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Preparing Bankable Documents
"The case study has been drawn up by the Development Bank of Turkey for the seminar of Preparing Bankable Documents, to be held in Sarejevo on 26 January 2010. It is organized by BBI and presentations are made by the Development Bank of Turkey together with PGlobal Global Advisory and Training Services Ltd."
X ENERGY ELECTRICITY GENERATION INDUSTRIAL & TRADING CORPORATION XYZ HEPP INVESTMENT APPRAISAL REPORT
INTRODUCTION
X Energy Electricity Generation Co. (X Enerji Elektrik retim A..) made an application to our bank on 10.05.2009, for USD 6.650.000 TKB-World Bank Renewable Energy Loan to be utilized for the XYZ Hydroelectric Power Plant Project in Adana, which has 4.825 MW installed power for electricity generation.
As a result of the appraisal made upon the said request, a loan in the amount of USD - 5,000,000 has been proposed for the project.
1.1. Company Name: X Energy Electricity Generation Industrial & Trading Corporation (X Enerji Elektrik retim San. ve Tic. A..)
1.2. Address and Tel No: Head Office Tel Fax Gsm : zmir cad. No: 35 Seyhan/ADANA : 0 312 417 9200 : 0 312 417 9201 :-
1.3. Tax Office and Tax No: 1.4. Activity Area: 1.5. Capital Structure:
: 1,300,000 TL : 192,000 TL
Shareholders Oktay Kuukkiremitci Mustafa Simsek Omur Genc Faruk Sekmen Emrah Ersoy TOTAL
X Energy Electricity Generation Industrial & Trading Corporation was established by X Group on 15.05.2007.
2.2. Location :
Adana
2.3.Installed Power:
2.5. Implementation Program - Starting Date - Start-up Date : June 2009 : 30.06.2011
: 1,320,957 USD
: 257,165 USD
: 1,063,792 USD
: 8 Person
X Energy Electricity Generation Co. has been constructing an electric energy plant from hydropower energy with an installed capacity of 4.852 MWm / 4.6094 MWe in Eastern Mediterranean Region, on Seyhan river basin. Project Evaluation studies have been made to evaluate the World Bank Renewable Energy Loan demanded by the company in the amount of 6,650,000 USD.
EPDK (EMRA Energy Market Regulatory Authority) Licence dated 20.10.2008 and numbered E/9000-24/1200 is presented to the bank.
Investment will be carried out in the southern of Turkey, within the boundaries of Seyhan District of Adana. XYZ regulator and power plant project consist of regulator, conduction canal, a forebay and a power plant.
Tarsus-Adana-Gaziantep highway, connecting GAP (Southeastern Anatolian Project) region to ukurova, is passing at the southern part of Adana. The railway passing through the city is 107,230 km long. There is an airport in the city which is 5 km away from the city center.
Adana is placed in the nearest part of three geographic regions (Mediterranean Region, Eastern Anatolia and Southeastern Anatolia). With the affects of the geographic region and the other factors, it has a climate named as deformed Mediterranean climate.
Most of the area of the XYZ Regulator and HEPP project is forest land which is owned by the state. These places will be expropriated by paying the fees to the Ministry of Environment and Forestry. Remaining part of the land will be purchased from the owners.
Project site takes place in the first earthquake zone on the map of Turkish Earthquake Regions. Therefore, horizontal seismic acceleration coefficient should be taken 0.4g during the construction calculations.
XYZ regulator and hydroelectric generator project is consist of regulator, sedimentation pool, conduction canal, forebay, penstock and power plant. The project is constructed to benefit the driving head between tailwater of the Kartal Dam and the Irrigation Regulator after the dam.
Regulator Type Level of the stream bed : : Roller Compacted Concrete Regulator with Radial valve and spillway 655 m
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Conduction Canal Type Length Slope Width Water height Capacity (Qmax.) Forebay Length Width Normal water level Max. Water level Min. water level : : : : : 45 m 15 m 663,07 m 663,65 m 660,07 m : : : : : : Rectangular sectioned canal 1.700 m 0,0004 5,00 m 3,05 m 23 m3/s
Power plant Type Installed Capacity Project flow Number of units Power of units Level of the tailwater Gross fall (hydraulic head) Net fall Revolutions per minute : : : : : : : : : Horizontal - Francis 4,852 MW 23 m3/s 2 pcs. 2,426 MW 638,40 m 25,60 m 24,44 m 500 rpm
Generator Type Power of units Coefficient of efficiency Power of the generator Voltage Frequency Revolutions per minute : : : : : : : Horizontal 2 0,9 2.620 kVA 6.3 kV 50 Hz 500 rpm
The water resource of the project is Aksu stream which is a branch of Seyhan River. By this project, the water flow of Aksu Stream at the thalweg level of 665 m. will be used. Kartal Dam is located in the upstream, 3 km away from XYZ Regulator. Kartal Dam, which has been operated since 1970, was built for irrigation and flood protection. Irrigation water which is released from Kartal Dam is used after being regulated by Deniz Regulator. The project site is between Kartal Dam and Deniz Regulator, and electrical energy will be generated by using the irrigation and spillway waters.
At the upstream of the project, there have been the gaging site 20-2, 20-31 and at the downstream of the project there have been the gaging site 20-17, 20-40 and 20-47. The characteristic features of those sites are shown on the table below: Gaging Site No Water Resource Gaging Site Name Precipitation Area (km2) Elevation Operating since 20-2 Aksu Bapnar 197.1 895 1967 20-31 Glba k 62 882 1969 20-17 Aksu Kpraz 1,740 560 1972 20-40 erisu Balklaya 79 670 1975 20-47 Aksu H.Mustafa 2,787 455 1979
XYZ Regulatory and Hepp is a plant for generating electricity and after generating electricity the used water will be released to the stream bed. At XYZ Regulator, 0.1 m3/s of water will be left for the existence life in the stream bed.
