results produced in the economic analysis show that the wind park in all four scenarios is highly economically feasible and these are: A 30.23 % Economic Internal Rate of Return (EIRR) for the Scenario I (Enercon E48) has been produced. For this Scenario the Net Present Value (ENPV) is 91.59 million USD and the Benefit/Cost (B/C) ratio is 1.81 calculated at 10 % discount rate. A 33.44 % EIRR is expected to be produced with the Enercon turbines of larger size type E53 (Scenario II). The Scenario II ENPV is estimated at 115.86 million USD and the Benefit/Cost (B/C) ratio at 1.98. A 27.76 % EIRR is produced with Scenario III (Vestas V52). The ENPV is 87.42 million USD, whereas the Benefit/Cost (B/C) ratio is 1.73 calculated at 10 % discount rate. The highest EIRR (35.35 %) is produced with the Scenario IV (Gamesa G58). The ENPV is logically the highest, i.e., 124.78 million USD and the Benefit/Cost (B/C) is 2.04 calculated at a 10 % discount rate.
The avoidance of CO2 emissions when installing the wind park instead of a diesel power plant is very high, estimated at 164,437 CO2 tonnes per year totalling 3,288,741 CO2 tonnes in the Scenario with the highest power generation (239,804,000 GWh/year). The scenario analysis carried out for Scenario IV shows that the variable with the highest impact on the EIRR is the investment cost. When decreasing investment cost by 10 % the EIRR increases from 35.35 % to 41.46 %.
1.9 Clean Development Mechanism Assessment

The assessment has shown that the Ashegoda Wind Park project is suitable to be registered as a CDM activity. By doing so, and considering the Scenario IV (Gamesa G58) with the highest wind power generation (239,804,000 GWh/year), it results in an annual emission reduction potential of 4,058.42 tCO2 per year the first crediting period and totalling
73,700.84 tCO2. This has been calculated considering a 3x7 crediting period and a 10 % reduction on the EF at the end of each crediting period. In terms of revenues, and with prices for Certified Emission Reductions (CERs) for CDM-projects as high as 6 USD/CER,
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the potential additional cash-flow to be generated through the application of CDM during the 20 years operational period is 442,205.1 USD.
Due to the relative low Emission Factor of the Ethiopian grid system, this amount is relatively modest.
1.10 Financial Analysis

The financial analysis differs from the economic analysis in that, in the financial analysis, the wind park is viewed as an enterprise and in the economic analysis the wind park is evaluated from the point of view of the national economy of the country. As in the economic analysis, four different Scenarios have been evaluated. The main assumptions considered in the financial analysis are: electricity price of 6 USDc/kWh increases by 2 % annually; Certified Emission Reduction (CERs) credits of CDM at a price of 6 USD/CER; the project has also been considered to be free of taxes; no inflation has been considered on O&M costs, whereas a major overhaul between the 10th and 11th years of operation has been considered as well as wind farm decommissioning costs in year 21. Under these assumptions and especially due to the strong favourable energy production estimates in the location of the wind park, the Ashegoda Windfarm is financially feasible in two Scenarios. A project has been considered financially feasible if the NPV has been higher than zero, the IRR is higher than the discount rate (10 %) and the minimum DSCR stays above the desired mark of 1.20x. Not surprisingly, in projects considered feasible, the specific generation costs are under the current power tariff levels of 6 USDc/kWh. Further, the financial addition of CDM has been measured in terms of impact on IRR. The two scenarios considered financially feasible are the Scenario IV (Gamesa G58) and Scenario II (Enercon E53). In the financial analysis sensitivity testing, energy generation and sales tarif had the major impact on project results carried on Scenario IV (Gamesa G58). A further parameter with a high impact on project IRR is the investment cost. Finally, the specific generation costs of the Ashegoda Wind Park are in all Scenarios lower than for the reference Diesel Power Plant and higher than current Hydropower Plants in operation or under construction in Ethiopia.
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The levelized costs are:
Scenario I (Enercon E48) Scenario II (Enercon E53) Scenario III (Vestas V52) Scenario IV (Gamesa G58)
6.44 USDc/kWh 5.82 USDc/kWh 6.84 USDc/kWh 5.60 USDc/kWh
whereas for the alternative supply options the levelized costs are:
Dire Dawa DPP Halele-Werabese HPP Finchaa HPP
12.90 USDc/kWh 3.00 USDc/kWh 3.40 USDc/kWh
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1.11 Conclusions and Recommendations

Due to the promising wind conditions at the project site at Ashegoda and the available open space at the large proposed area, a realisation of the project in general is feasible. Considering the need of Ethiopia to diversify its power generation currently highly depending on hydropower, the prevailing energy crisis due to decreasing rainfalls and the increasing power demand, a short term supply solution has to be implemented. In the short-run it is necessary to increase the current power generation mix, to cover increasing and unmet power demand and to avoid dependence on fuel imports. Wind and diesel power generation are the two fast-track implementation alternatives considered by EEPCo. Between both, the results show that the implementation of the wind park project is the most economic and financial feasible power generation alternative to be implemented in the short run in Ethiopia. The calculated net energy output at the P75 level for the wind park Ashegoda is in range of 197,392 MWh/y to 239,804 MWh/y at hub heights between 57 m and 60 m. The capacity factors of 31.0% to 37.7 % surpass average values in comparison with other international projects, even when taking into account the reduced performance of the wind turbines due to the low air density (at the altitude of 2,000 m), because of the high average wind speed on site. Depending on the wind turbine type considered, the Internal Rate of Return oscillates between 16.64 % and 11.00 %. Additional benefits can be generated through the avoidance of CO2 emissions, estimated at 1,359,387 CO2 tones for the diesel power plant. The Ashegoda Wind Park implementation is also recommendable from the point of view of the Capacity Credit. For Ashegoda a comparatively high Capacity Credit of 38 % (26.46 MW of hydropower capacity) can be generated. Even higher are the Capacity Credit results when combining the Ashegoda Wind Park with a large scale implementation of wind energy in Ethiopia. The realisation of the project could have other secondary positive effects for Ethiopia. Since the Ashegoda Wind Park fulfils the conditions to be registered as a CDM-activity, potential benefits of a CDM registration could be generated. Due to the relative low Emission Factor of the Ethiopian grid system, the amount to be generated is relatively modest. Thus, the registration as a CDM project is financially hardly feasible.
Concerning the technical part of Ashegoda wind park, the selected turbine types of the manufacurers VESTAS, GAMESA and ENERCON are suitable for the planned project
and can be considered as well engineered and proven technologies. For delivery, installation and commissioning of the turbines, a first Expression of Interest from the manufacturer ENERCON-India is available, which shows the interest in general for wind power projects in Ethiopia by a foreign turbine manufacturer. As stated in this report, some barriers were identified concerning the project implementation: Transportation of the large number of turbines will take several months. We recommend the development of a detailed transportation concept in advance. Several manufacturers have been requested for an EoI by the consultant, except of Enercon India most answers are still pending or under clarification of details. One of the main risks lies in the time frame for project construction (twelve months) in 2007. An extension of the construction phase seems difficult due to the extreme time pressure from the Ethiopian Authorities. However, the timely realisation of the construction works is possible in the event that a turbine supply contract is signed as soon as possible, and supervision of the construction works is applied. The grid connection to the 230 kV level is feasible.
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Background
This section describes the situation in Ethiopia, as far as it is relevant for the set up of the further analysis of wind energy in the Ethiopian power system, and the implications for the future of the system. Ethiopia is situated at the Horn of Africa between the 4th and the 15th degree of latitude. It is landlocked with a total area of 1.13 million km2 (comparison Germany 357.050 km2), with borders to Djibouti, Eritrea, Kenya, Somalia and Sudan. With a population of 74.8 million the population density reaches 66,7 persons per km2. The Gross Domestic Product (GDP) per capita was USD 800 in 2005, with 50 % of the population below the poverty line.
2.1 Power System

Roughly 95 % of Ethiopia s electric energy system is dependent on hydropower. The total net has an installed dependable capacity of 715 MW in the Interconnected System (ICS) and 31 MW in the Self Contained System (SCS)1. The ICS is the state wide electricity network supplying 98 % of Ethiopia s electrical energy. The SCS are small isolated grids, not connected to the ICS. The ICS is owned and operated by the state owned Ethiopian Electric Power Corporation. In 2003/04 it had an annual production of 2,317GWh together with the SCS, which is an increase of 12 % to the previous year. The EEPCo has 717,007 customers in both the ICS and the SCS, to whom 1,847 GWh of energy was sold that year. The difference between the sold and the produced value indicates a loss of 21 %. EEPCo states that close to 15 % of the population have access to electricity and it is projected to increase the electrification rate rapidly. Until today the Ethiopian grid is a secluded grid with no connections to neighbouring countries, even though there are plans, supported by the World Bank and the African Development Bank, to install a transmission 2 line to Djibouti and Sudan. Both projects await the final launch . Ethiopia, having no significant fossil fuel sources, is fully reliant on fuel imports. For the whole country fuel for cars and generators is hauled from Djibouti via rail and truck, and only recently the import of oil from Sudan has been taken up. Ethiopia has proven oil reserves of 214,000 bbl (January 2002) and 25 billion m3 in natural gas reserves, but the
Ethiopian Electric Power Corporation (EEPCo). EEPCo th http://www.eepco.gov.et/brief.html, last access: January 5 , 2006, 14:10 h.
2
in
Brief.
Internet
source:
African Energy (2006), World Bank Commits to Improve Access in Rural Ethiopia, Support EEPCo s Strengthening. African Energy. Issue 95, p. 8-9.
final report ashegoda_v05.09
deposits will not be explored any time soon, even though there are plans to produce plastic products from natural gas and energetic use of the gas is under discussion.
2.2 Hydro Power Capacity

There is 679 MW of installed hydro power capacity in the ICS. According to EEPCo this capacity cannot be counted on as dependable capacity. For the total system the dependable capacity is calculated by EEPCo as 601 MW. Currently eight hydro power plants are distributing to the grid with rated capacities between 11 and 184 MW of installed capacity. They have been commissioned between 1960 and 2004. Most of the reservoirs have been designed as a seasonal storage with a theoretical storage capacity of up to 1,000 GWh (Finchaa HPP) energy equivalents. Due to precipitation and siltation of the reservoirs, some of the hydro power plants (HPP) are loosing storage volume resulting in reduced energy output throughout the year3. Another restriction of the hydro system is caused by the variability of rainfall. In years of low rainfall and drought the amount of water available during the rainy season from July until September does not allow for the reservoirs be filled up to the maximum. Annual water inflow to the Finchaa reservoir from 1963 1997 varies between 293 and 532 Mm3 with a standard deviation of 57 and a mean of 427. These extreme changes in water availability indicate the problems of the Ethiopian electricity supply. In the past extended drought has been the reason for extensive load shedding, cutting regions or businesses off the grid to reduce consumption. Customers were left without electricity for 15 hours a day for two days a week. This unacceptable level of supply security and the aim of increasing the electrification ratio has forced the planning of new hydro power plants. Currently the Tekeze HPP with a projected installed capacity of 153 MW is under construction. Various other HPP with an installed total capacity of around 1,500 MW are projected to be built up until 20134. How much of this very ambitious plan is going to be commissioned until that date is not yet predictable.
Deutsche Gesellschaft fr Technische Zusammenarbeit (GTZ) (Ed.) (2004): Wind Energy Programme TERNA Information for Project Appraisal: Ethiopia. Internet-source. http://www.gtz.de/de/dokumente/enwindenergy-ethiopia-siteselectionreport-2005.pdf, last access: June 2nd, 2006, 15:55 h.
4
Ethiopian Electric Power Corporation (EEPCo) (2004): EEPCo Power System Expansion Master Plan Update. Personal communication, April 2004.
2.3 Diesel Power Plants

In 2004 three diesel power plants (DPP) were commissioned to ease energy shortage caused by drought and to reduce load shedding. The newly installed power plants are Kaliti (9 MW), Awash 7 Kilo (22.4 MW) and Dire Dawa (38 MW). The fuel used to run the DPPs is mainly heavy fuel oil (HFO), similar to #6-oil, which has to be imported as described earlier. The fuel is subsidised by the government so that market prices have to be estimated. For the year 2004/2005 (G.C.) the three DPP produced 18.4 GWh, which equals an average capacity factor of 3 %5 (EEPCo 2005b). These numbers and the fact that the diesel fuel has to be imported at a high price, indicate already that the production of diesel power is quite costly for EEPCo.
2.4 Implications
The energy sector in Ethiopia is expanding rapidly, and even with the new hydro power plants, the problem of the fluctuating water availability will not be solved entirely. Thus, in order to guarantee security of supply, the power generation system has to be diversified. The necessary increase of the electrification rate and the corresponding grid expansion, need additional capacity in the short-run to support the hydro system throughout the year and especially at the end of the dry season, when water levels are low and demand remains constant. Therefore, a fast-track implementation capacity increase is necessary. As a short-run solution to cover the increasing and suppressed demand, EEPCo evaluates two alternatives: wind and diesel power. Regarding wind, the primary question for Ethiopia is not how much capacity can be replaced, as it is a common issue in European or North American countries when assessing capacity credit of wind, but the question is how much capacity shall be added by specific amounts of installed wind capacity.
Ethiopian Electric Power Corporation (EEPCo) (Ed) (2005b): Power Plant Production Report 1997. Unpublished paper.
Table of Contents
1
1.1 1.2 1.3 1.4 1.5 1.6 1.7 1.8 1.9 1.10 1.11
Executive Summary ..................................................................................... 4

Approach .................................................................................................................................. 4 Site Description Ashegoda ....................................................................................................... 5 Wind Resource Assessment .................................................................................................... 5 Energy Production Estimation .................................................................................................. 6 Site Access............................................................................................................................... 7 Environmental Impact Assessment.......................................................................................... 8 Capacity Credit Assessment .................................................................................................... 8 Economic Analysis ................................................................................................................. 10 Clean Development Mechanism Assessment ....................................................................... 10 Financial Analysis................................................................................................................... 11 Conclusions and Recommendations...................................................................................... 13
2
2.1 2.2 2.3 2.4
Background ................................................................................................ 15
Power System ........................................................................................................................ 15 Hydro Power Capacity............................................................................................................ 16 Diesel Power Plants ............................................................................................................... 17 Implications............................................................................................................................. 17
3 4
4.1 4.2 4.3 4.4 4.4.1 4.4.2 4.4.3 4.4.4 4.5 4.6 4.7
Introduction ................................................................................................ 34 Site conditions ........................................................................................... 36

Site Description ...................................................................................................................... 36 Site Limitations ....................................................................................................................... 38 Ground and Soil Conditions ................................................................................................... 38 Access Roads, Availability of Cranes..................................................................................... 40 Road Access .......................................................................................................................... 40 Road Access for larger Turbines up to 2 MW ........................................................................ 42 Railway Transport .................................................................................................................. 43 Available Crane Capacities .................................................................................................... 46 Internal Access Roads ........................................................................................................... 48 Enviromental Impact Assessment .......................................................................................... 48 Legal Constraints ................................................................................................................... 49
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4.8
Earthquake Risk ..................................................................................................................... 49
5
5.1 5.2 5.3 5.4
Wind Resources ......................................................................................... 51

Wind Data Collection.............................................................................................................. 51 Wind Data Analysis ................................................................................................................ 57 Long-term Correlation ............................................................................................................ 60 IEC Wind Class ...................................................................................................................... 64
6
6.1 6.2 6.2.1 6.2.2 6.3 6.4 6.4.1 6.4.2 6.4.3 6.4.4 6.4.5 6.5 6.6 6.7
Technical Layout of Ashegoda Wind Park............................................... 67

Wind Potential Map ................................................................................................................ 67 Wind Turbine Selection .......................................................................................................... 69 Suitable Tower Heights .......................................................................................................... 69 Determination of the Optimal Unit Size .................................................................................. 71 Turbine Distances .................................................................................................................. 76 Wind Park Layouts ................................................................................................................. 77 Wind Park Layout Enercon E-48 ............................................................................................ 78 Wind Park Layout Vestas V52................................................................................................ 79 Wind Park Layout Gamesa G-58 ........................................................................................... 80 Wind Park Layout Enercon E-53 ............................................................................................ 81 Conclusion.............................................................................................................................. 81 Turbulence.............................................................................................................................. 82 Noise Impact........................................................................................................................... 83 Shadow Impact....................................................................................................................... 85
7
7.1 7.2 7.2.1 7.2.2 7.3 7.3.1 7.3.2 7.3.3 7.4 7.4.1 7.5 7.5.1 7.5.1.1
Energy Production Estimation .................................................................. 86

Meteorology............................................................................................................................ 86 Software Basics...................................................................................................................... 88 WindPro.................................................................................................................................. 88 WAsP...................................................................................................................................... 88 Model Input Parameters ......................................................................................................... 89 Orography............................................................................................................................... 89 Roughness ............................................................................................................................. 91 Wind Shear............................................................................................................................. 93 Wind Turbine Parameters ...................................................................................................... 96 Power Curve and Air Density ................................................................................................. 97 Losses and Uncertainties ..................................................................................................... 100 Losses .................................................................................................................................. 100 Park Efficiency ..................................................................................................................... 100
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7.5.1.2 7.5.1.3 7.5.1.4 7.5.2 7.5.2.1 7.5.2.2 7.5.2.3 7.5.2.4 7.5.3 7.5.3.1 7.5.3.2 7.5.3.3 7.5.3.4 7.6
Turbine Availability............................................................................................................... 101 Electrical Losses .................................................................................................................. 101 Miscellaneous Losses.......................................................................................................... 102 Wind Speed related Uncertainties........................................................................................ 102 Uncertainties of the WAsP-Model........................................................................................ 103 Uncertainties of the Wind Data ............................................................................................ 104 Total Wind related Uncertainty ............................................................................................ 106 Uncertainties of the Power Curve ........................................................................................ 106 Uncertainties Energy Yield ................................................................................................... 107 Enercon E-48 ....................................................................................................................... 108 Vestas V52........................................................................................................................... 111 Gamesa G 58....................................................................................................................... 114 Enercon E-53 ....................................................................................................................... 117 Summary .............................................................................................................................. 120
8
8.1 8.2 8.3 8.4 8.5
Internal Wind Park Cabling...................................................................... 121

Cabling Concept ................................................................................................................... 121 Cable Type ........................................................................................................................... 124 Earthing Network .................................................................................................................. 125 Determination of Wind Turbine Groups................................................................................ 127 Switching Station .................................................................................................................. 128
9
9.1 9.2 9.3 9.4
Grid Connection ....................................................................................... 129

Grid Integration Concept ...................................................................................................... 129 Overhead Line ...................................................................................................................... 133 Transmission Line ................................................................................................................ 134 Mekele Substation ................................................................................................................ 135
10
10.1 10.1.1 10.1.2 10.1.3 10.1.4 10.2 10.3 10.3.1 10.3.2 10.3.3 10.4 10.4.1
Estimation of costs .................................................................................. 137

Investment Costs Estimation................................................................................................ 137 Enercon E 48 Investment Costs........................................................................................... 137 Vestas V52 Investment Costs .............................................................................................. 138 Gamesa G58 Investment Costs ........................................................................................... 139 Estimated Enercon E-53 Investment Costs ......................................................................... 140 Construction Period.............................................................................................................. 141 Potential for Local/Regional Input ........................................................................................ 141 Grid Connection by EEPCo.................................................................................................. 141 Civil Works............................................................................................................................ 141 Lattice Towers for Wind Turbines ........................................................................................ 141 Operation and Maintenance Costs....................................................................................... 142 General Description.............................................................................................................. 142
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10.4.1.1 10.4.1.2 10.4.1.3 10.4.1.4 10.4.1.5 10.4.2 10.4.3 10.4.4
Enercon E-48 Maintenance and Repair Costs ................................................................ 144 Vestas V52 Maintenance and Repair Costs.................................................................... 145 Gamesa G58 Maintenance and Repair Costs................................................................. 146 Enercon E-53 Maintenance and Repair Costs ................................................................ 147 Comparison of Maintenance and Repair Costs Estimations ........................................... 147 High Technical Availability.................................................................................................... 148 Local and foreign Operation and Maintenance .................................................................... 148 Training................................................................................................................................. 149
10.4.5 Overview Operation and Maintenance Costs ...................................................................... 150 10.4.5.1 Scenario I 86 x Enercon E-48 Turbines........................................................................ 150 10.4.5.2 Scenario II 86 x Vestas V52 Turbines .......................................................................... 151 10.4.5.3 Scenario III 86 Gamesa G58 Turbines ......................................................................... 152 10.4.5.4 Scenario IV 86 Enercon E-53 Turbines ........................................................................ 153 10.4.5.5 Comparison of different Scenarios .................................................................................. 153
11
11.1 11.1.1 11.1.2 11.1.3
Capacity Credit ......................................................................................... 154

Methodology and assumptions ............................................................................................ 154 Definition of the Capacity Credit........................................................................................... 154 Methodology Overview......................................................................................................... 155 Assumptions ....................................................................................................................... 158
11.1.4 Load Duration Curve Calculations ....................................................................................... 159 11.1.4.1 Load Restrictions ............................................................................................................. 161 11.1.4.2 Load Duration Curve Analysis & Results......................................................................... 161 11.1.5 11.1.6 11.2 11.3 11.3.1 11.3.2 11.3.3 11.4 11.5 Load Following ................................................................................................................... 163 Spatial Smoothing Effect ...................................................................................................... 165 Year-Round Capacity Credit Approach................................................................................ 166 Peak Load Capacity Credit................................................................................................... 168 Seasonal Wind and Water Distribution ................................................................................ 168 Daily wind power distribution........................................................................................... 169 Peak Load Capacity Credit Calculation................................................................................ 170 Results: Capacity Credit....................................................................................................... 173 Conclusion: Capacity Credit ................................................................................................. 175
12
12.1 12.2 12.2.1 12.2.2 12.2.3 12.2.4 12.2.5
Economic Analysis .................................................................................. 177

Methodology & Main Assumptions ....................................................................................... 177 Economic Benefits................................................................................................................ 180 Basic Diesel Power Plant Data ....................................................................................... 180 Avoided Capital Costs ...................................................................................................... 180 Avoided Fuel Costs .............................................................................................................. 183 Avoided non-Fuel O&M Costs.............................................................................................. 189 Avoided Emissions ............................................................................................................ 190
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12.2.6 12.2.7 12.3 12.3.1 12.3.2 12.3.3 12.4 12.4.1 12.4.2 12.4.3 12.5 12.5.1 12.6
Diesel Summary Assumptions ............................................................................................. 193 Indirect benefits ................................................................................................................. 194 Economic Costs ................................................................................................................... 194 Investment Costs of the Wind Park ...................................................................................... 194 Economic O&M Costs of the Wind Park .............................................................................. 195 Leakage Costs of the Wind Park .................................................................................... 198 Results: Economic Analysis ................................................................................................. 198 Economic Cash-flow Projections .................................................................................... 198 EIRR and NPV ................................................................................................................... 199 B/C Ratio............................................................................................................................. 199 Scenario Analysis ................................................................................................................. 201 Results: Economic Scenario Analysis.................................................................................. 203 Conclusions: Economic Analysis ......................................................................................... 204
13
13.1 13.2 13.3 13.4 13.4.1 13.4.2 13.5
CDM Assessment ..................................................................................... 206

Introduction........................................................................................................................... 206 Institutional Framework for CDM Projects in Ethiopia.......................................................... 206 CDM Project Cycle ............................................................................................................... 208 Emission Reductions attributable to the Ethiopian WPs ...................................................... 209 Step 2. Calculation of the Build Margin ................................................................................ 213 Step 3. Calculation of the Baseline Emission factor ............................................................ 214 Conclusions: CDM Assessment........................................................................................... 220
14
14.1 14.1.1 14.1.2 14.1.3 14.1.4 14.1.5
Financial Analysis .................................................................................... 221

Methodology & Main Assumptions ....................................................................................... 221 Inflation Rate ...................................................................................................................... 222 Rate of Exchange .............................................................................................................. 222 Depreciation Rates ............................................................................................................ 223 Dividend Distribution ......................................................................................................... 223 Applicable Taxes ............................................................................................................... 224
14.1.6 Discount Rate (WACC) ........................................................................................................ 224 14.1.6.1 Definition .......................................................................................................................... 224 14.1.6.2 Methodology .................................................................................................................... 225 14.1.6.3 WACC Results ................................................................................................................. 227 14.1.7 14.1.8 14.1.9 Project s Milestones ............................................................................................................. 228 Investment Costs.................................................................................................................. 229 Operation and Maintenance Costs....................................................................................... 230
14.1.10 Land Lease Costs ................................................................................................................ 231

14.1.11 Costs for Mitigation Measures.............................................................................................. 231 14.1.12 Project Financing Structure .................................................................................................. 231 14.1.12.1 Equity Finance ................................................................................................................. 232 14.1.12.2 Debt Finance.................................................................................................................... 232 14.1.13 CDM Up-Front & Administrative Costs................................................................................. 233 14.1.14 Financial Benefits ................................................................................................................. 234 14.1.14.1 Electricity Sales................................................................................................................ 234 14.1.14.2 CDM Revenues................................................................................................................ 235 14.2 Results: Financial Analysis................................................................................................... 235
14.2.1 Major Financial Indicators ................................................................................................ 236 14.2.1.1 Net Present Value ......................................................................................................... 236 14.2.1.2 Financial IRR (FIRR) and Return on Equity (ROE) ................................................. 237 14.2.1.3 Return on Equity (ROE) ............................................................................................... 237 14.2.1.4 Debt Service Coverage Ratio (DSCR)....................................................................... 238 14.2.1.5 Levelized Costs................................................................................................................ 239 14.2.2 14.2.3 Summary of Key Financial Parameters.......................................................................... 242 Conclusions: Financial Analysis ..................................................................................... 242
14.2.4 Financial Statements ........................................................................................................ 244 14.2.4.1 Cash-flow projections ................................................................................................... 244 14.2.4.2 Profit and Loss Accounts ............................................................................................. 244 14.2.4.3 Balance ........................................................................................................................... 244 14.3 14.3.1 14.3.2 Sensitivity Analysis ............................................................................................................... 244 Methodology ....................................................................................................................... 245 Sensitivity Variables.......................................................................................................... 245
14.3.3 Results: Sensitivity Testing.............................................................................................. 245 14.3.3.1 Sensitivity Measurement.............................................................................................. 248
15
15.1 15.2
Framework Analysis for Wind Energy in Ethiopia ................................ 249

Financing Options ................................................................................................................ 249 Regulatory and Legal Framework ........................................................................................ 250
16 17
17.1 17.2 17.3 17.4 17.5 17.6 17.7 17.8
Conclusion and Recommendations ................................................... 251 Annex A..................................................................................................... 253

Annex A - 1: Aviation corridors at Mekelle airport ................................................................ 253 Annex A - 2: Enviromental Report of Ashegoda .................................................................. 254 Annex A - 3: Soil investigation report ................................................................................... 255 Annex A - 4: Road Authority Report, Weights and Wheel base........................................... 256 Annex A - 5: Description of available crane by MIDROC (Addis Abeba)............................. 257 Annex A - 6: Road Map Djibouti - Mekelle ........................................................................... 258 Annex A - 7: Road Survey Report ........................................................................................ 259 Annex A - 8: Terms of reference for consultant's work ........................................................ 260
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18
18.1 18.2 18.3
Annex B..................................................................................................... 261

Annex B Annex B Annex B 1: Correlation Diagrams...................................................................................... 261 2: Noise Impact................................................................................................... 262 3: Shadow Impact ............................................................................................... 263
19
19.1 19.2 19.3 19.4 19.5
Annex C..................................................................................................... 264

Annex C Annex C Annex C Annex C Annex C 1: Map of Ashegoda Wind Park Layout.............................................................. 264 2: Energy Calculations ....................................................................................... 265 3: Turbulence Calculations................................................................................ 266 4: two-dimensional view of the digital terrain model........................................... 267 5: three-dimensional view of the digital terrain model ....................................... 269
20
20.1 20.2 20.3 20.4
Annex D..................................................................................................... 272

Annex D Annex D Annex D Annex D 1: Technical Information of Enercon E-48.......................................................... 272 2: Technical Information of Vestas V52 ............................................................. 273 3: Technical Information of Gamesa G58 .......................................................... 274 4: Preliminary Technical Information of Enercon E-53....................................... 275
21
21.1 21.2 21.3 21.4
ANNEX E : ................................................................................................. 276

Annex E-1 ENERCON E-48 Cash-Flow Economic Analysis ............................................. 276 Annex E-2 ENERCON E-53 Cash-Flow Economic Analysis ............................................... 277 Annex E-3 VESTAS V52 Cash-Flow Economic Analysis .................................................... 278 Annex E-4 GAMESA G58 Cash-Flow Economic Analysis................................................... 279
22
22.1 22.2 22.3 22.4 22.5 22.6 22.7 22.8 22.9 22.10 22.11 22.12
ANNEX F : ................................................................................................. 280

Annex F-1 ENERCON E-48 Operating Results ................................................................... 281 Annex F-2 ENERCON E-48 Profit & Loss Account ............................................................. 282 Annex F-3 ENERCON E-48 Balance Sheet......................................................................... 283 Annex F-4 ENERCON E-53 Operating Results ................................................................... 284 Annex F-5 ENERCON E-53 Profit & Loss Account ............................................................. 285 Annex F-6 ENERCON E-53 Balance Sheet......................................................................... 286 Annex F-7 VESTAS V52 Operating Results ........................................................................ 287 Annex F-8 VESTAS V52 Profit & Loss Account................................................................... 288 Annex F-9 VESTAS V52 Balance Sheet.............................................................................. 289 Annex F-10 GAMESA G58 Operating Results..................................................................... 290 Annex F-11 GAMESA G58 Profit & Loss Account ............................................................... 291 Annex F-12 GAMESA G58 Balance Sheet .......................................................................... 292
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23
23.1
ANNEX G :................................................................................................. 293

Annex G-1 Fuel Factors used in the CDM Assessment ...................................................... 293
List of Figures
Figure 4-1: Map of Ethiopia with the region of Ashegoda wind park .................................36 Figure 4-2: Ashegoda area, digital terrain model, view from the southwest in a height of 1000 m above ground. A larger print-out can be found in Annex C-5 ........................37 Figure 4-3: The soil condition on Ashegoda site ...............................................................39 Figure 4-4: Branch from main road to Ashegoda sites ......................................................40 Figure 4-5: Road map of north-eastern Ethiopia (red arrow marks the wind park area) ...42 Figure 4-6: Typical open freight wagon of the Djibouti Ethiopean railway ......................45 Figure 5-1: Measurement masts at Ashegoda site ............................................................51 Figure 5-2: Vicinity of measuring mast 13 Ashegoda II (center of figure).........................53 Figure 5-3: Measuring mast 13 Ashegoda II, vertical adjustment......................................53 Figure 5-4: Measuring mast 4 Ashegoda I, anemometer and wind vane at 10 m a.g.l. ....54 Figure 5-5: measurement device installation at mast 4 Ashegoda I ..................................55 Figure 5-6: wind rose of mast 4 Ashegoda I ......................................................................56 Figure 5-7: wind rose of mast 13 Ashegoda II ...................................................................56 Figure 5-8: Correlation diagram for mast 13 Ashegoda II, anemometers at 10m (x-axis) and 40m (y-axis) for wind direction sector 105 to 135.............................................58 Figure 5-9: NCEP grid points around Mekelle (yellow pins mark the 2.5 -spacing NCEP grid points, red pins the location of the RIS delivered NCEP points), the red circle idicates the selected NCEP point ...............................................................................61 Figure 5-10: Wind rose at 40 m a.g.l. for Ashegoda site, mast 1 Ashegoda30m_40m, 10year corrected. ...........................................................................................................63 Figure 5-11: Summarized Weibull-distribution for mast 1 Ashegoda30m_40m, 10-year corrected ....................................................................................................................64 Figure 6-1: Wind potential map of Ashegoda site (red line indicates the road, orange areas mark the villages, yellow line the wind park area) ......................................................68 Figure 6-2: Turbine costs in accordance with several hub heights....................................70 Figure 6-3: Digital height model, view from a height of 1000 m height south-east to Ashegoda wind park. A larger print-out can be found in Annex C-5...........................77 Figure 6-4: Ashegoda Wind Park, Layout Enercon E-48..................................................78 Figure 6-5: Ashegoda Wind Park, Layout Vestas V52 ......................................................79 Figure 6-6: Ashegoda Wind Park, Layout Gamesa G-58 ..................................................80
Figure 6-7: Ashegoda Wind Park, Layout Enercon E-53...................................................81 Figure 6-8: Turbulence vs. IEC characteristics (conditions fulfilled)..................................83 Figure 7-1: Wind flow over forest (source: GASCH 1996).................................................86 Figure 7-2: Wind flow energy vs roughness class (source: WindPro manual) ..................87 Figure 7-3: SRTM height contour map of Ashegoda .........................................................90 Figure 7-4: three-dimensional digital elevation model of Ashegoda site, view from southwestern direction. .......................................................................................................90 Figure 7-5: Roughness classes (source: WindPro Manual) ..............................................92 Figure 7-6: Roughness map of Ashegoda site (red ellipse: wind park site) ......................93 Figure 7-7: Wind Profile for Ashegoda wind measurement ...............................................95 Figure 7-8: measured power curve with scatter band........................................................97 Figure 7-9: Power curves of the wind turbines under consideration for Ashegoda wind park for an air density of = 1.225 kg/m3 ..................................................................99 Figure 7-10: Weibull distribution of the correlated wind data of mast 1 Ashegoda 30_40m ...................................................................................................................................99 Figure 7-11: Probability of exceedance for Ashegoda wind park, Enercon E-48 layout..109 Figure 7-12: Probability of exceedance for Ashegoda wind park, Vestas V52 layout .....112 Figure 7-13: Probability of exceedance for Ashegoda wind park, Gamesa G58 layout ..115 Figure 7-14: Probability of exceedance for Ashegoda wind park, Enercon E-53 layout..118 Figure 7-15: P75 energy production of the different scenarios of Ashegoda wind park ..120 Figure 8-1: Principle scheme of a ring concept ...............................................................121 Figure 8-2: Principle scheme of a radial concept ............................................................122 Figure 8-3: Scheme of the internal Ashegoda wind park cabling ....................................123 Figure 8-4 Earthing network ............................................................................................125 Figure 8-5 Terminal Tower connected to substation earthmat ........................................127 Figure 9-1 Geographical layout of the Ashegoda wind park grid connection ..................131 Figure 9-2: Principle wind park grid connection layout ....................................................132 Figure 9-3 Wind Park grid connection schemes..............................................................134 Figure 9-4 Mekele substation ..........................................................................................135 Figure 9-5 Single line diagram of Ethiopian power grid section including MEKELE substation .................................................................................................................136 Figure 10-1: Development of the O&M cost for Ashegoda ..............................................144 Figure 10-2: Development of the O&M cost for Ashegoda ..............................................145 Figure 10-3: Development of the O&M cost for Ashegoda ..............................................146 Figure 10-4: Development of the O&M cost for Ashegoda ..............................................147
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Figure 11-1: Load duration curve and residual load duration curve for Ethiopia, The inset shows the 50 highest load hours (own illustration)...................................................160 Figure 11-2: LDCs and power output of other plants, dependable capacity, max. load, max. residual load (own illustration) .........................................................................162 Figure 11-3: Load following .............................................................................................164 Figure 11-4 Water reservoir levels with and without wind energy ...................................167 Figure 11-5: Average load and energy based CC ...........................................................168 Figure 11-6: Seasonal wind and water distribution..........................................................169 Figure 11-7: Daily load and wind distribution match ........................................................170 Figure 11-8: CC at different Load Levels.........................................................................172 Figure 12-1: HFO380 price development ........................................................................186 Figure 12-2: Development of the brent crude oil price from 1997 to 2005 ......................187 Figure 12-3: CO2 price development at EEX ...................................................................192 Figure 12-4: Crude price (USD/bbl) from April 2004 to March 2006................................202 Figure 12-5: Scenario analysis: HFO and LFO price development........................203 Figure 14-1 USD / ETB exchange rate development ......................................................223 Figure 14-2: Capital Asset Pricing Model ........................................................................226 Figure 14-3: Meaning of CAPM .......................................................................................226 Figure 14-4: Spider diagram showing results of sensitivity testing ..................................246
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List of Tables
Table 1-1: Summary of main estimation result for the different scenarios...........................6 Table 4-1 Transport figures of wind turbines .....................................................................44 Table 4-2: Basic dimensions of the required cranes .........................................................47 Table 4-3: Overview of the Access Roads distances ........................................................48 Table 5-1: Basic data of the Ammonit data logger WICOM 32..........................................52 Table 5-2: Basic data of the measuring masts at Ashegoda site ......................................52 Table 5-3: basic wind measured data for Ashegoda site...................................................55 Table 5-4: Correlation coefficients of the measurement masts used for the MCP-Process ...................................................................................................................................59 Table 5-5: wind speed data used for MCP-prediction .......................................................59 Table 5-6: Wind direction data used for MCP-prediction ...................................................60 Table 5-7: overview of the long term (10-year) wind data at 40 m a.g.l of mast 13 Ashegoda II ...............................................................................................................63 Table 5-8: IEC Wind Turbine classification.......................................................................65 Table 5-9: Site classification parameters...........................................................................66 Table 6-1: Specific investment costs for selected turbine types........................................73 Table 6-2: Requests for expressions of interest ...............................................................74 Table 6-3: minimal turbine distances for Ashegoda wind park ..........................................76 Table 6-4: turbulence sub-classes of the selected wind turbines ......................................82 Table 6-5: Noise standards according to German standards ............................................84 Table 6-6: Sunshine probability at Mekelle........................................................................85 Table 7-1: Hellmann-exponents, sector-wise, for the location of met mast 1 Ashegoda30m_40m ................................................................................................94 Table 7-2: Sources of the power curves ............................................................................97 Table 7-3: Array losses Ashegoda wind park ..................................................................101 Table 7-4: Deviation of Energy due to wind uncertainties ...............................................108 Table 7-5: Energy Calculations for Ashegoda Wind Park, Enercon E-48 layout .............110 Table 7-6: Deviation of Energy due to wind uncertainties ...............................................111 Table 7-7: Energy Calculations for Ashegoda Wind Park, Vestas V52 layout.................113 Table 7-8: Deviation of Energy due to wind uncertainties ...............................................114 Table 7-9: Energy Calculations for Ashegoda Wind Park, Gamesa G58 layout..............116 Table 7-10: Deviation of Energy due to wind uncertainties .............................................117 Table 7-11: Energy Calculations for Ashegoda Wind Park, Enercon E-53 layout ...........119
Table 8-1 Wind Park division by four areas .....................................................................128 Table 10-1: Total Investment Cost of Wind Farm Ashegoda...........................................137 Table 10-2: Total Investment Cost of Wind Farm Ashegoda...........................................138 Table 10-3: Total Investment Cost of Wind Farm Ashegoda...........................................139 Table 10-4: Total Investment Cost of Wind Farm Ashegoda...........................................140 Table 10-5: Local and foreign O&M tasks .......................................................................149 Table 10-6: Annual Operation & Maintenance Expenses................................................150 Table 10-7: Annual Operation & Maintenance Expenses................................................151 Table 10-8: Annual Operation & Maintenance Expenses................................................152 Table 10-9: Annual Operation & Maintenance Expenses................................................153 Table 11-1: Difference between LDC, ILDC and RLDC ..................................................162 Table 11-2: Frequency of load changes within one hour with and without wind .............165 Table 11-3: Stored energy at Finchaa reservoir ..............................................................167 Table 11-4: Frequency distribution of wind power during hours of highest load .............171 Table 11-5: Frequency of hours with available wind below the Year-Round CC.............172 Table 11-6: Capacity Credit Results ................................................................................174 Table 12-1: Technical data of the reference DPP ...........................................................182 Table 12-2: Economic data of the reference DPP ...........................................................183 Table 12-3: Fuel prices at different international ports in USD/metric ton .......................186 Table 12-4: Relevant fuel price data................................................................................188 Table 12-5: Non-fuel variable O&M for a DPP.................................................................190 Table 12-6: Avoided emissions of the DPP .....................................................................191 Table 12-7: Summary of basic assumptions of the reference DPP .................................193 Table 12-8: Investment costs considering shadow prices ...............................................195 Table 12-9: Economic values of Enercon E48 annual O&M costs ..................................196 Table 12-10: Economic values of Enercon E53 annual O&M costs ................................196 Table 12-11: Economic values of Vestas V52 annual O&M costs...................................197 Table 12-12: Economic values of Gamesa G58 annual O&M costs................................197 Table 12-13: Results economic analysis Ashegoda wind park .......................................200 Table 12-14: Summary results of scenario analysis ........................................................204 Table 13-1: Ethiopian power plant structure....................................................................211 Table 13-2 Baseline Scenario A ......................................................................................215 Table 13-3: Baseline Scenario B1 ...................................................................................216 Table 13-4: Baseline Scenario B2 ...................................................................................216 Table 13-5: Emission reductions & CER revenues for P75, P50 and P90 ......................217
Table 13-6: CDM Assumptions........................................................................................218 Table 13-7: CER generation and CER revenues with Enercon E48 turbines..................218 Table 13-8: CER generation and CER revenues with Enercon E53 turbines..................218 Table 13-9: CER generation and CER revenues with Vestas V52 turbines ....................219 Table 13-10: CER generation and CER revenues with Gamesa G58 turbines ...............219 Table 14-1: Average exchange rates ..............................................................................222 Table 14-2: WACC for the Scenario I (Enercon E48) ......................................................227 Table 14-3: Project s milestones .....................................................................................228 Table 14-4: Investment costs (financial value) ................................................................229 Table 14-5: O&M costs ....................................................................................................230 Table 14-6: Financing structure and disbursement .........................................................232 Table 14-7: Annual energy generation ............................................................................235 Table 14-8: Levelized costs for wind energy ...................................................................239 Table 14-9: Assumptions for the DPP & HPP levelized cost calculation .........................241 Table 14-10: Wind, diesel, hydropower levelized costs................................................241 Table 14-11: Summary of key financial parameters ........................................................242 Table 14-12: Financial sensitivity testing results .............................................................246 Table 14-13: Sensitivity indicators & switching values ..............................................248
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Abbreviations
a ACM0002 a.g.l a.s.l. B/C bbl bbl BM CAPM CDM CDM CER CER CIRR CIRR CM cSt DNA DOE DPP DPP DSCR DSCR ECA ECA EEPCo EEX EF EIRR EIRR EMD ENPV
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annum,year Approved consolidated baseline methodology 0002 above ground level above sea level Benefit/Cost (ratio) Barrel Barrel Build Margin Capital Asset Pricing Model Clean Development Mechanism Clean Development Mechanism Certified Emission Reduction Certified Emission Reduction Commercial Interest Reference Rate Commercial Interest Reference Rate Combined Margin Centi Stokes Designated National Authority Designated Operational Entity Diesel Power Plant Diesel Power Plant Dept Service Coverage Rate Dept Service Coverage Rate Export Credit Agency Export Credit Agency Ethiopian Electric Power Corporation European Energy Exchanges Emission Factor Economic Internal Rate of Return Economic Internal Rate of Return Energi-og Miljdata Economic Net Present Value
EPA ERPA ETB ETB FIRR FIRR FOCC FX GDP GDP GEF GEF GHG GHG HFO HFO HPP HPP ICS ICS IDC IDGTE IPP IRR KP KW kW-class KWh LDC LFO LHV LI MCM MDO MGO
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Ethiopian Environmental Protection Authority Emission Reduction Purchase Agreement Ethiopian Birr Ethiopian Birr Financial Internal Rate of Return Financial Internal Rate of Return Financial Opportunity Cost of Capital Foreign Exchange Gross Domestic Product Gross Domestic Product Global Environment Facility Global Environment Facility Greenhouse Gas Greenhouse Gas Heavy Fuel Oil Heavy Fuel Oil Hydro Power Plant Hydro Power Plant Interconnected System Interconnected System Interest During Construction Institution Diesel and Gas Turbine Engineers Independent Power Producer Internal Rate of Return Kyoto Protocol Kilowatt Windturbines in the range up to 1000 kW Kilowatthour Load Duration Curve Light Fuel Oil Lower Heating Value Lahmeyer International Million Cubic Meter Marine Diesel Oil Marine Gas Oil
MW-class NCEP NCV NGO NPV NREA O&M ODA OM PDD PoE PPP PSEMP RLDC ROE SCF SCS SI SW UNFCCC USD W WACC WAsP WPs
Wind turbines above 1MW (1000 kW) National Centre for Environmental Prediction Net Calorific Value Non-Governmental Organization Net PresentValue National Renewable Energy Authority Operation and Maintenance Overseas Development Assistance Operating Margin Project Design Document Probability of Exceedance Power Purchase Parity Power System Expansion Master Plan Residual LoadDuration Curve Return on Equity Standard Conversion Factor Self Contained System Sensitivity Indicator Switching Values United Nations Framework on Climate Change US Dollar weights Weighted Average Cost of Capital Wind Atlas Analysis and Application Program Wind Parks
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Introduction
Roughly 95 % of Ethiopia s electric energy system is dependent on hydropower. The total net has an installed capacity of 715 MW in the Interconnected System and 31 MW in the Self Contained System. Due to the precipitation and siltation of the reservoirs some of the hydro power plants are loosing storage volume resulting in reduced energy output throughout the year. Another restriction of the hydro system is caused by the variability of rainfall. In years of low rainfall and drought the amount of water available during the rainy season from July until September does not allow for the reservoirs be filled up to the maximum. These extreme changes in water availability indicate the problems of the Ethiopian electricity supply. The energy sector in Ethiopia is expanding rapidly, and even with the new hydro power plants, the problem of the fluctuating water availability will not be solved entirely. Thus, in order to guarantee security of supply, the power generation system has to be diversified. The necessary increase of the electrification rate and the corresponding grid expansion, need additional capacity in the short-run to support the hydro system throughout the year and especially at the end of the dry season, when water levels are low and demand remains constant. Therefore, a fast-track implementation capacity increase is necessary. As a short-run solution to cover the increasing and suppressed demand, EEPCo evaluates two alternatives: wind and diesel power. Three diesel power plants were already commissioned in 2004 to easy energy shortage caused by drought and to reduce load shedding. Ethiopia is fully reliant on fuel imports. Fuel prices have been steady increasing in the last years, which worsens the economic feasibility of the installed and new diesel power plants. Since the beginning of 2005, GTZ is supporting EEPCo in the planning of a gridconnected wind farm in the range of 40-60 MW. Within its TERNA program, GTZ has carryed out wind measurements at different sites in Ethiopia since January 2005. Ethiopian Electric Power Corporation (EEPCo) is planning the implementation of wind parks in several areas of the Federal Democratic Republic of Ethiopia, which are estimated to comprise of up to 200 MW to the year 2012. The first two wind parks, with a capacity of 40 60 MW each, are expected to come to the grid by the end of 2007 at the latest. One of the foreseen wind parks shall be located in the northern part of Ethiopia in the higher mountain areas, outside of larger towns, but close to existing transmissions lines and roads. For the prediction of the wind resources, wind measurements on-site have been performed by the GTZ TERNA program through the consultant of GTZ since 2005, which indicate above average wind speeds for the pre-selected sites in the range of 6.86 to 9.36 m/s at forty meters measurement height. The measurement campaign
started with the investigation of eleven sites; the four most promising sites have been preselected for further wind measurements at a height of 40m a.g.l. In the next stage of the project development, the preparation of Feasibility Studies were foreseen, with the sites Mesobo-Harena and Ashegoda being the task of Lahmeyer International. The german based GTZ supported EEPCo in the project development by carrying out a tender for Windpark Development in Ethiopia and Capacity Building as stated in the ToR related to the project. All information concerning the ToR can be found in Annex A 7. The originally foreseen sites of Mesobo-Harena and Nazareth as defined in the ToR, and as assigned to Lahmeyer International for feasibility analysis, were changed later to the sites Mesobo-Harena and Ashegoda due to problems with an ETV sending mast on the Nazareth site. The mast makes the implementation of a wind farm of 40-60 MW, as requested in ToR by GTZ and EEPCo, nearly impossible until end of 2007. Later on, EEPCo will develop the Feasibility Study for the Nazareth site under supervision of Lahmeyer International, taking into account the additional time demand. The second wind park site originally envisaged, to be supervisied by EEPCo at Gondar, was taken out of the feasibility study due to the limited available space on site, preventing the realisation of a 40-60 MW wind farm. This report is focusing on the Ashegoda site.
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Site conditions
4.1 Site Description
Figure 4-1: Map of Ethiopia with the region of Ashegoda wind park
The proposed wind park site is situated in the northern Ethiopian highland close to the descent to the coastal plain. The whole area, foreseen for the construction of the wind park, is covered with small bushes and grass. The land is mainly used for extensive goat farming, and partly for agricultural use. The wind park consists of two main areas; the western area is located at two low ridges in an approximately north-south orientation while the eastern area is spread over a more distinct hill in north-south orientation with several branches. In between the two parts a
lower plain area can be found where a high voltage line is passing in a north / south orientation. The altitude of the wind park ranges from approximately 2,300 to 2,450 m a.s.l. The considerable elevation above sea level results in a low average air density of 0.922 kg/m3. South-east of the eastern part of Ashegoda wind farm, the upper branches of a valley descending to the coastal plain are reaching the highland plain.
Figure 4-2: Ashegoda area, digital terrain model, view from the southwest in a height of 1000 m above ground. A larger print-out can be found in Annex C-5
The client has provided topographical maps in 1:50.000 and 1:12.500 scale which cover the full project site. Information on the surrounding terrain is taken from LI s world wide data base and of the visual impressions during the site visit. The orographical terrain conditions can be classified as medium complex. The slopes of the ridges where the wind park has been proposed and the valley towards the coast are adding some complexity to the vicinity of the wind park site while the remaining area is flat or modestly hilly.
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4.2 Site Limitations

