Solar energy as a mean to

reduce energy costs

Stefan Schapitz
Renewable energies international
Energy from renewable sources works at any scale and is cost competitive.

German energy mix Renewable energy big and cheap

Figures in billion kWh =
5.4 thousand GWh
4.1
59.8

118.0
88.0

195.7 19.3
91.8
44.2

38.4
5.8
155.0

Lignite Nuclear Hard Coal

Natural Gas Oil Others
Wind Water Biomass © DEWA
Solar (PV) Urban Waste
Dubai Electricity and Water Authority is currently
building a 1 GW solar plan which will be completed in
2020. Costs for the provided electricity will be USD
0.03 per kWh. Further expansion to 5 GW until 2030
is planned.

Bundesministerium für Wirtschaft und Energie (Federal Ministry for Economic Affairs and Energy) (2016): Erneuerbare Energien in Deutschland – Daten zur
Entwicklung im Jahr 2015, Berlin, p. 4.
IRENA (2016): Renewable Energy Statistics 2016, Abu Dhabi, p. 46 et seqq.
Federal Statistical Office Germany: https://www.destatis.de/DE/ZahlenFakten/Wirtschaftsbereiche/Energie/Erzeugung/Tabellen/Bruttostromerzeugung.html
Typical solar energy supply
Solar energy is available at day light hours, peaks around noon and is perishable.
Energia solara este disponibila ziua, cu maxime la amiaza si este perisabila.
Illustration of the typical profile of day light intensity as well as PV power generation
The load profile of an energy user
The load profile shows how much energy is used over any specific period.
Acest profil arata cita energie este utilizata in orice perioada specifica.
Examples of different types of load profiles
Optimisation load profile – size PV system
Minimising costs and maximising benefits requires an optimised system size.
Minimalizarea costurilor si maximalizarea beneficiilor solicita optimizarea sistemului.
Illustration of the typical profile of day light intensity as well as PV power generation

Beware: The daily load profile is Surplus energy from

only an average – there are almost the PV system
always weekly and seasonal
fluctuations which size Energy needs not
covered by PV system
optimisation must take care of!

Atentie: Profilul de zi reprezinta PV substitutes the grid

doar o medie – exista practic
permanent fluctuatii saptaminale si
sezoniere de care trebuie sa se
tina cont la optimizarea
dimeniunilor sistemului.
Renewable regulation in Moldova
Moldova has a new legislation for renewable energy in place

Renewable Energies Act Major schemes

Net metering:
• Up to 200 kW
• Electricity credits for unused renewable energy
• Simple application process
Contorizare neta:
• Pina la 200 kW
• Credit de electricitate pentru energia regenerabila
neutilizata
• Proces de aplicare simplu

Feed-in-tariff:
• 10 kW - 1 MW (up to 4 MW for wind)
• Payment for renewable energy fed into the grid
• Tariff guaranteed for 15 years plus foreign exchange
rate (USD) adjustment
• More complex application process
Tarif de alimentare:
• 10 kW – 1 MW
• Plata pentru energie regenerabila conectata la retea
http://lex.justice.md/md/363886/
• Tarif garantat pentru 15 ani plus ajustare la rata
schimbului de valuta straina (USD)
• Proces de aplicare mai complex
Using Net-Metering to utilise temporary surplus production
Net-Metering offers a solution to “store” temporary surplus electricity for later use.
Contorizarea neta faciliteaza depozitarea surplusului temporar de energie la utlizarea ulterioara.
Illustration of using Net-Metering to shift excess solar energy outside of daylight hours
Using a Feed-in-Tariff as separate revenue stream
Selling electricity to the grid provides additional revenues to offset energy costs
Comercializarea electricitatii asigura venit aditional la acoperirea costurilor de energie.
Payment for electricity according to tariff Compensation for energy fed into the grid

Bank Account
− $$$ + $$$
The energy user still has to pay for the used Solar energy fed into the grid is paid for by
electricity according to the tariff the utility company according to the Feed-in-
Tariff determined by ANRE

Compensation for solar energy can offset parts or all of the energy costs and can even provide
additional revenues
Major risks of renewable (PV) energy investments and their mitigation
Like other investments, renewable energy projects come with specific risks
Ca si orice alta investitie, proiectele de energie regenerabila vin cu riscuri specifice.
Main risks Risk mitigation
Technical risks • chose quality suppliers
• system does not deliver what promised • use independent advisors/consultants
• system (components) short life time • external financiers may provide additional
(technical) due diligence

Foreign exchange risk • consider local currency financing

• MDL devaluation results in higher payments
• MDL devaluation reduces opportunity costs

Counterparty risk • chose appropriate system size (do not oversize)

• not receiving credit / being paid (fully / on time)
• retroactive change of regulations