XYZ XYZ HEPP Released Energy HEPP from Generated Average Generated Energy spillway Flow Flow GWh/Year (hm3) (hm3) rate (m3/s) 0 1,81 132,33 154,04 371,31 73,76 19,56 217,46 211,99 22,14 0,83 27,71 3,87 0 165,37 248,85 0 0 0 6,93 90,66 3,03 0 409,88 21,1 105,01 0 0 0 34,62 16,25 33,78 0 2,49 0 67,85 168,79 199,47 342,34 297,79 457,83 301,22 284,42 353,16 355,93 384,99 209,41 334,09 238,44 235,44 340,47 353,17 162,46 263,08 121,83 246,33 297,79 202,65 274,69 353,16 372,55 362,32 262,98 220,89 121,83 326,7 248,02 279,14 225,49 236,57 121,83 273,06 5,352296 6,325152 10,85553 9,442859 14,51769 9,551624 9,018899 11,19863 11,28647 12,20795 6,640348 10,59392 7,560883 7,465753 10,79623 11,19895 5,151573 8,342212 3,863204 7,811073 9,442859 6,425989 8,710363 11,19863 11,81348 11,48909 8,339041 7,004376 3,863204 10,35959 7,864663 8,851471 7,150241 7,501585 3,863204 8,65883 9,83609 11,62394 19,94956 17,35345 26,67964 17,55333 16,57433 20,58009 20,74151 22,43496 12,20318 19,4688 13,89488 13,72006 19,84059 20,58067 9,467214 15,33076 7,099537 14,35467 17,35345 11,80925 16,00732 20,58009 21,71003 21,11388 15,32493 12,87217 7,099537 19,03816 14,45315 16,26664 13,14023 13,78591 7,099537 15,91262
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N=g x x Q x H
= gravitational acceleration (9.81 m/s) = efficiency of the plant = efficiency of the turbine = 0.93 = efficiency of the generator = 0.96 = efficiency of the transformer = 0.98 = Flow rate of the project (m/s) = Net fall (m) = power (MW) = 0.93 x 0.96 x 0.98 = 0.875
Install capacity is evaluated for the maximum flow rate and fall. In this case, install capacity;
In the equation, maximum flow rate in one turbine is taken 23 m/s and net fall is taken 24.44 m. The efficiency coefficient of plant is assumed to be 0.875.
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When the consumption of electricity for the plant itself, which is about the 0.0003 of the energy generated per year, is decreased, the amount of generated electricity per year is found as 15,864,878 kWh.
The generated electricity per year is the generated electricity that is calculated for the yearly average rate of flow. This quantity is also called actual capacity. In this case, the capacity utilization rate is found by dividing the capacity by actual capacity, which is 37.6 %.
XYZ regulator and HEPP, is an energy generation project that will use Kartal Dams spillway and water of irrigation. Kartal Dam was built in 1980, for irrigation. Project has a regulator, a conduction canal which is 1700 meter, a forebay, penstocks and a plant. HEPP will use the irrigation water except life water. Life water is about 100 liter per second. There is not any place near the plant which can be affected directly by the existence of the project. Total installed capacity of HEPP is 4.852 MWm / 4.6094 MWe. Environmental Impact Assessment has been completed for Project, and Document stating that EIA is not required has been taken from Adana Governorship, Provincial Directorate of Environment and Forests with the date 04.06.2009 and number 2009/002 for XYZ Regulator and HEPP. (Annex 3) But that document was prepared for EARC Electric Generation Industrial and Trading Corporation. So, document has to be modified. X Energy Corporation reported that they had started the modification procedures
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When Project was evaluated in June, Company signed contract for civil works, and got proposition for turbine, generator, plc systems and etc. from manufacturer companies. Company set up the construction camp and began excavation for conveyance canal and regulator. The investor pointed out that they will present the Document of Investment Incentive to Development Bank of Turkey later.
Central Bank of Republic of Turkeys foreign excange offer rate for the 10th of June 2009 is used for calculating the Projects investment cost.
1 EURO = 2.1702 TL
1 USD = 1.5397 TL
3.7.1. Land
expropriated or will be bought from their owners. Approximately 20,000-USD (30,800-TL) was estimated for expropriation and purchasing.
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COST ESTMATE Number CVL WORKS (TL) Regulator, Sediment Pool, 1 2 3 4 5 6 7 Cofferdam Conveyance Canal Forebay Penstock and Valve Chamber Plant and Tailwater Construction Camp and Ways Switchyard TOTAL CIVIL WORKS and 1,433,904 661,570 512,898 408,876 816,102 602,963 630,000 5,066,313 931,288 429,675 333,115 265,556 530,040 391,611 409,171 3,290,455 (US $)
DOMESTIC MACHINERY AND EQUIPMENT Transmission Line and Transformers Number Description Unit Quantity Unit Price ($) Electric Transition 1 Line and Transformers TOTAL 355,317 230,770 Km 4.62 50,000,00 355,317 230,770 Sub-total (TL) $
230,770-USD (355,317-TL) is estimated for domestic machinery and equipments. Total cost of machinery and equipment is 2,277,770-USD.
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IMPORT MACHINERY AND EQUIPMENT MACHINERY AND EQUIPMENT No Description 1 2 3 4 5 Generator 6 7 8 9 10 11 Control, Measuring and Protective Equipments Heat Measuring and Braking System Central Control System Cooling Water System of the Whole Plant Special Tools Spark Parts TOTAL set set set set set set 3,151,766 TL 1 2 1 1 1 1 2,047,000 $ Vertical Francis Turbine Generator and Excitation System Microcomputer-based Governor(with PLC) Inlet Valve Automatic Control Equipments for Turbine and set 2 Unit set set set set Quant. 2 2 2 2
2,047,000-USD (3,151,766-TL) is estimated for machinery and equipments. Company planned to import machinery and equipments from China.