The proposed wind park site has basically favourable conditions for implementing a wind farm: like available space, no housing directly on site, existing road access, a nearby high voltage line, a substation in approximately 20 km distance, and as well as favourable wind conditions. However some restrictions were identified which will limit the available area for the erection of wind turbines: Corridors claimed for aviation by Mekelle airport (see Annex A-1) Obligations of the Environmental Report (see Annex A-2) Several villages surrounding the wind park area (see Figure 6-1) The area north of the road is used by the Ethiopien military radar and can not be used for the wind park Ashegoda west. The wind park site will not be affected by the civil and military aviation directly but it is possible that a demand for aviation lights for all turbines will be made. For a possible future extension of the current wind park layout there are several options. One option are further negotiations with the Ethiopian military at Mekelle to shift the given boundary of the wind park towards north. The second option is to add additional wind turbines in the middle of both wind park areas accepting less energy yield in comparison with the proposed western and eastern hills of the Ashegoda wind park site.
4.3 Ground and Soil Conditions

A preliminary soil condition investigation was performed during the site visit in February with the preliminary result that the conditions of the entire site are suitable for flat foundations. After the preliminary investigation LI s subcontractor has provided a report on the geotechnical investigation for the planned wind park Ashegoda. The report describes the regional site geology in general as well as the seismic conditions at the site.
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Figure 4-3: The soil condition on Ashegoda site
The soil investigations have further been based on excavated test pits of different depths between 0.5 m and 1.0 m. Photos of each pit are attached to the specific report. The report states that the likelihood of the soil becoming fluidised in the event of an earthquake is very remote for the investigated area. But it is also stated that the Ashegoda is marked as Zone 2 within the Seismic Risk Zoning Map of Ethiopia. Therefore for the final design of the turbines and foundations a seismic check is recommended according to the regional risk. Based on a visual assessment and the examined material in the test pits the bearing capacity of the soil is conservatively estimated based on the experience of the conductors of the soil investigation. The estimations underline that sufficient soil properties can be expected to foresee shallow foundations for the wind turbines. For the final design of the foundations of each wind turbine a more detailed analysis is required at each location of a wind turbine, as described in the feasibility study report. It is expected that some optimisations will be possible based on that more detailed investigation. The complete soil investigation report carried out is shown in Annex A - 3.
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4.4 Access Roads, Availability of Cranes

4.4.1 Road Access
Basically, the transportation of the turbine equipment in Ethiopia will be by road. A paved main road leading from Mekelle towards the south passes the Ashegoda area nearby. From the main road an unpaved road is heading through the wind park sites Ashegoda west and Ashegoda east. No obstacles like trees or signposts exist. The site access road provides no problem for delivering turbines in the range of 800 kW to the wind park site but has to be improved and levelled for the transportation of components of larger wind turbine types. Currently this road is under reconstruction, all further roads required for the construction of the wind park have to be newly built; a preliminary design has been developed by the consultant. The exact length taken into consideration can be found in Annex C 1.
Figure 4-4: Branch from main road to Ashegoda sites
The total distance of the direct link from Djibouti via Dese and Alamta to Ashegoda is approximately 695 km (715 km distance Djibouti-Mekelle). The road is a gravel road except the part from Djibouti to Mile which is a paved road over a distance of 196 km.
As stated in detail in the road condition report (2003/2004) from Ethiopian Road Authority, attached in Annex A-6, the road from Djibouti via Mile and Chifra to Weldiya is a gravel road, the condition is mainly good and with a specified width of 7 m. For the road between Weldiya and Ashegoda no condition report has been provided to LI. Because this road is one of the main roads in the country, it can be assumed that the conditions of this part of the route are equal to the conditions of the first part from Djibouti to Weldiya. The axle loads of the trucks carrying the turbine nacelles and the towers do not exceed 12 tons and are within the limits that the roads as mentioned above can bear. For the transportation of the turbines to the site a maximum slope of 10% of the road access can be accepted. According to the site visit trip and the measured data by GPS the existing slope of the gravel road from the main road to the site is calculated to 2.9% maximum. A description of the maximum axle loads and wheel-bases given by the Ethiopian Road Authority are shown in Annex A - 6. The transportation of wind turbines of the 800 kW class as proposed within this report from Djibouti Harbour to the wind park site provides no major difficulties. The main problem is the development of a suitable logistics concept. For example, the hauIage of 86 wind turbines will take about one and a half years when using 10 seperate trucks, whereas the number of trucks in Ethiopia suitable for the transportation of heavy or long items like wind turbine components has yet to be evaluated.
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Figure 4-5: Road map of north-eastern Ethiopia (red arrow marks the wind park area)
4.4.2 Road Access for larger Turbines up to 2 MW According to our experience with wind power projects in similar countries, e.g. Djibouti and Nigeria, there are frequent problems with heavy weight and wide load transports in case of using large wind turbines of the Megawatt class. To take into consideration the erection of larger wind turbines up to 1.5 MW or 2 MW in Ethiopia, the experts of LI carried out a road survey study covering the main roads from Djibouti harbour to the wind park site. This study was done in June by car starting at Mekelle and traveling the route to Djibouti harbour. Some obstacles on the way from the highland to the lowland were found and described in detail in the Annexed road report. In the mountainous terrain, between Alamata and Korem there are two sections where the gradient exceeds the limit for a transport with the weight of a 40 m long, Megawatt-class blade load. Furthermore, on these points the radii of the curves also do not allow the
transport of these blades. These bottlenecks currently do not allow for the transportation of large wind turbines in the Megawatt-range. Besides this, it was stated in the report that the whole transport from Djibouti to the wind park site at the plateau will take approximately 11 days for a return trip per major component for turbines in the kW-class. In summing up we can establish that without road improvement and time extension the transportation of turbines up to 2 MW can not be carried out sufficiently at present. Therefore this report is focussing on turbines below the Megawatt-class.
4.4.3 Railway Transport In Ethiopia only one railway line, connecting Djibouti and Addis Abeba, exists. The railway is jointly owned by the countries of Ethiopia and Djibouti. A railway line to Ashegoda does not exist. Consequently, involving the railway in the transport chain requires the transfer of the turbine components at Addis Abeba to road vehicles. The railway, however, can be an option for the first part of the transport but it has to be noted that the track and rolling stock of the railway are worn out due to a considerable lack of investment. The railway is unreliable and can not fulfil the traffic demands as required. Additionally, several physical limitations hamper the transport of large goods. The information in general, given by the railway company describes the situation as follows: 1. Four freight wagons can be hauled per train as a maximum (but the consultant observed a much longer train) 2. Maximum weight per train is 160 tons (according to the consultants experience this could be increased by double-heading the trains) 3. Maximum wagon length is 12 m 4. Due to the limitations given by the tunnels and bridges of the line, the loading gauge is limited - width 3.7 m and height 3.3 m. 5. A maximum axle load was not specified but by observing track and capacity of the freight wagons LI assumes that this will not exceed 10 t. A maximum meter weight was not specified as well. Besides this information from the railway company, the exact figures of the transport manuals given by several turbine manufactures are shown in the following table:
Table 4-1 Transport figures of wind turbines
Main Measures and Weights of Wind Energy Converter (samples)

Type and hub height length m Enercon E 48; 55m 22.8 Blades width m 1.7 weight t 2.3 0 Enercon*** E 53/1; 72m 25.26 2.44 2.6 ** 4,50 ** ** Nacelle length width height weight length m m m t m 7.42 4.37 4.54 21 16.93 17.70 19.92 21.85 25.75 24.50 9.60 19.20 24.50 19.00 19.20 24.49 14.00 19.17 24.45 13.00 19.25 25.40 23.90 10.39 23.82 24.37 Tubular steel tower width m *3.30 2.53 1.87 *4.30 3.08 2.12 3.31 3.02 2.43 3.62 3.02 2.43 3.62 3.03 2.44 4.00 3.84 3.84 3.84 4.00 3.59 2.78 weight t 30 20 15 37 22 15 16 23 18 31 23 18 24.08 24.50 20.43 38.70 31.70 30.00 27.00 31.73 51.08 39.41 tower sections section I section II section III section I section II section III section I section II section III section I section II section III section I section II section III section I section II section III section IV section I section II section III
Gamesa
G 58; 55m
28.5
2.35
3.2
8.00
2.3
2.9
24
Gamesa
G 58; 65m
28.5
2.35
3.2
8.00
2.3
2.9
24
Vestas
V 52; 60m
25.3
2.10
1.9
6.681
1.923
2.819
22
Fuhrlnder MD 70; 65m
34.0
2.6
5.2
10.20
3.75
3.85
58.0
Vestas
V 80; 60m
39
3.520 appr. 6.5
10.05
3.37
4.05
61.2
The nacelle and blades from Gamesa would remain identical only tower specification would change according to the countries. * outside flange diameter ** data currently not published *** for the E 53 the dimension of the prototyp are given by Enercon Germany (E53/1 means the first turbine of this type)
Figure 4-6 shows a typical open freight wagon with a payload of 22.4 tons and a length of 12 m which can be used for the transport of rotor blades. These have a weight of less than 10 tons and a length between 22.8 and 40 m; the overlapping length when loading them on a 12 m length wagon provides no problem as it is common in such cases for railways world-wide to attach further flat wagons to both ends of the blade-carrying wagon which act as idler or distance cars. The clearances in tight curves where the overlapping part of the blades will swing out over the track have to be checked by the railway, however. Concerning the Nacelles, only Gamesa G-58 and Vestas V52 nacelles can be transported on these wagons: for the other manufacturers they either exceed the height clearances or the allowed payload of the wagons. Concerning the towers, for most sections, either the
diameter is too large (the height of the floor of the wagon has to be added to the height of the load) or the weight is beyond the limits of the railway equipment; only some of the upper parts of the towers are suitable for the transport on the line. Further parts can be hauled by the railway if lower wagons are available. It is not known to the consultant if these are available at the railway. Suitable meter gauge wagons, called Rollwagen, had been made redundant in Germany, Poland and Switzerland in large numbers recently.
Figure 4-6: Typical open freight wagon of the Djibouti
Ethiopean railway
Due to the unreliable and bad condition of the total railway system a safe transport over the long distance of the line can not be assured. In March 2006 it was announced to contract the operation of the railway to the South African company Comazar, which will presumably led to a higher transport capacity and improved reliability of the line. But this situation will not be of any help for the transportation of parts of the proposed wind turbines for the foreseen implementation during 2007.
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4.4.4 Available Crane Capacities In general two cranes are required for the erection of a wind turbine. One is the so called main crane and the second the helping crane. The main crane has to be dimensioned large enough to lift all tubular tower sections for commissioning and finally the nacelle and blades to the top of the turbine, whereas the helping crane mainly gives assistence to the lifting process, at a lower point of application than the main crane. Therefore a smaller crane can be used for the supporting crane. For the erection of the wind turbines it is foreseen to hire available cranes in Ethiopia. As a first result of the investigations by the consultant concerning available crane capacities it can be concluded that there is only one possibility to hire an 81.6 tons crane with a boom of 37.9 m plus a ten meter extension from the company MIDROC at Addis Abeba. Further details like daily costs, transportation costs to the site and the availability at the foreseen erection period in 2007 are depending on detailed negotiations with MIDROC after the final decision of which turbine type to select for the implementation of the wind park. We assume that the MIDROC crane, with some small extensions of the existing boom, can be used as the supporting crane. The information provided by MIDROC is shown in Annex A-5. Optionally, a crane from the construction company Bilfinger & Berger stationed in Nigeria can be hired. The preliminary information about this crane allows the assumption that this is a feasible option for 2007 and the Ashegoda wind park site. In addition, it should also be investigated if the utilisation of the available crane capacity at Zafarana, Egypt it possible. Zafarana is one of the largest wind park sites in the world, consisting of several hundred of wind turbines in the 800 kW range. However, it has to be noted that in 2006 and 2007, two extension stages of the wind park Zafarana are foreseen, limiting the available crane capacity. Finally there is another option of buying a new crane by EEPCo to independently solve the problem with the required crane. This option will need additional money for the investment phase of the project, and will be several times more expensive than using a rented or an overhauled crane. We do not recommend this option for the beginning of the wind park development in Ethiopia, in order to avoid additional costs, and keeping in mind that during the warranty period of the wind turbines there will be no need for an independent crane capacity by EEPCo. Taking into account the information above, it is likely that there are several options to bring sufficient crane capacities to the wind park site, allowing EEPCo to erect wind turbines in the proposed turbine class.
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We recommend the common option of hiring a crane in close cooperation with the turbine manufacturer and arrange an agreement for the use of one of the manufactures cranes as the main crane during the implementation phase of the project. The supporting crane should be hired from MIDROC to avoid further transportation costs caused by the shipment of a crane from other countries to Ethiopia. This concept has been choosen e.g. for Zafarana wind park. Additionally, Enercon India presented and offered their craneless repair concept during a visit in Addis Abeba through its representative. Further detailed information concerning the proposed craneless concept was not given by Enercon India so far. To get a general idea, the following table presents the minimum dimensions of the needed cranes for the erection of the several turbine types:
Table 4-2: Basic dimensions of the required cranes
WTG
Vestas V 52, hh 55 m Enercon E-48, hh 57 m Gamesa G58, hh 60 m Vestas V 80, hh 85 m
Hub heights
55 m 57 m 60 m 85 m
main crane assistance crane

250 t 300 t 350 t 600 t 100 t 80 t 100 t 250 t
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4.5 Internal Access Roads

The access roads have been preliminary designed and can be found at the wind park layout map presented in Annex C-1. It has to be separated between: access road to be newly built existing road to be improved The following table gives the summary of the different internal roads to be built:
Table 4-3: Overview of the Access Roads distances
Scenario I: Type Length in km Paths to be reinforced / widened Roads to be newly built 5.0
Scenario II: Length in km 5.0
Scenario III: Length in km 5.0
Scenario IV: Length in km 5.0
25.0
25.0
25.0
25.0
4.6 Enviromental Impact Assessment

An environmental impact assessment has been carried out by the feasibility study team of EEPCo. No serious impacts besides the permanent loss of agricultural land are to be considered neither for local inhabitants nor for flora and fauna. In detail:
The land foreseen for the erection of the wind park is mainly used for pasture farming and agriculture. Approximately 20 hectares of farm land will be permanently lost for farming while further areas will be not available during the construction phase of the wind park, the loss of grain is estimated to 100 tons. A compensation is to be paid, the exact figures are displayed in the environmental impact report in Annex A-2. During the construction period, care has to be taken that waste disposal and sanitary requirements are properly defined and implemented and precaution arrangements are taken to prevent the spread of infectious diseases. No serious long-term impact to the local fauna is to be expected, no designated national wild life parks or reserve areas tap the wind park.
No serious long-term impact to the local flora is to be expected. No serious long-term impact on birds is to be expected, no migration routes of birds are known for the area. No sanctuaries, no known historical or cultural sites exist in the proposed wind park area. The Environmental Monitoring Unit (EMU) of EEPCo proposes the implementation of an Environmental Monitoring Plan during all phases of the project. Details can be found in the Enviromental Assessment Report Ashegoda in Annex A-2.
4.7 Legal Constraints

Legal constraints at site are not known by the consultant at present. In any case, as kind of compensation, it should be recommended to provide to the affected communities employment within the project (during construction and operation).
4.8 Earthquake Risk

Eastern and Southern Africa covers a region which is prone to a significant level of seismic hazard due to the presence of the East African rift system. A number of destructive earthquakes have been reported during this century. In Ethiopia, they include the 1960 Awasa earthquake (Ms* = 6.1), the 1961 Kara Kore earthquake which completely destroyed the town of Majete and severely damaged Kara Kore town, the 1969 Serdo earthquake (Ms = 6.3), 1989 Dobi graben earthquake (Ms = 6.5) which destroyed several bridges on the highway connecting the port of Assab to Addis Ababa, the 1983 Wondo Genet and the 1985 Langano earthquakes which caused damage in parts of the main Ethiopian rift (Midzi V. al. 1997). * Ms = surface-wave magnitude
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Seismicity of eastern and southern Africa based on the catalogue compiled by Turyomurugyendo (1996). Earthquake epicentres are shown for MS4.0. If the project is developed in areas classified as earthquake zones, it must be proved that legislation in Ethiopia obliges the developer, to approach and consult with an engineer or a statics specialist approved by the authorities during the project phase. In several countries including, e.g., Italy legislation requires that a local engineer or statics specialist, approved by the authorities, must review the statics underlying a given construction design prior to the erection of buildings and this also includes wind turbine foundations in earthquake zones. If such a review should reveal that a wind turbine foundation must be modified to suit local seismic conditions, this is done in co-operation with local authorities in accordance with specific requirements and in this way, it is ensured that the seismic requirements are met.
Literature: Turyomurugyendo, G. 1996. Some aspects of seismic hazard in the east and south African region. Unpublished. M. Sc. Thesis, Institute of Solid Earth Physics, University of Bergen, Bergen, Norway, 80p. Midzi V. et al. 1997: Seismic hazard assessment in eastern and southern Africa
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Wind Resources
5.1 Wind Data Collection
13 Ashegoda II 4 Ashegoda I
Figure 5-1: Measurement masts at Ashegoda site
Two measurement masts have been erected in the area during the year 2005: Mast 4 Ashegoda I with a measuring height of 10 m a.g.l. in January 2005 and mast 13 Ashegoda II with two different measuring heights (10 m and 40 m a.g.l. respectively) in September 2005. Both masts are equipped with Thies first class cup anemometers and a wind direction vane (Thies compact) at 10 m height a.g.l. The anemometers have been calibrated according to MEASNET standards. Copies of the calibration protocols have been handed over to the consultant. The data logger used for the measurements are manufactured by Ammonit with the basic data given in Table 5-1.
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Table 5-1: Basic data of the Ammonit data logger WICOM 32
Type
Version / date
Sample Rate
Storage Intervall
Data channels
Wind speed Average, Minimum, Maximum, Standard deviation Wind direction Average, Minimum, Maximum, Standard deviation
Ammonit WICOM 32
V 1.4 15 September 2004

th
1 Hz
10 Minutes
No further data (temperature, air density, and humidity) have been collected. Basic data of the measurement stations are given in the following Table 5-2.
Table 5-2: Basic data of the measuring masts at Ashegoda site
Wind Measuring Mast
Wind Mast Coordinates

(UTM WGS 84, Zone 37)
Height a.g.l. Altitude [m]

2,391 2,418
Records
*)
Availability
x 4 Ashegoda I 13 Ashegoda II
562 882 565 488
y
1 484 021 1 483 611
[m]
10 10
From
Until
15.01.2005 09.04.2006 19.09.2005 19.02.2006
96% 100%
*) measurements still running, date shown is the end of data used within this study
With a data recovery rate of above 96 % for all stations the result of the measurement campaign can be considered as good. Mast 13 Ashegoda II was erected as a wired steel tubular tower) manufactured in Ethiopia. Although not strictly designed according to IEC 61400-121 Power Performance Measurement of Grid connected wind turbines the measuring mast 13 Ashegoda II and the mounting of anemometers and wind vane allows a wind measuring campaign with acceptable quality levels with the exception of the horizontal adjustment of the upper parts of the mast (see Figure 5-3) which is not optimal and has to be considered in the uncertainty analysis in chapter 7.5.2.2.
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Figure 5-2: Vicinity of measuring mast 13 Ashegoda II (center of figure)
Figure 5-3: Measuring mast 13 Ashegoda II, vertical adjustment
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For mast 4 Ashegoda I, a locally available wooden telephone pole has been used (Figure 5-4). The anemometer has been mounted on top of the mast with the aim to measure the wind flow without influence of the mast itself (Figure 5-5); the vertical distance to the mast however is small and an interference can not be excluded to all possibility of doubt. In addition, the wind direction is not properly detected when the wind comes from the upwind side of the mast due to the mounting of the wind vane close to the pole. However, as this direction is not the main wind direction, the influence of the tower to the measurements can be considered as not very significant.
Figure 5-4: Measuring mast 4 Ashegoda I, anemometer and wind vane at 10 m a.g.l.
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Figure 5-5: measurement device installation at mast 4 Ashegoda I
The average wind speeds and the frequency distribution of the measurements are presented in the following table.
Table 5-3: basic wind measured data for Ashegoda site
4 Ashegoda I
10 m a.g.l. Wind speed [m/s] Frequency [%]
13 Ashegoda II
13 Ashegoda II
N NNE ENE E ESE SSE S SSW WSW W WNW NNW
5.51 3.87 6.58 6.98 9.83 8.45 3.92 3.91 3.97 5.22 6.09 6.09
3.77 1.75 2.85 6.64 48.92 16.80 1.50 0.54 0.42 1.05 6.62 9.14
2.53 2.79 3.67 5.62 8.02 6.24 2.87 2.47 1.84 1.67 2.01 1.65
0.40 0.46 0.60 6.56 87.81 3.43 0.36 0.11 0.06 0.06 0.05 0.11
3.16 3.48 4.57 6.94 9.35 7.18 3.14 2.89 2.20 1.94 2.82 2.24
0.40 0.46 0.60 6.56 87.81 3.43 0.36 0.11 0.06 0.06 0.05 0.11
total
8.26
100.0
7.69
100.0
8.99
100.0
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In graphical format the data are presented as wind roses with the frequency graph scaled down to enhance clearness:
N 10.00 NNW 8.00 WNW 6.00 4.00 2.00 W 0.00 E ENE NNE 4 Ashegoda 10 m Frequency
WSW
ESE
SSW S
SSE
Figure 5-6: wind rose of mast 4 Ashegoda I
N 20.00 NNW 15.00 WNW 10.00 5.00 W 0.00 E ENE NNE
13 Ashegoda 10 m 13 Ashegoda 40 m Frequency
WSW
ESE
SSW S
SSE
Figure 5-7: wind rose of mast 13 Ashegoda II
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5.2 Wind Data Analysis

The raw data gathered directly from the data loggers can not be used unprocessed for the estimation of the energy yield as it may contain erroneous and incomplete recorded data. Apart from inadequate installation (anemometer not mounted horizontally, wind vane not aligned to north direction, faulty cable connections, exhausted batteries) the equipment is, as with every technical device, subject to spontaneous and unpredictable malfunction leading to data gaps or incorrect data values. Furthermore, external effects like extreme weather conditions or vandalism may cause similar losses of data and data quality. The data has therefore to be checked carefully with erroneous values to be sorted out or to be replaced by suitable ones. Data losses over longer periods of time also distort the information. Lahmeyer International has comprehensively checked the values of the time series of each measurement mast according to the following steps, removing faulty data:
-
the average wind speed at each 10-minutes interval has to be lower than the maximum value and higher than the minimum, the same for the wind direction detecting non plausible peaks and spikes in the time series (i.e. one value of 20 m/s surrounded by values of 5 m/s) carefully checking and interpreting zero values if data loss or calm checking low values if being measured value or an offset checking low values if being measured or indicating a bearing fault
In a second step, the time series of the further anemometers on site has been used to cross-check wind speed and direction data for plausibility and for identification of further conspicuous values by comparing data of different anemometers for the same time period. In order to predict wind data for the gaps in the time series left after the removal of erroneous values), the Linear Regression and Wind Index MCP (Measure-Correlate-Predict) Method has been applied. During the MCP-Process, the correlation between two time series is used to fill in the gaps in a time series by extrapolating missing data by using the appropriately adapted - data for the same time period of a second time series. The MCP procedure can accordingly be used to extend a time series by addition of adapted data of a second reference time series. Condition for applying the MCP process is an adequate correlation coefficient between the time series and commonly shared periods of time.
In case of the measurement campaign at Ashegoda, missing or erroneous data of the 40 m height anemometer of mast 13 Ashegoda II, in operation since 19 th September 2005 has been extrapolated using the MCP method. This anemometer has been used as the mast is situated within the area of the proposed wind park and 40 m is close to the proposed hub height of the wind turbines. Data of the mast 4 Ashegoda I (anemometer at 10 m height a.g.l.) which has delivered data since January 2005, as well as data from mast 13 Ashegoda II (anemometer at 10 m height a.g.l.) have been chosen for the MCP-Process. The available data of Mekelle Airport has not been selected as there is no common time period to the current measurements, consequently preventing a correlation with the on-site data. Figure 5-8 shows a correlation diagram as an example; the diagrams for the whole MCP-Process are displayed in Annex B 1.
Figure 5-8: Correlation diagram for mast 13 Ashegoda II, anemometers at 10m (x-axis) and 40m (y-axis) for wind direction sector 105 to 135
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Table 5-4: Correlation coefficients of the measurement masts used for the MCP-Process
REFERENCE MAST
SITE MAST
CORRELATION COEFFICIENT (R)
TIME SHIFT (min) to 13 Ashegoda II 40 manemometer 0
13 Ashegoda II_40m V40ave 13 Ashegoda II_40m V40ave
13 Ashegoda II_40m V10ave 4 Ashegoda I_10 m V10ave
95.7%
80.2%
During the MCP process, the time period of the time series of mast 13 Ashegoda II (40 m anemometer) has been extended from 4.8 months (19.09.2005 11.02.2006) to 14.0 months (15.01.2005 09.04.2006). The data coverage has decreased from 100% to 95% due to the data availability of 95.7% of mast 4 Ashegoda I which contributes the majority of data (see Table 5-5) but the quality of the time series has been increased considerably by eliminating and replacing data found to be erroneous during the quality check, furthermore the data period has nearly tripled. Table 5-4 and Table 5-5 provide the ratio between the measured original data of the 40 m anemometer, and the amount of data extrapolated from the other appropriate anemometers.
Table 5-5: wind speed data used for MCP-prediction
Data taken from mast measured data of mast 13 Ashegoda II (V40ave) predictions from data of mast 13 Ashegoda II ( V10ave) predictions from data of mast 4 Ashegoda I ( V10ave) Total measurements and predictions
Number of measured values 20857 10-minutes average values 11 10-minutes average values
40534 10-minutes average values 61402 10-minutes average values
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Table 5-6: Wind direction data used for MCP-prediction
Data taken from mast measured data of mast 13 Ashegoda II (V40ave) predictions from data of mast 13 Ashegoda II ( V10ave) predictions from data of mast 4 Ashegoda I ( V10ave) Total measurements and predictions
Number of measured values 20239 10-minutes average values none 40982 10-minutes average values 61221 10-minutes average values
5.3 Long-term Correlation

As described in chapter 5.1, the wind measuring campaign at Ashegoda was started in January 2005 thus delivering data for a period of slightly more than one year while an operational lifetime of at least 20 years is expected for a modern wind turbine. Wind conditions however are not stable over the years and oscillate around the long term average. Consequently, the result of a 12-month measuring period can not be considered as long term representative. It is therefore common practice to perform a long term examination of the wind conditions of the respective site. According to international standards, this has to be done by comparing and adjusting the measured wind data by means of suitable mathematical methods with data obtained from long-term measurements - usually meteorological stations. A period of at least 10 years (15 to 20 years is preferred) can be considered as long-term . In case of Ashegoda site, no suitable data from local meteorological stations were provided to LI and, as mentioned before, data from an anemometer on the military part of Mekelle Airport could not be used because of the lack of a common time period to the measurement data of the proposed wind farm site. Therefore, NCEP reanalysis wind data of a period of 35 years are used to determine the long-term representative value of the measurement data. The applied NCEP-Data are created by the US-National Center for Atmospheric Research and the National Centers for Environmental Prediction (NCEP / NCAR). Basically, these reanalysis data are the results of a global climate computation model which uses a large number of filtered and converted historical meteorological data from 1970 onwards and observations from surface, ships, aircrafts, satellites and other data sources to recalculate meteorological parameters like wind speed which is given four times per day from 1970 onwards and being updated every month.
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NCEP-data is available for certain grid points at a height of 50 m and 500 m a.g.l. in a resolution of 2.5 degrees world wide. For the purpose of the Ethiopian wind park evaluation program, further NCEP data for several further points has been provided by RIS national laboratory to GTZ which has been handed over to LI. These points give a better description to the wind climate of the Ethiopian highland close to the drop to the coastal plain and are given for a period of 25 years in a height of 10 m a.g.l. Figure 5-9 displays the nearest NCEP 2.5 degree-spacing grid points to Ashegoda respective Mekelle and the RIS-provided grid points.
Figure 5-9: NCEP grid points around Mekelle (yellow pins mark the 2.5 -spacing NCEP grid points, red pins the location of the RIS delivered NCEP points), the red circle idicates the selected NCEP point
To predict the long term wind speed, NCEP data of the grid point East 39.375 and North 12.3808 (red circle in Figure 5-9) were used as having the best correlation coefficient
when compared to East 39.375 North 14.2855. An analysis of the data shows that during the last ten years no significant variation of the wind speed occurred. For the common time period shared by both NCEP data and the measured wind speed data on site the average wind speeds have been calculated and set into ratio, providing a long-term-coefficient c(25Years) for the wind speed:
V 40ave 25Years
V 10ave NCEP ( 25Years ) V 10ave NCEP (C .P )
* V 40ave10 min
c (25Years ) * V 40ave10 min
with the individual figures as follows:
average velocity of NCEP at 10m a.g.l, during the common period of measurements and predictions with mast 13 Ashegoda II at 40m a.g.l. (i.e. the measuring period):
V 10 ave
NCEP ( C . P )
3 . 935 m / s
25 years long term average velocity of NCEP data at 10 m a.g.l:

V 10ave NCEP ( 25Years ) 3.917 m / s
Correction factor, relation between average wind speeds of the measuring period and the 25-year period
c( 25Years )
V 10ave NCEP ( 25Years ) V 10aveNCEP (C .P )
3.917 3.935
0.995
The long-term-coefficient c(25Years) is close to 1.0; it has consequently not been applied to the correlated 14.0-month time series of the 40 m anemometer of mast 13 Ashegoda II as the uncertainties of both the measurement and the MCP process are considerably higher than the deviation of the correlation factor from 1.00. The long term (25 years) corrected time series for the 40 m anemometer of mast 13 Ashegoda II is thus equal to the correlated 14.0-month time series of the 40 m anemometer of mast 13 Ashegoda II as displayed in Table 5-6 and Figure 5-10.
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Table 5-7: overview of the long term (10-year) wind data at 40 m a.g.l of mast 13 Ashegoda II
Sector
N NNE ENE E ESE SSE S SSW WAW W WNW NNW
Weibull A
[m/s]
Weibull k
3.63 2.33 1.83 3.93 5.95 2.43 2.86 1.86 7.17 3.05 2.68 2.93
Wind speed
[m/s]
5.19 4.64 5.64 8.31 10.09 7.56 3.49 7.13 3.14 3.87 6.55 6.93
4.68 4.11 5.01 7.52 9.36 6.70 3.11 6.33 2.94 3.46 5.82 6.19
total
9.03
3.32
8.11
N 14 NNW 12 10 WNW 8 6 4 W 2 0 E ENE NNE Frequency 13 Ashegoda II 40 m
WSW
ESE
SSW S
SSE
Figure 5-10: Wind rose at 40 m a.g.l. for Ashegoda site, mast 1 Ashegoda30m_40m, 10-year corrected.
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Figure 5-11: Summarized Weibull-distribution for mast 1 Ashegoda30m_40m, 10-year corrected
5.4 IEC Wind Class

Wind turbines are subjected to environmental conditions which may affect their loading, durability and operation. To ensure an appropriate level of safety and reliability, the environmental parameters shall be taken into account during the selection of appropriate wind turbines. The environmental conditions may be subdivided into normal and extreme external conditions. The normal conditions generally concern long-term structural loading and operating conditions, while the extreme external conditions represent the rare, but potentially critical, external conditions such as short-term gusts. Wind turbines are grouped into classes according to IEC 61400-1, Rev 3 depending to their ability to withstand defined wind conditions. These classes are characterised by the 10-min average value of the extreme wind speed with a transgression probability once every 50 years and by the long-term annual mean wind speed at hub height criteria (required by Rev. 2 of IEC 61400-1 but no longer used by Rev.3), the sub classes A, B and C (the latter implemented by the latest edition of the norm, Rev.3) refer to the turbulence intensity at a wind speed of 15 m/s at hub height.
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Table 5-8: IEC Wind Turbine classification
WT classes Vref [m/s] A I15 B C