Reliable supply of feedstock (Not applicable for solar) • chose an energy source where you have more
• relevant especially for biomass and biogas control over the supply chain
• shortage in supply or price increases of • consider long term contracts
feedstock
Example calculation for the illustration of the economics of a PV system

Main assumptions Presupuneri de baza

Company: Cold Store Companie: Depozit frigorific
System size: 100 kW p Dimensiunea sistemului: 100 kWp
Capex: MDL 2,200,000 Costurile investitiei: 2,200,000 MDL
Leverage: 50% Mecanisme de finantare: 50% creditare prin Livada
= 50% loan through Livada Moldovei Moldovei
50% own funds + 50% fonduri proprii
Loan: MDL denominated Imprumut: expimat in MDL
interest: 7.5% Rata dobinzii: 7.5%
tenure: 10 years Perioada: 10 ani
System life: 25 years Viata sistemului: 25 ani
Tariff: MDL 1.85 / kWh (excl. VAT) Tarif: 1.85 MDL/ kWh (fara
Compensation: through Net Metering TVA)
Space needed: 700 m² - 800m² Compensare: prin contorizare neta
Suprafata necesara: 700- 800 m²
Example calculation for the illustration of the economics of a PV system

Costs Profits
Investment: MDL 1,100,000 Scenario 1: ≈ MDL 3,680,000
Interest: ≈ MDL 450,000 (total over 10 years) Multiple: 3.06x
O&M: ≈ MDL 70,000 (total over 25 years)
Savings Scenario 2: ≈ MDL 3,980,000
Multiple: 3.62x
Generation: average ≈ 108,000 kWh p.a.
Value: Scenario 1: stable tariffs
Scenario 3: ≈ MDL 5,120,000
≈ MDL 200,000 p.a.
Multiple: 4.65x
≈ MDL 5,000,000 over 25 years

Scenario 2: 1% annual tariff increase Scenario 4: ≈ MDL 7,680,000

≈ MDL 227,000 p.a. Multiple: 6.99x
≈ MDL 5,600,000 over 25 years
Additional benefits
Scenario 3: 2.5% annual tariff increase • Possibly tax effects of interest payments
≈ MDL 323,000 p.a.
≈ MDL 6,740,000 over 25 years When using loan through Livada Moldovei:
• VAT discount
Scenario 4: 5% annual tariff increase
• Technical assistance
≈ MDL 576,000 p.a.
≈ MDL 9,300,000 over 25 years
Other possible solutions

Solar water pumps Pompe de apa cu energie din sursa solara

Most useful: Cel mai folositor:
• Replacement of old gasoline pumps • Inlocuirea pompelor vechi cu benzina
• No power line nearby • Cind nu avem linii de curent electric in preajma
Possible applications: Aplicare posibila:
• Pump water during daylight hours to an elevated • Pomparea apei in decursul zilei spre un rezervor
reservoir / tank, irrigate at night la inaltime, irigarea in timpul noptii;
• Irrigate directly during daylight hours • Irigarea directa in decursul zilei
Biomass, biogas Biomasa, biogaz
Most useful: Cel mai folositor:
• Factories requiring steam / heat • Pentru fabricile ce au nevoie de aburi, caldura
• Access to raw material • Accesul la materia prima

Possible applications: Aplicare posibila:

• Biomass boilers substituting natural gas • Boilerele de biomasa ce substituie gazul natural
• Anaerobic digesters for biogas • Digestorii anaerobici pentru biogaz
• Make use of cogeneration (heat, electricity) • Utilizarea cogenerarii (caldura, electricitate)

Usually requires more complex cost benefit analysis De obicei, solicita analiza beneficiilor de cost si
and technical planning. planificare tehnica mai complexa.
Livada Molodovei

Key terms (loan related) Termeni cheie (legati de imprumut)

Tenure: up to 10 years Perioada: pina la 10 ani
Interests: 2.8% - 4% (EUR denominated) Dobinda: 2.8% - 4% (exprimat in EUR)
7%-8% (MDL denominated) 7%-8% (exprimat in MDL)
Minimum: EUR 5,000 Minimum: EUR 5,000
Maximum: EUR 5,000,000
Maximum: EUR 5,000,000
Furnizor de imprumut: Banca Europeana de Investitii
Loan provider: European Investment Bank via prin
Comertbank Comertbank
Energbank Energbank
Mobiasbanca Mobiasbanca
ProCredit Bank ProCredit Bank

More information: www.livadamoldovei.md Mai multa informatie: www.livadamoldovei.md

Furnizor de Asistenta Tehnica:

Technical Assistance provider:
AFC GmbH
AFC GmbH
Igor Gorashov
Igor Gorashov igor.gorashov@afci.de
igor.gorashov@afci.de +373 69 104 412
+373 69 104 412