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Utilization Expense of System and Operating Expense of System for XYZ Regulator and HEPP Project is calculated from decision of EPDK (EMRA Energy Market Regulatory Authority) with date 24.12.2008 and number 1824.
(10.06.2009 CB)
20,000-USD is estimated for insurance. An engineer, 2 operator, 3 watchmen and 2 employees will work in the Plant. 100,800- USD is estimated for yearly staff expense.
80.000-USD is estimated for maintenance. 10% of the total expenses for general expense, 2% of the total expenses for unpredicted expenses are the cost of those units in Project.
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XYZ HEPP Projects saleable electric energy calculated from average of the annual flow. And it is evaluated by decreasing 0.3% of total generated electric energy from total generated electric energy.
It was accepted that all plant expenses paid in the period of 30 days and payment term is 30 days in Calculation of Circulation Capital.
XYZ Regulator and HEPP Project will use the water of irrigation and spillway of Kartal. Kartal is a dam which accumulates the water of Aksu Stream which is branch of Seyhan River. Installed capacity of the plant is 4.825 MW and in the amount of 15,912,616 kWh energy is expected to be generated. By decreasing 0.3% of the total energy because of the energy used inside the plant, 15,864,878 kWh is found as a saleable energy.
LOAN TYPE
MATURITY
Energy Loan 1
4/13
1.350.000
30.09.2009
4/13
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- Loans will be used according to Equity/Liability ratio that is proposed in the Appraisal Report. The Investor Corporation will pay the unpaid Capital (750,000-USD), additionally will increase the capital 1,400,000-USD.
XYZ Regulator and HEPP Projects installed capacity is 4.825 MW which is located in Adana city, Seyhan district. The project is an investment of X Electric Generation Industrial and Trading Corporation. 15,864,878 kWh/year is estimated as a saleable energy. Solvency was calculated from economical and technical data. Solvency is sufficient according to Development Bank of Turkeys criterions. Information of the solvency is displayed in the chart.
LIQUIDITY YEARS 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 SOLVENCY 1,54 1,68 1,37 1,40 1,35 1,25 1,29 1,34 1,40 1,46 1,53 DIFFERENCIATION(USD) 219.510 510.518 311.454 323.805 273.851 182.478 207.455 232.633 257.711 282.789 307.866
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X Energy Electricity Generation Industry and Trade Corp. generates electricity based on hydroelectric energy which is one of the renewable energy resources. According to the sectoral classification of the State Planning Organization (SPO), electricity generation is included in the Energy Sector.
Energy resources (or original forms of energy) may be classified as fossil, non-renewable energies and renewable energies. 90% of the requirement for energy resources in the world is met from fossil fuels. The remaining 10%, on the other hand, is met with such renewable energy resources as hydroelectric, geothermal, solar, wind, biomass and nuclear resources. Fossil resources are broken down as follows: petroleum (45%), natural gas (26%), coal (23%), biogas (6%).
Turkey has well-diversified primary energy resources. There are fossil resource reserves such as hard coal, lignite, asphaltite, crude oil, natural gas, uranium and thorium; and renewable energy resources such as hydroelectric energy, geothermal energy, solar energy, wind energy, ocean energy and biomass energy.
Table 1 shows Turkeys primary energy generation, consumption, export and import quantities between the years 1995-2007.
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Table 1: Primary Energy Generation, Consumption, Export and Import Quantities Years (TTOE)* 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 Generation (TTOE)* 26,719 27,386 28,209 29,324 27,659 26,047 24,576 24,282 23,783 24,332 24,549 26,802 27,443 Imports (TTOE)* 38,907 44,359 47,200 46,885 48,116 56,037 53,446 57,234 64,133 67,508 73,840 80,514 103,754 Exports** (TTOE)* 1,947 1,883 1,630 1,500 1,500 1,584 2,620 3,162 4,090 4,022 5,171 6,572 6,926 Consumption*** (TTOE)* 63,679 69,862 73,779 74,709 74,275 80,500 75,402 78,331 83,826 87,818 92,858 100,744 124,271 Generation / Consumption (%) 42 39 38 39 37 32 33 31 28 28 26 27 22
Source: Ministry of Energy and Natural Resources (*): Thousand tons of oil equivalent (**): Petrogas Journal, number:58, January-February 2006 (***): Consumption=Generation+Import-Export According to rapid increase of primary energy consumption of Turkey between 1995-2007, generation quantities do not increase and countrys dependence of foreign increases gradually. Although percent of generation/consumption is 42% in 1995, this ratio decrease 22% in 2007.
Today, the most important environmental problem of the world is global warming. Global warming originates from excessive use of fossil fuels. The fact that fossil fuel burning emissions contain greenhouse gases such as carbon dioxide has triggered a global warming process that may cause climatic changes with increased greenhouse effect of the atmosphere. The most serious solution of this problem is to make prevalent the use of new and renewable energy resources. Thus, it will be possible to preserve as much as possible the fossil fuel reserves that are limited in the world.
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Law on Utilization of Renewable Energy Sources for the Purpose of Generating Electrical Energy issued by the Ministry of Energy and Natural Resources in the Official Gazette dated 18.05.2005, numbered 25819 defines the renewable energy resources as follows:
Wind, solar, geothermal, biomass energy sources, channel- or river-type hydro power plants, or hydro power plants with a reservoir area of less than 15 square kilometers.
Unlike the depletable conventional fossil fuel reserves, undepletable natural resource potential is rich in Turkey. She has a usable and/or economical energy potential of Mtoe/y geothermal, 25 Mtoe/y solar, 50 TWh/y wind and 129.9 TWh/y hydroelectric, 1.8
Of the renewable resources, conventional biomass energy and hydroelectric energy is used most in Turkey. Although geothermal energy ranks third, its use is limited. By policy for increasing the electrical generation of renewable energy resources, rate of wind energy rise gradually nowadays. Use of solar energy is at symbolic level while ocean, wave motion energy is not used at all.