I15 I15
I 50.0 0.18 0.16 0.12
II 42.5 0.18 0.16 0.12
III 37.5 0.18 0.16 0.12
The figures given in the table are the maximum values for the respective wind classes
Whereas:
Vref : A: B: C: I15 : 50-year 10-minute averaged extreme wind speed designates the sub-class for higher turbulence characteristics designates the sub-class for medium turbulence characteristics designates the sub-class for lower turbulence characteristics characteristic value of the turbulence intensity at 15 m/s
Vref is determined by applying the corresponding WindPro software tool (using a fitted Gumbel-distribution, a statistical distribution function) on base of the Ashegoda wind measurement data. The prediction is delivering Vref = 24.05 m/s with an uncertainty of 1.97 m/s at the measuring height of 40 m a.g.l. According to IEC 61400 equation (1) 1, Rev 3 the wind speed is extrapolated to hub height using
v (z)
The power law exponent
v hub x ( z / z hub )
(1)
has been determined to 0.118 by analysing the correlated
wind data at the heights of 10 m and 40 m. The power law exponent may differ for other parts of Ashegoda wind park but can be determinded for the position of the measurement mast only. However, the location of the mast is representative for the site. This leads to the following:
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40 m Hub Height Vref [m/s] 24.5 Uncertainty [m/s] 1.97
60 m Hub Height Vref [m/s] 25.2 Uncertainty [m/s] 1.9
The results are equal to IEC wind class III for both heights when taking into account the uncertainties by adding them as a worst-case scenario to the calculated values. As the boundary value for wind class III is 37.5 m/s, a sufficient distance to the calculated value is given in case the power law exponent is considerable higher for some points as assumed. Turbulence is a factor which causes stress and fatigue to several components of a wind turbine, among them blades, bearings and gearbox. It is usually described as turbulence intensity which is defined as the standard deviation (which is calculated from measured wind speed data) divided by the average wind speed. The standard deviation is a statistical measure describing the deviation of the data points in a set from the average value (in this case, from the measured average wind speed in the 10-minute-intervall). The average turbulence intensity of Ashegoda site, measured at the measuring mast 13 Ashegoda II is 10.4%. Table 5-9 shows the results of the wind class investigation.
Table 5-9: Site classification parameters
50-year 10-minute averaged v = 25.2 m/s, uncertainty = 1.9 m/s extreme wind speed at hub height EWS (50) turbulence intensity 10.4 %
This leads Ashegoda site to be classified as IEC wind class III c, the lowest wind class meaning that every wind turbine on the current market ist suitable for Ashegoda wind park in terms of wind class.
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Technical Layout of Ashegoda Wind Park
Lahmeyer International was requested by the client to develop a wind park layout for approximately 40 - 60 MW installed capacity at Ashegoda. This micro-siting has been done using the long term experience of LI in international wind projects by means of the wind industry standard wind farm planning software WindPRO (see chapter 7.2.1).
6.1 Wind Potential Map

Based on the long-term corrected data of the wind measurements on site, a wind potential map has been calculated (using WindPro and WAsP [see chapter 7.2.2] software), providing information for the distribution of the average wind speeds over the area foreseen for the implementation of the wind park (Figure 6-1) and therefore being a base for the wind park layout development process.
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North
Figure 6-1: Wind potential map of Ashegoda site (red line indicates the road, orange areas mark the villages, yellow line the wind park area)
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It can be clearly seen that the ridges west and east of have considerably more favourable wind conditions than the plain in between, caused by the shadowing effects of the ridges and the speed-up effect atop a hill described in chapter 7.1. As mentioned in chapter 4.2, the military installations north of the road (red line) are limiting the wind park area to the region south of the road until it reaches the eastern ridges. It has to be noted that the exact alignment of the road is not known in the western part, as it is not covered by the topographical map provided by EEPCo and had to be estimated by GPS-trackpoints and the impressions gained on site. The villages around the site (orange areas) are furthermore restricting the available space, as noise emissions from the wind turbines and the shadow flicker caused by the moving turbine rotors cause stress to the inhabitants of these villages if specific values are exceeded, see chapters 6.5 and 6.7.
6.2 Wind Turbine Selection

6.2.1 Suitable Tower Heights Typically, wind speeds are higher with increasing levels above ground. For that reason higher towers can exploit higher wind speeds so that the annual energy production can be increased correspondingly. The counteracting effect is the respective additional investment cost for the tower and the foundation. In Ethiopia, the available crane capacities are a further limiting factor. The tower heights for wind turbines are chosen to find a good combination of energy yield which is increasing with tower height, and costs for tower and foundation, which are increasing with tower heights. Furthermore for larger turbines, the tower heights are also increasing in general. Especially in lower wind speed areas the tendency towards higher hub heights can be found. The following table will present the costs of several turbines types in connection with different hub heights showing the effect of higher hub heights described above:
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cost analysis
0.60 0.55 0.50 /kwh 0.45 0.40 0.35 0.30 40 50 60 70 80 hub heights
Figure 6-2: Turbine costs in accordance with several hub heights
Vestas V52 Gamesa G58 Siemens Bonus Enercon E-48 MD70 / MD77
90
100
110
120
This calculation was done with official market prices for the wind turbines of the named manufacturer and the production estimation is connected to the wind conditions at the Ashegoda wind park site. On the x-axis the standard hub height of the selected turbines in meters are plotted, and on the y-axis the specific investment costs in /kWh are presented, calculated by the estimated investment costs devided by the expected annual energy output (P75-value). The use of larger hub heights, above 60 m and up to 100m will cause higher costs for towers, foundations and the erection period, as well as higher crane costs and is not a satisfactory option for the Ashegoda site. At the site which is here under discussion, a quite low wind speed characteristic has been found which has been characterised as wind class III b according to the IEC regulations. As explained before, the terrain at the site can be described as complex. Therefore the extrapolation of the wind speed at higher hub heights compared to the height of the measuring mast is associated with comparatively high uncertainties. These uncertainties could be reduced using higher measuring masts or higher order models for the flow calculations like mesoscalic models like KLIMM.
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Since none of these options have been used at this site, a hub height has been chosen which is fulfilling the following two conditions: high hub height which allows qualified wind regime predictions
Based on LI s experience a meaningful prediction of the wind regime is possible for a site of these characteristics up to hub heights of 50 to 60 m. We recommend taking towers in the range of 50-60 m in order to fulfil both conditions. Nowadays these towers are of normal height for turbines up to 1MW and will be available for the proposed wind turbines. Therefore the hub heights used for the further evaluation have been chosen in this range. Based on our information no sufficient crane capacity is available in Ethiopia in any case. Therefore it has been assumed in the financial model to integrate the crane mobilisation from outside of Ethiopia. Please refer also to chapter 6.2.2 Determination of optimal unit size .
6.2.2 Determination of the Optimal Unit Size The selection of the wind turbine type, suitable for the wind energy application in Ethiopia, is depending on several criteria, such as:
-
Transportation to the foreseen wind park site Available space on site Orographical conditions on site which may prevent the installation of larger turbines in the Megawatt - range Local experiences with regular operation and maintenance with wind turbines Distances between site and turbine manufacturer who will perform the maintenance within the warranty period Wind turbines types yet installed in the county Energy Yield Turbine types available for the Ethiopean market
Wind turbines in the Multi-Megawatt range require a higher level of maintenance to be performed by the turbine manufacturer - compared to proven turbine types in the range below one Megawatt. In addition, proven in the past, almost all wind turbine manufacturers are not willing to offer turbines in the Megawatt class for countries which are just entering the wind energy market.
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In case of Ethiopia, the project under reference will be the first wind park project to be implemented in Ethiopia. It is therefore strongly recommended to start with proven wind turbines in the range below one Megawatt (around 800 kW is todays standard) for the project. This will have the following advantages when compared to wind turbines with larger capacity:
Regular O&M can be performed by local experts and thus a higher availability can be expected. More offers from wind turbine manufacturers will be available in the case a tendering for 800 kW range wind turbines is performed, enabling the Client a more detailed selection. The investigation of the transport logistic has been proven that it will be possible to transport wind turbines in the 800 kW range. For bigger turbines, a detailed road survey has to be performed as mentioned in section 4.4.2. It can be expected that the delivery time for turbines in the Megawatt range will be longer when compared with smaller turbines. For example, several manufacturers are not able to deliver any turbines in the Megawatt range in 2006 and 2007.
Consequently, it was decided to focus on wind turbines in the 800 kW range. The specific investment costs in Euro per generated MWh per year for two selected 2 MW wind turbines compared to the 0.8 MW turbines of the same manufacturer are displayed in the following Table 6-1:
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Total InvestCost [EUR]
V52 E-48 V80 HH 60m E-70 HH 65m
85,148,914 79,988,914 84,498,914 85,858,914
Total InvestCost [EUR] plus Construction Interests 85,148,914 79,988,914 88,723,860 90,151,860
Single Wind Farm Specific InCross EnNet Energy vestment ergy Yield Yield Costs P50 [MWh/y] P50[MWh/y] [EUR/MWh/y] 2,706 2,652 5,704 6,462 210,026 205,835 173,068 196,067 405 389 513 460
Table 6-1: Specific investment costs for selected turbine types Additional Assumptions for V80 and E-70 1) 50%/ WTG additional transportation Costs 2) 60.000 EUR additional Costs for Crane 3) 5 days for installation per Turbine instead of 3 4) 30% additional costs per Foundations 5) 5% additional interrests due to extended construction periode 6) No Electrical Losses are considered 7) Prices for E-70 + V80 from 2005 Parameters E-48 hub height 57m V52 hub height 60m V80 hub height 60m E-70 hub height 65m Park efficiency 0.95 0.95 0.97 0.97 Availibility 0.95 0.95 0.92 0.92 No. Turbines 86 86 34 34
Energy Yields [MWh/WTG/y] E-48 hub height 57m E-70 hub height 65m V52 hub height 60m V80 hub height 60m
2,652 6,462 2,706 5,704
The lower total number of V80 / E-70 wind turbines compared to the number of E-48 / V52 turbines is due to the effect that the distances between Multi-Megawatt turbines have to be considerable larger which may cause a reduced total installed capacity and thus a lower total energy production compared to a 800 kW / 850 kW wind turbines layout.
This calculation is clearly showing the higher specific investment costs of the MultiMegawatt-turbines compared to the 800 kW turbine class. As in contrast to most regions in Europe the space available at Ashegoda wind park site is sufficient to set up the installed capacity as requested with the 800 kW wind turbines, this turbine class is preferred for the project especially when considering that transportation of 2 MW turbines to Ashegoda is not possible and taking into account their one-year longer delivery time compared to the 800 kW turbines. Requests for Expressions of Interest on supply of wind turbines for wind parks in Ethiopia had been submitted to the manufacturers given in the following Table 6-2.
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Table 6-2: Requests for expressions of interest
Manufacturer
(contact person)
Contact(s)
Remarks
Nordex:
Mr. Dwenger
March 06
Nordex is currently completely booked and only 10-12 MD70 (1.5 MW) turbines would be available for delivering in 2007
REpower Systems:
Mr. Fricke
March 06
Ethiopia is not in REpower s country portfolio at present.
no interest
Fuhrlnder AG:
Mr. Kretz
March, April, May and July 2006
Fuhrlnder still needs for further activities a detailed statement of EEPCo concerning the projects like time schedule, project financing and project security.
Vestas:
Mr. Henriksen and Mr. Sondergaard
April, May and June 06
The discussion with Vestas is still ongoing. Vestas standard wind turbines are designed and certified for installation up to 1,000m above sea level maximum. Therefore, the technical support department of Vestas is currently still evaluating how they can quote for that project.
ENERCON:
Mr. Hoch March, April and May 06 Ethiopia is not a key market for Enercon Germany before 2012.
Enercon India:
Mr. Raman
A first EoI was sent to Ato Kebede in Dec. 05, offering the April, May, E-48 with two different hub heights. A detailed offer by EnJune and July ercon India for 2 wind park sites is offered to be send by 06 end of July. Enercon India is currently manufacturing the E48 only.
GE Energy:
Mr. Said (Nairobi)
March 06
An enquiry for 1.5MW turbines in general has not been answered until now, smaller turbines are currently not available
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Suzlon Energy:
Mr. Patel
May and June 06
An enquiry for 600kW and 950kW turbines has not been answered until now
Siemens:
Mr. Kruse
May 06
New markets like Ethiopia are not priority markets for Siemens at present.
Gamesa Eolica:
Mr. Artiago
May and June 06
Gamesa is currently completely booked and they would be able for delivery of turbines from the beginning of 2008 soonest.
SeeBA Energiesysteme:
Mrs. Lefevre
March and April 06
SeeBA is a manufacturer of lattice towers for several tower heights and turbine types, e.g. Nordex-, Fuhrlnder-, REpower- and Vestas turbines. This means that SeeBA s answer as an associated supplier depends on one of the above mentioned manufacturer s decisions finally.
This reduces the manufacturers coming into question to Enercon India, Vestas and Gamesa, the latter with the restriction of being not able to deliver turbines in 2007 as envisaged for the project. For the project, the following turbine types have been considered consequently:
Enercon E-48, 800 kW turbine Vestas V-52, 850 kW turbine Gamesa G-58, 850 kW turbine as an option for delivery in 2008 Enercon E-53, 800 kW turbine, (only an option for delivery in 2007 and offered by Enercon-India)
Note: According to the latest information from Enercon, the company is currently developing a variant of the E-48 wind turbine with a rotor diameter of 53 m and a rated power of 800 kW. The prototype of the Enercon E-53 has been erected in August 2006 in Germany and serial production is expected to start in 2007. This wind turbine has been included as an option within this study.
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6.3 Turbine Distances

For the micro-siting certain minimum distances between the individual wind turbines have to be observed. A common rule of thumb specifies three to five rotor diameters in cross wind directions (less than three is possible under some circumstances) and six to eight rotor diameters in main wind direction as a minimum spacing between the individual turbines. The minimum distance of three times or less the rotor diameter in cross wind direction is only feasible in case the wind direction is strictly perpendicular to the row of wind turbines which can be, due to the given orientation of the ridges on site, be achieved for some parts of the site, and then only if there is no additional rows of turbines within a considerable distance. The smallest distances in cross wind direction for Ashegoda wind park shown in Table 6-3 are the result of the layout development iteration process (the layouts are presented in chapter 6.4) carried out under the condition that the wake losses do not fall below an average level of at least 85 % for the individual turbines, which has been considered as necessary for the economical operation of the wind farm. Depending on the location of the individual wind turbine and the ambient conditions (topography, location of nearby wind turbines, number of wind turbines towards the main wind direction) the distance between two adjacent turbines can be larger. The closest distances between the individual wind turbines are attached in Annex C
Table 6-3: minimal turbine distances for Ashegoda wind park
2.
Turbine type
Minimal distance between turbines in cross wind direction

[m] [rotor diameter]
Enercon E-48 Enercon E-53 Vestas V52 Gamesa G58
170 175 185 185
3.6 3.3 3.5 3.2
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6.4 Wind Park Layouts
Figure 6-3: Digital height model, view from a height of 1000 m height south-east to Ashegoda wind park. A larger print-out can be found in Annex C-5
The park layouts have been developed by LI on base of the wind potential map and the topographical situation, taking into account the limiting factors already discussed in chapters 6.1 and 6.3. The wind potential map (see Figure 6-1) provides information of the areas with the most favourable wind conditions (the areas shown in greenish colours, followed by light blue); wind speeds at the plain (dark blue) are up to 2 m/s lower compared to the ridges, resulting in a concentration of the wind turbines on top of the latter. In order to minimise the wake losses, single lines of wind turbines with considerable distance between the individual rows are more preferable than clusters of turbines, leading to the layouts shown in Figure 6-4 to Figure 6-6. Detailed layout maps including internal roads and cabling are attached in Annex C 1, the exact turbine coordinates are given in Annex C - 2. The orientation of the central part of the eastern ridge nearly parallel to the main wind direction (southeast) prevents the more intensive usage for wind turbines as these will be situated behind each other in the main wind direction while the village at the eastern edge
of the wind park area limits the length of the southeasternmost row of turbines. Further wind turbines at the northern end of the row will cause the exceedance of the noise level limits for the village. Similar limitations exist for the northern end of the westernmost row of turbines.
6.4.1 Wind Park Layout Enercon E-48
Figure 6-4: Ashegoda Wind Park, Layout Enercon E-48
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6.4.2 Wind Park Layout Vestas V52
Figure 6-5: Ashegoda Wind Park, Layout Vestas V52
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6.4.3 Wind Park Layout Gamesa G-58
Figure 6-6: Ashegoda Wind Park, Layout Gamesa G-58
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6.4.4 Wind Park Layout Enercon E-53
Figure 6-7: Ashegoda Wind Park, Layout Enercon E-53
6.4.5 Conclusion The four wind turbine types under consideration allow the implementation of a wind park of the envisaged installed capacity within the foreseen area. Similar size of the turbines and a rotor diameter in a close range (from 48 m [Enercon E-48] to 58 m [Gamesa G58]) leads to a similar basic park design which has then been optimized in terms of park efficiency and energy production.
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6.5 Turbulence
To ensure the close spacing of the wind turbines will not affect (decrease) the lifetime of the turbine and its components, a turbulence calculation is necessary which has been carried out by LI. The turbulence of the wind flow is a factor which causes stress and fatigue to several components of a wind turbine including blades, bearing and gearbox. It consists of the so called ambient turbulence applied to the wind flow by the coarseness of the earth (vegetation, buildings, rocks etc.) and the turbulence added by the other wind turbines of a wind park. The impact of the turbulence to each individual wind turbine has been calculated and analysed by means of the WindPro software package using the Frandsen Turbulence Model6 (as recommended in IEC 61400 1, Rev 3) for GFK-Materials (rotor) with the results of the analysis, presented in Annex C 3, compared to the limits given by IEC 61400 1, Rev 3. The calculated annual average, direction weighted turbulence for each individual wind turbine has to be lower than the critical values of 16 % turbulence intensity for a IEC class A turbine and 14% for a class B turbine at a wind speed of 15 m/s. Furthermore, the calculated annual average, direction weighted turbulence curve has to remain below the the IEC A and B curves for the whole range of wind speeds occurring on site. The IEC wind clases of the selected wind turbines are as follows:
Table 6-4: turbulence sub-classes of the selected wind turbines
Turbine type Enercon E-48 Enercon E-53 Vestas V52 Gamesa G58
Turbulence sub-class A A A A
In case of Ashegoda wind park, at 15 m/s no exceedance of the critical A value of 18% has been calculated for the chosen layouts but the IEC A curves will be exceeded for wind speeds of more than 15 m/s for the majority of the selected wind turbine positions when using the Frandsen-model.
6 Sten Frandsen and Morton L. Thorgersen: Integrated Fatigue Loading for wind turbines in wind farms by combining ambient turbulence and wakes LI / GE6 25 0477 final report ashegoda
New studies show that the Frandsen-Model overestimates the turbulence applied to the turbines. For the calculations, the Empirical Turbilence Dutch TNO Laboratory 1993 Model has been selected alternatively; the results show then no exceedance of the limits. A consultation of the manufacturers of the wind turbines for checking the turbulence impact is generally required; for the proposed wind park layouts for Ashegoda site however, no problems in terms of turbulence intensity are to be expected.
Figure 6-8: Turbulence vs. IEC characteristics (conditions fulfilled)
6.6 Noise Impact

The target of the noise assessment is to investigate the potential noise impact of the wind turbine operation on sensitive areas in the vicinity of the wind farm. The advisable distances between residences and the proposed wind turbine sites depend on a variety of factors including local topography, eventually background noise and the size of wind farm development. Official demands with regard to noise limit values for the operation of a wind park in Ethiopia are not specified. Therefore a prediction of the sound produced by the proposed wind farm in the surrounding area and an optimisation of the micrositing was made in accordance to the strict German noise limit regulations. The calculation method is specified in ISO 9612-2 and implemented in the WindPro software used for the estimation of the noise effects. The sound emission data used in the calculation and the sound power level of the turbine bases on information given by the turbine manufacturers. Correspondingly the following standard values for noise emission are considered depending on the utilisation of the area:
Table 6-5: Noise standards according to German standards
Utilisation
Noise emission [dB(A)]

Day time 06:00 22:00 Night time 22:00 06:00
Regimen and hospital areas Exclusive residential areas General residential areas Village centres, mixed utilisation with small trades Working areas Industrial areas
45 50 55 60 65 70
35 35 40 45 50 70
Considering that identified noise sensitive areas can be assigned to the Village centres with mixed utilisation , the limiting noise standard for the operation of the wind farm is an impact level of 45 dB (A) at night time. The results of the calculations are showing no conflict in terms of noise level, the boundary levels for the noise emissions during the night are not exceeded for the emission points (houses of a village nearest to the wind park, churches) in the vicinity of the proposed wind farm. The detailed results can be found in the Annex B 2.
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6.7 Shadow Impact

When the sun is just above the horizon, the shadows of the wind turbine generators can be very long and can move across houses (windows) for short periods of time. If this happens for longer period, it causes stress to the inhabitants. The exact position and time period of shadow can be calculated very accurately for each location, taking into account the structure of topography and the movements of the sun. Official Boundary levels are not existing for the shadow flicker effect. In Germany, a commonly accepted value is the maximum of 30 hours shadow caused by the wind turbines per year, and 30 minutes shadow per day. WindPro software has been used for the calculation of the shadow impact. For the Enercon E-48 wind turbines, no exceedance of the limits has been calculated, whereas the Enercon E-53, Vestas V52 and Gamesa G58 wind turbines will cause an exceedance of the limits for the village immediately east of the wind park. However; the estimations are carried out for the worst case that the sun is always shining, 365 days per year. An additional calculation has been performed using the real sunshine probability . This data has been estimated by considering the (average) rainy days per year in northern Ethiopia as days without sunshine; this approach can be considered as adequately conservative; no exceedance of the limits of the maximum shadow impact can be expected now. The estimated sunshine probability is displayed in Table 6-6.
Jan Rain days Probability of rain Probability of sunshine 0
Feb 0
Mar 1
Apr 1
May 4
Jun 5
Jul 8
Aug Sep 7 1
Oct 1
Nov Dec 0 0
0.00 0.00 0.03 0.03 0.13 0.17 0.26 0.23 0.03 0.03 0.00 0.00 1.00 1.00 0.97 0.97 0.87 0.83 0.74 0.77 0.97 0.97 1.00 1.00
Table 6-6: Sunshine probability at Mekelle
The detailed results can be found in Annex B - 3.
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Energy Production Estimation
The calculation of the wind resources on-site and the corresponding energy production are based on the processed wind data collected by the measuring masts at Ashegoda (see chapter 5.1) with the energy yield estimation carried out by means of the WindPro and WAsP software packages.
7.1 Meteorology
Generally, wind flows are large-scale balancing air movements in the atmosphere between high pressure and low pressure-areas, in some cases superposed by local balancing movements. The pressure differences are caused, and driven by, the solar heating of the Earth s atmosphere, landmasses and water bodies. Warm air is rising, leaving a low pressure area at the surface and causing high pressure areas within higher layers of the atmosphere where the air is cooling down and falling to lower layers with respective pressure effects. Since the balancing air movements also run near the earth s surface they are significantly affected by the surface roughness and the orographic terrain structure. Roughness is a quantitative description for the friction of the surface causing a slowdown of the near-surface air flow. Water and land without vegetation has a low roughness and therefore a minimal effect to the wind, forests or cities have a high roughness.
Figure 7-1: Wind flow over forest (source: GASCH 1996)
The influence of the roughness to energy of the wind flow is shown in Figure 7-5.
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Figure 7-2: Wind flow energy vs roughness class (source: WindPro manual)
On top of a hill, the air flow is compressed and thus the wind has a higher energy density compared to the same air flow over flat terrain. Furthermore, valleys and similar terrain structures can act as a blast pipe, concentrating the air flow. Behind mountain ridges and inside valleys the air flow is disturbed by recirculation and shading effects.
from: Harald Frater, Wetter und Klima. Phnomene der Erde
The influence of the topography is shown in the energy calculation results in Annex C in Production Analysis
7.2 Software Basics

7.2.1 WindPro The WindPRO philosophy is object orientated projecting. A wind park project consists of a number of objects, whereby the wind turbines are key elements. Objects are: wind turbines, wind monitoring stations, local obstacles etc. Some of the objects directly determine the wind energy, others focus on the environmental aspects and yet some others can also influence the feasibility of the project. The characteristics of the objects are combined with the terrain data such as the surface roughness maps and the height level contour lines and serve as basic input data for the energy calculations with WAsP, which is the WindPRO integrated meteorological simulation model. 7.2.2 WAsP WAsP is a software program for predicting wind climate and energy yield of wind turbines. The predictions are based on wind data measured on site or from stations in the same region and considers the effects of the surrounding terrain to the wind flow (topography, surface description, obstacles).
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WAsP uses the wind atlas methodology. In a first step the influence of the terrain to the wind flow is calculated, creating a generalised regional wind climate. In a reverse process, this generalised regional wind climate (called wind statistic) is then applied to topography, surface description and obstacles at the vicinity of each individual wind turbine, providing the wind flow at this point even if the wind data has measured in some distance which can be, depending on the terrain, up to several kilometres. For the energy yield calculation as well as for the wind prediction analyses within this study the standard WASP-WindPro model has been generated using a digital terrain model in a radius of at least 20 km around the centre of the site. A digitised roughness map has been evaluated also in radius of at least 20 km. In a radius of about 1 km all major obstacles have to be considered in the model, but in the case of Ashegoda site there are no such obstacles.
7.3 Model Input Parameters

Besides the processed wind data, important input parameters for the energy yield calculation model are as described the terrain description, comprising of the orographical (topographical) model and the description of the earths surface (roughness description).
7.3.1 Orography
The orographical terrain data has been gathered from the SRTM -Shuttle Radar Topography Mission data base which is provided by the US Geological Survey. The mission has scanned the earths surface between 60 latitude north and 54 latitude south, with a resolution of 90 x 90 m. The data in between these points has been interpolated using the WindPro software to gain the topographical model of Ashegoda area, with a height contour density of 5 metres, as shown in Figure 7-3(a larger print-out can be found in Annex C-4). Orographical data of the 1:12.500 scale topographical map provided by EEPCO has been used for the wind park area itself. The gained data has been compared with the Ethiopian topographical maps in 1:50.000 scale to ensure the plausibility of the orographical terrain data.
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Figure 7-3: SRTM height contour map of Ashegoda
The height data provides a three-dimensional digital elevation model of the wind farm site as shown in Figure 7-4 with a larger print-out to be found in Annex C-5
Figure 7-4: three-dimensional digital elevation model of Ashegoda site, view from south-western direction.
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7.3.2 Roughness
Abbildung 7-1: Surface of the project site
For the model simulations the roughness classification for the surface in close proximity to the wind farm site is derived from topographical maps, data obtained during site visits as well as aerial photos of the region. A basic description of the roughness classes is given in the following (roughness length is a second roughness description unit), it has to be noted that the roughness class is a defined value which can not be measured directly. The roughness length describes the height where the wind speed in a logarithmic wind profile is becoming zero; the coarser the surface, the higher the roughness length.
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Figure 7-5: Roughness classes (source: WindPro Manual)
The roughness description for Ashegoda site is presented in the following Figure 7-6.
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Figure 7-6: Roughness map of Ashegoda site (red ellipse: wind park site)
7.3.3 Wind Shear
The upper anemometers of the wind measurement had been installed at a height of 40 m above ground while the hub height of the proposed wind turbines is between 55 m and 60 m above ground level. To estimate the wind regime at hub height of the wind turbines (the WAsP model simplifies the wind speed distribution over the rotor as concentrated to the hub height) the wind speed is extrapolated according to the following formula:
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vnew
vold
hnew hold
Whereas
is the Power Law Exponent or Wind Gradient which is depending on the
roughness of the terrain, the thermical lamination of the atmosphere, the wind speed itself and the height above ground. For Ashegoda wind park, the Exponent has been calculated sectorwise by means of the WindPro-Software package from the measured wind data at the heights of 10 m a.g.l. respectively 40 m a.g.l. The wind gradients for the twelfe wind distribution sectors which had been used for the generation of the wind statistic are presented in Table 7-1, the calculated wind profile (increase of the wind speed with height) of sector south-southeast (main wind direction) as an example is displayed in Figure 7-7. Under consideration of terrain and roughness, the wind profile for the area of each individual wind turbine is then calculated by WAsP.
Table 7-1: Hellmann-exponents, sector-wise, for the location of met mast 1 Ashegoda30m_40m
Sectors
N NNE ENE E ESE SSE S SSW WSW W WNW NNW
Hellmann-Exponent
0.152 -0.0218 -0.2513 -0.102 0.0288 0.0657 -0.0483 0.5547 -0.0303 0.0009 0.2859 0.3181 0.1184
Average
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Figure 7-7: Wind Profile for Ashegoda wind measurement
The extrapolation from 40 m measuring height to 60 m hub height can be considered as reasonable but a further increase of the wind speed for hub heights of 80 m and more is not stringent as the power law is not suitable for height extrapolations over this range.
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7.4 Wind Turbine Parameters
Four scenarios have been selected:
1. 61 x ENERCON: E-48; Hub Height 57 m Nominal power: Control system: Rotor diameter: 0.800 MW Pitch 48 m
2. 60 x VESTAS: V-52, Hub Height 55m Nominal power: Control system: Rotor diameter: 0.850 MW Pitch 52 m
3. 57 x GAMESA: G-58; Hub Height 60m Nominal power: Control system: Rotor diameter: 0.850 MW Pitch 58 m
4. 61 x ENERCON: E-53; Hub Height 57 m Nominal power: Control system: Rotor diameter: 0.800 MW Pitch 53 m
optiononal
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7.4.1 Power Curve and Air Density
The Power curve of a wind turbine is an important parameter, describing the relation between the wind speed on site and the respective electrical energy output. Power curves and ct-values (a parameter for the calculation of the wake effect) of the turbines under consideration are given in Annex C - 2 and are applied for the energy calculation. The parameters are provided as follows:
Table 7-2: Sources of the power curves
Enercon E-48 Origin Date Note Calculated Enercon India 07/03/2006 guaranteed power curve
Enercon E-53 Calculated Enercon Germany September 2005 guaranteed power curve
Vestas V52 Calculated Vestas 11-2004 guaranteed power curve
Gamesa G58 Calculated Gamesa 4/10/2002 Official power curve
Power curves which had been measured by independent institutions are of higher quality than calculated ones. Due to the fluctuations of both the characteristics of the wind turbine components, and the measuring conditions power curves of different measurements differing slightly between each other. Furthermore, the measurement does not provide the explicit power curve used for the calculations; the values are scattered around the mean, as displayed in Figure 7-8 (source: German measuring protocol of Windtest KWK).
Figure 7-8: measured power curve with scatter band
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Several manufacturers are thus providing power curves which are calculated from the results of several measured ones; the performance of these calculated power curves might be contractually guaranteed by the manufacturers. The power curves of the Enercon E-48 and Vestas V-52 wind turbines are such power curves while the power curves of the Gamesa G-58 is a non-measurement based calculated power curve. The E-53 is currently in the planning stage thus the power curve is only calculated theoretically but will be revised after the measurement of the prototypes. During the calculation of the energy yield, the power curves, given for the standard conditions of air density = 1.225 kg/m3 are adapted to the air density of each individual turbine location at hub height, with the transformed power curves for the average air density at Ashegoda site to be found in Annex C 2. The air density at Ashegoda is calculated by WindPro for each individual wind turbine according to the site conditions, height above sea level plus the hub height of the turbines of 57 m / 60 m and an annual average temperature level of 17.7C; the air density ranges from 0.914 kg/m3 to 0.926 kg/m3. The temperature data is taken from the Tekeze River Basin Integrated Development Master Plan, Vol XI, Water Resources, Climatology, May 1998. As verification, Asmara meteorological station was chosen as the nearest station in the data base implemented in WindPro which is located at an area similar to Mekelle (Ethiopean Highlands close to the descent to the coastal plain) and provides an annual average temperature level of 16 C which is within the same range.
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900 800 700 power [kWh] 600 500 400 300 200 100 0 1 3 5 7 9 11 13 15 17 19 21 23 25 wind speed [m/s]
Enercon E-48 Vestas V52 Gamesa G58 Enercon E-53
Figure 7-9: Power curves of the wind turbines under consideration for Ashegoda wind park for an air density of = 1.225 kg/m3
As can be clearly seen, the Enercon E-53 and Gamesa G-58 wind turbines are generating more energy in the wind speed range from about 6 m/s to 12 m/s which occur more frequently then the other wind speed ranges, see the Weibull-distribution in Figure 7-10. This is mainly caused by be larger rotor diameter compared to the Enercon E-48 and Vestas V52 wind turbines.
Figure 7-10: Weibull distribution of the correlated wind data of mast 1 Ashegoda 30_40m
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7.5 Losses and Uncertainties

Meteorological phenomena can only be predicted to a certain limited degree. As a consequence it is not possible to make an exact forecast of the wind conditions even if longterm reference data (which can only represent the past) is used. Furthermore, data collection and processing is always afflicted with errors and inaccuracies as is every mathematical or physical model used to describe or predict real procedures. To compensate the inaccuracies in modelling approach and basic input data, it is advisable to use factors of safety to adjust, or discount the final output. Two blocks determine the factors of safety: losses and uncertainties.
7.5.1 Losses
Losses are found on the whole energetic transformation chain from the rotor (kinetic energy) to the substation (electrical energy). The losses are simple add-ups to the total reduction of the calculated energy yield. In detail: 7.5.1.1 Park Efficiency After passing the rotor of a wind turbine, the wind has a decreased speed due to the kinetic energy taken away by the rotor and increased turbulence caused by the rotating rotor and the difference in speed compared to the undisturbed flow. Until the speed difference to undisturbed flow is not equalised, the result is a lower energy yield for the wind turbines following in the direction of the flow. These losses are called array or wake losses. The calculation of the wake losses of the wind turbines causing the so called shadowing effect between the wind turbines has been carried out using the wake model PARK which is part of the WindPRO software with the array losses of the individual wind turbine layouts of Ashegoda wind park calculated as follows:
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Table 7-3: Array losses Ashegoda wind park
Turbine type Enercon E-48 Vestas V52 Gamesa G58 Enercon E-53
Array losses 5.8% 5.0% 5.3% 5.7%
The values are within an acceptable range for a wind park with several rows of closely spaced wind turbines. 7.5.1.2 Turbine Availability The turbine availability is the percentage of a year (i.e. 8760 hours) where the turbine is able to generate electrical energy while being connected to the grid. Reasons for the non-availability of a wind turbine are various, and include downtimes for regular maintenance and servicing, component failures (including defect sensors), overheating of components, repairs or exchange of components, as well as errors and downtimes of the superior electrical grid. The turbine availability is set to 95 % as a standard value according to LIs long term experience, taking into account that no experience in the operation of windturbines in Ethiopia exists at present, and that all local staff have to be well educated and trained in the first operational years of the windpark. The proposed value is comparable with average values achieved in other wind parks abroad, and particularily in new wind markets where the total infrastructure for a high level operation of wind farms have to be build first. Later on and after the first years of sufficient turbine availability averages, the aim should be to raise the level up to 97 % which could be seen as a good value for the first wind parks in Ethiopia. To reach 98 % turbine availability as in high developed countries like in Europe, well educated and experienced staffs are needed. 7.5.1.3 Electrical Losses The electrical losses depend on the resistance of the conductors and on the current intensity. To assess the current intensity of the wind park the following methodology is used: the duration curve of the wind park for one year is approximated by a two stage approach. For 10% of the year (876 hours) full power is assumed and for the rest of the year (7,884 hours) the load is estimated to 25% of full load.
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For this power pattern of the wind park, the turbine current is derived and the losses for the internal wind park cabling, and for the wind park cabling connection to the substation are calculated relative to the total energy output. For electrical losses LI has calculated the following values:
-
internal park cabling: turbine transformers: transmission line 230kV: substation transformer
0.2% 1.1% 0.5% 0.5%
internal park transmission lines: 0.5%
The total electrical losses of the park are estimated at 2.8% of that amount of electricity which is produced by the wind turbines.
7.5.1.4 Miscellaneous Losses In addition to the transmission losses and lost production due to reduced availability a number of other losses should be taken into account. The aerodynamic turbine performance described by the power curve is strongly depending on the profile and surface of the wind rotor blades. Blade fouling from dirt or insects on the surface of the blades lead to non-expected change of airfoil characteristics and to lower energy yield. The average air density of 17 in 2.400 m above sea level provides no thermal problems for the wind turbines. No effect of the low air density is to be expected than the reduced energy production. High wind control losses are caused by the turbine cut-in and cut-out strategy. The turbines will cut-off when cut-out wind speed is reached and will not re-cut-in until wind sped is below a defined wind speed level, lower than the cut-out level. A reduction factor of 0.1% to the gross energy output was applied to take these effects into account.
7.5.2 Wind Speed related Uncertainties

Uncertainties cover the inaccuracy of the data processing from the measurement, the internal data processing and the long-term prediction. A percentage value describes the
standard deviation of scattering results around the expected true value. For the energy calculation, these wind speed-related uncertainty values have to be transformed to the energy production level. Additional uncertainties have to be determined for modelling and mathematical algorithms. 7.5.2.1 Uncertainties of the WAsP-Model The WAsP (Wind Atlas Analysis and Application Program) software is a proven tool used in the wind industry for more than 15 years. As every model it has limitations and uncertainties mainly due to the simplifications behind it which had been done to handle the calculations on desktop computers in an acceptable time frame. Mesoscalic meteorological models require powerful computers and a calculation time of several days. However, WAsP has been used for a considerable time worldwide and the uncertainties have been evaluated over the years. In case of Ashegoda, the existence of modestly shaped hills and ridges lead to a suffiecient quality of the calculation.
Transfer Wind to Energy The discrete wind flow from discrete wind directions is simplified to 10-minute average values for 12 direction sectors and statistically preprocessed before being applied to the power curve. The uncertainty of this step can be set to 1%. Site modelling Consists basically of two input parameters: the topographical model and the surface description (roughness description). The topographical data is gained from the digital 1:12.500 map delivered by EEPCO to LI for the wind park area itself and from the SRTM (Shuttle Radar Topographical Mission) Satellite height data base for the vicinity of the site. Quality and resolution of both data are good, the uncertainty is low. As the surface structure of the earth in the area around Mekelle is not complex, it can be described with acceptable accuracy. The uncertainty of the Site Model is set accordingly to the below-average value of 2.5%. Flow modelling WasP has been developed for use in areas with only modestly shaped hills which is the case at Ashogoda site. The uncertainty of the flow modelling is set to the medium value of 3.0% . Wake modelling
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The uncertainty of the selected wake model (N.O.Jensen) is low and as the area of the wind farm itself is nearly plain (no additional uncertainties due to the influence of the terrain) it can be set to 0.5%.
wind-related uncertainties for the WAsP-model

Source Transfer Wind to Energy Site Model Flow Model Wake Model Uncertainty WAsP Uncertainty Comments
1.0% typical value 2.5% below average 3.0% medium average value 0.5% typical value 4.1%
To calculate the total uncertainty all single uncertainties can be considered as stochastically independent and the commonly used way of estimating the joint uncertainty of independent (un-correlated) uncertainties is to calculate the RMS (root mean square) value. Total wind speed related uncertainty WAsP =
0.012
0.025 2
0.03 2
0.005 2
0.041
7.5.2.2 Uncertainties of the Wind Data The reliability of the WAsP calculation is highly dependent on the quality of the input parameters of which wind data is the most important one. The collection and processing of wind date is subject to several uncertainties. Anemometer calibration Anemometers should be calibrated in order to secure that the measured wind speed equals the actual wind speed. The anemometers of the Ethiopian wind measurement campaign have been calibrated according to MEASNET standards, the calibration protocols have been handed over to LI. The assignment of the individual calibration protocols to the individual anemometers of the measuring campaign is not possible but as nothing significantly conspicuous has been detected the uncertainty of the calibration process can be set to the average value of 1.5 %.
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Anemometer characteristics Describes the uncertainty of the quality the anemometer detects the wind flow and processes the values to digital data. Can be set to the lower value of 0.5% as calibrated first class anemometers have been used. Mounting error The anemometer has to be vertically mounted. The uncertainty describes the effect if this is not done properly. As can be seen in Figure 5-3, mast 13 Ashegoda II is not properly vertical aligned. For the other mast the mounting is more accurately. The average uncertainty for the mounting error is set to 1.0 %. Data recording Describes the uncertainties related to processing and storage of the data provided by the anemometer and the wind vane in the data logger. Set to 0.4 %. Terrain description Describes the uncertainty of the influence of the terrain to the measurement. Inclined wind flow and strong turbulence can not be measured accurately by a cup anemometer. At Ashegoda site, mast 4 Ashegoda I is located close to a steep descent in main wind direction (height difference 20 m), mast 13 Ashegoda II is situated on a small plateau on a modestly shaped ridge. The uncertainty for the terrain description is set to the average value of 1.5 %. Long term correlation The data used for the long term correlation as well as the MCP-Process includes uncertainties; as long-term reference data of 25 years is available the uncertainty for this category can be set to the moderate value of 3.0 %. This can be decreased when using measured long-term data near the site (NCEP data are recalculated data).
To calculate the total uncertainty all single uncertainties can be considered as stochastically independent and the commonly used way of estimating the joint uncertainty of independent (un-correlated) uncertainties is to calculate the RMS value. The total uncertainty of 4.1 % refers to the wind speed at hub height for each single turbine.
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Uncertainties for Wind Database Source Anemometer calibration Anemometer characteristics Mounting error Data recording Terrain description Long term correlation Uncertainty Wind Uncertainty Comments 1.5% typical average value, 0.5% typical lower value, 1.0% increased value 0.4% typical value 1.5% modestly shaped terrain 3.0% data base satisfactorily 3.9%
Total uncertainty Wind Data =
0.015 2
0.05 2
0.012
0.004 2
0.015 2
0.03 2
0.039
7.5.2.3 Total Wind related Uncertainty The total wind related uncertainty is the RMS value of Total uncertainty WAsP and Total uncertainty Wind which is 5.6%.
7.5.2.4 Uncertainties of the Power Curve It has to be considered that the power curve used for the gross energy calculation is also subject to uncertainties which had been described in chapter 7.4.1. Due to the non linear relation of mean wind speed and energy these uncertainties can not be integrated into the uncertainties of wind conditions but have to be dealt with separately. In chapter 7.5.3 the calculation of the uncertainties of the energy yield for the different wind turbine types is performed; the uncertainty of the power curve is, assuming the power performance of the turbine as independent of the energy deviation due to wind uncertainties, connected to the uncertainties of the energy yield by the following equation:
Total uncertainty =
uncertainty energy yield
uncertainty power curve
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The turbine supplier usually gives a guarantee of 95 % of the energy values, which leads to an uncertainty to the predicted figures of 5 %; the actual guarantee value has to be negotiated with the manufacturer, the uncertainty can be adapted accordingly. This figure has been taken for every wind turbine type as it is sufficiently conservative for both calculated and measured power curves.
7.5.3 Uncertainties Energy Yield

