8/6/2019 Damitha Kumarasinghe - FiT Regulation Setting the Right Rates

http://slidepdf.com/reader/full/damitha-kumarasinghe-fit-regulation-setting-the-right-rates 1/7

Damitha Kumarasinghe

1

8/6/2019 Damitha Kumarasinghe - FiT Regulation Setting the Right Rates

http://slidepdf.com/reader/full/damitha-kumarasinghe-fit-regulation-setting-the-right-rates 2/7

• Production Incentive-promote efficient operation of plants

• Incentive to develop best sites-economic allocation of resources

• Investor take technology and resource risk-consumer

sa eguar e

• Predictable prices-less risk to the investor

•

Ability to promote individual technologies byproviding attractive prices at the beginning

Setting the Right Rate is the KeySetting the Right Rate is the KeySetting the Right Rate is the KeySetting the Right Rate is the Key

2

8/6/2019 Damitha Kumarasinghe - FiT Regulation Setting the Right Rates

http://slidepdf.com/reader/full/damitha-kumarasinghe-fit-regulation-setting-the-right-rates 3/7

If not set high enough-no or little

deployment of renewable energy

If set too high-cost for end users of 

Should be closely tied to the governmentpolicy objectives

3

8/6/2019 Damitha Kumarasinghe - FiT Regulation Setting the Right Rates

http://slidepdf.com/reader/full/damitha-kumarasinghe-fit-regulation-setting-the-right-rates 4/7

Cost based FiT (fixed price) – market

independent

Percentage based FiT- market dependent

Avoided cost based

Most countries choose market independentfixed price approach

4

8/6/2019 Damitha Kumarasinghe - FiT Regulation Setting the Right Rates

http://slidepdf.com/reader/full/damitha-kumarasinghe-fit-regulation-setting-the-right-rates 5/7

Investment

O & M costs

Fixed cost

In ation Interest rates

Plant factor

Profit margin for investor

5

8/6/2019 Damitha Kumarasinghe - FiT Regulation Setting the Right Rates

http://slidepdf.com/reader/full/damitha-kumarasinghe-fit-regulation-setting-the-right-rates 6/7

Various stakeholders- consumers, investors,

utilities and government etc.

Fair and acceptable to allFair and acceptable to allFair and acceptable to allFair and acceptable to all while achieving

Stakeholder participation- ascertain thefairness and acceptability

Transparency- Stakeholder confidence of theprocess & hence acceptability

6

8/6/2019 Damitha Kumarasinghe - FiT Regulation Setting the Right Rates

http://slidepdf.com/reader/full/damitha-kumarasinghe-fit-regulation-setting-the-right-rates 7/7

7