Hydroelectric energy which ranks first among the renewable resources in the world is the energy obtained by converting potential energy of water into kinetic energy, and the quantity of energy depends on the variables of head and flow rate. Exploitable hydroelectric potential worldwide is 14,000 TWh/y. 60% of this capacity is used in Europe and North America. 10% of the said capacity is being used in the other regions of the world, while 30% thereof awaits exploitation. Share of small hydroelectric power plants (HEPPs) in the worlds hydroelectric potential is 5-10% in the World, while 2% in Turkey. But the topographical and hydraulic structure of our country is suitable for this ratio to rise to 10% level.
With her 433 billion kwh technical hydroelectric potential, Turkey has 1% share in the worlds hydroelectric potential, and approximately 15% share in the economic potential of Europe with her 129.9 billion kwh economically feasible hydroelectric potential. In Turkey, total flow of the water resources in 26 river basins is at 186 km3/y level. The basins having the biggest shares therein are
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Table 2 shows the hydroelectric energy potential of our country as of the year 2007, by status of projects.
Table 2: Breakdown of Turkeys Hydroelectric Energy Potential by Status of Projects (February 2007) Status of Hydroelectric Power Plant Projects Under operation Under construction Final design ready Planning ready Master plan ready Preliminary Study Ready TOTAL POTENTIAL Number of Projects 142 41 13 176 99 301 772 Installed Capacity (MW) 12,788 4,397 2,356 7,269 5,260 4,474 36,544 Annual Average Energy (GWh) 45,930 14,351 6,919 26,415 18,280 17,559 129,454 Share % 36 11 5 20 14 14 100
Until establishment of TEK (Turkish Electricity Authority) in 1970 which was the first institutional structure in the sector, electricity generation, transmission and distribution were carried out by Etibank (State Mining-Banking Concern), DS (The Directorate General of State Water Works), EE, private privileged companies, municipalities and autoproducers. With the establishment of TEK, the mission of electricity generation and distribution was given to it. With the Cabinet Decision, TEK was split into two companies in 1993, named Turkish Electricity Distribution Company (TEDA) and Turkish Electricity Generation-Transmission Company (TEAS). While TEDA is responsible for distribution market, TEAS is responsible for generation and transmission markets. Conveniently to liberalization process in sector, third restructure existed in 2001 by the Electricity Market Law no. 4628. Under the law, the electricity
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With the Cabinet Decision according to the said law, TEAS was split into three independent divisions named Turkish Electricity Transmission Co. Inc. (TEAS), Turkish Electricity Trading & Contracting Co. Inc. (TETAS) and Electricity Generation Co. Inc. (EUAS). With the said law Energy Market Regulatory Board established and be responsible for the regulations to be made in the electricity sector. It is envisaged that the transmission line will remain under public monopoly and that generation and distribution facilities will be gradually transferred to the private sector through privatization. Transmission and distribution markets will be subject to regulation, while wholesale and retail sale markets will be opened to competition.
Pursuant to Electricity Market Law no. 4628; generation activities involve conversion of energy resources into electrical energy at power generation plants. Generation activities are carried out by EUAS, privatesector generation companies and an autoproducer or a group of autoproducers. License-holder legal persons in this scope may sell the capacity and/or electrical energy produced by themselves to wholesale license-holder legal persons, to retail license-holder legal persons and to eligible consumers through bilateral agreements.
Table 3 gives the breakdown by generation institutions of Turkeys electrical energy installed capacity.
As seen from Table 3, as the year 2008 Turkeys electrical energy total installed capacity is 41,748 MW, thermic total is 27,534 MW, geothermal total is 30 MW, wind total is 355 MW and hydroelectric total is 13,829 MW.
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Table 3: Breakdown of the Installed Capacity by Institutions 1998 1999 2000 2001
INSTITUTIONS
Thermic Hydro Geothermal TOTAL 10,046 9,498 18 19,562 --11,400 9,701 18 21,119 79 11,256 9,977 18 21,251 91 10,936 10,109 18 21,063 297 10,932 10,109 18 21,059 622 9,108 10,990 15 20,113 795 9,100 10,995 15 20,110 780 9,780 11,110 15 20,905 750 12,540 11,160 15 23,715 725 12,525 11,335 15 23,875 263
Mobile Plants
Thermic
Privileged Companies
Auto producers
3,525
Thermic Hydro TOTAL Thermic Hydro Wind TOTAL Thermic Hydro Wind Geothermal TOTAL Thermic Hydro TOTAL 106 611 717 2,292 14 2 2,308 576 185 7 --768 -------19,568 12,241 18 19 31,846 21,293 14,259 15 19 35,586 22,464 14,325 15 19 36,823 24,222 14,586 15 20 38,843 --611 611 2,632 22 2 2,656 1,445 203 7 --1,655 ---------611 611 2,955 39 2 2,996 1,450 518 17 --1,985 300 30 330 ---611 611 3,319 53 2 3,374 1,450 871 17 --2,338 620 30 650 ---1,120 1,120 3,634 100 2 3,736 3,760 882 17 --4,659 620 30 650 --------3,900 640 2 4,542 6,870 919 17 --7,806 620 30 650 1,680 ----3,725 653 2 4,380 8,239 967 17 --9,223 620 30 650 1,680 ------3,497 563 3 4,063 9,576 1,204 17 --10,797 620 30 650 1,680
TOTAL
------3,153 563 1 3,717 10,391 1,309 57 --11,757 620 30 650 1,680 27,429 13,062 15 58 40,564
------3,175 558 1 3,734 10,689 1,456 145 23 12,313 620 30 650 --27,272 13,379 38 146 40,835
Thermic 13,020 15,556 16,052 16,622 Hydro 10,307 10,537 11,175 11,673 TOTAL INSTALLED Geothermal 18 18 18 18 CAPACITY OF Wind 9 9 19 19 TURKEY TOTAL 23,354 26,120 27,264 28,332 Source: Ministry of Energy and Natural Resources, TEAS, EE, TEDA, EUAS.