The interpretation of uncertainty in energy yield from the total uncertainty in wind speed is not straightforward. The theoretical cubic relation of wind speed and energy does not give a correct description of the phenomena. For the long term mean wind speed averaged over all turbine locations at hub height the average wind speed value is derived from the wind data processing. The uncertainty is equivalent to a reduction to the mean wind speed when considering the worst case. To translate this reduced mean wind speed into energy yield the parameters of a Weibull distribution are adapted and this new Weibull distribution is then applied to the individual turbine power curves. The results for the considered wind park layout can be found in the examinations in the following tables Deviation of Energy due to wind uncertainties , indicating an energy deviation due to the uncertainty in wind speed assessment.
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7.5.3.1 Enercon E-48 The transformation of the wind speed related uncertainties into the energy related uncertainty by appropriately reducing the wind speed at hub height leads to the following results displayed in Table 7-4:
Table 7-4: Deviation of Energy due to wind uncertainties
Mean wind speed [m/s] calculated WAsP reduced wind speed; uncertainties taken into account 8.78
Deviation wind speed 0.0%
A-factor [m/s]
k-factor
Energy Yield [MWh/y] 252,175
Deviation Energy
9.75
3.62
0.0%
8.29
5.6%
9.20
3.62
217,290
13.83%
Assuming the power performance of the turbine as independent of the energy deviation due to wind uncertainties, the total uncertainty for energy yield can be determined from the uncertainties of wind conditions (13.83 %) and power curve (5%) ( (13.83 ) 2 to 14.71 %
5 2 ).
The analysis of uncertainties is an important step for the risk assessment of the project. From the predicted annual energy and from the total uncertainty on the energy level of 16.5 % the probability of exceeding of certain energy yields can be calculated by statistical methods. Applying a Gauss process for the statistic analysis, the calculated gross annual energy can be understood as the mean annual energy yield having the highest rate of probability of all single results. The uncertainty shall be understood as standard deviation of the expected results around the most probable event. Figure 7-11 displays the probabilities that a certain amount of annual electricity production is exceeded. Gross annual energy describes the energy yield as calculated and net annual energy the energy yield considering the losses and uncertainties.
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290,000
MWh/y
280,000 270,000 260,000 250,000 240,000 230,000 75% 220,000 210,000 200,000 190,000 180,000 170,000 160,000 150,000 0.0% 50 %
219,133
90%
197,392
177,82
10.0%
20.0%
30.0%
40.0%
50.0%
60.0%
70.0%
80.0%
90.0%
100.0%
Probability of Exceedance
gross annual energy net annual energy
Figure 7-11: Probability of exceedance for Ashegoda wind park, Enercon E-48 layout
Besides the uncertainties for wind conditions and power curve, the losses for electricity transmission (2.8 %) and reduced availability of the turbines (95 %) have also to be considered as constant factors, reducing the estimated energy yield. For the Enercon E-48 800kW wind turbine described within section 6.2 the energy calculations, the results for different levels of exceedance are displayed on the following table:
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Table 7-5: Energy Calculations for Ashegoda Wind Park, Enercon E-48 layout
Enercon E-48 800 kW; 57 m hub height at Ashegoda Wind Park

Enercon E-48 kW 800 86 MW m m m2/kW 68.8 57 48 2.26 Enercon E-48 800 86 68.8 57 48 2.26 Enercon E-48 800 86 68.8 57 48 2.26 Enercon E-48 800 86 68.8 57 48 2.26
Turbine Type Turbine Capacity Number of WTG Installed park capacity Hub Height Rotor Diameter Specific Rotor Area
Probability
Gross energy production Wind park array losses Turbine availability Electrical losses Miscellaneous losses
%
MWh/y % % % %
50
252,175 5.8 95.0 2.8 0.10
75
227,155 5.8 95.0 2.8 0.10
90
204,637 5.8 95.0 2.8 0.10
95
191,160 5.8 95.0 2.8 0.10
Net Output
Specific Energy Production Full load hours Capacity Factor
MWh/y 219,133 197,392 177,824 166,113

kWh/m2 h/a % 1,408 3,185 36.4 1,268 2,869 32.8 1,143 2,585 29.5 1,067 2,414 27.6
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7.5.3.2 Vestas V52 The transformation of the wind speed related uncertainties into the energy related uncertainty by appropriately reducing the wind speed at hub height leads to the following results displayed in Table 7-4:
A-factor [m/s]
k-factor
Deviation Energy
9.81
3.62
0.0%
8.35
5.6%
9.26
3.62
218,642
12.14%
Assuming the power performance of the turbine as independent of the energy deviation due to wind uncertainties, the total uncertainty for energy yield can be determined from the uncertainties of wind conditions (12.14 %) and power curve (5 %) ( (12.14) 2 to 13.13 %
5 2 ).
The analysis of uncertainties is an important step for the risk assessment of the project. From the predicted annual energy and from the total uncertainty on the energy level of 15.10% the probability of exceeding of certain energy yields can be calculated by statistical methods. Applying a Gauss process for the statistic analysis, the calculated gross annual energy can be understood as the mean annual energy yield having the highest rate of probability of all single results. The uncertainty shall be understood as standard deviation of the expected results around the most probable event. Figure 7-12 displays the probabilities that a certain amount of annual electricity production is exceeded. Gross annual energy describes the energy yield as calculated and net annual energy the energy yield considering the losses and uncertainties.
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280,000
MWh/y
270,000 260,000 250,000 240,000 230,000 220,000 210,000 200,000 190,000 180,000 170,000 160,000 150,000 0.0% 75% 50 %
218,084
90%
198,771 181,38
10.0%
20.0%
30.0%
40.0%
50.0%
60.0%
70.0%
80.0%
90.0%
100.0%
Figure 7-12: Probability of exceedance for Ashegoda wind park, Vestas V52 layout
Besides the uncertainties for wind conditions and power curve, the losses for electricity transmission (2.8 %) and reduced availability of the turbines (95 %) have also to be considered as constant factors, reducing the estimated energy yield. For the Vestas V52 850kW wind turbine described within section 6.2 the energy calculations, the results for different levels of exceedance are displayed on the following table:
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Table 7-7: Energy Calculations for Ashegoda Wind Park, Vestas V52 layout
Vestas V52 850 kW; 60 m hub height at Ashegoda Wind Park

Vestas V52 kW 850 86 MW m m m2/kW 73.1 60 52 2.50 Vestas V52 850 86 73.1 60 52 2.50 Vestas V52 850 86 73.1 60 52 2.50 Vestas V52 850 86 73.1 60 52 2.50
Probability
%
MWh/y % % % %
50
248,854 5.0 95.0 2.8 0.10
75
226,816 5.0 95.0 2.8 0.10
90
206,981 5.0 95.0 2.8 0.10
95
195,110 5.0 95.0 2.8 0.10
Net Output
MWh/y 218,084 198,771 181,388 170,985

kWh/m2 h/a % 1,194 2,983 34.1 1,088 2,719 31.0 993 2,481 28.3 936 2,339 26.7
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7.5.3.3 Gamesa G 58 The transformation of the wind speed related uncertainties into the energy related uncertainty by appropriately reducing the wind speed at hub height leads to the following results displayed in Table 7-4:
A-factor [m/s]
k-factor
Deviation Energy
9.84
3.62
0.0%
8.37
5.6%
9.28
3.62
265,865
11.10%
5 2 ).
The analysis of uncertainties is an important step for the risk assessment of the project. From the predicted annual energy and from the total uncertainty on the energy level of 14.02% the probability of exceeding of certain energy yields can be calculated by statistical methods. Applying a Gauss process for the statistic analysis, the calculated gross annual energy can be understood as the mean annual energy yield having the highest rate of probability of all single results. The uncertainty shall be understood as standard deviation of the expected results around the most probable event. Figure 7-13 displays the probabilities that a certain amount of annual electricity production is exceeded. Gross annual energy describes the energy yield as calculated, and net annual energy the energy yield considering the losses and uncertainties.
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340,000
MWh/y
330,000 320,000 310,000 300,000 290,000 280,000 270,000 260,000 250,000 240,000 230,000 220,000 210,000 200,000 190,000 0.0% 75% 50 %
261,258
90%
239,804
220,49
10.0%
20.0%
30.0%
40.0%
50.0%
60.0%
70.0%
80.0%
90.0%
100.0%
Figure 7-13: Probability of exceedance for Ashegoda wind park, Gamesa G58 layout
Besides the uncertainties for wind conditions and power curve, the losses for electricity transmission (2.8 %) and reduced availability of the turbines (95 %) have also to be considered as constant factors, reducing the estimated energy yield. For the Gamesa G58 850kW wind turbine described within section 6.2 the energy calculations, the results for different levels of exceedance are displayed on the following table:
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Table 7-9: Energy Calculations for Ashegoda Wind Park, Gamesa G58 layout
Gamesa G58 850 kW; 60 m hub height at Ashegoda Wind Park

Gamesa G58 kW 850 86 MW m m m2/kW 73.1 60 58 3.11 Gamesa G58 850 86 73.1 60 58 3.11 Gamesa G58 850 86 73.1 60 58 3.11 Gamesa G58 850 86 73.1 60 58 3.11
Probability
%
MWh/y % % % %
50
299,064 5.3 95.0 2.8 0.10
75
274,505 5.3 95.0 2.8 0.10
90
252,402 5.3 95.0 2.8 0.10
95
239,174 5.3 95.0 2.8 0.10
Net Output
MWh/y 261,258 239,804 220,494 208,939

kWh/m2 h/a % 1,150 3,574 40.8 1,055 3,280 37.4 970 3,016 34.4 920 2,858 32.6
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7.5.3.4 Enercon E-53 The transformation of the wind speed related uncertainties into the energy related uncertainty, by appropriately reducing the wind speed at hub height, leads to the following results displayed in Table 7-4:
A-factor [m/s]
k-factor
Deviation Energy
9.75
3.62
0.0%
8.30
5.6%
9.20
3.62
251,976
12.04%
5 2 ).
The analysis of uncertainties is an important step for the risk assessment of the project. From the predicted annual energy and from the total uncertainty on the energy level of 14.88 % the probability of exceeding of certain energy yields can be calculated by statistical methods. Applying a Gauss process for the statistic analysis, the calculated gross annual energy can be understood as the mean annual energy yield having the highest rate of probability of all single results. The uncertainty shall be understood as standard deviation of the expected results around the most probable event. Figure 7-14 displays the probabilities that a certain amount of annual electricity production is exceeded. Gross annual energy describes the energy yield as calculated and net annual energy the energy yield considering the losses and uncertainties.
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320,000
MWh/y
310,000 300,000 290,000 280,000 270,000 260,000 250,000 240,000 230,000 220,000 210,000 200,000 190,000 180,000 0.0% 50 %
75%
249,183
90%
227,278
207,56
10.0%
20.0%
30.0%
40.0%
50.0%
60.0%
70.0%
80.0%
90.0%
100.0%
Figure 7-14: Probability of exceedance for Ashegoda wind park, Enercon E-53 layout
Besides the uncertainties for wind conditions and power curve, the losses for electricity transmission (2.8 %) and reduced availability of the turbines (95 %) have also to be considered as constant factors, reducing the estimated energy yield. For the Enercon E-53 800kW wind turbine described within section 6.2 the energy calculations, the results for different levels of exceedance are displayed on the following table:
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Table 7-11: Energy Calculations for Ashegoda Wind Park, Enercon E-53 layout
Enercon E-53 800 kW; 57 m hub height at Ashegoda Wind Park

Enercon E-53 kW 800 86 MW m m m2/kW 68.8 57 53 2.76 Enercon E-53 800 86 68.8 57 53 2.76 Enercon E-53 800 86 68.8 57 53 2.76 Enercon E-53 800 86 68.8 57 53 2.76
Probability
%
MWh/y % % % %
50
286,451 5.7 95.0 2.8 0.10
75
261,271 5.7 95.0 2.8 0.10
90
238,608 5.7 95.0 2.8 0.10
95
225,045 5.7 95.0 2.8 0.10
Net Output
MWh/y 249,183 227,278 207,564 195,765

kWh/m2 h/a % 1,313 3,622 41.3 1,198 3,303 37.7 1,094 3,017 34.4 1,032 2,845 32.5
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7.6 Summary
The four layouts scenarios for Ashegoda wind park show the following energy yield, related to the P75 value:
Miscellaneous losses Electrical losses Gross energy production 274,505 KW/h Gross Energy production 226,816 KW/h 250.000 Gross energy production 227,155 KW/h Turbine availability Gross energy production 261,271 KW/h Wind park array losses Net Energy Production
300.000
200.000 Energy in MW/h
150.000 Net Energy Production, 239,804 Net Energy Production, 197,392 Net Energy Production, 227,278
100.000
Net Energy Production, 198,771
50.000
0.000
Vestas V52
Enercon E-48
Gamesa G58
EnerconE-53
Probability 75%
Figure 7-15: P75 energy production of the different scenarios of Ashegoda wind park
The higher energy yield calculated for the Gamesa G58 and Enercon E-53 wind turbines is mainly related to the larger rotor diameter of these turbines compared to the Enercon E-48 and Vestas V52 turbines. The focusing to the generated energy yield however is not sufficient. Investment costs, indicated by the ratio specific investment costs ( per kWh) are more significant, for details refer to the economical part of the Feasibility Study for the presented specific data in per kWh.
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8
8.1
Internal Wind Park Cabling

Cabling Concept
There are two common base alternatives for an internal cabling concept: radial feeders and ring feeders. The ring feeder concept is the most reliable concept, based on the n-1 criteria. N-1 criteria ensure that the disconnection of any equipment of the network is allowed without serious consequences for the total network. This is valid for the grid devices like cables, transformers, substation busbars, etc. In the case of a cable section fault, the correspondent cable section will be disconnected automatically and all wind turbines still keep in power production, supplied through the operative cable sections in both directions, as shown schematically in the following figure.
Wind turbine
Power flow
Fault
Power flow
Cable section
- closed disconnector - opened disconnector

Figure 8-1:
Switching station
Principle scheme of a ring concept
However, the ring concept is more expensive than the radial concept because the double cable length (preferably even in a separate trenches), additional two disconnectors for each cable section as well as an additional switching station feeder for each ring in order to ensure the ring concept.
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The radial feeder concept is more economical than ring feeder. There is only one way cable necessary for each area. In case of a wind turbine or transformer fault, the corresponding device will be disconnected and the remaining wind turbines stay connected to a feeder and still produce power. The main disadvantage of this concept is the low reliability in case of a cable section fault (short circuit). The whole feeder will be disconnected for a time period for the repairing works. The principle scheme of the radial concept is shown in Figure 8-2.
Wind turbine
Fault
Cable section
- opened disconnector
Figure 8-2:
Switching station
Principle scheme of a radial concept
Considering area and the economical aspect of the Wind Park, the radial feeder is reliable option for connecting all turbines in one line for Ashegoda Wind Park. The experience with wind parks in the last years shows, that due to the very low error rate of ground cables, the connection via radial feeders is an economical solution as well.
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Figure 8-3: Scheme of the internal Ashegoda wind park cabling
It is advantageous to implement the internal cabling with several radial feeders in order to increase the generation availability (in case of above described cable section fault only one feeder will be disconnected and remaining one will still supply the power to grid). Considering the size of the Ashegoda Wind Park, five similar feeders are recommended to implement. The switching station is located approximately in the middle of the wind park as shown schematically in Figure 8-3.
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8.2
Cable Type
The internal cable connection of the wind turbines is realised by 33 kV underground XLPE aluminium cables. The 33 kV is one of the standard medium voltage level used in Ethiopia. Underground cables are necessary in wind parks because the trucks and cranes need free space for operation. Since the voltage level of the wind turbine generator is 400 V (Enercon E-48), at the base of each wind turbine, transformer generates the 33 kV for internal park transmission. The selection of the optimal cable type depends on both the arrangement and grouping of wind turbines (number and power of turbines) and also the choice of feeder concept. All wind turbines are divided into five groups: 2 groups consist of 13 wind turbines with capacity of 10.4 MW each, two groups consist of 18 wind turbines with capacity of 14.4 MW each and one group with 24 wind turbines with a power capacity of 19.2 MW. This group allocation is more reliable, from the technical point of view, such as reduction in electrical losses, reliability and availability in fault cases etc. The selection of the optimal cable type is standard cable cross sections used according to Wind turbine specification with respect to its thermal and mechanical stress. Considering load factor, operating temperature, climatic and operational factors, the suitable cable cross section is chosen on basis of the standard local cable characteristics. The values are calculated for one, to two, cable circuit, in the trench, U = 1.05 Urated, cos phi =0,95 and rated current density from 0.12 to 1.75 A/mm2 for aluminium conductors. The overhead line cross section of 125 mm2 for the aluminium/steel conductors is sufficient for transmission of required feeder load from each group (See Chapter 8.4). Due to the selected radial feeder for internal cabling concept, only the 33 kV overhead line sections of each feeder connected to the switching station shall be designed to be able to transfer 10.4 MW, 14.4 MW and 19.2 MW respectively. Due to the selected radial feeder for internal cabling concept, the cable sections shall be designed to be able to transfer an installed power from 9.6 MW to 10.4 MW. In order to optimise the cable costs, at least one cross sections of cable design with safety margin of 120 mm, aluminium XLPE conductor cables will be used. The cost estimation is based on the internal uniform cable design with safety margin: 120 mm aluminium conductor cable.
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8.3
Earthing Network
Due to the design for the wind park Ashegoda, and availability of information about the Mekelle Substation, the earthing cable to be used in the wind farm shall be at least 95 mm Copper cable. The earthing network is composed by the wind turbines earthing system, and the wind farm earthing connection. In order to have a system at the same electrical potential, each wind turbine is connected to, at least, one other wind turbine.
Figure 8-4 Earthing network
The earthing network of the wind farm is composed of copper cables of 95 mm to be installed directly on the trench.
EARTHING CABLE
EARTHING CABLE
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Earthing rods shall be solid, copper-clad steel rods with a minimum diameter of 16 mm with provision for coupling together with a suitable clamp for connection of the ground wire. The copper coating shall have a minimum thickness of 0.3 mm. The earthing rod arrangement shall have the principle layout. The ground wire shall be directly connected to the pole with bolted connectors, of an approved material, suitable for use with the ground wire such that galvanic action, i.e. chemical reaction between copper and galvanised steel, is minimised. Connections to the substations earthing grid shall be made by compressed clamps or bolted connectors of approved design. The earthing of the wind park shall be connected to the existing ground network in the substation. The terminal tower should always be connected to the substation earthmat. The reason for bonding the terminal tower to the substation earthmat is to obtain very low impedance at the terminal tower in order to prevent a back-flash at the terminal tower in the event of lightning striking the terminal tower.
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Figure 8-5 Terminal Tower connected to substation earthmat
If the terminal tower cannot be bonded to the substation earthmat, the tower footing resistance of the thermal tower on its own should then be reduced to less than 10 ohm in order to still prevent back-flash at the terminal tower, in the event of lightning striking the terminal tower.
8.4
Determination of Wind Turbine Groups
The proposed wind turbines will be arranged in five groups where two groups divided into equally installed power capacity of 10.4 MW and the remaining groups each with 2x18 and 1x24 units of 14.4 MW and 19.2 MW respectively like shows in Table 8-1. The division into the groups with 13 to 24 units is advantageous from the technical point of view such as reduction of electrical losses, reliability and availability in fault cases etc.
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Area Group A Group B Group C Group D Group E Total
No. of units 0,8 MW 18 24 13 18 13 86

Table 8-1 Wind Park division by four areas
Installed Power MW 14.4 19.2 10.4 14.4 10.4 68.8
For better visualization, wind turbine groups shown in the Figure 8-3
8.5
Switching Station
Within the proposed internal cabling concept, there are five incoming radial feeders to the switching station busbars and one outgoing direct connection to the existing high Voltage overhead transmission line to the Ethiopian power grid. It is advantageous to locate the 33 kV switching Station in the central area of the Wind Park (86 units). The length of cable and overhead lines can be reduced with the proposed implementation and problems regarding electrical parameters such as voltage drop, higher power losses, cable costs etc. can be avoided. For the transmission of maximal 68.8 MW, an 80 MVA 230 kV / 33 kV power transformator is needed. There are five 33 kV overhead lines feeders incoming to the substation busbar. One of 33 kV and one of 230 kV busbars are needed. The proposed substation design includes secondary systems and measurement equipment. In order to optimise the reliability and maintenance costs, at least, a SF6 gas insulated switching station is recommended for implementation, due to the atmospheric conditions at the 2400 m altitude of the Ashegoda wind park. The switching station is located centrally between the proposed wind turbine groups and close to the existing 230 kV overhead transmission line, dividing the wind park line into five radial feeders with 2x13 and 2x18 and 1x24 wind turbines accordingly. The distance between switching station and wind turbine should be minimum 500 m.
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9
9.1
Grid Connection
Grid Integration Concept
Different potential grid integration concepts have been investigated. In order to conceptulize installation capacity of 68.8 MW, transmission on the high voltage level should be considered for approx. 24 km air-distance between the wind farm site and the Mekele substation. The most practical concept for grid connection is the construction of a separate substation at the wind park area (230 kV / 33 kV), where a short high voltage single overhead transmission line brings the generated electricity in direct connection into the existing 230 KV overhead transmission line to the existing transformer station at the Mekele substation at the 230 kV busbar. The capacity of 68.8 MW is technically possible within the existing grid at the moment with respect to the data provided by the EEPCo. This option is favourable for technical as well as economical reasons. A grid connection via underground cables should be considered as a subordinate option (due to enormous additional cost) only if the construction of an OHTL is not possible.
Investigated concepts for the grid integration of the Ashegoda Wind Park: 1. Connection to the 15 kV Grid An economical solution of the wind park integration is to connect the wind park with a 15 kV overhead transmission line to the existing 15 kV busbar at 230 / 132 kV / 15 kV at the Mekele substation but according to the information, provided by EEPCo, there are no available electrical connection (capacity) at the substation for the planned installation power of 68.8 MW. However, this option would be cause a great increase of electrical losses and voltage drops. 2. Connection to the 132 kV Grid via 132 kV Overhead Transmission Line Transformation from 33 kV to 132 kV directly at the wind park site, transmission with 132 kV to the Mekele substation and connection to the existing 132 kV busbar. According to the planned connection for the Wind Park Mesobo-Harena (48.8 MW) at this voltage rate and the provided information by EEPCo there is no more available electrical capacity at the substation for the planned installation power range of 86.6 MW. This option recommends a new investment for a transformer at the Mekele substation as well as the 24 km 132kV overhead transmission line from Ashegoda site to the Mekele substation.
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3. Direct Connection to the 230 kV Grid via existing 230 kV Overhead Transmission Line According to our recent inspection of existing overhead transmission line of EEPCo, the connection to the 230 kV grid via existing 230 kV OHTL can be realised. There are two possibilities for a direct grid connection of the wind park. The first one is a socalled T-of Joint connection, where a short high voltage, single overhead transmission line (one line bay), bring the generated electricity in the Ethiopian national grid. This option may have a few disadvantages regarding reliability of systems during outages, operation and maintenance; moreover in case of any fault around the T-Joint area will cause a loss of the total generated electricity contribution of the wind park. A appropriate connection type of this wind park with the existing 230 KV overhead transmission line, as it can be shown on the attached Figure 9-3, is designed to be as Line In Line Out (LILO) configuration, where two short high voltage, overhead transmission lines (two line bays), bring the generated electricity to the Ethiopian national grid. This configuration will provide good protection and a reliable system during outages, Operation, and more security during maintenance. For example, when any faults either on the right line section (Mekele direction) or left line section (Alamata direction) occur, still there will not be total disconnection of the wind park from supplying Power in the Ethiopian national grid. Having the above mentioned advantages of the LILO type of configuration, careful selection and detailed definition of all the switching equipment, Protection and control devices and their features for the substations Mekele and Alamata must be done in a detailed grid study. Moreover, it is important to mention the additional cost of the two complete in and out going line bays at the wind park station. Modern wind turbine (pitch-concept wind turbine) installations feature a grid feeding system that meets the latest grid connection requirements and can therefore easily integrated in any supply and distribution structure, especially when stipulated requirements, such as voltage frequency and reactive power for each individual turbine in a wind farm have to be considered. The concept offers solutions such as reactive power management and voltage control for normal operation as well as for critical situations resulting from network short-circuits or bottlenecks, leading the wind turbines to provide maximum grid compatibility due to their control and operating mode. Output peaks do not occur due to the closed-loop and open-loop control concept. The grid feed system allows the wind turbine to operate within a wide range promoting reliable operation in weak grids. This enables wind energy converters to support the electrical grid even at complex locations. An example for a reliable and modern system is the Enercon technology where the energy generated in the annular generator is fed to an inverter via a rectifier and a soLI / GE6 25 0477 final report ashegoda
called DC link; it ensures that output power is regulated according to grid specifications. In order to provide reliable economical grid operation, power feed timing has to be regulated. To ensure that this takes place, variable set point values for maximum permitted power gradients can be specified for the most wind turbines grid feed systems. For example, when the wind turbine or wind farm is started up, power feed can be controlled according to requirement. This allows the grid operator to optimise load flow and grid voltage stability as well as the interaction between power supply companies and consumers. With the regard to carrying capacity of the existing 230 kV AAAC, 2x180 mm conductor, according to the information provided by EPCo., it can accommodate over 150 MW power. Presently it serves to provide power to the northern part of the grid only as a radial network. But in the near future when the new Tekeze power plant starts to function in 2008, it will be the main power transmission line from Tekeze power plant and thus it requires immediate reinforcement. After 2008 with the proper development on the indicated grid infrastructure and the simultaneous demand rise of the northern grid consumption it is envisaged that this line will be definitely capable of transmitting power to the grid from Tekeze and wind park power plants as well.
Figure 9-1 Geographical layout of the Ashegoda wind park grid connection
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With regards to the planned installation capacity of total 68.8 MW, generally a transmission on the high voltage level for Ethiopia in this area (230 kV) should be considered for a approximately 24 km distance between the wind farm site and the Mekele substation. The most practical and economical concept for grid connection in this site is the direct connection to the existing 230 kV overhead transmission line for the planned radial feeders. This option is favourable for technical as well as economical reasons; in this case the proposed option would save the cost for the construction of a 24 km new overhead transmission line to the Mekele substation as well as the investment in a new transformer for Mekele. As already mentioned a grid connection via 132 kV overhead transmission line should be considered as a subordinate option (due to significant additional cost) only if the direct connection at the existing 230 kV overhead transmission line is impossible. The principle wind park grid connection layout is shown in Figure 9-1. The red dotted line shows schematically the 230 kV overhead transmission line connecting the switching station in the middle of the wind park and the 230 kV/132 kV/15 kV Mekele substation.
Figure 9-2: Principle wind park grid connection layout
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9.2
Overhead Line
As considered in chapter 9.1 the grid connection shall be implemented through five overhead lines feeders (internal connection of the five groups, Table 8-1) to the separate substation 230 kV / 33 kV. The distance between planned feeders and the proposed substation 230 kV / 33 kV varies approximately from 1 to 3 km where a short high voltage overhead transmission line (230 kV) brings the generated electricity into the existing high voltage transmission overhead line and from there to the transformer station at the Mekele substation at the busbar 230 KV. The optimal conductor type is selected for the maximum installed power of the whole radial feeders. The selection of the optimal conductor type has been done by the standard overhead line used within the Ethiopian power grid with respect to its thermal and mechanical stress. Considering load factor, operating temperature, climatic and operational factors the suitable conductor cross section is chosen on basis of the standard local cable characteristics. Aluminium Conductors, Steel Reinforced (ACSR) 125 mm would be used to transmit the electrical power from each radial feeder to the proposed switching station in the Wind Park Ashegoda and from there the existing 230 kV overhead transmission line close to the wind park and from there to the Mekele substation. This conductor is designed so that it can reduce losses and reach at the highest efficiency. The values are calculated for one overhead transmission line circuit, U = 1.05 Urated, cos = 0.95. The cable cross section of 125 mm has sufficient reserves for transmission of over 10.4 MW to 19.2 MW To be on the safe side, approximately 10% of the total internal cable lengths are assumed to deviate for the external 33 kV overhead line due to differences in the air-line distances and cable laying at the real site between wind turbines and the wind park substation, and also the planned radial feeders.
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ALAMATA SUBSTATION
T1 230/132/15 kV T4 230/132/15 kV BUS 230 kV
MEKELE SUBSTATION
T2 230/132/15 kV
Existing overhead line 230 Kv AAAC 2X180mm approx. 110 km
Existing overhead line 230 Kv AAAC 2X180mm approx. 24 km
BUS 230 kV
BUS 230 kV SUBSTATION 230/33 kV Single-circuit ACSR overhead line 33 kV approx. 1,2 Km Single-circuit ACSR overhead line 33 kV approx. 2,3 Km BUS 33 kV T3 230/33 kV
Single-circuit ACSR overhead line 33 kV approx. 2,2 Km
WT
WT
WT
WT WT WT WT WT WT WT WT WT WT WT WT
WT
WT
WT
GROUP A 800 KW 18 units
GROUP B 800 KW 24 units
GROUP C 800 KW 13 units
GROUP D 800 KW 18 units
GROUP E 800 KW 13 units
Figure 9-3 Wind Park grid connection schemes
9.3
Transmission Line
The air-line distance between proposed wind park substation location and 230kV/132kV/15kV substation Mekele is approximately 24 km. The overhead transmission conductor type is the existing AAAC 180 mm (Aldrey). The selection of the conductor type has been done by the standard overhead line used within the Ethiopian power grid with respect to its thermal and mechanical stress, considering load factor, operating temperature, climatic and operational factors.
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9.4
Mekele Substation
The 230 /132 / 15 kV Mekele substation is the air insulated outdoor substation, located approximately 24 km from the wind farm site. The substation supplies the region Mesobo and is connected to the high voltage ring as shown schematically on the Figure 9-3. The substation has to be extended with an additional feeder including 230 kV 2x40 MVA transformer field and two circuit breakers.
Figure 9-4 Mekele substation
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ASH/AAAC 2x180
1x10 MVAR WITH CB
141 kM ALAMATA
Pr = (ONAF) 2x63/40/23 MVA V = 23010x1% /132/15 kV Tap Changer = ON-LOAD
1371 132
2320 230
205 15 CP=77
MERLO/ACSR 65.75
Pr = (ONAF) 2x63/40/23 MVA V=23010x1%/132/15 kV Tap Changer = ON-LOAD
665 66
MAYCHEW
206 15
ZEBRA/ACSR 484.5
1x15 MVAR WITH CB
CP=76 Pr = (ONAF) 1x20/12/8 MVA V = 13210x1% /66/15 kV Tap Changer = ON-LOAD

MERLO/ACSR 65.75
MERLO/ACSR 65.75
249 15
105 kM
1x15 MVAR WITH DISCONNECTOR
2322 230
Prated = 1x25 MVA V = 667x1.43%/15kV Tap changer=ON-LOAD
80 kM
245 15
2x7.5 MVAR WITH CB
666 66
667 66
10 xx.x Prated = 1x6.3 MVA V = 667x1.43%/15kV Tap changer=ON-LOAD
LALIBELA
SEKOTA
Prated = 1x6.3 MVA V = 667x1.43%/15kV Tap changer=ON-LOAD
TEKEZE
Figure 9-5 Single line diagram of Ethiopian power grid section including MEKELE substation
According to the possibility about a grid connection of the wind parks in scaling form in order to bridge supply gaps in the Ethiopian electrical distribution network, the consultant doesn t see problems for its implementation. In principle the consecutively grid connection of the turbines or turbine-groups is technically possible taking into consideration the following aspects: Electrical infrastructure as switch-station, transformers, overhead transmission lines, cable cross section and trenches for the proposed number of radial feeders had to be performed, parameterised and defined for the total proposed installation power of the wind park The proposed substation for each wind park has to be previously installed with all the necessary electrical parts and components able to transmit the whole planed installation power
LI / GE6 25 0477
WUKRO
664 66
Prated = 1x6.3 MVA V = 667x1.43%/15kV Tap changer=ON-LOAD
105 kM
48 kM
2321 CP=80 230 209 15
1372 132
MEKELE
10
Estimation of costs
10.1 Investment Costs Estimation

The itemised specification of investment costs are described in the table below. Furthermore a proposal of a financing cash flow broken down in foreign and local cost components in order to increase the use of local participation and local materials in as many aspects of the work as possible is shown in the following investment tables.
10.1.1 Enercon E 48 Investment Costs

Table 10-1: Total Investment Cost of Wind Farm Ashegoda Wind farm Development Ethiopia PROJECT: Wind Farm at 'Ashegoda' site, Ethiopia PHASE: Final FEASIBILITY STUDY
Total Investment Cost of Wind Farm Ashegoda Investment 1 86 Turbines (FOB) incl. Erection Sea transport and inland transport Crane 300t, incl. sea transport Crane works Installation (3 days per turbine) Local installation Subtotal 2 Civil works Road access Crane pads Foundation Cable trenches Control building Subtotal 3 Required electrical equipment Extension of substation Civil works new substation Transformer (230kV / 33kV) Auxiliary equipment of substation 230 kV components OHL 1x1x125mm
2 2
Cost (in ) 60200000,0 8600000,0 120000,0 602000,0 430000,0 69.952.000,0 750000,0 215000,0 2666000,0 450000,0 50000,0 4.131.000,0 200000,0 120000,0 2000000,0 150000,0 1200000,0 225000,0 125000,0 494000,0 120000,0 120000,0 15000,0 100000,0 4.869.000,0 550000,0 150000,0 700.000,0 336.914,2 336.914,2 79.988.914,2
Cost in Birr (ETB) 624.935.118,9 89.276.445,6 1.245.717,8 6.249.351,2 4.463.822,3 726.170.455,7 7.785.736,5 2.231.911,1 27.675.698,1 4.671.441,9 519.049,1 42.883.836,8 2.595.245,5 1.245.717,8 20.761.964,1 1.038.098,2 12.457.178,4 2.335.721,0 1.297.622,8 5.128.205,1 1.245.717,8 1.245.717,8 155.714,7 1.038.098,2 50.545.001,6 5.709.540,1 1.557.147,3 7.266.687,4 3.497.500,0 3.497.500,0 830.363.481,5
% 75,26 10,75 0,15 0,75 0,54 87,45 0,94 0,27 3,33 0,56 0,06 5,16 0,31 0,15 2,50 0,13 1,50 0,28 0,16 0,62 0,15 0,15 0,02 0,13 6,09 0,69 0,19 0,88 0,42 0,42 100,00
Cost (in USD ) 72.498.723,1 10.356.960,4 144.515,7 724.987,2 517.848,0 84.243.034,6 903.223,3 258.924,0 3.210.657,7 541.934,0 60.214,9 4.974.953,9 301.074,4 144.515,7 2.408.595,5 120.429,8 1.445.157,3 270.967,0 150.537,2 594.923,1 144.515,7 144.515,7 18.064,5 120.429,8 5.863.725,6 662.363,7 180.644,7 843.008,4 405.745,0 405.745,0 96.330.467,5
Foreign invest
Local invest
84.243.034,6
4.974.953,9
; 18 km (33kV)
OHL 1x180mm ; 1,0 km (230kV) Wind park cabling, earthing, Scada (26 km) 6 x distribution stations on site Electrical equipment inside control building Auxiliary transformer at control building 2 x cars for maintenance team Subtotal 4 Engineering International enginering Local engineering Subtotal 5 Others Mitigation measures Subtotal Total
5.863.725,6 662.363,7 662.363,7 180.644,7 180.644,7 405.745,0 405.745,0 84.905.398,3 11.425.069,2
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10.1.2 Vestas V52 Investment Costs

Table 10-2: Total Investment Cost of Wind Farm Ashegoda Wind farm Development Ethiopia PROJECT: Wind Farm at 'Ashegoda' site, Ethiopia PHASE: Final FEASIBILITY STUDY
2 2
Cost (in ) 65360000,0 8600000,0 120000,0 602000,0 430000,0 75.112.000,0 750000,0 215000,0 2666000,0 450000,0 50000,0 4.131.000,0 200000,0 120000,0 2000000,0 150000,0 1200000,0 225000,0 125000,0 494000,0 120000,0 120000,0 15000,0 100000,0 4.869.000,0 550000,0 150000,0 700.000,0 336.914,2 336.914,2 85.148.914,2
Cost in Birr (ETB) 678.500.986,2 89.276.445,6 1.245.717,8 6.249.351,2 4.463.822,3 779.736.323,1 7.785.736,5 2.231.911,1 27.675.698,1 4.671.441,9 519.049,1 42.883.836,8 2.595.245,5 1.245.717,8 20.761.964,1 1.038.098,2 12.457.178,4 2.335.721,0 1.297.622,8 5.128.205,1 1.245.717,8 1.245.717,8 155.714,7 1.038.098,2 50.545.001,6 5.709.540,1 1.557.147,3 7.266.687,4 3.497.500,0 3.497.500,0 883.929.348,9
% 76,76 10,10 0,14 0,71 0,50 88,21 0,88 0,25 3,13 0,53 0,06 4,85 0,29 0,14 2,35 0,12 1,41 0,26 0,15 0,58 0,14 0,14 0,02 0,12 5,72 0,65 0,18 0,82 0,40 0,40 100,00
Cost (in USD ) 78.712.899,4 10.356.960,4 144.515,7 724.987,2 517.848,0 90.457.210,8 903.223,3 258.924,0 3.210.657,7 541.934,0 60.214,9 4.974.953,9 301.074,4 144.515,7 2.408.595,5 120.429,8 1.445.157,3 270.967,0 150.537,2 594.923,1 144.515,7 144.515,7 18.064,5 120.429,8 5.863.725,6 662.363,7 180.644,7 843.008,4 405.745,0 405.745,0 102.544.643,8
Foreign invest
Local invest
90.457.210,8
4.974.953,9
; 18 km (33kV)
OHL 1x180mm ; 1.0 km (230kV) Wind park cabling, earthing, Scada (26 km) 6 x distribution stations on site Electrical equipment inside control building Auxiliary transformer at control building 2 x cars for maintenance team Subtotal 4 Engineering International enginering Local engineering Subtotal 5 Others Mitigation measures Subtotal Total
5.863.725,6 662.363,7 662.363,7 180.644,7 180.644,7 405.745,0 405.745,0 91.119.574,6 11.425.069,2
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10.1.3 Gamesa G58 Investment Costs

