GET FiT for Solar PV
The Government of Uganda, ERA and GET FiT are delighted to announce the introduction of solar/PV window under the GET FiT Premium Payment Mechanism (GFPPM). After small hydro, bagasse co-generation and biomass, Solar/PV will be the fourth renewable energy technology eligible for support under GET FiT.The inclusion of the Solar/ PV sub-component under GET FiT follows a request by ERA for support to the development of Uganda’s huge Solar/ PV potential. The relatively short lead time for commissioning, makes Solar/ PV an attractive option for meeting Uganda’s rising electricity demand. Short term supply deficits that would otherwise have to be covered by thermal generation could be addressed through Solar/ PV. Additional advantages lie in the possibility to decentralize generation, reduce transmission and distribution losses, stabilize the grid and diversify the electricity mix in the country.
During the first rounds of request for proposals under GET FiT in 2013, Solar/ PV was not included as an eligible technology. This was due to the fact that following a revision of the REFiT policies in 2012 there was no REFIT for Solar/ PV in Uganda. A fixed premium payment methodology as applied for hydro, bagasse and biomass under the GFPPM is therefore not possible for Solar/ PV.
To benefit nevertheless from the framework provided by the GET FiT Programme, ERA and KfW have developed a revised approach that does not only consider the lack of a fixed REFiT, but also benefits from the competition in the market for Solar/ PV and the ongoing decrease in costs:
In 2014, ERA will tender out Solar/ PV concessions on the basis of a reverse auction, following the successful example of South Africa. During this “dutch auction” or reverse bidding process, developers will be asked to bid a price per kWh – in addition to documenting compliance with the established technical, economical and financial, environmental and social as well as legal requirements under GET FiT (http://www.getfit-uganda.org/information-for-developers/selection-criteria/). Concessions will be awarded after a through due diligence process to the cheapest eligible bidder(s). Selected developers will receive a GET FiT Premium Payment to bridge the gap between a predetermined tariff set by ERA and their offer. Successful bidders will then enter into a Developer Finance Agreement with the Government of Uganda (represented by KfW) for the GET FiT Premium Payment and sign a standardized, 20 year PPA with UETCL.
Please note that the maximum installed capacity (individual project size and total) to be awarded, depends on the technical absorption capacity of the Ugandan transmission and distribution system as well as the availability of funding under GET FiT. The latter is a function of the subsidy demand of individual project and hence the price per kWh offered by developers. We expect that between 20 and 50MW can be supported in 2014/15.
Under the GET FiT TA Facility, ERA is currently procuring consultancy services to support them in the implementation of the Solar/ PV reverse auction. ERA and GET FiT will jointly host a kickoff meeting early next year, during which developers can express their interest and address open questions. Please register with the GET FiT Secretariat, should you be interested in attending this event.
We expect the Solar/ PV tender to be launched during the 2nd quarter of 2014. At this stage only projects in an advanced stage of development will stand a chance to be awarded with a concession!
Funds for the Solar/ PV Premium Payment have been made available by the European Union through the EU Africa Infrastructure Trust Fund (ITF). The funding for the Solar / PV Tender Agent consultancy comes from the UK Government through their support for the GET FiT TA Facility.