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Activities aimed at liberalization of the market and the reform applications in the energy sector particularly beginning from 2001 have caused the contribution of the private sector to installed power capacity to rise from 26% in 2001 to 43% at the end of 2008.
4.5.2. Generation
In Turkey, electrical energy generation is predominantly obtained from thermic power plants, followed by hydroelectric power plants, the lowest generation contribution is obtained from geothermal and wind power plants. Table 5 gives breakdown of electrical energy generation in Turkey by generation institutions.
As the year 2008 electrical energy generation in Turkey increased %3 relative to the previous year and reached 198.330 GWh. 17% (33.265 GWh) of this generation was received from hydroelectric power plants, also 82% (164.106 GWh) of this generation received from thermic power plants.
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Table 5: The Breakdown of Electricity Generation by Institutions 1999 2000 2001 2002
INSTITUTIONS
97,859
323
14,437 68,188
15,325 74,253
15,327
80,214 293
2,021 2,021 22,575 546 5 23,127 42,731 2,674 56 2,730 45,269 2,558 4,256 61 4,317 2,591 105,102 35,329 150 140,581 99,086 46,083 149 150,698 115,712 39,561 153 161,957
----22,196 1,557 5 23,758 49,851 3,797 52 2,849 53,700 1,288 3,874 61 3,935 5,379
----16,247 835 6 17,088 62,738 3,618 53 3,671 66,409 878 4,058 62 4,120 6,531
4,315
Thermic 60,494 65,387 65,864 50,924 Hydro 31,737 27,772 20,409 26,304 EUAS and Its Geothermal 81 76 90 105 Subsidiaries TOTAL 92,312 93,234 86,363 77,333 Thermic --------ADA Hydro ----------------TOTAL Hydro 2,169 1,903 1,346 4,507 Privileged Companies TOTAL 2,169 1,903 1,346 4,507 Thermic 12,493 15,895 17,797 20,225 Hydro 33 63 112 217 Autoproducers Wind 4 4 4 4 TOTAL 12,530 15,962 17,913 20,446 Thermic 8,469 10,936 11,151 17,084 Hydro 739 1,073 2,071 2,570 Generation Wind 16 29 57 44 Companies Hydro+Wind 755 1,102 2,128 2,614 TOTAL 9,224 12,039 13,279 19,698 Mobile Plants Thermic 205 643 1,117 3,209 Transferring of Thermic -1,073 2,634 4,120 Operation Hydro -68 73 85 Rights TOTAL -1,141 2,707 4,205 Administration ----TOTAL of Privatization TOTAL Thermic 81,661 93,934 98,563 95,562 ELECTRICITY Hydro 34,678 30,879 24,011 33,683 GENERATION Geo.+Wind 101 109 151 153 OF 116,440 124,922 122,725 129,398 TOTAL TURKEY Source: Ministry of Energy and Natural Resources, TEAS, EE, TEDA, EUAS.
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Lignite is second after natural gas in electrical consumption by fuel types. 20% of electrical energy generation exists from lignite, 18.7% is hydraulic, 6.2% is imported coal, 4% is liquid fuels, %1.6 is coal and the rest is other sources.
Percentage of public and private sector in electrical energy generation is given in Table 6.
Table 6: Percentage Distribution of Electricity Generation (%) Years 2001 2002 2003 2004 2005 2006 2007 2008 Source: Table 5 Public Sector 70 60 43 43 43 48 48 49 Private Sector 30 40 57 57 57 52 52 51 Total 100 100 100 100 100 100 100 100
While the share of the public sector in the electrical energy installed capacity was close to its contribution to generation by years, the public sector realized only 49% of generation in 2008 while owning 57% of the installed capacity. This stems from low-capacity operation of existing power plants of EUAS and its subsidiaries and/or decommissioning of some power plants, depending on the new Electricity Market Law. An increase in favor of private sector is expected in electricity generation, as in the case of installed capacity.
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Table 7: The Gross Demand Of The Electricity Sector Gross Generation 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 86,247 94,862 103,296 111,023 116,440 124,922 122,725 129,398 140,581 150,698 161,957 176,300 191,558 --270 2,492 3,299 2,330 3,791 4,579 3,588 1,158 464 636 573 864 695 343 271 298 285 437 433 435 588 1,144 1,798 2,236 2,422
(GWh)
Years
Import
Export
Gross Demand*
85,552 94,789 105,517 114,024 116,388 128,276 126,871 132,554 141,151 150,018 160,795 174,637 190,000
Source: Ministry of Energy and Natural Resources (*): Transmission & distribution loss and internal consumption of the power plants are not included in the gross demand (Gross Demand =Gross Generation+Import-Export) As will be seen in Table 7, electricity demand is mostly met by generation. Electricity imports do not exceed 4% of gross demand even in the years when relatively more imports have been made. Turkey imports electricity from Georgia and Turkmenistan. Exports, on the other hand, increase of late three years. The main countries to which we export electricity are Azerbaijan and Iraq.
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Gross electricity demand includes the internal consumption quantities (i.e. internal requirements) of the power plants as well. The electricity quantity delivered to the interconnected system does not reach the consumers in whole. The difference in between represents the network losses arising in the system due to transmission and distribution losses. Consequently, network losses should be deducted from the electricity quantity delivered to the system in order to calculate the net electricity consumption. Table 8 gives Turkeys net electricity consumption quantities by years, which have been calculated in this manner.