Table 10-3: Total Investment Cost of Wind Farm Ashegoda Wind farm Development Ethiopia PROJECT: Wind Farm at 'Ashegoda' site, Ethiopia PHASE: Final - FEASIBILITY STUDY
2 2
Cost (in ) 63962500,0 8600000,0 120000,0 602000,0 430000,0 73.714.500,0 750000,0 215000,0 2666000,0 450000,0 50000,0 4.131.000,0 200000,0 120000,0 2000000,0 150000,0 1200000,0 225000,0 125000,0 494000,0 120000,0 120000,0 15000,0 100000,0 4.869.000,0 550000,0 150000,0 700.000,0 336.914,2 336.914,2 83.751.414,2
Cost in Birr (ETB) 663.993.563,8 89.276.445,6 1.245.717,8 6.249.351,2 4.463.822,3 765.228.900,7 7.785.736,5 2.231.911,1 27.675.698,1 4.671.441,9 519.049,1 42.883.836,8 2.595.245,5 1.245.717,8 20.761.964,1 1.038.098,2 12.457.178,4 2.335.721,0 1.297.622,8 5.128.205,1 1.245.717,8 1.245.717,8 155.714,7 1.038.098,2 50.545.001,6 5.709.540,1 1.557.147,3 7.266.687,4 3.497.500,0 3.497.500,0 869.421.926,5
% 76,37 10,27 0,14 0,72 0,51 88,02 0,90 0,26 3,18 0,54 0,06 4,93 0,30 0,14 2,39 0,12 1,43 0,27 0,15 0,59 0,14 0,14 0,02 0,12 5,81 0,66 0,18 0,84 0,40 0,40 100,00
Cost (in USD ) 77.029.893,3 10.356.960,4 144.515,7 724.987,2 517.848,0 88.774.204,8 903.223,3 258.924,0 3.210.657,7 541.934,0 60.214,9 4.974.953,9 301.074,4 144.515,7 2.408.595,5 120.429,8 1.445.157,3 270.967,0 150.537,2 594.923,1 144.515,7 144.515,7 18.064,5 120.429,8 5.863.725,6 662.363,7 180.644,7 843.008,4 405.745,0 405.745,0 100.861.637,7
Foreign invest
Local invest
88.774.204,8
4.974.953,9
; 18 km (33kV)
5.863.725,6 662.363,7 662.363,7 180.644,7 180.644,7 405.745,0 405.745,0 89.436.568,5 11.425.069,2
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10.1.4 Estimated Enercon E-53 Investment Costs

Table 10-4: Total Investment Cost of Wind Farm Ashegoda
Wind farm Development Ethiopia PROJECT: Wind Farm at 'Ashegoda' site, Ethiopia PHASE: Final FEASIBILITY STUDY
2 2
Cost (in ) 64500000,0 8600000,0 120000,0 602000,0 430000,0 74.252.000,0 750000,0 215000,0 2666000,0 450000,0 50000,0 4.131.000,0 200000,0 120000,0 2000000,0 150000,0 1200000,0 225000,0 125000,0 494000,0 120000,0 120000,0 15000,0 100000,0 4.869.000,0 550000,0 150000,0 700.000,0 336.914,2 336.914,2 84.288.914,2
Cost in Birr (ETB) 669.573.341,6 89.276.445,6 1.245.717,8 6.249.351,2 4.463.822,3 770.808.678,5 7.785.736,5 2.231.911,1 27.675.698,1 4.671.441,9 519.049,1 42.883.836,8 2.595.245,5 1.245.717,8 20.761.964,1 1.038.098,2 12.457.178,4 2.335.721,0 1.297.622,8 5.128.205,1 1.245.717,8 1.245.717,8 155.714,7 1.038.098,2 50.545.001,6 5.709.540,1 1.557.147,3 7.266.687,4 3.497.500,0 3.497.500,0 875.001.704,3
% 76,52 10,20 0,14 0,71 0,51 88,09 0,89 0,26 3,16 0,53 0,06 4,90 0,30 0,14 2,37 0,12 1,42 0,27 0,15 0,59 0,14 0,14 0,02 0,12 5,78 0,65 0,18 0,83 0,40 0,40 100,00
Cost (in USD ) 77.677.203,4 10.356.960,4 144.515,7 724.987,2 517.848,0 89.421.514,8 903.223,3 258.924,0 3.210.657,7 541.934,0 60.214,9 4.974.953,9 301.074,4 144.515,7 2.408.595,5 120.429,8 1.445.157,3 270.967,0 150.537,2 594.923,1 144.515,7 144.515,7 18.064,5 120.429,8 5.863.725,6 662.363,7 180.644,7 843.008,4 405.745,0 405.745,0 101.508.947,7
Foreign invest
Local invest
89.421.514,8
4.974.953,9
; 18 km (33kV)
5.863.725,6 662.363,7 662.363,7 180.644,7 180.644,7 405.745,0 405.745,0 90.083.878,5 11.425.069,2
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10.2 Construction Period

A period of 12 months was assumed for the construction of the Ashegoda Wind Farm. It was estimated that construction will commence the first of January 2007 latest, implying that commissioning will be at the End of 2007. The concession period was chosen as 20 years.
10.3 Potential for Local/Regional Input

10.3.1 Grid Connection by EEPCo For the potential local input to the project realisation we can assume that EEPCo will be responsible and experienced for the whole grid connection work, internal and external cabling, of the wind park. 10.3.2 Civil Works Besides this there are some additional tasks to be done by local staff and Ethiopian companies for all other civil works like: road construction, internal and external cabling trenches, erection of control building at the site and building of the foundation can be done with local materials and local staff. The work on the substation extension can also be done by EEPCo staff. Especially the cement factory of Mekelle, located near by, will be able to provide labor, cement, and trucks for the implementation phase. Additionally, seasonal staff can be also obligated at the City of Mekelle or at EEPCo.
10.3.3 Lattice Towers for Wind Turbines A possible additional local input could be in an extensive manner the erection of wind turbines using lattice towers instead of tubular steel towers. Some manufacturers of wind turbines are offering lattice towers as an option besides tubular towers. The production of lattice towers by manufacturing the needed profiles in Ethiopia could increase the local input considerably because of the large number of the planned wind turbines at the Ashegoda site. To take this option into consideration of the future wind park plannings, it is necessary to negotiate with the manufacturers of lattice towers directly about their conditions for local production in Ethiopia. Unfortunately, Enercon is not accepting lattice towers for its wind turbines in general.
10.4 Operation and Maintenance Costs

10.4.1 General Description The estimates for operation and maintenance (O&M) have been modeled based on the experience of Lahmeyer International in Due Diligence projects and calculated through a model developed by our technical engineers to this aim. The O&M costs include repairs, maintenance, spare parts, insurance costs, personnel costs for wind park management and maintenance and electricity consumption. Further, a major overhaul of all equipment has been assumed to take place between the 10th and 11th years of operation in an amount of 5% of total investment costs. Finally, wind farm decommissioning costs in operation year 21 have been considered in an amount of 5 % of total investment costs. For the wind parks within this report, an analysis of the expected O&M costs has been performed. The LI-O&M cost estimation model takes the governing influence factors of the wind park into account to predict the expected O&M costs. This analysis is based on the following assumptions: The wind speed conditions can be described using the specific energy yield per swept rotor area. The higher this value, the higher is the operating time of the turbine which leads to higher stresses and higher O&M costs. Besides the steady wind speed, also the unsteady portions of the wind will increase the O&M costs. The situation of the wind park regarding this influence can be described using the turbulence intensity of the site as well as the park efficiency. The park efficiency takes into account the distance between the turbines within the park. The presence of a condition monitoring system (CMS) will increase the annual O&M costs depending on the system, it might be an online or an offline CMS. On the other hand it is expected that the repair costs can be reduced for some parts since it is possible to detect failures in an early state and reduce the required costs for the repair measures. The technical concepts of the wind turbines can be different, therefore the type of the wind turbine will have also an influence on the O&M costs which is taken into account. The presence of a substation within the wind park leads to higher O&M costs depending on the design of the substation either as HV or MV substation. The length of the internal roads has an influence on the maintenance costs for the roads.
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The personnel costs depend on the country where the wind park is placed with regard to the labor productivity and average gross annual earnings in comparison to our reference values in Germany. The prediction of the O&M costs is combined with uncertainties (e.g. lifetime of the components). To take these uncertainties into account, for the influence factors uncertainties are defined. The insurance costs have been estimated as no detailed offer from an insurance company is currently available. This has to be specified in cooperation with the turbine manufacturer. Based on the experience of the Consultant and compared to other wind park projects in established markets the P50 value of the energy yield is used as input value for the model. For the long-term cost estimation the P50 value of the model result is used especially for larger wind parks as planned in this project. In order to get a conservative estimation, a safety factor has been applied to take into account the specific conditions and uncertainties for the operation of the first wind park in Ethiopia. This factor also includes the uncertainties concerning the future inflation rates. The aim to calculate conservatively also leads to the use of the P75 probability value for the calculations.
Within this report the results of the O&M analyses are given in the following categories as expected average values per wind park: 1) Planned Maintenance a) Personnel Costs b) Consumable Costs 2) Unscheduled Repair a) Personnel Costs b) Replacement Part Costs
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10.4.1.1 Enercon E-48 Maintenance and Repair Costs See also the following table for the expected cost development of these components during the operation period of the park Ashegoda with Enercon E-48 turbines.
[k ]
2000 1800 1600 1400 1200 1000 800 600 400 200 0 Repairs - personnel 50% Repairs - spare parts 50% Planned Maintenance pesonnel 50% Planned Maintenance consumables 50%
20 16
20 22
20 18
20 12
20 14
20 20
Figure 10-1: Development of the O&M cost for Ashegoda
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20 30
20 24
20 26
20 28
Year
10.4.1.2 Vestas V52 Maintenance and Repair Costs See also the following table for the expected cost development of these components during the operation period of the park Ashegoda with Vestas V52 turbines.
[k ]
20 12
20 14
20 16
20 18
20 20
20 22
20 24
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20 30
20 26
20 28
Year
10.4.1.3 Gamesa G58 Maintenance and Repair Costs See also the following table for the expected cost development of these components during the operation period of the park Ashegoda with Gamesa G58 turbines.
[k ]
2000 1800 1600 1400 1200 1000 800 600 400 200 0
20 12 20 14 20 20 20 22 20 18 20 16 20 24 20 30 20 26 20 28
Repairs - personnel 50% Repairs - spare parts 50% Planned Maintenance pesonnel 50% Planned Maintenance consumables 50%
Year
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10.4.1.4 Enercon E-53 Maintenance and Repair Costs The following table shows the estimated cost for development of these components during the operation period of the park Ashegoda with Enercon E-53 turbines. Only estimated costs can be taken into consideration until some turbines of this type will be erected.
[k ]
20 14
20 16
20 12
20 18
20 20
20 22
20 24
10.4.1.5 Comparison of Maintenance and Repair Costs Estimations The O&M costs for the four different turbines differ by approx. 10% between the Enercon and the other machines. In case of Enercon the costs are generally smaller since one main component, the gearbox, is not present. On the other hand the electrical components are more expensive, which leads also to higher repair costs for these components. Furthermore the Enercon machines have a higher specific energy yield at this site which leads to slightly higher maintenance and repair costs. Overall however, it is estimated that the Enercon machines have smaller O&M costs, but only slightly.
20 30
20 26
20 28
Year
10.4.2 High Technical Availability To reach high technical availability of the turbines we suggest to negotiate with the turbine manufacturer for sufficient EPC-contract condition. As a major aim the turbine supply contract shall include a five year warranty period instead of the usual two year period. In case of ENERCON India being the turbine manufacturer it should be possible to agree on a special warranty agreement similar to the German EPK (Enercon partner concept) which includes high technical availability with fixed costs in cent/kWh connected to the energy production in kWh. It is so far not known to LI that other manufacturers offer this for a first wind park in Ethiopia. They shall be contacted in case another manufacturer is considered. Additionally we propose to establish separate service teams of the manufacturer at the site Ashegoda in order to fulfill high quality of maintenance during the warranty period and also to shorten the reaction time in case of failures of the wind turbines. It is envisaged that the manufacturer will be obligated to arrange a constant presence for a minimum of 2 years for training of local operational staff in maintenance and repair measures. According to Consultant's experience, manufactures have to guarantee that in wind parks with an approximately installed capacity of 50 MW, two experts (usually, one electrical engineer and one mechanical engineer) will be constantly present at the wind park. Additionally, a team of four local experts has to be established for maintenance tasks and a crane has to be available, at least once per year, to realise operation revisions. Further, condition monitoring is realised by independent engineers in order to plan the repairs.
10.4.3 Local and foreign Operation and Maintenance The concept for operation and maintenance is supposed to create the highest possible technical availability at reasonable costs. To achieve this goal it is favourable to divide the O&M activities between the manufacturers staff and local operation staff. The following table shows the local and foreign O&M interfaces.
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Table 10-5: Local and foreign O&M tasks
Interfaces for operation and maintenance Task 1. 1.1 1.2 1.3 2. 2.1 2.2 2.3 2.4 Operation daily turbine check-up via remote monitoring staffing of the local monitoring room daily operation of the wind park Service and maintenance regular visual control of the turbines permanent service maintenance of the turbines infrastructure maintenance Manufacturer responsibility x Lokal Staff execution x responsibility execution execution execution execution
responsibility responsibility responsibility
The displayed interfaces and tasks allow the inclusion of the local operation staff into the maintenance process. Thus the responsibility for the availability of the turbines remains with the manufacturer, whereas the responsibility for the stability of the grid is fully in the hands of the local staff. The O&M activities of the local staff on the turbines are conducted after the briefing from the manufacturer. Local storage of spare parts should be limited to expendable items and spare parts. To maintain the availability on a high level, it is recommended to implement a Conditioning Monitoring System. Thus the possible failure of components can be identified in advance and transport and installation of spare parts can be organised ahead of time.
10.4.4 Training The training measures have to be organised by the manufacturer to train the local experts by beginning with basic knowledge on wind energy. Currently no well experienced wind energy experts in the field of wind turbine technology are available in Ethiopia.
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10.4.5 Overview Operation and Maintenance Costs The expected annual operation and maintenance costs for the wind park Ashegoda are shown in the following tables:
10.4.5.1 Scenario I
86 x Enercon E-48 Turbines

Table 10-6: Annual Operation & Maintenance Expenses
Wind farm Development Ethiopia PROJECT: Wind Farm at 'Ashegoda' site, Ethiopia PHASE: Final Draft - FEASIBILITY STUDY Annual Operation & Maintenance Expenses of Wind Farm Ashegoda
in % of turbine prize
1. 1.1 Annual Operating Expenses Annual cost of maintenance Maintenance of wind turbines Repairing of wind turbines Consumables Spare parts (including rent of crane) Wind park management Expenses of international technical assistance Local technical expenses 1.3 Insurance Insurance of wind turbines, cables and grid connection equipment Insurance of wind park staff Power demand Expenses of annual power demand of the turbines 12,0% 52,7%
Years 1-20 (Cost in /a)

2.880.570 1.586.270 114.219 131.345 83.100 1.257.607 602.000 239.756 362.244 361.200 139.219 221.981 120.400 120.400 210.700 5.200 205.500
Years 1-20 (Cost in Birr/a)

29.903.145 16.467.040 1.185.705 1.363.485 862.660 13.055.190 6.249.351 2.488.903 3.760.448 3.749.611 1.445.230 2.304.381 1.249.870 1.249.870 2.187.273 53.981 2.133.292
Years 1-20 (Cost in USD/a)

3.469.064 1.910.341 137.554 158.178 100.077 1.514.533 724.987 288.738 436.250 434.992 167.661 267.331 144.997 144.997 253.746 6.262 247.483
1.2
20,0%
1.4
4,0%
1.5 Other Costs Subscriptions to federations and associations Office costs, materials and others
7,0%
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10.4.5.2 Scenario II
86 x Vestas V52 Turbines


3.130.964 1.755.771 114.219 131.345 83.100 1.427.107 639.625 239.756 399.869 383.775 139.219 244.556 127.925 127.925 223.869 5.200 218.669

32.502.485 18.226.623 1.185.705 1.363.485 862.660 14.814.773 6.639.936 2.488.903 4.151.033 3.983.961 1.445.230 2.538.731 1.327.987 1.327.987 2.323.977 53.981 2.269.996

3.770.613 2.114.471 137.554 158.178 100.077 1.718.662 770.299 288.738 481.561 462.179 167.661 294.518 154.060 154.060 269.605 6.262 263.342
1.2
20,0%
1.4
4,0%
7,0%
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10.4.5.3 Scenario III
86 Gamesa G58 Turbines


3.143.757 1.768.563 114.219 131.345 83.100 1.439.900 639.625 239.756 399.869 383.775 139.219 244.556 127.925 127.925 223.869 5.200 218.669

32.635.284 18.359.422 1.185.705 1.363.485 862.660 14.947.572 6.639.936 2.488.903 4.151.033 3.983.961 1.445.230 2.538.731 1.327.987 1.327.987 2.323.977 53.981 2.269.996

3.786.019 2.129.877 137.554 158.178 100.077 1.734.068 770.299 288.738 481.561 462.179 167.661 294.518 154.060 154.060 269.605 6.262 263.342
1.2
20,0%
1.4
4,0%
7,0%
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10.4.5.4 Scenario IV
86 Enercon E-53 Turbines

2.895.620 1.601.320 114.219 131.345 83.100 1.272.657 602.000 239.756 362.244 361.200 139.219 221.981 120.400 120.400 210.700 5.200 205.500

30.059.379 16.623.274 1.185.705 1.363.485 862.660 13.211.424 6.249.351 2.488.903 3.760.448 3.749.611 1.445.230 2.304.381 1.249.870 1.249.870 2.187.273 53.981 2.133.292

3.487.189 1.928.466 137.554 158.178 100.077 1.532.657 724.987 288.738 436.250 434.992 167.661 267.331 144.997 144.997 253.746 6.262 247.483
1.2
20,0%
1.4
4,0%
7,0%
10.4.5.5 Comparison of different Scenarios The different scenarios are based on the estimated M&R costs as described above in chapter 10.4.1.5 in more detail. The reasons for the differences are also described there. Further aspects are treated in the same way in all scenarios with constant percentages of the turbine price. This is a common estimation for these values. The quality of the maintenance is assumed for all scenarios to be carried out according to good industry practice. Therefore we do not expect significant differences at this stage. The achievement of this quality should be secured by competent review of the works. To support EEPCo in this field, the expenses for international technical assistance are included in point 1.2 of the tables.
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11
Capacity Credit
11.1 Methodology and assumptions

11.1.1 Definition of the Capacity Credit Any kind of electrical power plant is required to answer the crucial question: To what extent is a specific energy production unit with an installed nameplate capacity available to meet system demand? Typically the answer is derived from a statistical analysis of this period, when a unit or technology is not available, even if it is supposed to be working, generally termed as forced outage. For conventional generation units this is mainly a technical question, whereas for intermittent resources like wind, solar and hydro power, it is a question of fuel availability: is wind, water or solar radiation available when it is needed? And if yes, what amount is available and how does the intermittency influence the rest of the electrical supply system? The answer is given by the capacity credit, which should consider each of the posed questions. There are various definitions of the term capacity credit (CC), and several synonyms are used in parallel, each bearing a similar variety of definitions. The two most common synonyms of CC are "firm capacity" and "capacity value". In this feasibility study, the CC is defined as the firm capacity, which can be replaced by a certain amount of installed wind power or any other energy source. It can be used either as a value in MW or as a percentage of the installed wind capacity. This is the terminology used in recent studies throughout industrialised countries, where wind energy is replacing other forms of energy. In Ethiopia, a country rapidly developing, and with high goals for improving the electrification rate, it is important to analyse how much capacity wind energy can add to the current system.
Further, the influence of wind power on the Interconnected System is measured through three different methods: Changes on the Load Duration Curve (LDC) of the Interconnected System (ICS), Load Following and Spatial Smoothing Effect.
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The LDC reflects how the seasonal and daily wind distribution matches to the load pattern of the ICS. This is especially important to get an idea of the amount and capacity category (base, intermediate or peak capacity) that have to be installed within a system with a demand represented by a certain LDC. When comparing the LDC and a LDC reduced by the wind energy distributed to the system, an illustration of the wind influences on the system is obtained, showing when peak capacity, base load capacity is needed or when wind has to be dumped. Wind energy is highly required at peak load hours being the CC 68 MW. Load following indicates whether an additional effort has to be considered regarding power balancing when introducing wind energy to the Ethiopian system. The calculations have shown, that no further effort has to be realised. Finally, the Spatial Smoothing Effect, which is the effect that numerous wind parks at different sites reduce the fluctuation of wind energy distributed to the grid, has been dealt. Fluctuation of wind power output is reduced the more dispersed the installed capacity. Because of this effect, the installation of more than one wind park is recommended.
11.1.2 Methodology Overview The Capacity Credit analysis for wind power allows an evaluation of the effects of wind power on the energy system. In the considered case of Ethiopia, it is analysed how two wind parks located at the Harena-Mesobo and Ashegoda sites, influence the supply in the Interconnected System (ICS). The influence of wind power in the ICS is strongly dependent on the size of the wind parks. Therefore, four Scenarios with different nominal capacities have been considered in the Capacity Credit assessment. The Scenarios have been defined as: Scenario I - the sole installation of the Mesobo-Harena Wind Park (48 MW), Scenario II- the sole installation of the Ashegoda Wind Park (68.8 MW), Scenario III- the simultaneous installation of the two wind parks (totalling 116.8 MW) and Scenario IV - the installation of two large wind parks at the sites of Mesobo-Harena and Ashegoda (2 x 180 MW).
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Two approaches were used to calculate the Capacity Credit, which are described in the following: Year-Round Capacity Credit Approach, Peak Load Capacity Credit Approach. Year-Round Capacity Credit Calculation Approach The Year-Round Capacity Credit approach is based on the hypothesis, that wind energy is distributed to the system, assuming constant power demand. An hydropower system with seasonal storage capacities and a variation of different units can be assumed as an ideal storage. The water is not actively stored, like in a pumped hydro power plant, where losses of 15 % and more have to be taken into consideration7, but the wind is a water saver, reducing the actual usage of water. In this case the efficiency loss can be diminished, since the hydro system, run at the point of optimal efficiency, will be readjusted to a new point of optimal efficiency. The total efficiency will be the same, if the system is run properly, even though it might be necessary to include other units and store wind energy at various reservoirs, in order to have all units running at the point of best efficiency8. The Year-Round Capacity Credit calculation for Ethiopia is based on the prediction of wind power production, which can be expected to be delivered to the grid according to the restrictions described later. This wind dispatch is compared to an equivalent of water saved in Finchaa reservoir, which was agreed with EEPCo to be considered as the reference Hydro Power Plant (HPP). This leads to the energy based definition of the Capacity Credit. This approach is only valid in energy systems with a high portion of hydro power and seasonal storage potentials, where stored water energy can be distributed at any time. Hydro power allows to balance fluctuating wind energy with little efficiency losses. Especially when hydro power is used to provide base load and peak load, wind power can be perfectly included into the dispatch order9.
Lnker, O. (2005), Zukunfsspeicher . In: Neue-Energie-das Magazin fr erneuerbare Energien, Heft 4, 2005. Pag. 26-33.
8
Matevosyan, J. (2004), Wind power in areas with limited export capability . Internet source. http://www.lib.kth.se/Lfulltext/2004matevoszan.pdf, last update: 2004, last access: April 26th, 2006, 15:00 hours. An example for the interaction of wind and hydro power is the shaping service of the Bonneville Power Administration (BPA) 9 active in the north west of the USA. BPA uses its hydro resources to shape wind power distributed to the system and then sells the energy as it is needed. (Source: www.bpa.gov )
9
Peak Load Capacity Credit Calculation Approach
Whereas the Year - Round Capacity Credit approach is annual energy driven, the PeakLoad Capacity Credit calculation is based on power supplied in specific hours. The Peak Load Capacity Credit approach assesses different fractions of the highest load hours for their individual capacity factor, which has been proven in recent studies by the US National Renewable Energy Laboratory (NREL) to be a good indicator for the CC during times of high demand. The background of this approach is that during the hours of highest demand the system has the highest loss of load probability. This is not necessarily the case in countries with high reserve capacities, which can be activated for the times of highest demand. In developing countries like Ethiopia, where capacity is still expanding, it is important to find to what extent wind energy can add to the available system capacity during these hours. The method screens all 8,760 hours of the year and orders them by demand. For every hour the corresponding wind can be analysed. Following the approach of Milligan10, different fractions of the highest load hours are chosen to analyse the capacity factor of these fractions. Further, a reliability calculation has been conducted for the 1 % of the highest load hours, representing a load decrease of roughly 100 MW. Both approaches are based on average hourly wind distribution provided by EEPCo, measured for one year from February 2 nd , 2005 until February 2 nd , 2006 at the site. This wind distribution is compared to the hourly load of the ICS for the same period of time 11. It is modelled, how the load duration curve (LDC) changes when wind energy is introduced to the ICS and how the seasonal and daily wind distribution matches the load pattern of the ICS. (LDC are defined in Section 11.1.1).
10
Milligan, M. (2002); Modeling utility-scale wind power plants Part 2: Capacity Credit . Internet source: http://www.nrel.gov/docs/fy02osti/29701.pdf, last access: June 2nd, 2006, 21:05 hours. Pag. 15-19.
11
The provided ICS load data is from January 2005 until December 2005. The Data for January 2005 is used for January 2006 plus 11,7 % for every hour (average difference between January 2005 and January 2006 given in the monthly reports provided by EEPCo)
11.1.3 Assumptions Calculations are based in the following assumptions: A hydro base load of 100 MW is assumed as must run capacity at all times, to stabilise frequency and voltage. This leads to a partial shut down of wind turbines in hours of very low demand. The average inflow data of Finchaa reservoir during 1960 and 1997 was used for the calculation. The Finchaa HPP will be one of the most influenced HPP by the installation of wind power in Ethiopia, since it is one of the large important balancing power plants. Finchaa HPP has a gross head of 596 m and an installed capacity of 134 MW divided into 4 evenly sized Pelton turbines. The live storage of the reservoir is 790 MM, which equals 976 GWh, if the turbines constantly operate at rated flow. The use of Finchaa as the reference power plant, is justified due to its important balancing effect. Another reason is the relative large size of the installed capacity, which is able to balance a 100 MW wind park. The conversion from wind power to stored hydro power is based on the conversion value 809 m3/MWh12, used by EEPCo in the monthly reports to calculate the discharge of Finchaa reservoir. Data scarcity: the results have been evaluated for the measured period provided by EEPCo to reflect a realistic simulation. Nevertheless, extrapolations should be based on long term measurements for wind and power loads. The load data provided by EEPCo consists of daily data sets with load measurements for every hour and in parts with inter-hour measurements. The data was transferred into a consistent time line of hourly increments using averages for the hours if more than one measurement was available. Improbable low data points below 100 MW were increased to 100 MW of minimum load. Since the load data set did not match the wind measurements data, the load data for January 2005 was increased by 11.7 % to use it as a projection for January 2006. The value 11.7 % is derived from an aggregated spreadsheet provided by EEPCo and is equivalent to the increase from January 2005 to January 2006 projected for January 2006 in December 2005. Since there was no information available regarding suppressed demand (load shedding), neither the occurrence during the evaluated period nor its amount, it has not further been considered.
12
The value for m /MWs has been changed from the nameplate value of 0,209m /MWs to the value used by EEPCo of 0,225m3/MWs. This leads to shifts in the following values in this Section. It has to be noted, that different Excel tables provided by EEPCo use different values for this calculation. The value used now, is the most conservative, meaning the highest water consumption per unit.
11.1.4 Load Duration Curve Calculations Based on the load data provided by EEPCo for the year 2005 the load duration curves (LDC) were calculated. LDCs are constructed from a sample of observed load values measured in MW, normally the hourly load data of one year. The load values are re-arranged in descending order over the 8,760 hours of the year. By normalising the horizontal axis to range from 0 to 1, it is possible to read off the probability of exceeding a certain level of load13. Given the hourly load is a random variable L(t), the duration on the horizontal axis equals the probability for L(t) being greater or equal to the load on the vertical axis (See Figure 11-1). This allows the determination of generation capacities with different characteristics and cost structures. The area below the LDC represents the energy produced during the whole year. By re-arranging the hourly load data, any information about seasonal or daily variation is lost; what counts is the distribution over the year. It indicates the duration of the year for which a certain level of capacity has to be available to meet the demand. This is especially important for getting a general idea of the amount and capacity category (base, intermediate or peak capacity) that have to be installed within a system with a demand represented by a certain LDC. Residual load duration curves (RLDC) are LDC reduced by the hourly specific energy, which is dispatched first within the power system. This is generally low cost, must run capacity, especially renewable energies such as hydro and wind power, but can just as well be nuclear or coal base load14. This procedure allows creating a second LDC, e.g. by reducing the LDC by the distributed wind energy. The resulting RLDC illustrates how wind influences the system and, for example, increases the need for peak capacity. Also, it indicates the extent to which the need for base load is reduced. To conduct a residual load duration curve calculation, the measured (or predicted) load of each specific hour is reduced by the measured (or predicted) energy, which is dispatched first. Formally the residual load duration curve is represented by the following formula:
R (t )
L(t ) PW (t )
where R(t) is the residual load at a certain hour, L(t) is the total load and PW(t) is the wind power output available at the corresponding hour. Again the hourly values have to be ordered to a monotonically decreasing time series to accomplish the RLDC. The area between LDC and RLDC represents the energy delivered by the reduction technology. If the power output of the technology in question is higher than the load at certain times, the
13 14
Stoft, S. (2002): Power System Economics
Designing Markets for Electricity . New York. Pag. 41-42.
Billinton, R., (1996), Reliability Evaluation of Power Systems , 2nd Edition, Plenum Press, New York. Pag.
73
RLDC becomes negative on the right end of the graph. The area below zero corresponds to the energy, which cannot be used in the system and has to be either dumped or, if possible, sold to a connected system. After calculating LDC and RLDC by the described method and depicting the two curves in one graph as done in Figure 11-1 the capacity credit can be derived graphically. It is specified by as the vertical-axis intercepts of the LDC and the RLDC.
600
Load Duration Curves

Load and Wind 100 highest hours
600
Capacity Credit
500
Capacity Credit
550
Load [MW]
500
Load [MW]
400
450 0 10 20 30 40 50
Hours
300
LDC RLDC
200
Load (L(t))
100
Duration (t)
0 0 730 1460 2190 2920 3650 4380 5110 5840 6570 7300 8030 8760
25%
50% Hours of one Year Hours / Probability
75%
100%
Figure 11-1: Load duration curve and residual load duration curve for Ethiopia, The inset shows the 50 highest load hours (own illustration)
The obvious advantage of the RLDC approach is its relatively low need for data and its fast application. On the other hand, it does not give information about the risk of loss of load during a specific hour or period of time, and leaves the question of necessary reserve capacity unanswered. Nevertheless it illustrates how the system is influenced by the addition of a new resource.
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11.1.4.1 Load Restrictions Within the power systems of developing countries the demand during night hours often is so low that the wind energy produced cannot be distributed to the grid completely. In Ethiopia the lowest average demand of 154 MW is recorded between three and four o clock a.m., with particular hours as low as 90 MW. To assure stable frequency and voltage a certain amount of conventional capacity (in Ethiopia hydro power) has to be running at all times. For this reason wind energy should be totally or partially turned down at times with too little demand. For the calculation of the must run restriction the following formula has been applied to every hour. The distributed wind energy PWi is given with
PWi
Li
LR,
for
0 Li
LR
PWpi
where PWpi is the potential wind power, Li the load, and LR the load restriction, defined as the minimum of conventional production first dispatched to the system. For all other hours, the wind energy produced can be fully included to the system PWpi = PWi.
11.1.4.2 Load Duration Curve Analysis & Results The load duration curve analysis is applied in two directions: On the one hand calculating the residual load duration curve resulting in a curve below the original LDC and on the other hand calculating the increased load duration curve (ILDC) being above the LDC. The first calculation corresponds to the case depicted in Figure 11-2. The effective wind output is distributed to the system while the hydro power plants work less and water is stored. The ILDC represents the load which could be met with the same distribution of hydro energy and the addition of the potential wind energy. Figure 11-2 shows the three load duration curves and two step graphs. The two step graphs correspond to the LDC and RLDC representing the activity of plants other than Finchaa HPP. The hypothesis applied to the step graphs are that 60 MW of the installed capacity is working as base load and the remaining 70 MW are working as balancing capacity. This results in a maximum distance between step graph and LDC of 130 MW and a minimum of 60 MW always occurring at the tip of each step. The same step graph is valid for the ILDC as for the original LDC since the distribution of hydro power does not change, all energy is distributed.
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700
Increased Load
600 500
LDC RLDC Base Load Reduced Base Load Dependable Capacity Max Load Max Residual Load
Load [MW]
400 300 200 100 0 0 730 1460 2190 2920 3650 4380 5110 5840 6570 7300 8030 8760
Hours of one Year

Figure 11-2: LDCs and power output of other plants, dependable capacity, max. load, max. residual load (own illustration)
The change in vertical distance between the LDC and the two derived curves has to be pointed out. During the high load hours the difference between LDC and ILDC is larger near the vertical axis and decreases to the right, whereas the difference between LDC and RLDC reaches its maximum towards the middle. As Figure 11-2 does not visualise this very well, the following table shows the results for different fractions of the year in numbers.
Table 11-1: Difference between LDC, ILDC and RLDC
Percentile of LDC 1% 5% 10% 20% 40% 60% 80% 100%
ILDC - LDC 68 56 51 49 45 41 39 35
LDC - RLDC 44 42 42 39 38 38 36 34
The difference between the two calculated curves in relation to the original LDC is due to the method applied in this case: For the RLDC load hours corresponding with high wind output move to the right of the curve, while for the ILDC hours of high wind output move to the left. The result already indicates that during high load hours there is also a high wind output available. The vertical intercept difference of LDC and ILDC is 74 MW, whereas the average of 1 % of the peak hours is still 68 MW (see Table 11-1). It should be pointed out,
that the capacity factor of potential and effective wind energy output is reached at 100 % in both columns. The capacity credit for the enlarged system represented by the ILDC is 68 MW and for the reduced system, reducing water usage, the capacity credit is 44 MW. Both values are depicted in Table 11-1 in bold. However this value indicates a peak load capacity credit and is not to be confused with the annual energy yield to be expected. The reserve capacity for Ethiopia before the installation of wind is calculated using the 715 MW dependable conventional capacity and the maximum load of 586 MW. It results in 129 MW of reserve capacity. With regards to the expanding Ethiopian system and the large hydro capacities available, ILDC is more representative for the situation of Ethiopia. It gives a good picture on how wind energy will increase the system capacity.
11.1.5 Load Following Load following, defined as the necessity to change the system power output within a certain time period15, has been calculated. The Load difference between every two consecutive hours has been analysed and introduced into a frequency distribution table. The same measure was taken, in the case of wind added to the system to increase the capacity and for the case where wind was deducted from the load to save water. The needed load following requirements of the capacity used can be expressed by the ramp rate between two consecutive hours expressed by the formula:
Ri
Li
Li
Where L is the hourly load at hour i, and R is the load following requirement in the hour i. For adding wind to the system, the load following requirements are defined as
RWi
( Li
PWi ) ( Li
PWi 1 )
Where RWi is the load following requirement in the hour i for the system with wind, and PW is the wind production at hour i, making the terms in parentheses the load net of wind in the respective hour. The load changes are investigated for three different occasions:
15
In Ethiopia this is hydropower.

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the measured load, the residual load, with the distributed wind energy being deducted from the load, the increased load, with a hypothetical load being calculated, which could have been met during the analysed period, if wind had been added. For each of the three cases a separate frequency distribution table is created stating the frequency of the load changes in classes with increments of 25 MW. To visualise the distribution, the load changes are ordered and displayed in Figure 11-2. The analysis of the change of load, and the change of residual load during two hourly values has shown, that wind power does not significantly increase the changes which have to be followed. Figure 11-3 shows the ordered load changes of the measured load, the residual load, the increased load and the change of distributed wind energy. This indicates that no further effort has to be considered regarding the balancing activities of the power plants.
Figure 11-3: Load following
The two load curves are so close together, that a difference can be hardly seen. To show the changes that do occur in Table 11-2 gives the number of load changes within a certain class, representing 25 MW increments. It is differentiated in negative and positive load changes.
It has to be mentioned, that the load change between two hours with added wind (increased load duration curve) are hypothetical, since the actual demand pattern has to be followed which would change the dispatch of the hydro power plants and from the resulting fewer hours of higher load, changes in the column of the increased load are not likely to occur.
Table 11-2: Frequency of load changes within one hour with and without wind
Class
-275 -250 -225 -200 -175 -150 -125 -100 -75 -50 -25 0 25 50 75 100 125 150 175 200 225 250 275
Load
0 0 2 4 16 85 88 146 186 329 952 2578 2419 877 615 312 87 37 11 10 3 1 1
Residual Load
0 1 2 6 33 75 104 135 205 366 970 2504 2209 1067 621 311 93 34 11 7 3 1 1
Increased Load
0 0 2 1 24 74 94 155 217 425 1138 2313 2090 997 645 354 127 62 25 10 2 3 1
The second important issue to be regarded when assessing the influence of wind power on the system and especially the reserve capacity is the spatial smoothing effect.
11.1.6 Spatial Smoothing Effect The spatial smoothing effect is the effect, that numerous wind parks at different sites reduce the fluctuation of the wind energy distributed to the grid. It influences the different capacity credit fractions and with these the balancing activities, which result from wind power. This topic is not part of the scope of this feasibility study and thus it has not been dealt with in detail. Nevertheless, fluctuation of the wind power output is reduced, the more dispersed the installed wind capacity. Because of this effect, the installation of more
than one wind park is recommended. The effect increases with greater dispersion of the sites. For Ashegoda and Harena-Mesobo the impact is small since the sites are located very close to each other.
11.2 Year-Round Capacity Credit Approach

As described previously, the Year Round Capacity Credit is based on the special conditions in Ethiopia, where the wind energy can either be saved in the water reservoirs to increase the seasonal storage or to be supplied to the grid directly and thus, increase the capacity available. Between these two alternatives, any variation can be chosen to increase energy supply and security. In the next section, it has been assumed that all wind energy is saved throughout the year and thus, the storage level of the reference reservoir Finchaa is increased significantly. Figure 11-4 shows the influences on the stored energy at Finchaa HPP assuming a half full live storage at the beginning of the period, when all wind energy is saved. As base load energy, 100 MW hydropower has to be dispatched first into the grid. Then wind energy is dispatched, before hydropower covers the residual demand. This is important, since hydropower is the time independent energy source compared to the fluctuating nature of wind distribution. This dispatch strategy allows to preserve the unused water in the reservoirs and the seasonal storage is conserved. In Figure 11-4 the area between the two curves represents the effective energy, which can be stored. It is used for the calculation of the capacity credit. In case of a full reservoir the described restrictions apply, and the top curve would be in part flattened, as long as no storage is available, which would reduce the effective energy yield and with it, the capacity credit.
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Figure 11-4 Water reservoir levels with and without wind energy
The lower curve shows the development of the stored water without the installation of wind power during one year based on the assumptions for Finchaa HPP. The top curve assumes the installation of both wind parks. Evaporation can be neglected in this assessment, regarding the fact that evaporation does not increase significantly, if more water is stored in the reservoir. Table 11-3 summarises the detailed numbers of saved water for the installation of the two wind parks considering a water consumption of 752 m/MWh (0.21 m/MWs)16 at full load.
Table 11-3: Stored energy at Finchaa reservoir
Stored energy at the end of one year at Finchaa reservoir without wind MWh MCM 17 281,901 212 with Harena 379,307 285 with Ashegoda 513,707 386 with Harena and Ashegoda 784,326 589
16 17
Source: EEPCo & ACRES (Ed.) (2001): The Ethiopian Energy System . Unpublished report. Million Cubic Meter
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The assumption of storing all the distributed energy allows to quantify the influence of wind energy on the hydropower system. In practice, EEPCo will regulate the use wind and hydropower together. Figure 11-5 depicts how the available capacity is increased, if the water saved by wind energy is dispatched continuously.
Average Load + energy based Capacity Credit

600,0 500,0 Load [MW] 400,0 300,0 200,0 100,0 0,0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 Hours Load Evenly distributed Wind
Figure 11-5: Average load and energy based CC
With this approach the Year-Round Capacity Credit is 36.5 MW.
11.3 Peak Load Capacity Credit

After the previous analysis of the wind and hydropower distribution throughout the year, it is reasonable to calculate a Peak Load Capacity Credit for the dry season only. During the rainy season enough hydropower capacity is available to meet the load, as water availability is the restricting parameter for the HPP.
11.3.1 Seasonal Wind and Water Distribution The plans to interconnect the ICS to the grid of neighbouring countries and to use the large potential of hydro power to sell energy into adjacent systems require the ability to meet system demand at all times. Because of the fluctuating water conditions in Ethiopia
the installation of wind power will increase the security of supply of the system. The combination of wind and water on a seasonal basis is very good. As it can be seen in the following figure, during the dry season the wind energy distribution is high, while during the rainy season the wind energy distribution drops significantly compared to the highest distribution in December.
Water Inflow and Wind Energy Potential exemplarily for Harena

120 100 Water [MWh] 80 60 40 20 0 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Average Water Inflow Wind Energy Potential 18.000 16.000 Wind [MWh] 14.000 12.000 10.000 8.000 6.000 4.000 2.000 0
Figure 11-6: Seasonal wind and water distribution
This seasonal difference has the effect, that competition between the two renewable energy sources, wind and water, hardly occurs. Only in hours of very low demand and high wind speeds the potential wind energy has to be turned down to meet the 100 MW hydro base load restriction.
11.3.2 Daily wind power distribution
The special climatic and topographic situation in Ethiopia leads especially during the dry season to a characteristic wind distribution over the day. The wind speeds start increasing in the early morning to reach their peak in the early evening and then to drop slowly to its lowest point in the morning again. A similar distribution over the day can be observed with the load.
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Yearly Average of hourly Load and Wind Pattern

700 600 Load [MW] 500 400 300 200 100 0 0 6 12 Hours Load Pattern Wind Distribution 18 70 60 50 40 30 20 10 0 Wind Power [MW]
Figure 11-7: Daily load and wind distribution match Figure 5-4 shows the base case with the two wind sites at Harena-Mesobo and Ashegoda together. Because of the strong diurnal characteristics of the average wind speeds, the match of the wind energy output and the load, significantly complement each other. The Correlation Coefficient of load and wind distribution is 0.28 and increases if only the dry season is analysed. To have a comparison, just to indicate that in studies conducted in the US the correlation coefficient of load and wind distribution was zero.
11.3.3 Peak Load Capacity Credit Calculation The capacity credit calculated here is not the firm capacity, if the firm capacity is defined as the capacity which is available at all times. During the rainy season the wind distribution is very low (below 5 m/s) and also during the dry season, there are days when wind energy output drops under the capacity credit. Thus, for these periods, balancing power has to be supplied by HPPs or DPPs. To calculate the peak load capacity credit a special measure is applied concentrating only on the dry season. In this analysis, peak hours are not certain hours of the day, but the top hours from the ordered load duration curve. In Ethiopia the capacity shortages are primarily apparent there, when water in the reservoirs is getting scarce.
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The following Table displays the frequency of supplied wind power during time of highest demand, differentiated into the 10 %, 20 % and 30 % of highest load and classes of power being distributed.
Table 11-4: Frequency distribution of wind power during hours of highest load
Capacity of the WP MW 10 20 30 40 50 60 70 80 90 100 110
For 30% of highest Load Dry Season 15.8% 4.9% 7.0% 8.0% 7.7% 9.4% 3.9% 6.3% 16.7% 8.5% 11.7% Rainy Season 59.4% 7.8% 6.1% 6.9% 6.1% 6.3% 1.8% 2.9% 2.3% 0.2% 0.0%
For 20% of highest Load Dry Season 13.2% 4.1% 6.2% 7.0% 8.0% 8.7% 3.5% 6.5% 19.8% 9.6% 13.6% Rainy Season 59.6% 7.4% 5.5% 6.5% 6.7% 6.5% 2.0% 3.7% 2.0% 0.2% 0.0%
for 10 % of highest Load Dry Season 6.4% 2.4% 5.8% 4.8% 9.1% 9.1% 3.4% 8.4% 23.1% 10.0% 17.4% Rainy Season 57.7% 7.2% 5.8% 6.3% 4.8% 5.8% 3.4% 5.8% 2.9% 0.5% 0.0%
The variance of the demand during the top 30 % of the hours is 277 MW, whereas for the 20 % of the hours it is 254 MW and for the highest 10 % of the hours it is 197 MW (starting with the highest load during 2005 of 586 MW).Table 11-4 shows how the frequency of low wind distribution decreases when approaching the highest loads of the year. This supports the conclusion drawn earlier from Figure 11-7, i.e. the higher the demand the higher the wind distribution. Table 11-5 shows the percentage of hours when the available wind power drops under the Year-Round Capacity Credit.
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Table 11-5: Frequency of hours with available wind below the Year-Round CC
Frequency of hours with available wind below CC highest load hours 30% 20% 10% 5% Dry season 35.8% 30.4% 19.5% 15.3% Rainy season 80.3% 78.9% 76.9% 75.5%
During 5 % of the highest demand hours, only for 4.9 % of the time does the available capacity drop under the capacity credit. The following graph illustrates the distribution of the CC in correspondence to different load levels. 100% equals the highest load of 586 MW. The values given along the curve are the number of highest load hours for which the capacity factor has been calculated.
65%
Capacity Credit
60% 55% 50%
87 h 9 h 219 h 438 h
876 h 1314 h
45% 40% 35% 40%
50%
60%
70%
80%
90%
100%
CC at different Load Levels
Percent of maximum Load

Figure 11-8: CC at different Load Levels
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11.4 Results: Capacity Credit
Year-Round Capacity Credit Approach Using Finchaa HPP station as a reference and as it was calculated in the merit order dispatch section, the additional saved water allows a permanent increase of available capacity of 36.5 MW.
Peak Load Capacity Credit Approach When the correlation between wind and demand distribution is considered, the average capacity factor of the highest load hours has to be evaluated. By using different fractions of the highest load hours, it is analysed to what extent wind energy matches the demand and is available during peak demand hours. Table 11-2 shows the Capacity Credit results for Mesobo - Harena and Ashegoda and the two parks together. Additionally, a hypothetical scenario with 2x180 MW wind park sizes with similar wind behaviour than Mesobo-Harena and Ashegoda has been calculated and presented in the following Table.
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Table 11-6: Capacity Credit Results
Capacity Credit Comparison MesoboHarena 48.00 MesoboAshegoda Harena & Ashegoda 68.8 116.8 360 MW Scenario 2 x 180
Results
Installed capacity [MW] Year-Round CC Aproach Capacity Credit [MW] Capacity Credit [%] Peak-Load CC Approach CC for the 30% highest load hours CC for the 20% highest load hours CC for the 10% highest load hours CC for the 5% highest load hours CC for the 1% highest load hours [%] Generated wind energy [MWh] 18 Rejected wind energy [MWh/a] Rejected wind
11.12 23 %
26.46 38 %
36.51 31.69 %
83.90 23.31 %
30.0 %
47.2 %
40.3 %
36.7 %
33.2 %
51.1 %
43.9 %
41.0 %
38.0 %
57.1 %
49.4 %
47.4 %
40.1 %
59.9 %
51.9 %
50.0 %
47.1 %
68.4 %
59.8 %
57.8 %
97,406
231,806
319,831
996,510
461 0.47 %
3,969 1.68 %
13,811 4.14 %
261,560 26.25 %
18
Does not correspond with the windpro results, because of the explained assumptions
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11.5 Conclusion: Capacity Credit

Comparatively high Capacity Credit (CC) values for wind energy have been obtained for all the sites. The Mesobo-Harena Wind Park is expected to have a CC of 23 %, whereas the CC in the Ashegoda Wind Park is even higher at 38 %. Further, the CC of both wind parks has been calculated at 31.69 %. Finally, a hypothetical scenario with the installation of 180 MW at the Mesobo-Harena site and 180 MW at the Ashegoda site has been calculated resulting in a CC of 26.25 %. The CC has also been calculated for the 30 %, 20 %, 10 %, 5 % and 1 % of the highest load hours. When calculated with the 1 % of the highest load hours, the CC reaches values of 47.1 % and 68.4 % for the Mesobo-Harena and Ashegoda sites, respectively. The results in Table 11-2 also show that assuming constant load and an isolated grid, hydro power and wind power start to compete with each other with increasing installed capacity of wind energy and an increasing amount of wind energy is rejected starting from 0.47 % when only considering Mesobo-Harena only, and up to 4.14 % when considering both wind parks (Mesobo-Harena with 48 MW and Ashegoda with 68.8 MW). When considering two wind parks of 180 MW each, located at similar sites as the Mesobo-Harena and Ashegoda sites, the amount of wind energy rejected because of the load restriction is as high as 26.25 %. As soon as energy can be exported to neighbouring countries or demand increases, the amount of rejected wind decreases again or is zero. Among all the results obtained, the wind park planned at Ashegoda presents the highest capacity factor values and also the highest output during peak load hours. The implementation of both wind parks would have the following advantages: Wind energy contributes to improve the security of supply in Ethiopia. Considering that Ethiopia suffers on constant low water dam levels, which reduces the ability to use the installed dominating hydropower capacities, specially during the peak demand hours of the dry season, wind would add available capacity. The positive correlation between load and demand occurs precisely during the dry season, whereas during the rainy season the peak load Capacity Credit cannot be reached in the majority of the hours. So that wind and hydropower complement each other. The grid expansion plan to interconnect the ICS to the grid of neighbouring countries and a growing demand as indicated in the PSEMP to raise the electrification ratio will be dependent on a secured energy supply. Wind energy reduces the influence of low water levels caused by drought in years of low rainfalls. The comparatively high Capacity Credit for wind power in Ethiopia is a reliable alternative to support the hydro power system.Moreover, hydropower has lower efficiency
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losses, when running in partial load, which makes it the perfect shaping capacity for wind power19. Another advantage is that unused hydro power capacity can be fully accounted for as reserve capacity20. (Obviously, this is only the case, if the water is stored to produce energy at other times).
19
Leonhard, W.; Grobe, M. (2004): Realistisches Langzeitkonzept oder Utopie? Nachhaltige elektrische Energieversorgung mit Windenergie, Biomasse and Pumpspeicher . In: EW Energiewirtschaftliche Tagesfragen, Jg. 103, Heft 5 2004, pages 26 31.
20
Stoll, H.G. (1989): Least-Cost Electric Utility Planning. New York, 1989.
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12
Economic Analysis
12.1 Methodology & Main Assumptions

Following the World Bank Handbook for Economic Analysis of Investment Operations 21, the main purpose of an economic analysis is to help to design and select projects that contribute to the welfare of a country. Whereas the financial analysis evaluates the project from the point of view of the operating company or Independent Power Producer (IPP), the economic analysis evaluates the project from the point of view of the whole economy of the country. The purpose of the investigation is to compare from a macroeconomic standpoint the benefits of the project with the costs it incurs, as is customary in any cost-benefit analysis. The standard of evaluation for costs and benefits is a monetary quantification. To the greatest possible extent, the project impacts are evaluated in terms of economic market prices. Shadow prices are employed, i.e., internal accounting prices that free the day-today (market) prices from multifarious biases. In other words, shadow prices represent an attempt to illuminate the actual costs of a product or service for the economy as a whole. In comparison with micro- and macro-economic prices, shadow prices are devoid of taxes and charges, duties and subsidies. The calculations are made for the years 2007 through 2028, i.e., the year in which the wind turbines are expected to be commissioned plus 20 years of operation. As in the technical analysis, four Scenarios have been considered in the economic analysis of the Ashegoda Wind Park:
Scenario I Scenario II Scenario III Scenario IV
- 86 Enercon E48 turbines 86 Enercon E53 turbines 86 Vestas V52 turbines 86 Gamesa G58 turbines
The economic analysis is conducted in the form of equalising the value of getting wind farms introduced to the power system to the induced savings in the power system in terms of avoided costs of thermal power generation. The incremental economic cost of the wind
21
Handbook for Economic Analysis of Investment Operations , World Bank, May 1996, p. 169
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farm output is defined as the difference between the economic costs of the wind farm and the avoided economic cost (economic benefits) of a diesel power plant. The economic benefits or the costs of power generation with a diesel power plant comprise: capital costs of the plant; fuel costs; variable and fixed operating costs; external costs of diesel power generation. As per recommendation of the GTZ TOR s (Item 1.4 Estimation of Benefits, footnote no. 2), the Consultant based the technical data and derived calculations for the capital costs of the diesel power plant on one existing 40 MW DPP located in the northern part of Ethiopia. The financial data was adjusted where ever applicable to arrive at the estimated current market value of the existing plant. The economic costs for power generation with the alternative project (wind power) are accounted for: capital costs of the wind park, fixed operating costs of the wind power installation, external costs of wind power generation - leakage costs-. From an economic point of view, the project is profitable, if during the period of time in question the cost of generating electricity with the wind park is lower than the cost of generating electricity with the diesel power plant. In other words: the costs incurred for building and operating the discussed wind park must be lower than the utility value, or economic benefits, which it provides. The economic benefits are measured here in terms of avoided costs (savings). If the wind park is built, the operating costs, and the external costs, of diesel-based power generation will be avoided. Pertinent to the cost categories for the diesel systems, differentiation can be made for the following economising effects: Capital effects: These account for savings on capital costs and fixed operating costs, because the result is, thanks to the wind power project, less money will have to be spent on new equipment and spare parts for the diesel power plants through to the year 2028.
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Fuel and lubrication oil substitution. The wind turbines avoid fuel consumption of the diesel system. The difference between non-fuel operating costs of the diesel power plant and O&M costs of the wind park is also accounted for here. External effects. These stand for the reduced level of harmful emissions.
Since costs and benefits arise at different points in time, the time factor must be accounted for in the form of cash-flow discounting, hence bringing costs and benefits in line with a uniform initial date. A so-called standard discount rate (SDR) is used for discounting. The SDR is defined as the interest rate at which the company discounts a marginal future increase in consumption to its present value. This makes it possible to summarise and compare costs and benefits, each as a single factor. The following profitability criteria are postulated for the purposes of this analysis: Benefits-cost ratio (B/C). The present values of the benefits are divided by the present values of the costs, and the project is profitable if the resultant benefits-cost ratio is greater than one. Economic Internal Rate of Return (EIRR). The internal interest is the social discount rate at which the present values of costs and benefits are equal. Economic Net Present Value (ENPV). Present value is the financial-mathematical expression used for the sum of the discounted values of a time series. The net present value is the difference between the present value of the benefits and the present value of the costs. The project is profitable, if the net present value is positive. The discount rate (the opportunity cost of capital) applied in the calculation of the ENPV has been set at 10 %, in accordance with conversations held with EEPCO s Management. Also, this rate is considered by the Ministry of Economic Development and Co-operation as appropriate for Ethiopia at present. The indicated discount rate has also been applied in other recent feasibility studies carried out for EEPCO, particularly in hydropower generation.
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12.2 Economic Benefits

In the economic analysis the identified benefits are (i) the avoided capital costs, (ii) the avoided fuel costs, (iii) avoided O&M costs and (iv) the avoided emissions.
12.2.1 Basic Diesel Power Plant Data As already mentioned, the basic data for this study was based on one existing Diesel Power Plant located in the northern part of Ethiopia. This heavy fuel operated DPP commenced commercial operation in July 200422. The plant consists of four state-of-the-art 18 cylinder, V-type, 4-stroke, medium speed Wrtsil diesel engines type 38 coupled to ABB alternators: each genset is rated at 9,991 kW (site capacity at alternator terminals). The net plant capacity exported to the grid at full load is 38 MW. The production and the sale of Wrtsil type 38 diesel gensets was stopped by Wrtsil within the course of strengthening Wrtsil s engine and alternator portfolio. The type 38 was replaced by the type 46. The Wrtsil 12V46 genset has a similar capacity as the 18V38 genset. The engine speed of the type 46 is 500 rpm.
12.2.2 Avoided Capital Costs The economic feasibility is determined comparing the wind park with an equivalent diesel power plant alternative. The wind parks relative to the equivalent diesel based generation has been considered in terms of energy production. If the wind park would not be installed, additional energy would have to be provided by new diesel generators at higher costs. The chosen DPP is especially suited for the analysis, since its annual generation is similar to the estimated energy production of the wind park. The capacities of the diesel units at this power plant are derated because of the prevailing site conditions. Due to the importance of this fact, for the correct interpretation of the calculated capital costs and operation costs, the influence of the site conditions on the engine s capacity will be further analysed.
22
Source: EEPCo, Project Completion Report for Dire Dawa 38 MW Heavy Fuel Oil Fired Power Plant , November 2004.
Diesel engines are internal combustion engines whose capacity is mainly influenced by the following site conditions: altitude of the site, combustion and cooling air temperature. ISO 3046 Part 1 specifies the standard reference conditions, declarations of power, consumption and test methods for diesel engines. The ISO standard reference conditions are used as normative conditions for all diesel engines. The ISO conditions are as follows:
Barometric pressure: 100 kPa (corresponds to 100 m altitude) Air temperature: 25C Relative humidity: 30% Charge air coolant temperature: 25C Except for the humidity value, an increase of these values results in reduced capacity of the diesel engine. ISO 3046 Part 1 specifies also the algorithms for the derating calculations. The site reference conditions for the regarded DPP are as follows: Site altitude: 1,200 m Air temperature: 30C Relative humidity: 30% (estimated) Charge air coolant temperature: 40C The ISO capacity at alternator terminals of each Wrtsil unit is 11,058 kW. The site capacity is 9,991 kW. This comparison shows, that each diesel genset is derated by 9.65% due to the site conditions, mainly due to the site altitude. This diesel power plant would deliver approximately 9.65% more capacity, if it was installed between 0 and 300 meters above sea level. This comparison is important for the interpretation of the study s results, since the derated capacity of the plant increases the specific costs of the plant compared to a non-derated plant by approximately 9-10%. The gross plant capacity (= at alternator terminals) is 4 x 9,991 kW = 39,964 kW. The net plant capacity (= capacity exported to the grid) is 4 x 9,500 kW = 38,000 kW. The difference between both values (= 1,964 kW = 4.9%) is the auxiliary power consumption of the plant. The technical and economic data of the reference DPP considered in the economic analysis are presented in Table 12-1 and in Table 12-2.
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Table 12-1: Technical data of the reference DPP
Engine Data Engine model Engine Type Number of cylinder Scenario Cylinder bore Stroke Swept volume Mean piston speed Number of valves per cylinder Engine speed for 50 Hz Aspiration Mean effective pressure (pme) Mechanical ISO capacity Mechanical site (derated) capacity Derating factor, calculated acc. ISO 3046-1 Alternator Data Alternator model Phase Insulation class Protection class Frequency Power Factor (P.F.) Output Voltage Efficiency Genset Data ISO capacity at alternator s terminals Site capacity at alternator s terminals
Value Wrtsil 18V38 4 stroke 18 V 380 mm 475 mm 970.2 dm 9.5 m/s 2 inlet, 2 outlet 600 rpm Turbo charged & charge air cooled 23.4 bar 11,340 kW 10,246 kW 9.65% = 0.9035 Value ABB AMG 1250RR10 Three phase F IP 23 50HZ 0.8 15 kV 97.51 at 0.8 P.F. at 100 % load Value 11,058 kW= 13,823 kVA (@ P.F. 0,8) 9,991 kW = 12,489 kVA (@ P.F. 0,8) 4 x 9,991 kW = 39,964 kW
Net plant capacity (measured at the HV side of the step-up transformer, according to 4 x 9,500 kW = 38,000 kW ISO 8528-1) 15-20 years Lifetime
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Table 12-2: Economic data of the reference DPP
Value 23 Economic Data Value in USD DPP Investment Requirements Capital Cost of the DPP @ ISO electrical gross capacity of 4 x 11,058 kW = 44,232 kW Adjusted Cost for Derating (9.65 %) Capital Cost of the DPP @ site electrical net plant capacity of 4 x 9,500 kW = 38,000 kW 31,069,272.98 USD 702.42 USD/kW 770.20 USD/kW 817.61 USD/kW Value in ETB 24 267,815,472 ETB 6,054.79 ETB/kW 6,639.08 ETB/kW 7,047.78 ETB/kW
The avoided capacity costs refer to the investment costs that would occur when installing a DPP like the investigated 40 MW plant. The avoided capacity costs were calculated at USD 817.61/kW. Due to strong continued demand for diesel power plants over the last few years, and limited production capacity of the diesel engine & genset manufacturers, the specific costs of diesel power plants (EPC contracts) are slightly, but nevertheless continuously increasing.
12.2.3 Avoided Fuel Costs In the current economic analysis, avoided fuel costs are determined by the fuel prices and the fuel consumption of the diesel gensets. The fuel prices are calculated as delivered to the site . The considered DPP is laid out for continuous operation on cheap heavy fuel oil (HFO). Expensive light fuel oil (LFO) is only needed as back-up fuel: used during start-up and shut down of the diesel engines, and when HFO is not available due to technical problems of the transfer and/or fuel treatment systems. HFO is a residual oil produced during the refinery process of crude oil. It has a lower quality and higher viscosity than LFO and consequently a lower price than LFO. Depending on its viscosity, HFO must be kept heated during transport in order to avoid problems during loading and unloading due to high viscosity.
23
Source: EEPCo, Project Completion Report for Dire Dawa 38 MW Heavy Fuel Oil Fired Power Plant , Nond vember 2004 and exchange rates as per June 2 2006.
24
Rate 1:8.61
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The light fuel (LFO) used at the considered DPP varies between 45 and 80 centi Stokes (cSt) at 50C, and the HFO used, has a maximum viscosity of 180 cSt at 50C. The annual fuel consumption recorded in the operation log books of the regarded DPP can be divided as follows: HFO consumption: 82% LFO consumption: 18% Considering the same lower heating value (LHV) for HFO and LFO, the above mentioned percentages do not need to be corrected and can be directly used for the fuel consumption cost calculations. The fuel consumption of diesel units of a state-of-the-art DPP is measured by means of volumetric fuel flow meters with thermal correction and automatic data transfer to the control system of the plant (history/data record). Together with the produced energy (kWh; GWh) a specific fuel consumption can be calculated, which is normally given in g/kWh, referred to the alternator s terminal. The stated HFO to LFO consumption ratio are values of the 38 MW Dire Dawa diesel power plant (DPP). Based on the log sheet figures of this DPP, it can be derived that Dire Dawa DPP was not operated in continuous mode, thus resulting in numbers of starts above the average of comparable DPPs. Fuel losses occurring during the fuel treatment (water & sediment drainage, separation and filtering of fuel) should be added to the above mentioned specific consumption, since the lost fuel/water/sediment volume was also purchased by the Owner. These losses were estimated in this case to 3% of the specific consumption. The fuel consumption is normally based on a LHV of fuel of 42.7 MJ/kg. Other LHV values can be also applied by calculating the specific consumption by means of a linear relation between the two LHV s. The fuel consumption of a diesel genset is also subject to derating based on the prevailing site conditions like the genset s capacity. The genset s consumption is normally given as ISO based value and as site based value. In case of the Wrtsil 18V38 genset, the ISO fuel consumption is 182.1 g/kWh (@ LHV 42.7 MJ) at the alternator s terminals, 5% tolerance. This represents an electrical efficiency of the gensets of 46.3% at ISO conditions. Considering the site conditions, the site fuel consumption of each unit is 200.3 g/kWh (@ LHV 42.7 MJ) at the alternator s terminals, 5% tolerance. This represents an electrical efficiency at site of the genset of 42.1 %.
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Including 3% losses inside the plant, the net plant fuel consumption of each genset is 206.3 g/kWh (@ LHV 42.7 MJ). Including 5% tolerance the value is 216.6 g/kWh. The following table summarises the relevant fuel consumption values:
Denomination Share of HFO consumption Share of LFO consumption ISO fuel consumption at the alternator s terminals Site fuel consumption at the alternator s terminals Losses boundary Site fuel consumption at the alternator s terminals including losses inside the plant
Value 82% 18% 182.1 g/kWh 200.3 g/kWh 3%
Comments
As per manufacturer s handbook, 5% tolerance
Estimated value
206.3 g/kWh
= 8,809 kJ/kWh
For the economic analysis a fuel consumption of 207.0 g per generated kilo watt hour at the alternator s terminals was considered. This corresponds to a net plant heat rate of 8,839 kJ/kWh. Fuel prices vary strongly, proportional to the volatile price development of crude oil prices. Table 12-3 shows stock market fuel prices at different international harbours in metric tons (t) for different categories of fuel oil. The fuel oil prices consists normally of the following components: Fuel price at port of loading Cost of sea transport and insurance Cost at port of unloading: pumping, taxes, transport to fuel depot Cost of land transport (tank truck) and insurance
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Table 12-3: Fuel prices at different international ports in USD/metric ton
[USD/t] Singapore Fujairah Rotterdam Houston
HFO 380 25 333.50 334.50 314.50 330.00
HFO 180 26 343.50 353.50 335.00 345.00
MDO 27 624.00 648.50 568.50 579.00
MGO 28 631.50 648.00 620.00 *
Source: www.bunkerworld.com; date: June 1 st , 2006
HFO 380 Price (USD/t)
May 2006
Figure 12-1: HFO380 price development29 Figure 12-1 shows the HFO 380 price development in Singapore (yellow), Fujairah (red), Houston (blue) and Rotterdam (green) during May 2006. The y-axis shows the fuel price in USD/t. In the last months, prices tended to decrease. Despite in the month of May of 2006 there has been a decreasing oil price trend, the brent crude oil price development (see Figure 12-2) has had an increasing trend when analysing the years 1997 till December 2005.
25 26
Heavy fuel oil (HFO) viscosity 380 cSt at 50C Heavy fuel oil (HFO) viscosity 180 cSt at 50C 27 Marine diesel oil 28 Marine gas oil
29
Source: www.bunkerworld.com, June 1st 2006

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Figure 12-2: Development of the brent crude oil price from 1997 to 2005
30
The heavy fuel oil price for HFO 180 at Fujairah port is 353.50 USD/Mt. With an estimated HFO density of 0.96, the metric ton is equivalent to 1,041.7 litres. The HFO 180 litre price at Fujairah port is USD 0.3393. According to EEPCO, the HFO 180 price at Djibouti harbour amounts to 3.6949 ETB per litre as per May 2006. Considering the above mentioned density and an exchange rate of 1 USD = 8.61 ETB, the price of HFO 180 is 446.51 USD/Mt. The price for LFO at Djibouti port is 3.7754 ETB per litre corresponding to USD 0.4379. With a maximum density of 0.90, the metric ton is equivalent to 1,111.1litres. Consequently, the LFO price is 486.65 USD/Mt. According to EEPCO s data, the land based transport from Djibouti port up to the dealer s depot in the region of the considered DPP is routed via 105 km paved roads (= transport cost of 45.40 ETB/Mt) and 239 km gravel roads (= transport cost of 125.10 ETB/Mt). The fuel finally delivered by dealers from the depot to the considered DPP has the following price increment covering the transport, service charges and profit of the dealers: HFO: 0.4151 ETB/liter = USD 50.16/Mt
30
Source: OECD
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LFO: 0.4146 ETB/liter = USD 53.44/Mt The final fuel prices at the regarded DPP are as follows: HFO: USD 516.45 /Mt LFO: USD 559.87 /Mt = USD 0.4958/litre = 4.2737 ETB/liter = USD 0.5039/litre = 4.3435 ETB/liter
With a specific HFO price of 11.88 USD/GJ and a net plant heat rate of 8,839 kJ/kWh, the specific fuel cost is 0.106 USD/kWh. The following table summarises the relevant fuel price data:
Table 12-4: Relevant fuel price data
Denomination HFO IF 180 estimated density LFO estimated density USD/ETB exchange rate Distance Djibouti-depot HFO (IF 180) price at Fujairah HFO price at Djibouti port LFO price at Djibouti port
Value
Comments 1 Mt = 1,041.7 litres 1 Mt = 1,111.1 litres
0.96 Max. 0.90 1:8.61 105 km paved road 239 km gravel road 353.50 USD/Mt 446.51 USD/Mt 486.65 USD/Mt 19.78 USD/Mt 466.29 USD/Mt 506.43 USD/Mt 0.4151 ETB/litre
Transport cost Djibouti - depot HFO price at local depot LFO price at local depot Dealer s fixed charge for HFO delivery depot - DPP Dealer s fixed charge for LFO delivery depot - DPP HFO price at the DPP LFO price at the DPP Specific HFO cost Specific LFO cost
344 km paved and gravel road
= USD 50.16.30/Mt
0.4146 ETB/litre USD 516.45 /Mt USD 559.87 /Mt 0.10690 USD/kWh net 0.11589 USD/kWh net
= USD 53.44/Mt = USD 0.4958/litre = 4.2737 ETB/litre = USD 0.5039/litre = 4.3435 ETB/litre = 0.92146 ETB/kWh net = 0.99896 ETB/kWh net
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A HFO price of USD 516.45/Mt (0.10690 USD/kWhnet) and a LFO price of 559.87/Mt (0.11589 USD/kWhnet) were considered for the economic analysis.
12.2.4 Avoided non-Fuel O&M Costs Depending on the plant load factor, operating hours and fuel price, the fuel costs represents more than 80% of the total operation costs of a DPP. The remaining costs, the (non-) fuel O&M costs consist of fixed and variable costs. The fixed O&M costs include all those cost items which will be incurred irrespective of an operation of the plant s operation status. These fixed costs include costs for personnel, insurance, management and administration, as well as general maintenance costs. The general maintenance cost component includes costs of administration for services, consumables, materials, supplies procured, costs of postage, telephone, facsimile, reproductions and travel expenses. The variable O&M costs include such cost components which are only incurred if the plant is operating. These costs comprise of lubrication oil and other consumables like chemicals, etc. Variable costs for the power plant also include the cost for overhauls including spare parts. Each diesel engine has to undergo service and maintenance every 1500/3000/6000/12000/24000 and 36000/48000 operation hours. After 12000/24000 and 36000/48000 operation hours the diesel engines undergo major maintenance works, which are very cost intensive. This means that the below mentioned specific variable O&M costs (6 USD/MWh) for HFO operated DPP s of similar design and configuration is an average value calculated within one whole operation cycle until major overhaul at 36000/48000 operation hours. EEPCo s figures on variable and fixed O&M costs provided for the reference years 2004 to June 2006 are very low, even considering that the power plant has recently started commercial operation. Among other reasons, this is due to a low plant load factor. Since the annual fix non-fuel O&M costs provided by EEPCo could not be considered as representative for the whole period of analysis31, moderate international standard cost estimates settled at 100.000 USD for fix non-fuel O&M costs per year were applied in the economic analysis.
31
Fix non-fuel O&M costs have been budgeted by EEPCo as per May 2006 as low as USD 48,525 (ETB 426,791) for the period June 2005 to June 2006.
The estimation of avoided non-fuel variable O&M costs per year for the Diesel Power Plant has been considered according to the Consultant s experience from similar African Diesel Power Plants and according the following data:
Table 12-5: Non-fuel variable O&M for a DPP
Net plant capacity Assumed plant load factor, DPP as base load plant Net plant energy production at HV side of step-up transformers Specific variable O&M costs for HFO operated DPP s of similar design and configuration all over the world (source Evaluation of Institution of Diesel and Gas Turbine Engineers (IDGTE) Working Cost and Operational Report 1997 Estimated annual expenditure for variable O&M costs
38,000 kW 75 % 249,660 MWh/year 6 USD/MWh
USD 1,497,960
12.2.5 Avoided Emissions
The avoided CO2 emissions are calculated considering that a DPP with an efficiency of 43 % emits 670 gr. of CO2 per kWh. The calculation follows the formula:
The results of applying the above formula to each Scenario are summarised in Table 12-6.
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Table 12-6: Avoided emissions of the DPP

ASHEGODA SITE Avoided Emissions of the DPP (CO2 tonnes) Annual emissions avoided Total avoided emissions (CO2 tonnes) Scenario I Enercon E48 135,355 2,707,090 Scenario II Enercon E53 155,848 3,116,955 Scenario III Vestas V52 136,300 2,726,002 Scenario IV Gamesa G58 164,437 3,288,741
In the economic analysis the wind park is compared with a diesel power plant. Thus, the avoided emissions refer to the DPP. The economic monetary quantification of the avoided emissions has been based on the Mitigation Cost Approach. In the Mitigation Cost Approach, the use of USD20/CO2 tonnes is considered as a reasonable estimate for the shadow price of carbon emissions and it is consistent with the existing work by many experts:
Anderson et al. (1990, 1993) estimated a present-day USD25/CO2 tonnes shadow price using a carbon accumulation-backstop technology model based on the Hotelling rule; Fankhauser (1995, 1996) estimates a global damage function for climate change, and derives a range of USD6-45/CO2 tonnes shadow price, with a best estimate of USD20/CO2 tonnes; The Federation of American Scientists arrived at a shadow price of USD10-20/CO2 tonnes based on a Delphi-type assessment; And simulations of the global carbon offset market performed by the Norwegian research group, ECON, indicate a future market price for carbon of USD10-30/tC;
whereas in ADB's Economic Evaluation of Environmental Projects (March 1996), Appendix H, Average Annual Global Climate Change Damages for Carbon Emissions are estimated at USD7.85-USD17.66/CO 2 tonnes for 1991 to 2000, increasing to 8.90 USD/CO 2 tonnes - 20.03 USD/CO 2 tonnes for 2011 to 2020, and decreasing thereafter. The value has been also compared to the prices of CO 2 emissions in the European Emissions Trading System at the European Energy Exchange (EEX) based in Leipzig (Germany). As showed in the figure below, prices have been over 20
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/ CO 2 tonnes (24 USD/ CO 2 tonnes) almost all the time since October 2005 32, so that a price of 20 USD/ CO2 tonnes has been applied in the economic analysis 33.
CO2 certificate price development at the EEX
Figure 12-3: CO2 price development at EEX
32 33
VIK Mitgliedsrundschreiben 15/2006, March 3rd, 2006
In the financial analysis, current Certified Emission Reduction (CER) credit prices for Clean Development Mechanism (CDM) activities have been considered at 6 USD/CER.
12.2.6 Diesel Summary Assumptions The basic parameters of the DPP used in the economic evaluation are summarised in the following table.
Table 12-7: Summary of basic assumptions of the reference DPP
Item Project Implementation Start Date Construction Period Commercial Operation Date Tax and Duties Exchange Rate ETB/USD Net Plant Capacity Plant Load Factor Average Saleable Capacity Capital Costs Fixed non-fuel O&M Cost Variable non-fuel O&M Cost Heat rate Specific HFO180 Fuel Cost Specific LFO Fuel Cost
Data 2006 18 months 2007 Tax-free status 8.6199 : 1 38,000 kW 75 % 249,660 MWh/year 817.61 USD/kW USD 100,000 p.a. USD 1,497,960 p.a. 8,839 kJ/kWh 0.10690 USD/kWh net 0.11589 USD/kWh net
Comment
Rate as per March 8th, 2006
This data has been adapted to each windfarm s output @site electrical net plant capacity of 4 x 9,500 kW As per EEPCo information = 6 USD/MWh @ LHV share: 82 % share: 18 %
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12.2.7 Indirect benefits Main indirect benefits that have not been quantified, but are to be considered are: the fact that the injected wind energy reduces the absolute consumption of diesel fuel, which is relatively expensive, the generation of power will become more diversified, the dependence on imported diesel fuel will decline, the project confirms the energy-policy objectives of the Government of Ethiopia.
12.3 Economic Costs

In the economic analysis, the identified economic costs are (i) capital costs - investment costs - of the wind park, (ii) operating costs of the wind power installation, and (iii) leakage costs. 12.3.1 Investment Costs of the Wind Park An itemised specification of investment costs (wind turbines, foundation, civil works, electrical work, consulting services, physical and price contingencies, etc.) in actual prices broken down in foreign and local cost components has been included in Section 9 Part I. Internal prices in Ethiopia are considered to reflect an open market economy and do not require further correction for distortions created by constraints of supply and demand in the market. Based primarily on the conditions of foreign currency acquisition as well as to take into account of the national allocation system of foreign currency, the Ministry of Economic Development and Co-operation recommends that a shadow exchange rate factor of 1.11 would be applied. This leads to a standard conversion factor (SCF) of 0.9 is obtained for local currency expenditure, effectively reducing local costs accordingly when expressed in foreign currency units. Similar conversion factors were also applied in other recent studies carried out for EEPCo34. In the economic analysis the SCF of 0.9 has been applied to the expenditures in local currency, resulting in total investment costs for the different wind park scenarios as detailed in the following tables.
34
Feasibility Study of Weles, Zhemoga-Yeda and Halele-Werabesa Hydropower Project , Lahmeyer International Gmh in association Mid-day Consulting Engineers and Tropic Consulting Engineers, June 2005.
Table 12-8: Investment costs considering shadow prices
Enercon E48
WP Investment Costs Investment in Foreign Currency Investment in Local Currency Total Investment
Costs [USD] 84,905,398 11,425,069 96,330,468
[%] 88.14% 11.86% 100.00%
SCF 0.9
Economic Value [USD] 84,905,398 10,282,562 95,187,961
Enercon E53
Costs [USD] 90,083,879 11,425,069 101,508,948
[%] 88.74% 11.26% 100.00%
SCF 0.9
Vestas V52
Costs [USD] 91,119,575 11,425,069 102,544,644
[%] 88.86% 11.14% 100.00%
SCF 0.9
Gamesa G58
Costs [USD] 89,436,569 11,425,069 100,861,638
[%] 88.67% 11.33% 100.00%
SCF 0.9
12.3.2 Economic O&M Costs of the Wind Park The standard conversion factor (SCF) of 0.9 for local currency expenditure, effectively reducing local costs accordingly when expressed in foreign currency units, has also been applied to the O&M costs. To this end, O&M costs have been divided into foreign and local costs. For maintenance and repair of the wind turbines it is assumed that after sufficient education of the local operation team, the work for these two activities can be executed to a significant extend by the local personnel. For maintenance this portion is higher than for repair, since for the repair procedures more specialised know-how is required and it has thus, to be carried out by experienced wind energy foreign experts. (A further explaLI / GE6 25 0477 final report ashegoda
nation is included in Section 9.4 Part I). The following Tables include a detail of the annual O&M costs for the Ashegoda Wind Park considered in economic values.
Table 12-9: Economic values of Enercon E48 annual O&M costs
WT-Type: Enercon E48 Item

Maintenance of wind turbines Repairing of wind turbines Consumables Spare parts International technical assistance Local technical expenses Insurance Insurance of wind park personnel Power demand of the turbines Subscriptions Office costs, materials & others TOTAL (USD/year) TOTAL (%)
Years 1-20 (USD/year)
Foreign Portion % (USD/year)

48,144 79,089 70,054 1,514,533 288,738
Local Portion %
65.0% 50.0% 30.0% 0.0% 0.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0%
SCF 0.9
Economic Value O&M (USD)

128,613 150,269 97,075 1,514,533 288,738 392,625 150,895 240,598 130,497 5,636 222,735 3,322,213 95.8%
(USD/year)
137,554 35.0% 158,178 50.0% 100,077 70.0% 1,514,533 100.0% 288,738 100.0% 436,250 167,661 267,331 144,997 6,262 247,483 3,469,064 100.0%
2,000,558 57.7%
89,410 80,469 79,089 71,180 30,023 27,021 0 0 0 0 436,250 392,625 167,661 150,895 267,331 240,598 144,997 130,497 6,262 5,636 247,483 222,735 1,468,506 1,321,656 42.3% 38.1%
Table 12-10: Economic values of Enercon E53 annual O&M costs
WT-Type: Enercon E53 Item

Foreign Portion % in USD

48,144 79,089 70,054 1,532,657 288,738
Local Portion %
65.0% 50.0% 30.0% 0.0% 0.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0%
SCF 0.9

128,613 150,269 97,075 1,532,657 288,738 392,625 150,895 240,598 130,497 5,636 222,735 3,340,337 95.8%
in USD
137,554 35.0% 158,178 50.0% 100,077 70.0% 1,532,657 100.0% 288,738 100.0% 436,250 167,661 267,331 144,997 6,262 247,483 3,487,188 100.0%
2,018,681 57.9%
89,410 80,469 79,089 71,180 30,023 27,021 0 0 0 0 436,250 392,625 167,661 150,895 267,331 240,598 144,997 130,497 6,262 5,636 247,483 222,735 1,468,506 1,321,656 42.1% 37.9%
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Table 12-11: Economic values of Vestas V52 annual O&M costs
WT-Type: Vestas V52 Item


48,144 79,089 70,054 1,718,662 288,738
Local Portion %
65.0% 50.0% 30.0% 0.0% 0.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0%
SCF 0.9

128,613 150,269 97,075 1,718,662 288,738 433,405 150,895 265,066 138,654 5,636 237,008 3,614,020 95.8%
in USD
137,554 35.0% 158,178 50.0% 100,077 70.0% 1,718,662 100.0% 288,738 100.0% 481,561 167,661 294,518 154,060 6,262 263,342 3,770,613 100.0%
2,204,686 58.5%
89,410 80,469 79,089 71,180 30,023 27,021 0 0 0 0 481,561 433,405 167,661 150,895 294,518 265,066 154,060 138,654 6,262 5,636 263,342 237,008 1,565,927 1,409,334 41.5% 37.4%
Table 12-12: Economic values of Gamesa G58 annual O&M costs
WT-Type: Gamesa G58 Item


48,144 79,089 70,054 1,734,068 288,738
Local Portion %
65.0% 50.0% 30.0% 0.0% 0.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0%
SCF 0.9

128,613 150,269 97,075 1,734,068 288,738 433,405 150,895 265,066 138,654 5,636 237,008 3,629,426 95.9%
in USD
137,554 35.0% 158,178 50.0% 100,077 70.0% 1,734,068 100.0% 288,738 100.0% 481,561 167,661 294,518 154,060 6,262 263,342 3,786,019 100.0%
2,220,092 58.6%
89,410 80,469 79,089 71,180 30,023 27,021 0 0 0 0 481,561 433,405 167,661 150,895 294,518 265,066 154,060 138,654 6,262 5,636 263,342 237,008 1,565,927 1,409,334 41.4% 37.2%
Further, a major overhaul of all equipment has been assumed to take place between the 10th and 11th years of operation in an amount of 5 % of total investment costs. Also wind farm decommissioning costs in operational year 21 have been considered with an amount of 1 % of total investment costs.
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12.3.3 Leakage Costs of the Wind Park No leakage costs (or other external costs) could be identified for the wind park activity. Leakage is defined by the United Nations Framework Convention on Climate Change (UNFCCC) in its Guidelines for Completing CDM Project Design Documents, Version 02, as the net change of antropogenic emissions by sources of GHG which occurs outside the project boundary, and which is measurable and attributable to the project activity . The project activity essentially involves the generation of electricity from wind, the employed wind turbines can only convert wind energy into electrical energy and cannot use any other input fuel for electricity generation. Thus, no fuel leakage costs occur from the wind park project.
12.4 Results: Economic Analysis