Table 8: Net Electricity Consumption in Turkey Domestic Years 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 Gross Demand 85,552 94,789 105,517 114,024 118,485 128,276 126,871 132,554 141,151 150,018 160,795 174,637 190,000 Demand 4,389 4,777 5,050 5,523 5,738 6,224 6,473 5,673 5,332 5,633 6,487 6,757 8,218 Losses of System 13,769 15,855 18,582 20,795 21,545 23,756 23,329 23,932 24,053 23,243 24,044 24,810 26,647
(GWh) Net Consumption 67,394 74,157 81,885 87,705 91,202 98,296 97,069 102,949 111,766 121,142 130,264 143,070 155,135
Starting from the year 1995, Turkeys net electricity consumption has increased, excepting the year 2001. In 2001, generation and consequently consumption declined due to the crisis experienced in Turkey. There was a 1% drop in gross demand and net consumption. Gross demand annually increase 6.9% also net consumption annually increase 7.2% between the years 1995-2007.
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Table 9: Electrical Energy Consumption on Sector Basis House Years 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 GWh 20,034 22,584 23,888 23,557 23,559 25,195 27,619 30,935 34,466 36,476 % 23 25 24 24 23 23 23 24 24 24 Commerce GWh 7,734 8,208 9,339 9,908 10,867 12,872 15,656 18,544 20,256 23,141 % 9 9 10 10 11 12 13 14 14 15 Industry GWh 46,139 46,480 48,842 46,989 50,489 55,099 59,566 62,294 68,027 73,795 % 53 51 50 48 49 49 49 48 48 48 Other GWh 13,798 13,929 16,227 16,616 18,032 18,600 18,301 18,490 20,321 21,724 % 16 15 17 17 18 17 15 14 14 14 Total GWh 87,705 91,202 98,296 97,070 102,948 111,766 121,142 130,263 143,070 155,135
Source: TEDA
As seen in Table 9, industrial sector takes the most share from electrical energy consumption. Generally electrical energy consumptions shares in total electric consumption do not change year to year.
Preparing demand forecasts of the electricity sector in Turkey is done by the Research-PlanningCoordination Department of TEAS (Turkish Electricity Transmission Corp.).
Table 10 gives generation-consumption balance showing how the electrical energy demand foreseen for the next 10 years will be met by taking into consideration the generation facilities which exist, which are under construction, for which license has been issued up to December 2007.
As seen on Table 10, for some years energy demand exceeds energy supply. Thus in these years stand-by energy turns into negative value.
31
10.1.
Receiving the Total Demand With Total Project Generation Capacity of Plants That Exists, in Operation , Under Construction and Taken Out
License (GWH)
YEARS 204,000 238,306 16.8 780 239,086 17.2 2,168 7,569 18,722 36,494 51,374 8.8 1.9 -5.4 -9.8 -16.2 58,730 238,251 240,748 240,097 246,128 245,715 2,384 5,260 5,408 11,288 11,288 7.7 -0.3 -7.5 -13.9 -20.0 -26.3 15,121 247,504 -21.5 61,062 235,867 235,488 234,689 234,840 234,427 232,383 219,013 236,182 253,837 272,812 293,205 315,123 338,679 232,957 -31.2 16,826 249,783 -26.2 61,062
2008
2009
2010
2011
2012
2013
2014
2015
1.Energy Demand
2.Existing Capacity
8. Existing Capacity + Cap. Under Construction+ Cap. Taken Out License 241,254 18.3 350 241,604 18.4 14.8 19.6 251,434 282,577 323,774 27.6 5,614 23,107 47,183 12.2 9.9 9.0 245,820
259,47 0
9.1 71,827 369,329 35.4
276,59 1
297,50 2
304,44 5
3.8 96,907 401,352 36.9
308,56 6
-2.1 124,287 432,853 37.4
310,84 5
-8.2 153,337 464,182 37.1
311,44 4
-14.4 172,389 483,833 33.0
307,004
-21.4 196,095 503,099 28.8
10.Added Capacity
11. Existing Capacity + Cap. Under Construction+ Cap. Taken Out License+ Added Capacity
32
10.2.
Receiving the Total Demand With Total Reliable Generation Capacity of Plants That Exists, in Operation , Under Construction and Taken Out
License (GWH)
2008 204,000 209,581 2.7 496 210,077 3.0 1,925 6,554 15,196 28,934 40,724 46,026 -3.5 -9.4 -15.6 -16.6 -23.0 211,310 213,885 214,335 227,602 225,886 227,604 -27.8 47,340 1,494 3,275 3,326 8,932 8,932 11,391 -4.2 -10.8 -16.9 -19.8 -26.0 -31.4 209,816 210,60 211,009 218,670 216,954 216,213 216,267 -36.1 12,520 228,787 -32.4 47,340 219,013 236,182 253,837 272,812 293,205 315,123 338,679 2009 2010 2011 2012 2013 2014 2015 2016 363,695 217,386 -40.2 12,520 229,906 -36.8 47,340 2017 390,559 212,938 -45.5 12,520 225,458 -42.3 47,340
YEARS
1.Energy Demand
2.Existing Capacity
8. Existing Capacity + Cap. Under Construction+ Cap. Taken Out License 212,001 3.9 175 212,176 4.0 1.9 6.0 12.9 223,128 250,365 286,535 5,264 21,285 43,267 65,548 333,874 22.4 -0.5 -3.0 -4.2 -1.6 217,864
229,08 0
243,26 8
268,32 6
271,91 2
-7.3 88,024 359,936 22.8
274,94 3
-12.8 112,668 387,611 23.0
276,12 6
-18.5 139,243 415,369 22.6
277,24 6
-23.8 155,965 433,211 19.1
272,797
-30.2 177,355 450,152 15.3
10.Added Capacity
11. Existing Capacity + Cap. Under Construction+ Cap. Taken Out License+ Added Capacity
33
Electrical energy demand increased at an average rate of 8.3% per year in last decade and is forecast to reach 236.1 billion kwh in the year 2010, 390.5 billion kwh in the year 2017. Results of project generation-consumption power balance indicate that stand-by power will become minus in the year 2010. Also reliable generation-consumption power balance indicate that stand-by power will become minus in the year 2009.