The economic appraisal of the Ashegoda Wind Park has been carried out by comparing the cash flow associated with construction and operation the wind power scheme with the cash flow for the construction and operation of the equivalent least cost thermal alternative plant (diesel power plant). In the appraisal, the avoided costs of thermal generation are regarded as benefits attributable to the Wind Power Project. The difference between the costs of the wind power project and the benefits of the avoided thermal power and energy has been determined over a 20 year operational period. With regard to implementation of the wind power plant, a fast-track schedule has been adopted. Only a fasttrack schedule will come close to meeting EEPCo s short and long-term strategic installed capacity target. Under the fast-track implementation schedule, construction probably will start at the end of 2006, with the first energy feeding into the ICS in 2007. The results of the comparison of the proposed Ashegoda Wind Power Project development with an equivalent DPP are shown in Table 12-13. Three main economic parameters have been used to evaluate the economic feasibility of the wind park: the EIRR, the Benefit/Cost Ratio, and the ENPV calculated at a 10 % discount rate.
12.4.1 Economic Cash-flow Projections
Cash flow projections associated with construction and operation of the wind parks have been compared with the cash flow projections of construction and operation of the equivaLI / GE6 25 0477 final report ashegoda
lent least cost thermal alternative plant, in this case, an emergency diesel power plant with nominal capacities ranging from 14 MW to 16 MW depending on the estimated power output of the wind park. In the study, the avoided costs of thermal generation are regarded as benefits attributable to the wind park project. The difference between the costs of the wind park project and the benefits of the avoided thermal power and energy has been determined over a 20 year operational period. Further the economic benefits of avoided emissions have been quantified. 12.4.2 EIRR and NPV
In this study, the EIRR is defined as the discount rate that causes the present value of the project costs to be equal to the present value of the benefits. The EIRR indicates the actual profit rate of the total investment outlay. The project is feasible if the EIRR is greater than the agreed economic discount rate. It is given by the following equation:
n net flow i i=1 (1 + R )i-1 = 0
where n denotes calculation period (years) and R denotes discount rate. As indicated in the assumptions, the discount rates for the basic scenarios are 10 %. The ENPV of an investment is the present (discounted) value of future cash inflows minus the present value of the investment and any associated future cash outflows. The ENPV of the Ashegoda Wind Park has been calculated at different discount rates (8 %, 10 % and 12 %). Results are indicated in the table below.
12.4.3 B/C Ratio
In the Benefit/Cost (B/C) Ratio, the total discounted benefits are divided by the total discounted costs. Projects with a benefit-cost ratio greater than 1 have greater benefits than costs as well as positive net benefits. The higher the ratio, the greater the benefits relative to the costs.
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Table 12-13: Results economic analysis Ashegoda wind park
Discount Rate 8% 10% 12% 8% 10% 12% 8% 10% 12% 8% 10% 12%
Wind Turbine Type (Scenario)
Key Economic Parameters EIRR (%) B/C Ratio 1.97 ENPV (Mio USD) 107.78 91.59 64.21 134.83 115.86 82.37 104.04 87.42 60.39 144.45 124.78 89.30
Enercon E48
30.23 %
1.81 1.66 2.16
Enercon E53
33.44 %
1.98 1.81 1.89
Vestas V52
27.76 %
1.73 1.59 2.22
Gamesa G58
35.35 %
2.04 1.87
The results of the economic analysis are highly positive, showing that the wind park in all four Scenarios and at a discount rate of 10 % is highly economically feasible. The highest result is produced by the Scenario with the Gamesa G58 followed by the Scenario with Enercon E53 wind turbines, Scenario I with Enercon E48 and Scenario III with Vestas V52.
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12.5 Scenario Analysis

A scenario analysis has been carried out for the wind park scenario with the highest EIRR, highest B/C Ratio and highest net benefits, i.e., the Scenario IV (57 Gamesa G58 turbines). Changes in (i) avoided capacity costs, (ii) diesel fuel prices, (iii) CO2 penalties and (iv) electricity generation and their impact on the EIRR have been evaluated. Change in avoided Capacity Costs As indicated previously, avoided capacity costs are calculated as the difference between capacity costs of installing a DPP and the capacity costs of implementing a wind park. These avoided capacity costs are negative since the investment costs of the wind park are higher than the costs of the DPP. The effect of increasing and reducing the wind park investment costs has been studied in two cases: o o Best Case: Investment costs 10 % lower than in the Base Case. Worst Case: Investment costs 10 % higher than in the Base Case.
Change in Fuel Prices Oil prices oscillate along the time. (Figure 12-4 for the development of the crude price in USD per barrel (bbl) from April 2004 to March 200635).
35
Source: www.tecson.de
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Figure 12-4: Crude price (USD/bbl) from April 2004 to March 2006
The impact of oil price variations (i.e., oscillations in the HFO crude oil price at DPP 516.45 USD/Mt and in the LFO oil price at DPP 559.87 USD/Mt-) , have been analysed in the scenario analyses by modelling two cases: Best Case: with an annual increase of 2 % on HFO & LFO prices at the DPP; Worst Case: with an annual decrease of 2 % HFO & LFO prices at the DPP. Figure 12-5 reflects the three scenarios used in the economic analysis, where in year 2028 HFO prices are expected to increase until 798.42 USD/Mt and LFO until 865.55 USD/Mt in the Best Case and to decrease until 331.13 USD/Mt for HFO and 358.97 USD/Mt for LFO in the Worst Case.
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Scenario Analysis - Oil Price Development USD/Mt 920.00 820.00 720.00 620.00 520.00 420.00 320.00 220.00 120.00 20.00 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 Year Base Case (HFO) Base Case (LFO) Best Case (HFO) Best Case (LFO) Worst Case (HFO) Worst Case (LFO)
Figure 12-5: Scenario analysis: HFO and LFO price development
Change in Emission (CO2) Penalties Two cases have been tested in the scenario analysis in the costs of mitigating CO2 emissions (penalties for emitting CO2), which were set at 20 USD/t in the base case: Best Case: emissions penalty is set at 25 USD/t and Worst Case: emissions penalty is set at 15 USD/t. Change in Electricity Generation The base case has been calculated assuming a Probability of Exceedance of 75 % (P75). For the scenario analysis two further cases have been considered: Best Case: Probability of Exceedance of 50 % (P50); Worst Case: Probability of Exceedance of 90 % (P90). A definition of the Probability of Exceedance can be found in Section 6 of Part I).
12.5.1 Results: Economic Scenario Analysis The scenario analysis shows that the variable with the highest impact on the EIRR is the investment cost of the wind park followed by the electricity generation estimates. The best results are obtained when decreasing investment costs by 10 %, whereas the impact on EIRR of increasing emission penalties is from an economic point of view very low. The following table summarises the results obtained in the scenario analysis.
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Table 12-14: Summary results of scenario analysis
Variable Best Case

Avoided capacity costs
Scenario Analysis Worst Case
EIRRInv(-10%) = 41.46 %
EIRRInv(+10%) = 30.77 %
Change in fuel prices
EIRRFuel Price(+2%) = 38.99 %
..
EIRRFuel Price(-2%) = 31.72 %
Emission penalties
EIRR (25USD/t) = 36.57 %
EIRR (15USD/t) = 34.14 %
Electricity Generation (P)
EIRR (P50) = 39.37 %
EIRR (P90) = 31.72 %
12.6 Conclusions: Economic Analysis

The economic appraisal of the Ashegoda Wind Park scheme has been carried out by comparing the cash flow associated with construction and operation of the wind park with the cash flow of construction and operation of the equivalent least cost thermal alternative plant36. In the appraisal, the avoided costs of thermal generation are regarded as benefits attributable to the Ashegoda Wind Park Project. The difference between the costs of the Ashegoda project and the benefits of the avoided thermal power and energy has been determined over a 20 year operational period37. With regard to implementation of the wind park, a fast track schedule has been adopted. Only a fast track schedule will come close to meet EEPCO s short and long-term strategic installed capacity target. Under the fast track implementation, construction probably will start in 2007, with the first energy feeding into the ICS in 2007. The comparison of the proposed Wind Power Project with an equivalent thermal plant has been made for 4 different Scenarios (Enercon E48, Enercon E53, Vestas V52 and Gamesa G58). The results (Table 12-13) show that all scenarios are economically feasible, being the best Scenario the wind park with Gamesa G58 wind turbines followed by Enercon turbines type E53 and E48. Since all the scenarios produce an EIRR higher than
36 37
The least costs thermal alternative plant has been defined by EEPCo as a Diesel Power Plant. Cash-flows are presented for 20 year operational period plus decommissioning in year 21.
LI / GE6 25 0477
the discount rate of 10 % settled by the Ministry of Economic Development and Cooperation38 for Ethiopia, all the scenarios can be considered as economically feasible. For the Scenario with the highest produced results, (Scenario IV with Gamesa wind turbines) a sensitivity analysis has been carried out. Four variables have been subject to the sensitivity analysis: (i) changes in avoided capital costs through an increase /decrease on the investment costs of the wind park in +10 %/-10 %; (ii) changes of fuel prices, i.e., an annual increase/decrease on fuel prices of +2 %/-2 %; (iii) an increase/decrease of the emission penalties from 20 USD/t considered in the base case scenario to 25 USD/t and 15 USD/t considered in the best and worst cases, respectively; and finally, (iv) an increase/decrease in electricity output. The results of the economic sensitivity analysis have shown that changes on the investment costs of the wind park have the major influence on the economic results. If the investment costs could be negotiated and reduced by 10 %, the EIRR would increase from 35.35 % to 41.46 %.
38
Information provided by EEPCo during first mission.

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13
CDM Assessment
A detailed assessment of the Clean Development Mechanism (CDM) has been carried out in order to evaluate the institutional and regulatory framework for CDM in Ethiopia as well as the opportunities to register the project as a CDM activity. Furthermore, the potential amount of annual Certified Emission Reduction (CER) credits to be generated by the wind park has been calculated and considered in the financial analysis.
13.1 Introduction
The Clean Development Mechanism (CDM) as established under Article 12 of the Kyoto Protocol (KP) represents a collaborative policy approach between industrialised and developing countries, aimed at promoting sustainable infrastructure projects in developing countries whilst simultaneously reducing greenhouse gas (GHG) emissions such as CO2. From the perspective of industrialised countries, CDM represents a cost-effective option to comply with their national emission reduction obligations under the KP. Developing countries benefit from CDM as an additional co-financing source for sustainable energy projects. Its applicability to particular projects, however, depends on how these cope with country-specific and project-specific eligibility requirements. This section provides an assessment of the applicability of the CDM to the envisaged wind park.
13.2 Institutional Framework for CDM Projects in Ethiopia

In order to be eligible for CDM, aspiring host countries like Ethiopia need to be Parties of the United Nations Framework Convention on Climate Change (UNFCCC) and the Kyoto Protocol. Furthermore, each host country needs to have established a Designated National Authority (DNA) for the CDM, which co-ordinates the CDM approval process on the national level on behalf of the host country government. Ethiopia registered with the Kyoto Protocol on greenhouse gas emissions in April 2005 as a "non-Annex I state", which means it has not undertaken measures to meet specific targets; its future plans should emphasise the development of power plants to reduce growth in carbon emissions. Hence, Ethiopia fulfils the first main requirement to become a CDM host country. Furthermore, Ethiopia has established a Designated National Authority (DNA) for the CDM, namely the Ethiopian Environmental Protection Authority (EPA). EPA s objective is to formulate policies, strategies, laws and standards, which foster social and economic development in a manner that enhances the welfare of humans and the safety of the enviLI / GE6 25 0477 final report ashegoda
ronment sustainable, and to spearhead in ensuring the effectiveness of the process of their implementation. 39
The contact address is mentioned below:
Environmental Protection Authority (EPA) Contact: Yeka Kifleketema P.O. Box 12760 Gurd Shola, Addis Ababa The Federal Democratic Republic of Ethiopia
Phone: 251 -1 46 46 07 / 46 48 80 / 46 38 43 Email: greenet@telecom.net.et http: www.epa.gov.et/index.html
39
http://www.epa.gov.et/AboutEPA.htm; April 4th 2006

LI / GE6 25 0477
13.3 CDM Project Cycle

Developing countries and transition economies may host a project and benefit from CDM as an additional co-financing source. Project sponsor can be either the host country or usually a project sponsor of an Annex I country. In the case of a wind energy project, for instance, the owner of the wind park in a non-Annex I country generates revenues from electricity sales in the national market and also from the sale of Certified Emission Reduction (CER) credits.
val pro Ap r of te Let

monetization of ERPA
Host Country ETHIOPIA
Kyoto Protocol Compliance (e.g. NDA)
Carbon Fund / CER Buyer
CERs sales revenues
ER s
E Pu miss (E rch ion RP as R A) e A ed gr uct ee ion me nt
electricity sales revenues
Lenders
Loan Debt Service
Project Sponsor in Host Country EPPCo

Figure1: CDM structure
Customers
CERs can be sold to carbon exchanges or to a CER acquisition program such as a carbon fund. Carbon funds offer the opportunity to project owners to close an Emission Reduction Purchase Agreement (ERPA) for the whole CER crediting period, usually 10 years, which avoids risks of oscillating CER market prices. A potential buyer for the CERs generated by a wind park project could be found, for example, through the Community Development Carbon Fund of the World Bank, which links small scale projects seeking carbon finance with companies, governments, foundations, and through NGOs looking for improvement of livelihoods in local communities and obtain
verified Emission Reductions. The advantages of collaborating with an established carbon fund include, for example: the signing of a long term ERPA (likely to be characterised by a low price, but with the guarantee of having an assured buyer); and possibility to have a buyer/investor which covers the associated up-front payments.
Under the second point, the target would be to find an investor willing to overtake the upfront costs, which relate to, for example:
the preparation of a Project Design Document (PDD); the project validation by a Designated Operational Entity (DOE); and costs incurred for registration at the UNFCCC CDM Executive Board.
13.4 Emission Reductions attributable to the Ethiopian WPs CDM project activities must reduce emissions below those emissions that would have occurred in the absence of the CDM project activity. Due to this claim and due to the increasing demand of electricity in Ethiopia it is necessary to compare the emissions avoided by realising the CDM project according to a reasonable alternative of electric energy generation such as wind energy. To do so, the approved consolidated baseline methodology ACM0002, Version 05, as of 3rd March 2006, Consolidated baseline methodology for grid-connected electricity generation from renewable sources , which is applicable to grid connected power generation project activities including wind farms has been applied by the Consultant. The ACM002 methodology is applicable because the proposed project activity: implies electricity capacity additions from wind sources; does not imply switching from fossil fuels to renewable energy at the site of the project activity; and its geographic and system boundaries can be clearly identified and information on the characteristics of the grid is available. The baseline scenario assumed for the proposed project activity consists of electricity supplies, which in the absence of the project would have been generated by the operation of grid-connected power plants in the Ethiopian supply system and by the addition of new generation sources.
The baseline emission factor (EFy) is calculated as a combined margin (CM), consisting of the combination of operating margin (OM) and build margin (BM) factors according to the following three steps: Step 1: Calculation of the Operating Margin For the derivation of the Operating Margin emission factor (EFOM,y), the baseline methodology ACM0002 / VERSION 05, 03 MARCH 2006 provides four different procedures: Dispatch Data Analysis OM , or Simple OM, or Simple adjusted OM, or Average OM. Dispatch data analysis should be the first methodological choice. However, in the case of the proposed project activity, the data collection, processing and analysis would cause very high transaction costs, which cannot be justified by the minor gain of accuracy that it might provide. Even with regard to the Ethiopian power plant structure shown in the table below and granted that hydropower jointly comprised more than 50 % in 2004 of the Ethiopian power generation, the Simple adjusted OM calculation is the method which should be used. For the calculation of the Simple adjusted OM, the power sources of the Ethiopian power supply system are separated into low cost/must run power sources (k) in Ethiopia singly hydropower -and other sources (j), i.e. thermal power plants. For both groups, the average emission factor needs to be derived. In the case of hydropower, this is obviously zero. (See Table 13-1 for a list of the low cost/must run power sources in Ethiopia and other sources, i.e. diesel power plants).
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Table 13-1: Ethiopian power plant structure Source Plant Gilgel Gibe Finchaa Tis Abay II MELKA WAKANA Awash III Awash II Tis Abay I Koka Total Hydro Kaliti I Awash Dire Dawa Adwa Adigrat Shire Mekele Axum Nekempt Ghimbi Jimma Total Diesel Total all
40
Installed capacity [MW] 184.00 134.00 75.00 153.00 32.00 32.00 11.40 43.20 664.60 9.00 22.40 40.00 3.00 1.10 0.80 1.30 0.55 1.70 0.30 0.10 80.25 744.85
H y d r o
D I E S E L
Fi , j , y COEFi , j
EF OM, simple adjusted, y = 1
i, j y j i ,k
Fi ,k , y COEFi ,k
y k
GEN j , y
GEN k , y
EF OM, 2004 =
1.05 t CO /GWh 2
40
Source: EEPCo, www.eepco.gov.et/brief.html; April 6th, 2006 12:10 and EEPCo Power Sector Extension Plan, April 2004
where:
Fi , j , y
is the amount of fuel i (in a mass or volume unit) consumed by relevant
sources j in year(s) y;
COEFi , j , y
is the CO2 emission coefficient of fuel i (t CO2 / mass or volume unit
of fuel), taking into account the carbon content of the fuels used by relevant power sources j and the percent oxidation of the fuel in year(y) ;
GEN j , y
y
is the electricity (MWh) delivered to the grid by source j; and Hours per year for which low cost/must run sources are on the mar-
gin 8,760 hours per year
where lambda ( y) was assumed to be almost 1, because the Ethiopian power plant portfolio consists on 95% of hydro.41 The CO2 emission coefficient COEFi is obtained as
COEFi
NCVi EFCO 2,i OXIDi
COEFi = 0.000011 GWh/l x 809.58 CO2t/GWh x 0.955 COEFi = 0.008505 CO2t/l
where:
NCVi i, OXIDi EFCO2,i
is the net calorific value (energy content) per mass or volume unit of a fuel is the oxidation factor of the fuel, is the CO2 emission factor per unit of energy of the fuel i.
Since local values of NCVi and EFCO2,i were not available, country-specific values (e.g. IPCC Good Practice Guidance) were used as preferable to IPCC world-wide default values which can be seen in the Annex , using a 3-year average based on the most recent statistics available.
41
Note that even a slight decrease in -value advances the CDM results as well as the project cash flow significantly. It is recommended to pay attention on this value beyond this report. LI / GE6 25 0477 final report ashegoda
13.4.1 Step 2. Calculation of the Build Margin The Build Margin emission factor (EFBM,y) is calculated as the generation-weighted average emission factor (t CO2 / MWh) of a sample m of power plants, as follows:
Fi, m, y COEFi, m EFBM , y
i ,m
GEN m, y
m
EFBM 2004
(268,961.81 liters/GWh) x 16.39 GWh x 0.008505 tonnes CO2/l 1,142.91 GWh
EFBM 2004 = 32.8 t CO 2/GWh
where Fi,m,y, COEFi,m and GENm,y are analogous to the variables described for the simple OM method above for m plants. The sample group m consists of either the five power plants that have been built most recently, or the power plants capacity additions in the electricity system that comprise 20 % of the system generation (in MWh) and that have been built most recently. The sample group that comprises the larger annual generation should be used for this calculation (noting that power plant capacity additions registered as CDM project activities shall be excluded from the sample group m). With regard to the calculation of the Build Margin emission factor (EFBM,y), the ACM0002 / VERSION 05, 03 MARCH 2006 allows to choose between one of the following two options: Option 1 Calculate the Build Margin emission factor EFBM,y ex-ante based on the most recent information available on plants already built for sample group m at the time of PDD submission. The sample group m consists of either the five power plants that have been built most recently, or the power plant capacity additions in the electricity system that comprise 20% of the system generation (in MWh) and that have been built most recently.6 Project participants should use from these two options that sample group that comprises the larger annual generation. Option 2 For the first crediting period, the Build Margin emission factor EFBM, y must be updated annually ex-post for the year in which actual project generation and associated emissions reductions occur. For subsequent crediting periods, EFBM, y should be calLI / GE6 25 0477 final report ashegoda
culated ex-ante, as described in option 1 above. The sample group m consists of either the five power plants that have been built most recently, or the power plant capacity additions in the electricity system that comprise 20% of the system generation (in MWh) and that have been built most recently.7 Project participants should use from these two options that sample group that comprises the larger annual generation. Taking into account the available information, in the analysis the Consultant has made use of the first option.
13.4.2 Step 3. Calculation of the Baseline Emission factor The baseline emission factor EFy is calculated as the weighted average of the Operating Margin emission factor (EFOM,y) and the Build Margin emission factor (EFBM,y): EFy = wOM EFOM + wBM EFBM
EF2004
= 50% x 1.05 + 50% x 32.80
EF2004
= 16.92 tonnes CO2/GWh
where: the weights wOM and wBM, by default, are 50% (i.e., wOM = wBM = 0.5), and EFOM,y and EFBM,y are calculated as described in Steps 1 and 2 above and are expressed in t CO2/MWh. According to ACM0002 / VERSION 05, 03 MARCH 2006, alternative weights can be used, as long as wOM + wBM = 1. The annual GHG emission reduction is calculated as the product between the annual net electricity production fed into the grid, and the average emission intensity of the existing power plant fleet (the grid emission factor usually referred to as the baseline emission factor, BEF). Hydropower plants are free of any emission during the electricity generation process and go into the equitation with a value of zero. The average emission factor of the Ethiopian thermal units has been calculated as 2,287.48 tCO2 per GWh of electricity produced. It follows from above that the EF operation margin, EF OM 1.05 tCO2 / GWh. At next, the Build Margin emission factor was calculated. It was derived from a batch (m) of power plants already built. Three Scenarios were considered for the Build Margin.
2004
; derived was equivalent to
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As stated before, the sample group m consists of either (Scenario A) the five power plants that have been built most recently, which accounts for 1,142.91 GWh of the total capacity generation as can be seen in the table below, or
Table 13-2 Baseline Scenario A
Scenario A Installed capacity Plant Kaliti I Awash Dire Dawa Subtotal DPP Finchaa Tis Abay II Subtotal HPP Subttal A Adwa Shire Adigrat Mekele Axum MELKA WAKANA Ghimbi Nekempt Awash III Awash II Tis Abay I Koka [MW] 9.00 22.40 40.00 71.40 134.00 75.00 209.00 280.40 3.00 0.80 1.10 1.30 0.55 153.00 0.30 1.70 32.00 32.00 11.40 43.20 Commissioning Year 2004 2004 2004 2003 2001 Gerneration [GWh] 2.07 5.14 9.18 16.39 750.76 375.77 1126.53 1142.91 Generation Share
%
1.21% 3.01% 5.37% 17.99% 10.07%
1998 1995 1995 1993 1992 1988 1984 1984 1971 1966 1964 1960
0.40% 0.11% 0.15% 0.17% 0.07% 20.54% 0.04% 0.23% 4.30% 4.30% 1.53% 5.80%
(Scenario B) the power plant capacity additions in the electricity system that comprise 20 % of the system generation (in MWh) and that have been built most recently consist on the Gilgel Gibe HPP with a share of 24.70 % in the total electricity. In Scenario B, a comparison of HPP and wind power makes no sense in this context, since both technologies are free of any emission during the electricity generation process. Computing a Build Margin emission factor in this context would not increase emission savings. Therefore, the Consultant decided to distinguish two cases in Scenario B.
Build Margin: Case B1 and Case B2 The batch of scenario (B) consists of the power plant capacity additions in the electricity system that comprises 20 % of the system generation in GWh. As the CDM aims to help non-Annex I Parties such as Ethiopia achieve sustainable development i.e. by reducing GHG emissions, the target of this section was to analyse whether current and future GHG
emissions can be avoided per substitution of polluting technologies, i.e. current diesel power plants. As mentioned above Scenario B is divided into two cases. Case B1 consists on three recently build DPP Kaliti I, Awash and Dire Dawa as well as the latest HPP of Gilgel Gibe. Together covering about 34.29% of ICS annual generation capacity.
Table 13-3: Baseline Scenario B1
Scenario B1 Installed capacity Plant Kaliti I Awash Dire Dawa Subtotal DPP Gilgel Gibe Subtotal HPP Subtotal B [MW] 9.00 22.40 40.00 71.40 184.00 184.00 255.40 Commissioning Year 2004 2004 2004 2004 Gerneration [GWh] 2.07 5.14 9.18 16.39 378.71 378.71 395.10 Generation Share [%] 1.21% 3.01% 5.37% 24.70% Cummulative Generation Share [%] 1.21% 4.22% 9.59% 34.29%
Case B2 consist only on the Gilgel Gibe DPP since it is even covering more than 20 % of the ICS generation capacity namely 24.7 % at 378.71 GWh (as is deployed in the following table).
Table 13-4: Baseline Scenario B2
Scenario B2 Plant ? Gilgel Gibe Subtotal B2 Dire Dawa Awash Kaliti I Finchaa Tis Abay II Adwa Adigrat Shire Mekele Axum MELKA WAKANA Nekempt Ghimbi Awash III Awash II Tis Abay I Koka Installed capacity [MW] 184.00 184.00 40.00 22.40 9.00 134.00 75.00 3.00 1.10 0.80 1.30 0.55 153.00 1.70 0.30 32.00 32.00 11.40 43.20 Com. Year 2004 2004 2004 2004 2003 2001 1998 1995 1995 1993 1992 1988 1984 1984 1971 1966 1964 1960 Gerneration [GWh] 378.71 378.71 Generation Share [%] 24.70% 5.37% 3.01% 1.21% 17.99% 10.07% 0.40% 0.15% 0.11% 0.17% 0.07% 20.54% 0.23% 0.04% 4.30% 4.30% 1.53% 5.80% Cummulative Generation Share [%] 24.70% 30.07% 33.08% 34.29% 52.28% 62.35% 62.75% 62.90% 63.01% 63.18% 63.25% 83.80% 84.02% 84.06% 88.36% 92.66% 94.19% 99.99%
Comparing these three options and according to the UNFCCC (methodology AMC0002) the sample group that comprises the larger annual generation has to be used. The result of the calculation Scenario (A) the five power plants that have been built most recently , was 1,494.25 GWh which is comprised of 58.15 % of the total system generation (approximately 2,570 GWh based on EEPCo s 2004 data). While, the result of the calculation for (B1) the power plants capacity additions in the electricity system that comprise 20 %
of the system generation which has been built most recently including the three diesel power plants was 764.44 GWh and (B2) excluding DPP was 378.71 GWh. The result of scenario A was selected because the higher generation has to be chosen comparing one to another. As mentioned above, the grid emission factor is calculated as the weighted average of the Operating Margin emission factor and the Build Margin emission factor, which results in a value of approximately 16.92 t CO2 per GWh. The average emission factor of the Ethiopian grid is very low when compared with the emission factor of other African countries like Egypt, where Lahmeyer International GmbH has estimated it to be 520 t CO2 per GWh. Nevertheless, and since a 100 MW coal power plant (Yayu coal-fired power station42) is currently under planning, the average emission factor of the Ethiopian grid is expected to increase 10 % instead of decreasing in the second and third crediting period. Taking into account the expected annual net output of the foreseen Ashegoda Wind Park Project (in P75, P50, P90 and in the four different wind park scenarios) the expected annual and total emission reductions considering a crediting period of 7 x 3 years, are shown in the table below:
Table 13-5: Emission reductions & CER revenues for P75, P50 and P90
PoE
Ashegoda Site WP Configuration
Estimated Generation [GWh] 197.392 227.278 198.771 239.804 219.133 249.183 218.084 261.258 177.824 207.564 181.388 220.494
Emission Reduction Potential [t CO2/yr]
Annual CER Revenues [USD] 20,043.84 23,078.57 20,183.87 24,350.50 22,251.50 25,302.87 22,144.98 26,529.01 18,056.84 21,076.74 18,418.74 22,389.70
TOTAL [t CO2/yr]
TOTAL CER Revenues [USD] 363,996.2 419,106.8 366,539.1 442,205.1 404,087.2 459,500.2 402,152.8 481,766.8 327,912.3 382,753.6 334,484.4 406,596.9
Enercon E48 Enercon E53 Vestas V52 Gamesa G58 Enercon E48 Enercon E53 Vestas V52 Gamesa G58 Enercon E48 Enercon E53 Vestas V52 Gamesa G58
3,340.64 3,846.43 3,363.98 4,058.42 3,708.58 4,217.15 3,690.83 4,421.50 3,009.47 3,512.79 3,069.79 3,731.62
60,666.03 69,851.13 61,089.85 73,700.84 67,347.86 76,583.37 67,025.47 80,294.47 54,652.04 63,792.27 55,747.40 67,766.15
In order to evaluate the financial impact of the emission reductions, the following assumptions as stated in the next Table were considered. An explanation of these assumptions is entitled in Section 14.1.
42
EEPCo builds 52 milion birr power distribution network , Capital: Local News, May 21st, 2006. Vol. 8 No. 388.
P90
P50
P75
Table 13-6: CDM Assumptions
Parameter Crediting Period (Chosen option: 3 x 7 ) CDM Up-front Costs (PDD / Validation / Registration) CDM Periodic Costs Average emissions factor of Ethiopian grid (1st to 7th year) Average emissions factor of Ethiopian grid (8st to 14th year) Average emissions factor of Ethiopian grid (15th to 21st year)
Unit Years USD USD/year tCO2/GWh tCO2/GWh tCO2/GWh
Value 7 + 7 + 6 = 20 0 (assumed to be granted) 5,000 16.92 16.75 16.58
Table 13-7: CER generation and CER revenues with Enercon E48 turbines
Annual generation of CERs (1st to 7th year) Annual generation of CERs (8st to 14th year) Annual generation of CERs (15th to 21st year) Assumed average CER price Annual net revenues from CER sales (1st to 7th year) Annual net revenues from CER sales (2nd to 14th year) Annual net revenues from CER sales (15th to 21st year)
tCO2/year tCO2/year tCO2/year USD/ tCO2 USD/year USD/year USD/year
3,340 3,006 2,706 6 20,040 18,036 16,236
Table 13-8: CER generation and CER revenues with Enercon E53 turbines
3,846 3,462 3,116 6 23,076 20,772 18,696
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Table 13-9: CER generation and CER revenues with Vestas V52 turbines
3,364 3,028 2,724 6 20,184 18,168 16,344
Table 13-10: CER generation and CER revenues with Gamesa G58 turbines
4,058 3,652 3,288 6 24,348 21,912 19,728
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13.5 Conclusions: CDM Assessment

Due to the high portion of hydropower resources in the electricity grid of Ethiopia, which results in a low emissions factor, the annual emission reductions generated by the wind park is comparatively low43. When calculating the Net Present Value (NPV) of the total emission reduction potential, it is below 0.5% of the total investment costs of the wind park. Thus, CDM does not indicate significant improvement in project performance through the effect of the relevant CDM cash flows. Regarding the assumption of considering CER prices constant at 6 USD/CER, it should be noted that a certain amount of uncertainty surrounds the development of the market in the post-Kyoto period. In this regard, remuneration from the sale of CO2 post-2012 is difficult to estimate with certainty. The positive impact of the CER on project cash flows is evaluated in the financial analysis in Section 14. Under current CDM prices a registration of the project is financially hardly feasible but it would establish Ethiopia as an example for CDM activities in Africa.
43
Whilst the grid emission factor in Ethiopia is 16.92 tCO2/GWh, the grid emission factor of other African countries like Egypt is estimated at 502 tCO2/GWh (Source: Project Design Document Final Draft for the Zafarana IV Windfarm elaborated by Lahmeyer International GmbH of October, 2005).
14
Financial Analysis
14.1 Methodology & Main Assumptions