In the project generation-consumption balances prepared according to existing plants, stand-by generation will decrease by the end of 2008, become minus in the year 2010 (-0.3%) and will reach to -41.3% in the year 2017.
In the project generation-consumption balances prepared according to existing and under construction plants, stand-by generation will decrease by the end of 2008, become minus in the year 2011 (-5.4%) and will reach to -37% in the year 2017.
In the project generation-consumption balances prepared according to existing, under construction, taken out license plants, stand-by generation will decrease by the end of 2008, become minus in the year 2014 (-2.1%) and will reach to -21.4% in the year 2017.
In the relaible generation-consumption balances prepared according to existing plants, stand-by generation will decrease by the end of 2008, become minus in the year 2009 (-4.2%) and will reach to -45.5% in the year 2017.
In the project generation-consumption balances prepared according to existing and under construction plants, stand-by generation will decrease by the end of 2008, become minus in the year 2009 (-3.5%) and will reach to -42.3% in the year 2017.
In the project generation-consumption balances prepared according to existing, under construction and taken out license plants, stand-by generation will decrease by the end of 2008, become minus in the year 2009 (-0.5%) and will reach to -30.2% in the year 2017.
X Energy Electricity Generation Industry and Trade Corp. will generate electricity from the XYZ Regulator and HEPP located in Seyhan County in Adana province. The HEPP will be established on Seyhan River.
According to license mentioned; installed capacity is 4.60 MW. But in the technical evaluation part of the project it is calculated 4.825 MW.
34
Pursuant to article 18 of the License Regulation, the generation license is issued for a minimum of 10 years, and a maximum of 49 years at a time. According to article 12 of the License Regulation, the legal entities applying for licenses for construction of facilities based on domestic natural resources and renewable energy resources annual license fee is not collected for the first 8 years following the facility completion date inserted in their respective licenses for the generation facilities based on renewable energy resources. If there occurs a delay exceeding 10% of the facility completion period, indicated in the generation, the licensees shall not benefit from the exception of not paying annual license fees for the first 8 years as indicated in the Regulation.
Furthermore, pursuant to article 38 of the said Regulation, TEAS and/or distribution-license-holder legal entities are obligated to give priority to the generation facilities based on local natural resources and renewable energy resources in making connection to the system.
According to the License Regulation, customers consist of the following legal persons: Wholesale companies, retail sale companies, distribution companies holding retail sale license (TEDA), eligible consumers.
At present, TEDA is the only distribution company holding retail sale license in Turkey. Pursuant to the last paragraph of article 30 of the License Regulation, companies may sell the whole surplus energy to TEDA.
The whole of the generation quantities taken as basis for revenue calculated after deduction of technical losses from the average generation quantities of HEPPs is offered for sale. As is known, electricity is a product which should be consumed as soon as it is generated and consequently, it is not storable in this sense.
According to the technical evaluation part of the project, installed capacity is 4.825 MW and 15,.864,878 kwh energy will be generated annually average.
35
Pursuant to the Electric Market Law, priority is given to purchase of electricity amounts put into market by power plants generating electricity from renewable energy sources. Therefore, TEDA is responsible of purchasing all of electricity generated from renewable energy sources. So the generation quantity taken as basis for revenue (15.864.878 kwh) at XYZ HEPP can be sold to TEDA from Turkey Average Electricity Total Selling Price.
Table 11. X Energy Corp. Electricity Selling Price GENERATION QUANTITY TAKEN AS BASIS FOR REVENUE (kwh) 15.864.878 12.82 0.0833 SELLING PRICE (ykr/kwh) SELLING PRICE (usd/kwh)
(*):Exchange rate of Central Bank of the Republic of Turkey dated on 10.04.2009, 1 USD=1,5397 TL
The search for consumers, depending on market conditions, rival firms, sales and competition possibilities, is not related with how to sell the power generated, but with how high a profit margin it can be sold. In economic sense, there is no market share limit to the sales quantities; the only limit is the generation quantities of power plants. As detailed in the technical examination and evaluation section of the report, since generation quantity of HEPPs depends on flow rate, it can differ from year to year, as well as among months. Therefore, the quantity that can be generated is calculated as an average figure. Since there is no economic limit to the sale of the said quantities, the whole of the average generation quantities calculated in the technical examination part can be sold. Due to all these reasons, no economic capacity utilization rate is estimated for XYZ HEPP and it is foreseen that the whole of the generation quantities taken as basis for revenue, as stated in the section on technical examination and evaluation, can be sold.
36
5. FINANCIAL EVALUATION
(USD)
ITEMS / YEARS 100% 660.478 603.143 57.335 100.099 0 0 0 57.335 100.099 0 (2.138) 59.473 301.462 15.866 21.155 0 338.483 407.664 0 25.479 19.109 363.076 84.621 101.916 423.104 509.581 0 0 0 542.469 108.494 433.976 0 27.123 20.343 386.509 423.104 509.581 542.469 897.853 811.376 778.487 1.320.957 1.320.957 1.320.957 100% 100% 100% 100%
2011
2012
2013
2014
2015
712.710 608.247
11 - Dividends ((10-(11+12))*%5
37
CUR
A - Cash Inflows
a . Operating ncome
- Domestic Slaes
- Export
b . Stock Difference
2 - K.K.D.P. + Tevik Primi 95.741 536.710 128.583 128.583 0 0 0 (2.138) 0 (2.138) 0 408.127 208.127 200.000 372.640 374.254 746.895 0 843.333 287.778 555.556 15.866 84.621 100.487 0 0 0 0 0 121.025 101.916 19.109 0 810.444 254.889 555.556 257.165 257.165 257.165 257.165 257.165 257.165 1.001.922 1.200.986 1.188.635 191.483 191.483 191.483 116.452 1.163.557 257.165 257.165 0 0 128.836 108.494 20.343 0 777.556 222.000 555.556 1.138.479 257.165 257.165 0 0 136.648 115.072 21.576 0 744.667 189.111 555.556
3 - Deductable VAT
B - Cash Outflows
a . Operating Expenses
b . Stok Fark
a . Taxes
b . Dividend Payout
c . kramiye
3 - Installment Payments
a . Interest Payments
b . Principal Payments
219.510
1,53
1,48
1,37
1,33
1,30
38
COST / YEARS
CUR
Depreciation
Selling Expense
Financial Expenses
(USD)
Discount Rate
ITEMS / YEARS
2015
2016
Investment Expenditures
Depreciation
Taxes to be paid
Financial Expenses
(6.924.609)
(6.924.609)
1.919.823
(6.924.609)
(6.432.113)
(5.520.083)
(4.742.785)
(4.035.778)
(3.385.618)
(2.787.763)
39
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 1,53 1,48 1,37 1,33 1,30 1,29 1,34 1,40 1,46
1,54 1,68 1,37 1,40 1,35 1,25 1,29 1,34 1,40 1,46 1,53
219.510 510.518 311.454 323.805 273.851 182.478 207.555 232.633 257.711 282.789 307.866
40
(US $)
31.12.2010
YEARS
COST ITEMS 20.000 6.658.223 350.000 10.000 3.290.455 2.277.770 95.000 0 120.000 0 30.000 85.342 399.657 6.678.223 40.778 6.719.000 0 0 4.467.000 40.778 4.426.223 2.252.000 0 2.252.000 0 85.342 399.657 0 0 30.000 0 0 0 0 0 0 106.651 1.203.157 0 1.203.157 0 0 0 120.000 0 0 0 0 10.000 85.000 0 230.770 2.047.000 0 3.290.455 0 716.506 10.000 0 10.000 350.000 0 350.000 4.406.223 2.252.000 1.183.157 0 20.000 0 20.000
TOTAL
LOCAL
FOREIGN
LOCAL
FOREIGN
LOCAL
FOREIGN
A - Land
B - Fxed Investment
2.124.094
1.472.900
3 - Civil Works
7 - Mounting
40.000
8 - Vehicles,Fixtures
9 - Start-up Expenses
2.124.094
1.472.900
41
(DOLLAR)
EXPENDITURE ITEMS
A - Generation Cost
4 - Electric
5 - Fuel
6 - Water
10,0% 2,0%
B - Sales Expenses
: :
: :
42
(US $)
WORKING TOTAL TIME (DAY) 30 30 30 0 0 0 30 30 73.040 135.260 116.905 140.260 0 0 0 0 9.742 6.087 116.905 140.260 0 0 5.000 0 20.000 0 0 23.865 0 1.989 0 0 0 0 0 0 11.688 11.272 (FIXED) (VARIABLE) (FIXED) (VARIABLE) AMOUNT AMOUNT AMOUNT AMOUNT TOTAL CAPITAL CAPITAL
WORKING
ITEMS
1 . RAW MATERIALS
2 . AUXILIARY MATERIALS
3 . OPERATING MATERIALS
5 . WORK-IN-PROCESS INVENTORY
6 . FUEL
7 . RECEIVABLES ON SALES
8 . CASH IN HAND
TOTAL
350.715
420.780
17.818
22.960
40.778
43
ANNUAL OPERATING INCOME AT FULL CAPACITY TOTAL SALES AMOUNT UNIT PRICE UNIT ($)
PRODUCTS
ELECTRICITY
15.864.878
EXPORT
TOTAL OF EXPORT
1 $=1,5397 TL 0,083262973 $
1 kwh = 12,82ykr =
5 . FINANCIAL EVALUATION
(USD)
TOTAL TOTAL 20.000 6.658.224 205.608 0 6.883.832 40.778 40.778 786.640 7.711.250 5.459.250 2.252.000 80.788 40.778 40.778 786.640 0 0 0 40.330 40.330 40.459 4.631.832 2.252.000 1.209.738 (40.330) (40.330) 214.768 1.384.177 20.000 4.406.224 205.608 0 0 2.252.000 0 0 20.000 1.183.157 6.581 DOMESTIC FOREIGN DOMESTIC DOMESTIC DOMESTIC 0 2.124.094 92.667 31.03.2009 31.12.2009 31.12.2010 FOREIGN 0 1.472.900
YEARS
A - Land B - Fixed Investment Cost C - Interest Expenses D - Differences in Foreign Exchange Rates
1.472.900 0 0 0 1.472.900
TOTAL FINANCIAL SOURCES 2.138.610 1.575.610 563.000 79.675 79.675 282.632 282.632 0 770.624 476.402 337.057 (42.835) (42.835) 1.114 1.689.000 1.238.600 1.238.600 450.400 572.640 572.640 0 5.459.250 0 0 0 2.252.000 1.114 1.101.545 887.368 650.736 650.736 236.631 214.177 214.177 1.803.551 1.593.071 1.168.252 1.168.252 424.819 210.481 210.481 368.225 368.225 0
A - Equities 838.709 1.400.000 (100.099) (100.099) 5.572.640 5.000.000 3.650.000 3.650.000 1.350.000 572.640 572.640 0 7.711.250 3.311.000 2.411.400 2.411.400 899.600 3.883.640 838.709 837.000 (100.099) (100.099) 0 563.000 0 0 1.689.000
B - Liabilities
1 - Medium and Long Term Liabilities 1. 1 - Medium and Long Term Bank Loans Energy Loan CTF Loan
80.789
1.384.177
2.574.175
1.472.900
45