This financial analysis is intended to clarify whether or not the wind farm project is financially feasible for the described parameters. And, as the case may be, whether or not the financial efficiency threshold can be reached and surpassed and, if so, how by which means of technical and non-technical modifications. The main difference between a financial analysis and an economic analysis is that, in the financial analysis, the wind farm is viewed as an enterprise and in the economic analysis the windfarm is evaluated from the point of view of the national economy of the country. In the financial analysis, the windfarm operating company has to earn enough money, by feeding electricity into the existing grid, to cover its operating costs, interest payments, loan payments and distribution of dividends to equity investors. The object of consideration is the commercial or microeconomic. As in the economic analysis, four Scenarios have been considered in the financial analysis of the Ashegoda Wind Park: Scenario I Scenario II Scenario III Scenario IV - 86 Enercon E48 turbines 86 Enercon E53 turbines 86 Vestas V52 turbines 86 Gamesa G58 turbines
The parameters and assumptions, upon which the financial assessments are calculated, are elaborated below. These parameter and assumption values are used to calculate the Base Case scenario. In addition to the base scenario, other scenarios are elaborated within the scope of the sensitivity analysis. Project s financial feasibility has been evaluated with the financial internal rate of return (FIRR), the Debt Service Coverage Ratio (DSCR) and the Return on Equity (ROE). Further, the levelized generation costs of the wind park in its four Scenarios have been compared to the levelized generation costs of the Dire Dawa Diesel Power Plant and two Ethiopian large hydropower plants (Halele-Werabesa and Finchaa).
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14.1.1 Inflation Rate
According to EEPCO, local currency price inflation is assumed to increase 3.6 % annually whereas foreign currency price inflation is assumed to increase 2.50 % annually. Starting from year 2009, the mentioned inflation rates are assumed to decrease to 2 % and 3 % in 2015 for foreign and local currency, respectively. As agreed with EEPCo, no inflation has been considered for the O&M costs, whereas a 2 % annual escalation has been considered on the current power tariff. The O&M model of Lahmeyer International comprised for this feasibility study 50% additional charge on general O&M costs, thus to ensure a realistic calculation of arising expenses. 14.1.2 Rate of Exchange
An exchange rate of ETB 8.61995 equal to USD 1.00 has been adopted as applicable for the year 2006. The financial (as well as the economic model) have assumed the following average interbank exchange rates for the period July 1st, 2005 to December 31st, 2005.
Table 14-1: Average exchange rates
Commodity currency USD ETB Euro ( )
Rate 1 8.61995 0.83036
Average value for the period:
July 1 st , 2005 to December 31 st , 2005 July 1 st , 2005 to December 31 st , 2005 July 1 st , 2005 to December 31 st , 2005
The future development of the USD /local currency exchange rate has been modelled on the principle of Purchasing Power Parity (PPP). The USD/ETB exchange rate was analysed as some quotes within the investment costs were received in USD. As it is foreseen that the debt capital be raised in ETB as well as in USD and that routine O&M costs are mainly to be paid in USD whereas operating revenues are to be obtained in ETB. This item presents the project with exposure to foreign exchange (FX) risk if the ETB devaluates prior to the contract prices being fixed. The development of the USD/ETB exchange rate since the beginning of the year is presented graphically below. The standard deviation of the ETB/USD exchange rate is 0.1317 in relation to the median exchange rate of 8.7645.
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Figure 14-1 shows the exchange rate USD/ETB development for last year 2005. The FX has been relatively stable except for the month June, where a strong oscillation took place.
Exchange Rate USD/ ETB
9.2 9.1 9 FX Rate [USD/ETB 8.9 8.8 8.7 8.6 8.5 8.4 1/31/2005 5/31/2005 6/30/2005 7/30/2005 8/29/2005 9/28/2005 10/28/2005 11/27/2005 12/27/2005 1/1/2005 3/2/2005 4/1/2005 5/1/2005
Date
Figure 14-1 USD / ETB exchange rate development
14.1.3 Depreciation Rates Depreciation is calculated using the straight-line method for all investment cost components.
14.1.4 Dividend Distribution Annual dividends were calculated as the minimum of: internal funds available for distribution (cash after debt service, taxes, and reserve account payments); and net income. Dividends in any period were only distributed if the Debt Service Coverage Ratio (DSCR) was greater than or equal to 1.20x, and if net income in that period was positive.
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14.1.5 Applicable Taxes Corporate Taxes In accordance with information provided by EEPCo, the company in charge of operating the wind park, i.e. EEPCo, is not subject to corporate taxes. Consequently, the projections do not foresee any related tax estimations. Import Taxes In accordance with present legislation on imports of material and equipment for HPPs, the company is not liable for related import duties. Although the legislation is not expressively referring to wind parks, as these did not exist at the time relevant legislation was approved, it can be assumed that the legal norms governing HPPs will be applicable also for imports of material and equipment for wind parks. Consequently, and for the purpose of the calculations presented in this feasibility study, no import taxes are considered.
14.1.6 Discount Rate (WACC) 14.1.6.1 Definition The weighted average cost of capital (WACC) serves as representative for the financial opportunity cost of capital (FOCC) to assess the financial viability of projects. The net cash flows during the lifetime of the project are discounted at FOCC to show the project s worth. Although it is an accepted benchmark, it is important to understand that the WACC may not fully reflect the FOCC in the market. A project may generate sufficient returns to allow full recovery of all investment and operations and maintenance costs while still yielding a small return on investment, this return may not be sufficient incentive for the owner to make the original investment or to maintain the investment. Private foreign investors will be looking for returns on equity that also include an allowance for risks, such as political and economic. Private domestic investors will also have alternative investments, whether they are in financial assets, other productive activities or areas such as real estate. Governmental investment may be guided by whether the funds are fungible, by the real cost of investment funds and the economic benefits of the project. If funds are fungible, they may be more interested in investing in projects with higher returns, economic and/or financial. Finally, projects with low returns are riskier to implement and strain the financial sustainability of the corporate entity (public or private) charged with its operation and maintenance. Consequently, it is important to keep these issues in mind when comparing the FIRR of a project against a benchmark such as the WACC. These issues become particuLI / GE6 25 0477 final report ashegoda
larly important as the role of government in the supply and operation and maintenance of infrastructure services changes and private sector participation becomes more prevalent. 14.1.6.2 Methodology The discount rate to be normally used in financial benefit-cost analyses is the WACC. The WACC represents the cost incurred by the entity in raising the capital necessary to implement the project. Since most projects use several sources to raise capital and each of these sources may seek a different return, the WACC represents a weighted average of the different returns paid to these sources. To avoid highly optimistic results and after clearance with the Ethiopian Ministry of Economic Development and Co-operation, a discount rate of 10% instead of the WACC has been used in all wind park calculations of this study. The methodology used to calculate the WACC is as follows: Step 1: A categorisation of financing components according to the Project Financing Plan has been done. These components are domestic (local loan at an interest rate of 7 % p.a. and local equity share) and foreign components (foreign loan at an interest rate of 5 % and international equity). Step 2: The Consultant estimated the cost of funds, since: Government funds are not costless they might be applied to purposes other than the project, such as debt repayment or to alternative investments. For simplicity, the average cost of government funds can be calculated by dividing total government debt servicing by total public debt. For the Ethiopian Wind Park Project governmental funds were not expected. In order to estimate the cost of equity capital, the capital asset pricing model (CAPM) has been used. CAPM describes the relationship between risk and expected return and that is used in the pricing of risky securities.
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Capital Asset Pricing Model (CAPM) r = Rf + iE =r Rf Km *( Km - Rf ) Rf = = Km = iE = 4.00% 1.50 10.00% 13.00%
expected return rate on a security rate of a "risk-free" investment, i.e. cash return rate of the appropriate asset class risk factor, according to the projects sensitiveness to market fluctuation
Figure 14-2: Capital Asset Pricing Model
The general idea of CAPM is that investors need to be compensated in two ways: time value of money and risk. The time value of money is represented by the risk-free (rf) rate in the formula and compensates the investors for placing money in any investment over a period of time. The other half of the formula represents risk and calculates the amount of compensation the investor needs for taking on additional risk. This is calculated by taking a risk measure (beta) that compares the returns of the asset to the market over a period of time and to the market premium (Km-rf).
Figure 14-3: Meaning of CAPM
Step 3: Adjustment for Taxation. If interest payments are deductible for taxation, applicable tax rates have to be adjusted to each component. In the Ethiopian case and as stated by EEPCo - no tax purposes have to be considered. Step 4: Adjustment for Domestic Inflation. The estimated costs of borrowing and equity capital have been adjusted for inflation to obtain the WACC in real terms. Domestic inflation rate (of 2 %) has been used for domestic loans and equity. Shadow Price Adjustment
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does not apply in the financial analysis and hence, the standard conversion factor (SCF) of 1 has been considered for local currency expenditure, without reducing local costs. Step 5: Application of the Minimum Rate Test, i.e. to review the real cost of capital for each component. The rate for each component should be at least 4 %. Step 6: The determination of the WACC has been done by applying the weighting percentage to each component.
14.1.6.3 WACC Results In this project, an equity share of 20 % has been assumed, that arise additional capital from local and foreign banks. No thought has been given to additional funding options as well as governmental grants. Differing nominal returns on each source of capital are assumed, including an expected return of 10 % on equity to the shareholders. In this calculation the corporate tax rate for EEPCo was set to zero.
Domenstic Computing WACC [specific model] A B C D E F G H I J K Amount Weighting Nominal cost Taxation (corporate tax rate) Tax-adjusted nominal costs SCF Domestic Inflation rate Real cost Min. rate test Weighted component of WACC WACC 6.15% 4% 1.00 2.00% [%] [%] [%] [%] Loan 1 [USD x10^ 11.425 [%] [%] 0.00% [%] [%] 11.86% 7.00% 0.00% 7.00% 7.00% 2.00% 4.90% 4.90% 0.58% Loan 2 0 0.00% 0.00% 0.00% 0.00% 0.00% 2.00% Fund 0 0.00% 0.00% 0.00% 0.00% 2.00% Equity share 20% 19.266 20.00% 13.00% 13.00% 13.00% 2.00% 10.78% 10.78% 2.16% Loan 1 65.639 68.14% 5.00% 0.00% 5.00% 5.00% 5.00% 5.00% 3.41%
Foreign Total Loan 2 0 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% Fund 0 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 6.15% 96.330 100%
-1.96% -1.96% -1.96% -1.96% 0.00% 0.00%
Table 14-2: WACC for the Scenario I (Enercon E48) The WACC in real terms amounts to 6.15 %. This is the discount rate to be normally used in the financial benefit-cost analysis of this particular project as representative for the FOCC. (A list of the WACCs for the different wind park scenarios is presented in Table 14-11). The resulting WACC differs from the discount rate of 10 % considered by the Ethiopian Ministry of Economic Development and Co-operation as appropriate for the counLI / GE6 25 0477 final report ashegoda
try at present. This is due to the relative low interest rates considered for the debt service of the wind park. To avoid highly optimistic results, the discount rate of 10% instead of the WACC (6.15%) has been used in all wind park calculations of this study. 14.1.7 Project s Milestones Main project s milestones are specified in Table 14-3. The project construction timeframe is planned to comprise 12 months. It includes the construction of infrastructure, erection, installation, and commissioning of the wind turbines. Using the financial model all potential financial fees and interests during construction incurred prior to commissioning have been calculated. Since more than 10 wind turbines are planned in each wind park, the construction will take place at least in 3 sets (shipments)44.
Table 14-3: Project s milestones
Milestone Financial Close Down Payment First Shipment Last Taking over Certificate Starting of wind park operation Number of Wind Turbines Major Overhaul / Decommissioning Period of Analysis
Ashegoda Wind Park 01.10.2006 01.10.2006 01.01.2007 01.10.2007 01.10.2007 86 Year 11 and year 21, respectively 21 years
44
The financial model considers that the first sets installed will be operating previous to Taking over Certificate, so that they start generating revenues. Nevertheless and previous to Financial Close at the latest, the energy production of the turbines during the first months of operation needs to be calculated into more detail.
14.1.8 Investment Costs
Table 14-4 shows the total investment costs used for each wind park Scenario in the financial analysis. A detail of the different investment cost components is detailed in Section 10.
Table 14-4: Investment costs (financial value)
Enercon E48 WP Investment Costs Investment in Foreign Currency Investment in Local Currency Total Investment
Financial Value [USD] 84,905,398 11,425,069 96,330,468
[%] 88.14% 11.86% 100.00%
Enercon E53 WP Investment Costs Investment in Foreign Currency Investment in Local Currency Total Investment
[%] 88.74% 11.26% 100.00%
Vestas V52
[%] 88.86% 11.14% 100.00%
Gamesa G58 WP Investment Costs Investment in Foreign Currency Investment in Local Currency Total Investment
[%] 88.67% 11.33% 100.00%
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14.1.9 Operation and Maintenance Costs The estimates for operation and maintenance (O&M) have been created based on the experience of Lahmeyer International in Due Diligence projects, in the country (through its hydro power projects) and calculated through a model developed by our engineers. The O&M costs include repairs, maintenance, spare parts, insurance costs, personnel costs for wind park management and maintenance and electricity consumption. The range of the costs is determined by the changing lifetime of the components and their prices which can not be predicted exactly. Furthermore the way of operating the wind parks can have an influence on the expected costs which can also be only estimated for future times. In addition, the size of the machines and the operating time under full load is expected to have an influence on the maintenance costs. The LI-O&M cost estimation model takes these uncertainties into account, giving an expected range of maintenance costs (expected average, expected upper bound and expected lower bound). For the calculation the expected average has been considered. The results of applying the LI-O&M Model to the two wind parks are shown in detail in Section 10. Table 14-5 gives an overview of the O&M costs considered in the different wind park scenarios.
Table 14-5: O&M costs
WT Type O&M Annual Costs (ETB) O&M Annual Costs (USD)
Enercon E48 Scenario I 29,903,145 3,469,064
Enercon E53 Scenario II 30,059,379 3,469,064
Vestas V52 Scenario III 32,502,485 3,770,613
Gamesa G58 Scenario IV 32,635,284 2 3,786,019
During the elaboration of this study, the questions about which tasks should stay with the manufacturer and whether constant presence of the manufacturer in Ethiopia is necessary, has been raised. According to Consultant s experience, manufactures have to guarantee that in wind parks with an installed capacity of approximately 50 MW, two experts (usually, one electrical engineer and one mechanical engineer) will be constantly present at the wind park. Additionally, a team of four local experts has to be established for maintenance tasks and a crane has to be available, at least once per year, to realise operation revisions. Further, condition monitoring should be realised by independent engineers in order to plan the repairs.
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The O&M costs have taken insurance costs into consideration in the form of an insurance following commissioning (Business Interruption Insurance). This has been calculated as an annual 12.0 % of the wind turbine price. Additionally, a major overhaul of all equipment has been assumed to take place between the 10th and 11th years of operation in an amount of 5 % of total investment costs. Finally, wind farm decommissioning costs in operation year 21 have been considered in an amount of 1 % of total investment costs. 14.1.10 Land Lease Costs As indicated by EEPCo, no annual land lease charge was used in the analysis.
14.1.11 Costs for Mitigation Measures The costs for measures of mitigation required by environmental regulations in Ethiopia is estimated to be zero, because the environmental impacts of wind farms concern mainly the visual impact on the landscape and the impact on birds. In general, these impacts are minor. There have been problems at a few sites in the world with rather significant killings of birds and bats. But even examples for local resistance to the setting up of wind farms are known. But, overall, surveys tend to show that the population living in the vicinity of wind farms has a more positive attitude to wind farms than persons who do not, and surveys do not show a negative impact on real estate prices in the local area. Consequently, the cost of environmental damage from wind farms is set to zero in this feasibility study. An amount of USD 244,870.1 for mitigation measures (non-environmental) has been considered in the investment costs. A description of this cost is contained in Section 9.4 of the Part I. 14.1.12 Project Financing Structure Based on EEPCO s information, a possible financing structure with which the required funds could be raised, is under development. As such, the financing structure is to be interpreted as preliminary only and subject to optimisation. A debt / equity ratio of 80 % has been assumed, and it has furthermore been assumed that the debt will be raised in US Dollar and local currency. The total equity shares will be held by EEPCOo and (an-)other international organisation(s), whereas donor and local loans will provide debt financing. The local loan shall cover local investment costs, whereas the international/donor s loan is calculated to cover international investment costs. The proposed project financing structure is summarised numerically in Table 14-6.
Table 14-6: Financing structure and disbursement
Ashegoda Wind Park Scenarios Item Scenario I: Enercon E48 Debt / Equity Ratio Investment Requirements (*) International Donor Loan Local Loan Equity 65.64 Mio. USD 11.43 Mio. USD 19.27 Mio. USD 69.78 Mio. USD 11.43 Mio. USD 20.30 Mio. USD 70.61 Mio. USD 11.43 Mio. USD 20.51 Mio. USD 69.26 Mio. USD 11.43 Mio. USD 20.17 Mio. USD 96.33 Mio.USD 101.51Mio. USD 102.54Mio. USD 100.86Mio. USD 80 /20 Scenario II: Enercon E53 80 /20 Scenario III: Vestas V52 80 /20 Scenario IV: Gamesa G58 80 /20
(*) Interest during Construction (IDC) has been considered to be zero, whereas commissioning fees are considered to be fix at 100.000 USD.
14.1.12.1 Equity Finance Total equity required for both wind parks has been estimated at 20 % of total funding requirements. Equity funds will be used to finance both foreign and local components. Furthermore, additional equity will also cover the initial working capital requirements. Equity investments will be finalised prior to Financial Close or similar legal procedure. Once the equity is drawn into the Projects, the debt facilities will be utilised. 14.1.12.2 Debt Finance The assumed terms and conditions for the debt finance are based on the terms and conditions obtained in Ethiopia during the first mission of this assignment, the Consultant s experience in financial analysis of wind parks in developing countries and the current local loan conditions. The ultimate financing conditions at which debt can be raised will depend upon several factors, including for example the general environment in the debt markets, local political conditions as well as the Lender s interpretation of the project s risk profile.
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The debt will be provided by foreign or domestic financial institutions, while local activities will be covered by local loans. The debt will be utilised to finance the project costs including the development costs, financing fees, operation cost during the construction period, IDC and contingency for the Project. In the financial analysis, the debt structure for both wind parks is as follows: Tranche 1: Foreign currency investment portion supported by an international donor loan and/or an Export Credit Guarantee Availability period from financial closing and/or similar financial legal procedure approximately 15 years from financial close thirty sculpted semi-annual instalments a fixed rate CIRR of 4.750 % p.a. spread or margin of 0.250 % p.a. 2 semi-years (1 year)
Final maturity
Repayment profile
Base rate Grace period Tranche 2:
Local currency investment portion supported by a domestic financial institution Availability period from financial closing and/or similar financial legal procedure approx. 10 years from financial close and/or similar legal procedure fourteen sculpted semi-annual instalments; fix rate of 7 % 2 semi-years (1 year)
Final maturity
Repayment profile Base rate Grace period
14.1.13 CDM Up-Front & Administrative Costs As specified in Section 13, in order to register a project as a CDM activity, the project participants have to incur mainly in CDM up-front and CDM monitoring costs. CDM Up-front
Costs for large scale project are usually estimated at USD 100,000. In our analysis, we have assumed that these costs will be subsidised or supported by international donors, and hence, to be zero. An amount of USD 5,000 / per annum has been assumed for the ongoing CDM Administrative Costs. CDM Administrative Costs are applicable only in years where CDM has been taken into consideration, i.e. up to and including 2028 (since the considered crediting period has been 7x3 years45). 14.1.14 Financial Benefits Financial benefits have been defined as (i) electricity sales and (ii) sales of Certified Emission Reduction Credits (CERs). 14.1.14.1 Electricity Sales Financial revenues will be mainly generated through the sell of electricity. According to EEPCo, sales tariffs are as low as 0.06 USD/kWh on average and a 10 % tariff increase each 5 years is settled by law. Thus and as indicated by EEPCo, the Consultant has assumed an annual tariff increase of 2 %. Electricity sales per annum are defined as the net amount of electricity generated and connected to the grid multiplied by the electricity price (as per USDct/kWh) as indicated in the following formula:
Wind Power generation (Base Case: P75) [kWh/year] x
power tariff [6 USDct/kWh]
In the base case, the estimated wind power generation (P75) for each wind park scenario is as follows:
45
2x7+1x6 years when considering an operational period of 20 years.

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Table 14-7: Annual energy generation
ASHEGODA SITE WT Type Enercon E48 Wind park output (P75) in KWh 197,392,00 0 Enercon E53 227,278,000 Vestas V52 198,771,000 Gamesa G58 239,804,000
The energy potential as measured by gross production using the 75 % probability of exceedance. 14.1.14.2 CDM Revenues
is given in the Base Case
Additional to electricity sales, the potential to generate financial benefits through the sell of Certified Emission Reduction (CER) credits of the Clean Development Mechanism has been analysed. The influence of the Clean Development Mechanism (CDM) has been isolated for the with CDM and without CDM scenarios. The with CDM scenario includes the additional Certified Emission Reduction (CER) revenues as cash inflows, as well as the CDM Up-Front Costs and Administrative Costs as cash outflows. CER Price Given the projects specific boundary conditions, and taking into consideration the relatively small size of the project, the estimated sales price for the CER has been assumed to be USD 6 / t CO2. Note, that this is the price to sell certificates. In the economic analysis we estimate the penalties to polute which include costs for environmental impact alleviations. Details on CDM assessment are included in Section 13.
14.2 Results: Financial Analysis

LI has exemplary assessed the future financial performance of Ashegoda Wind Farm with the aim to analyse their financial viability. To reach this objective, a comprehensive financial model has been developed. The model determines, on the one hand, the required tariff to achieve a 10 % Return on Equity (ROE). On the other hand, it calculates the IRR when applying for 20 years the existing average electricity tariff of 0.06 USD/kWh with an escalation of 2 % per annum. Furthermore, the model has been structured in semiperiods, so that in case the wind conditions would have been strongly different from summer than in winter months, a different tariff for winter and summer could be calculated.
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In the model, all the conventional financial statements have been developed, giving an overview of costs and revenues, assets, and liquidity. The values are based upon all relevant financial aspects, such as investment costs, capital structure, fees accrued during construction, operational costs and distribution of dividends. 14.2.1 Major Financial Indicators
This Section deals with financial key parameters characterising the Ashegoda Wind Farm. Short introductions to the indicators provide a better understanding of the subsequently presented financial results. Results are depicted in the summary Table 14-11. A final sensitivity analysis on the best wind park scenario illustrates the impact of chosen parameters to the financial feasibility of the project and identifies leverage effects (See Section 14.3). 14.2.1.1 Net Present Value
The net present value (NPV) of an investment has been defined as the present (discounted) value of future cash inflows minus the present value of the investment and any associated future cash outflows. The NPV of the Ashegoda Wind Park has been calculated using the WACC. Results for all wind park scenarios are indicated in Table 14-11. A positive NPV indicates that the projects are justified in an economic sense and vice verse for a negative NPV. The NPV of the cash flow from operations (for both cases: Base Case with CDM and Base Case without CDM) is not higher than zero. Thus, the project is not financially feasible. For each Scenario the produced NPV is: Scenario I: Scenario II: Scenario III: Scenario IV: -8.19 Mio. USD +3.99 Mio. USD -15.95 Mio. USD +9.37 Mio. USD
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14.2.1.2 Financial IRR (FIRR) and Return on Equity (ROE)
The Financial Internal Rate of Return (FIRR) is an indicator to measure the financial return on investment of an income generation project and is used to make the investment decision. The FIRR has been obtained by equating the present value of investment costs (as cash out-flows) and the present value of net incomes (as cash in-flows) as shows below.
I 0 = Initial Investment B= Benefits r= Discount Rate m= Period The FIRR of Ashegoda wind farm has been calculated with the impact of CDM and without CDM. (See results in Table 14-11.). The FIRR with and without CDM for each Scenario is as follows: Scenario I Scenario II Scenario III Scenario IV 8.73 % (without CDM) 10.52 % (without CDM) 7.67 % (without CDM) 11.26 % (without CDM) 8.75 % (with CDM) 10.54 % (with CDM) 7.69 % (with CDM) 11.28 % (with CDM)
14.2.1.3 Return on Equity (ROE)
The ROE measures the profitability of a project, calculated as net income divided by Shareholders Equity. Essentially, ROE reveals how much profit a project generates for the capital shareholders, which have invested in it. At least it turns out that a project revenue cannot grow faster than its current ROE without raising additional cash. The ROE of the Ashegoda Project is illustrated in Table 14-11.
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ROE is very high, concretely: Scenario I Scenario II Scenario III Scenario IV 13.02 % (with CDM) 18.45 % (with CDM) 10.17 % (with CDM) 20.79 % (with CDM)
Due to a very favorable energy generation in the location of the wind park, the absence of taxes on revenues and a favorable tariff for wind energy, the produced ROE is comparatively high. 14.2.1.4 Debt Service Coverage Ratio (DSCR)
The long-term debt-service coverage has been examined to ensure that all long-term loans and the related financial expenses can be paid in the yearly instalments without depriving the firm of needed funds. The Debt Service Coverage Ratio (DSCR) defines the capability of the Ashegoda Wind Farm operating company to repay principal and interest payments on debt. It is stated as the ratio between cash available to service debt and total debt service. Conventionally, the lender will require that a minimum DSCR of 1.20x be upheld during the amortization period, to ensure that the project can meet its upcoming debt commitments with sufficient buffer. Table 14-11 shows the minimum DSCR of the Ashegoda Farm, which in the Scenario IV (Gamesa G58) is high enough at 1.20x. For the remaining scenarios below 1.20x, further improvements in the results could be achieved through, for example: a slightly higher sales tariff; a further revision of the debt conditions; a further revision of the local and foreign investment costs. (Investment costs are based on initial supplier offers and/or on the Consultants experience in similar projects, so that they do not include any discount as a result of price negotiations). The sensitivity analysis carried out in Section 14.3 reveals the extent to which a variation in certain project parameters would improve the economics of the project.
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14.2.1.5 Levelized Costs Similar to the internal rate of return calculation, the levelized costs of energy are calculated by searching for a tariff for electricity, with which the net present value turns out as zero and the internal rate of return equals the applied discount rate (World Bank 2006, Minister of Natural Resources Canada, 2005, p. 65). In this calculation only the annual project costs such as operation and maintenance and debt service are included, whereas the inflation rate is set to zero. The results of the application of the base case assumptions for the levelized cost calculation of wind energy production is displayed in Table 14-8:
Table 14-8: Levelized costs for wind energy
ASHEGODA Wind Power Project WT Type Levelized Generation Costs (USDc/kWh) Enercon E48 6.44 Enercon E53 5.82 Vestas V52 6.84 Gamesa G58 5.60
Comparing the levelized costs of the different Scenarios to the current power tariff (6 USDc/kWh), it can be seen that results are congruent with the positive NPV obtained in Scenario II (Enercon E53) and Scenario IV (Gamesa G58). In both cases, levelized costs are below the current tariff. Therefore, they have been compared to the current levelized costs of generating power with a DPP and with HPPs in Ethiopia. For the comparison the following plant types are used: DPPs: Dire Dawa DPP with an annual production of 249,660 MWh, HPPs: The Halele Werabese HPP and the Finchaa HPP with average annual productions of 2,030,000 MWh and of 615,572 MWh, respectively. The assumptions regarding the Dire Dawa DPP have been described in detail in Section 12.2.6 The main assumptions are recapitulated in Table 14-9 together with the resulting levelized electricity generation unit cost for the DPP. The assumptions concerning the Halele-Werabesa HPP are based on two feasibility studies, namely the Feasibility Study of Weles, Zhemoga-Yeda and Halele-Werabesa Hydropower Project46 and the Feasiblity Study of Halele-Werabesa Stage II Hydropower Pro-
46
"Feasibility Study of Weles, Zhemoga-Yeda and Halele-Werabesa Hydropower Project , Lahmeyer International GmbH in association with Mid-day Consulting Engineers and Tropic Consulting Engineers, June 2005.
ject47 . The latter correlates to the first study and states as financing terms the following parameters: Loan repayment period: 20 years from commencement of operation Interest rate for foreign currency: 10,0 % Interest rate for local currency: 8,0 % Share of local currency on total investment: 26 % Based on these assumptions and the technical and economic plant data shown in Table 14-9, a levelized electricity generation unit cost of 3.0 USc/KWh for the complete project (Phase I & II) is calculated. There is a probability that the current costs are higher than 3.0 USc/KWh, due to a low capacity factor of the HPP and decreased capacity of the reservoir due to siltation. Note that the estimation of the levelized unit cost can be problematic in HPP projects and is highly dependent on the assumptions made, since the cost-intensive components belonging to the civil engineering lot have a lifetime much higher (40 years or longer) than the usual depreciation period. Further, HPP projects often are realised in various phases or extended during the operation period. Concerning the Finchaa HPP, the assumptions for the calculation are based on data provided by EEPCO. A summary of the main assumptions and results are provided in Table 14-9. Since for the investment cost of the plant only inconsistent data was available, a typical specific investment cost of 1,300 USD/KWh for a medium sized HPP was used as a basis for the calculations (figure marked with *). Note that the specific investment cost for HPP can vary within a wide range depending on factors such as length and height of dam, geological conditions etc. For the financing terms, the same conditions as for the Halele-Werabesa HPP were assumed.
47
Feasibility Study of Halele-Werabesa Stage II Hydropower Project , Lahmeyer International GmbH, (2004)
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Table 14-9: Assumptions for the DPP & HPP levelized cost calculation Dire Dawa Plant Type Installed Power [MW] Annual Production [GWh] Total Investment Cost [$] specific Investment Cost [$/kW] Depreciation Period Annual Capital Costs [$/a] Annual O&M (non-fuel) [$/a] Annual Fuel Cost [$/a] Total Cost per year [$/a] Electricity Gen. Cost [$c/kWh] DPP 38 250 31,100,000 818 15 4,087,964 1,597,960 26,463,960 32,149,884 12.9 61,525,508 3.0 20,995,516 3.4 HaleleWerabesa HPP 422 2030 508,800,000 1,206 20 53,893,508 7,632,000 Finchaa HPP 134 616 174,200,000 1,300* 20 20,461,467 534,050
As seen in the above table, the HPP plants supply relatively cheap electricity in spite of the high specific investment costs. The Dire Dawa DPP has much higher operating costs, mainly consisting of the expenses for fuel. As such, the electricity generation cost for the DPP considerably exceeds all other options at current fuel prices, as can be seen in Table 14-9.
Table 14-10: Wind, diesel, hydropower levelized costs
Ashegoda Wind Power Project Enercon WT Type E48 Levelized Generation Costs (USDc/kWh) 6.44 Enercon E53 5.82 Vestas V52 6.84
DPP
HPP
HPP Finchaa 3.40
Gamesa Halele Dire Dawa G58 Werabese 5.60 12.90 3.00
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14.2.2 Summary of Key Financial Parameters A summary of the key financial parameters is included in the following table:
Table 14-11: Summary of key financial parameters
ASHEGODA SITE WT Type WACC (%) FIRRw/o CDM (%) FIRRwith CDM (%) Financial NPV (mill. USD) ROE (%) Min. DSCR Financial Feasible (YES/NO) Power tariff to reach financial feasibility* (USDc/kWh) Enercon E48 6.15% 8.73% 8.75% -8.19 13.02 % 0.81x NO Enercon E53 6.15% 10.52% 10.54% +3.99 18.45 % 1.08x YES Vestas V52 6.15% 7.67% 7.69% -15.95 10.17 % 0.69x NO Gamesa G58 6.15% 11.26% 11.28% +9.37 20.79 % 1.22x YES
6.44
5.82
6.84
5.60
(*) Financial feasibility has been defined with a moderate 10 % FIRR.
14.2.3 Conclusions: Financial Analysis The summary of the key financial parameters in Table 14-11 indicates that the project generates a high ROE in all Scenarios. So that the project is very attractive for equity investors. This is mainly due to high energy generation of the wind park, absence of taxes, favorable loan conditions and relative high power tariffs (6USDc/kWh with an escalation of 2 % per annum). In two Scenarios (Scenario II Enercon E53 - and Scenario IV Gamesa G58 -) the NPV of the cash flow from operations is clearly higher than zero, so that the project is financially viable. On the contrary, the project struggles to generate sufficient cash to service its debt commitments in Scenario I (Enercon E48) and Scenario III (Vestas V52).
Similarly, the FIRR (with and without CDM) is above their target value of 10 % in two Scenarios (Scenario II Enercon E53 - and Scenario IV Gamesa G58 -) and it is below their target values in Scenario I (Enercon E48) and Scenario III (Vestas V52). Due to a relatively low emission grid factor (as assessed in Section 13), the positive impact of CDM is rather moderate. CDM-up front costs have not been included in the investment costs, which could have made the results of including CDM even worse. Furthermore, the DSCR stays well above the desired mark of 1.20x on one Scenario (Gamesa G58), whereas in the Scenario II (Enercon E53) it approaches the target with 1.08x. In the other Scenarios the DSCR is below the desired mark. Possible approaches to improve the results could include, for example: to settle higher sales tariff; Tariffs in order to reach a 10 % FIRR have been calculated, resulting in tariffs higher than 8.5 USDc/kWh; local investment costs could be further revised. The sensitivity analysis (in Section 14.3) reveals the extent to which a variation in certain project parameters would improve or worsen the financial viability of the project. The sensitivity analysis has been done for the wind park scenario that presents the best financial results, i.e., the Gamesa G58 wind turbines.
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14.2.4 Financial Statements
The results of the financial model have been presented in pro-forma financial statements. Annual asset and liquidity positions are reflected in the Balance Sheet, Profit and Loss Accounts and Cash Flow Statement, giving an overview of the profitability and capital structure of the project. These basic financial statements are described briefly in turn.
14.2.4.1 Cash-flow projections To assist with the financial planning and the assurance of liquidity of the wind farm operating company, a cash flow schedule, showing all sources and applications of funds, has been prepared. The operating cash-flow for the Ashegoda wind park in all four scenarios are shown in Annex E.
14.2.4.2 Profit and Loss Accounts The Profit and Loss Account is used to compute the net earnings or deficit of the project arising each year. The Profit and Loss Account shows the revenues, operational expenses, financial activities and taxes and dividend distribution of the project, shown in Annex F for the different scenarios.
14.2.4.3 Balance The Balance Sheets show the accumulated assets this wealth is financed And are present in Annex F. the wealth of the project and how
14.3 Sensitivity Analysis

The purpose of the sensitivity testing is to establish which project parameters have the potential to alter the financial feasibility of the project by the greatest amount. By systematically altering individual parameters and recording the influence on the project evaluation criteria, those parameters with the greatest potential to cause the economics of the project to deviate from its expected value can be isolated. This provides a transparent overview of the project s risk profile, assists project planning, and helps prepare risk mitigation strategies.
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14.3.1 Methodology
Where applicable, parameters listed in Section 14.1 had their expected values (as used in the Base Case with CDM calculations) increased and decreased by +5 %, -5 %, and +10 %, -10 % respectively. This has been done for one parameter at a time, so as to isolate the impact of that variable on project feasibility. The resulting project IRR has been recorded in table form, and a so-called Spider diagram was derived to provide a graphical representation. Complimentary to this, the respective Sensitivity Indicators (SI) and Switching Values (SV) have been derived and presented. The definitions of the SI and SV are as follows: SI: represents the percentage change in project NPV as a result of a 1 % increase in the parameter; and SV: represents the percentage change in the parameter value necessary to drive project NPV down to zero.
14.3.2 Sensitivity Variables Sensitivity testing was conducted on the wind park scenario of Gamesa Wind Turbines and for the following variables: Investment costs Energy generation Routine O&M Sales Tariff CO 2 Contract Price
14.3.3 Results: Sensitivity Testing Results of the sensitivity analysis on the financial model with the Gamesa wind turbines are presented on the following table:
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Table 14-12: Financial sensitivity testing results
Project IRR (%) Change Sensitivity Items Investment Costs Generation (GWh) Routine O&M Sales Tariff CO2 Contract Price 12.88% 9.33% 11.72% 9.34% 11.28% 12.05% 10.32% 11.50% 10.32% 11.28% 11.28% 11.28% 11.28% 11.28% 11.28% 10.58% 12.23% 11.07% 12.23% 11.29% 9.93% 13.15% 10.85% 13.15% 11.29% -10% -5% Base +5% +10%
Each sensitivity variable was altered independently, so as to ensure that its potential impact on the project s IRR is isolated. The results are provided graphically below for clarification.
Spider Diagram
15.00% 13.00% 11.00% FIRR 9.00% 7.00% 5.00% 3.00% 1.00% -10% Investment Costs -5% Generation (GWh) Base Routine O&M +5% Sales Tariff +10% CO2 Contract Price
Figure 14-4: Spider diagram showing results of sensitivity testing
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The spider diagram is useful to provide a different perspective of the sensitivity testing results. The x-axis represents the change in the value of the sensitivity variable, while the y-axis represents the subsequent change in project IRR. The diagram can best be interpreted by analysing the slope of the individual functions. Where a small change in the value of the sensitivity variable causes a large change in project IRR, the gradient of the curve will be steep. Where the change in project IRR, following a change in the value of the variable, is small or negligible, the gradient of the function will be flat. Hence, it is concluded that those variables having the greatest potential effect on project IRR are those which have the steepest slopes, positive or negative. Figure 14-4 indicates that this includes the parameters sales tariff, the energy generation and investment costs. This is confirmed by the sensitivity indicators and switching values, as it is elaborated below. It can also be seen in the spider diagram that the sales tariff and wind power generation have an identical potential influence on the project IRR. This underlines the fact that both increase equally the volume of sales.
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14.3.3.1 Sensitivity Measurement
As Table 14-12 shows, the parameters with the greatest potential influence on project IRR are the energy generation, sales tariff and the investment costs, whereas project IRR is the most immune against fluctuations in the CO2 price. These findings are confirmed by the Sensitivity Indicators and Switching Values, as illustrated in Table 14-13.
Table 14-13: Sensitivity indicators & switching values
Sensitivity Measure
Sensitivity Item
SV SI -10.46% 14.83% 14.83% 0.00%
Investment Costs Generation Sales Tariff CO2 Contract Price
9.56% 6.74% 6.74% 100%
The following remarks should be taken into consideration when referring to Table 14-13: Since the project NPV for the Base Case with CDM is higher than zero an increase in the basic costs by 1 % decreases project NPV. Accordingly, this results in a negative SI. For the SV figures and since the NPV is being driven down to zero, the SV has a positive value since items have to be reduced to reach the zero NPV. The indicators in Table 14-13 again highlight the significance of the investment costs, sales tariff and energy generation on project IRR, as expected. Unfavorable fluctuations in the CO2 price or routine O&M would have a less dramatic impact on the project. The variable having the least impact on project returns is the CO2 price, as evidenced by its low Sensitivity Indicator. This means that even large deviation from its expected value will not bring the project NPV to zero. This is due to, as explained in Section 13, a low emissions grid factor.
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15
Framework Analysis for Wind Energy in Ethiopia
15.1 Financing Options

As presented in Section 14, the project will be financed 80 % by debt and 20 % by equity. EEPCo will hold 100 % of the equity shares while the debt will be raised in USD and local currency. Various sources of financing can be explored for the project, and this includes the following: Multilateral institutions. Many of these institutions have introduced programs and initiatives that provide various forms of financing especially in the seed stage. Lending organisation such as the World Bank, AfDB, etc have traditionally been source of capital for large renewable energy projects. The involvement of these multilateral lenders makes the participation of commercial lenders and other private investors more likely. Available ODA (Overseas Development Assistance) instruments could be surveyed in order to optimise financing of the project. These instruments include grants, soft loans, promotional credits and other financial supporting instruments as guarantees. This seems to be the most likely opportunity to finance the project. Private equity funds. A number of private equity funds have been founded over the last 10 years in co-operation with multilateral institutions that focus on the development of renewable energy. Many of these funds primarily invest in companies that are engaged in the development of new technologies but they are also interested in stand alone projects such as wind power projects that meet their respective investment criteria. Private equity funds have been specified by EEPCo, although EEPCo already informed that these are still subject to approval. Export credit agencies (ECAs). ECAs promote the exports of countries through credits and political risk insurance to the buyers of goods. The participation of ECAs is often crucial for commercial lenders to loan money to energy projects in countries with high degree of economic and political instability. With the growing commercialisation of wind power, many producers of wind turbines use ECA to promote the exports of machinery. This alternative to finance the project dependent on the choosed turbine manufacturer. Similarly, international promotional schemes such as carbon finance (Clean Development Mechanism, EU-Emissions Trading Scheme) and GEF could also be explored.
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15.2 Regulatory and Legal Framework

The government should establish enabling frameworks to reduce the transaction costs in the preparation, implementation and operation of the wind park. These frameworks could be categorised into: Authorisation procedures. The authorisation process involves different agencies at the central and local levels, and is often time consuming. The wind park developer needs permits and licenses related to environmental assessment, construction, project site use, use of protected areas, etc. The government can increase the productivity of the administrative process by establishing a one-stop agency for the approval process of the wind park project. This agency would co-ordinate the approval activities of all involved public agencies. Access conditions to the grid. The existing grid codes may pose obstacles to the integration of the wind park. It may be necessary to introduce technical standards that facilitate intermittent energy producers access to the grid. Access conditions to the power market. The current power market rules and regulations could also impose high entry costs to the wind park project developer. This could be reduced by introducing regulations that standardise connection charges and fees for market access, use of system charges (payments for balancing power, back-up power, wheeling charge), and metering services.
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16
Conclusion and Recommendations
Due to the promising wind conditions at the project site at Ashegoda and the available open space at the large proposed area, a realisation of the project in general is feasible. Considering the need of Ethiopia to diversify power generation currently highly reliable on hydropower, the prevailing energy crisis due to decreasing rainfalls and the increasing power demand, a short term supply solution has to be implemented. In the short-run it is necessary to increase current power generation mix, to cover increasing and unmet power demand and to avoid dependence on fuel imports. Wind and diesel power generation are the two fast-track implementation alternatives considered by EEPCo. Between both, the results show that the implementation of the wind park project is the most economic and financial feasible power generation alternative to be implemented in the short run in Ethiopia The calculated net energy output at the P75 level (as a common value for financing wind parks by international banks) for the wind park Ashegoda is in range of 197,392 MWh/y to 239,804 MWh/y at hub heights between 57 m and 60 m. These values can be considered as conservative. The capacity factors of 31.0% to 37.7 % surpass average values in comparison with other international projects, even when taking into account the reduced performance of the wind turbines due to the low air density (at the altitude of 2,000 m), because of the high average wind speed on site.Depending on the wind turbine type considered, the Internal Rate of Return oscillates between 16.64 % and 11.00 %. Additional benefits can be generated through the avoidance of CO2 emissions, estimated at 1,359,387 CO2 tones for the diesel power plant. The Ashegoda Wind Park implementation is also recommendable from the point of view of the Capacity Credit. For Ashegoda a comparatively high Capacity Credit of 38 % (26.46 MW of hydropower capacity) can be generated. Even higher are the Capacity Credit results when combining the Ashegoda Wind Park with a large scale implementation of wind energy in Ethiopia. The realisation of the project could have other secondary positive effects for Ethiopia. Since the Ashegoda Wind Park fulfils the conditions to be registered as a CDM-activity, potential benefits of a CDM registration could be generated, such as the strengthening of the institutional framework regarding CDM and the DNA, the facilitation of know-how transfer, the constitution of a path for the registration of further CDM activities in Ethiopia, and finally, since the project is the first of this kind in the region, it would position Ethiopia as an example for other CDM activities in Africa.
Concerning the technical part of Ashegoda wind park, the selected turbine types of the manufacurers VESTAS, GAMESA and ENERCON are suitable for the planned project and can be considered as well engineered and proven technologies. For delivery, installation and commissioning of the turbines, a first Expression of Interest from the manufacturer ENERCON-India is available, which shows the interest in general for wind power projects in Ethiopia, by a foreign turbine manufacturer. As stated in this report, some barriers were identified concerning the project implementation: Transportation of the large number of turbines will take several months. We recommend the development of a detailed transportation concept in advance. Several manufacturers have been requested for an EoI by the consultant, except of Enercon India most answers are still pending or under clarification of details. One of the main risks lies in the time frame for project construction (twelve months) in 2007. An extension of the construction phase seems difficult due to the extreme time pressure from the Ethiopian Authorities. However, the timely realisation of the construction works is possible in the event that a turbine supply contract is signed as soon as possible, and supervision of the construction works is applied. The grid connection to the 230 kV level is feasible.
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17
Annex A
17.1 Annex A - 1: Aviation corridors at Mekelle airport
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17.2 Annex A - 2: Enviromental Report of Ashegoda
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17.3 Annex A - 3: Soil investigation report
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17.4 Annex A - 4: Road Authority Report, Weights and Wheel base
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17.5 Annex A - 5: Description of available crane by MIDROC (Addis Abeba)
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17.6 Annex A - 6: Road Map Djibouti - Mekelle
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17.7 Annex A - 7: Road Survey Report
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17.8 Annex A - 8: Terms of reference for consultant's work
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18
Annex B
18.1 Annex B
1: Correlation Diagrams
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18.2 Annex B
2: Noise Impact
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18.3 Annex B
3: Shadow Impact
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19
Annex C
19.1 Annex C
1: Map of Ashegoda Wind Park Layout
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19.2 Annex C
2: Energy Calculations
Energy yield Coordinates Production analysis Wind data Map Power curve Wind turbine distances
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19.3 Annex C
3: Turbulence Calculations
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19.4 Annex C
4: two-dimensional view of the digital terrain model
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19.5 Annex C
5: three-dimensional view of the digital terrain model
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20
Annex D
20.1 Annex D
1: Technical Information of Enercon E-48
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20.2 Annex D
2: Technical Information of Vestas V52
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20.3 Annex D
3: Technical Information of Gamesa G58
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20.4 Annex D
4: Preliminary Technical Information of Enercon E-53
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21
ANNEX E :
21.1 Annex E-1 ENERCON E-48 Cash-Flow Economic Analysis
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21.2 Annex E-2
ENERCON E-53 Cash-Flow Economic Analysis
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21.3 Annex E-3
VESTAS V52 Cash-Flow Economic Analysis
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21.4 Annex E-4
GAMESA G58 Cash-Flow Economic Analysis
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22
ANNEX F :
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22.1 Annex F-1
ENERCON E-48 Operating Results
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22.2 Annex F-2
ENERCON E-48 Profit & Loss Account
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22.3 Annex F-3
ENERCON E-48 Balance Sheet
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22.4 Annex F-4
ENERCON E-53 Operating Results
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22.5 Annex F-5
ENERCON E-53 Profit & Loss Account
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22.6 Annex F-6
ENERCON E-53 Balance Sheet
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22.7 Annex F-7
VESTAS V52 Operating Results
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22.8 Annex F-8
VESTAS V52 Profit & Loss Account
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22.9 Annex F-9
VESTAS V52 Balance Sheet
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22.10 Annex F-10 GAMESA G58 Operating Results
LI / GE6 25 0477
22.11 Annex F-11 GAMESA G58 Profit & Loss Account
LI / GE6 25 0477
22.12 Annex F-12 GAMESA G58 Balance Sheet
LI / GE6 25 0477
23
ANNEX G :
23.1 Annex G-1
Fuel Factors used in the CDM Assessment
LI / GE6 25 0477

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Feasibility Study for Wind Park Development in Ethiopia and Capacity Building

Ashegoda Wind Park Site Final Report

Feasibility Study for Windpark Development in Ethiopia and Capacity Building

August 2006, Final Report - page ii

Kebede Walelu Wind Power Study Project Coordinator Kebwal@ethionet.et

Feasibility Study for Windpark Development in Ethiopia and Capacity Building

August 2006, Final Report - page iii

final report ashegoda

Feasibility Study for Windpark Development in Ethiopia and Capacity Building

August 2006, Final Report - page 4

850 kW turbines, rotor diameter 52 m, hub height 60 m; total capacity

850 kW turbines, rotor diameter 58 m, hub height 60m; total capacity

Feasibility Study for Windpark Development in Ethiopia and Capacity Building

August 2006, Final Report - page 5

1.2 Site Description Ashegoda

1.3 Wind Resource Assessment

final report ashegoda

Feasibility Study for Windpark Development in Ethiopia and Capacity Building

August 2006, Final Report - page 6

1.4 Energy Production Estimation

Scenario Type of Turbine

Scenario 1 ENERCON E 48 800 86 68,800 57 48

2.26 227,155 5.8 95.0 2.0 0.1 197,392

1,268 2,869 32.8

final report ashegoda

Feasibility Study for Windpark Development in Ethiopia and Capacity Building

August 2006, Final Report - page 7

1.5 Site Access

final report ashegoda

Feasibility Study for Windpark Development in Ethiopia and Capacity Building

August 2006, Final Report - page 8

1.6 Environmental Impact Assessment

1.7 Capacity Credit Assessment

final report ashegoda

Feasibility Study for Windpark Development in Ethiopia and Capacity Building

August 2006, Final Report - page 9

final report ashegoda

Feasibility Study for Windpark Development in Ethiopia and Capacity Building

August 2006, Final Report - page 10

1.8 Economic Analysis

1.9 Clean Development Mechanism Assessment

final report ashegoda

Feasibility Study for Windpark Development in Ethiopia and Capacity Building

August 2006, Final Report - page 11

1.10 Financial Analysis

final report ashegoda

Feasibility Study for Windpark Development in Ethiopia and Capacity Building

August 2006, Final Report - page 12

The levelized costs are:

6.44 USDc/kWh 5.82 USDc/kWh 6.84 USDc/kWh 5.60 USDc/kWh

Dire Dawa DPP Halele-Werabese HPP Finchaa HPP

12.90 USDc/kWh 3.00 USDc/kWh 3.40 USDc/kWh

final report ashegoda

Feasibility Study for Windpark Development in Ethiopia and Capacity Building

August 2006, Final Report - page 13

1.11 Conclusions and Recommendations

Feasibility Study for Windpark Development in Ethiopia and Capacity Building

August 2006, Final Report - page 14

final report ashegoda

Feasibility Study for Windpark Development in Ethiopia and Capacity Building

August 2006, Final Report - page 15

2.1 Power System

Feasibility Study for Windpark Development in Ethiopia and Capacity Building