Using Natural Gas Resources to De-Risk Renewable Energy Investments in Lower-Income Countries
Abstract
:1. Introduction
2. The Integrated Energy Contract
2.1. Rationale
2.2. Structure
3. Materials and Methods
3.1. Details of the Integrated Energy Contracts
3.2. Elements of the Monte Carlo Simulations
- The approach adopted to compute the country-specific gas price forecasts;
- The reasoning behind the assumed discount rates for the upstream and renewable energy projects;
- The parametrization of the various estimates used in the simulations.
3.2.1. Country-Specific Natural Gas Prices
Forecasting Hub Prices
Linking Country-Specific Prices to Hub Prices
3.2.2. Discount Rates
3.2.3. Upstream Gas and Renewable Energy Estimates
4. Results and Discussion
- The effectiveness of the guarantee mechanism in protecting against the risk of off-taker default;
- The benefits that the considered countries achieve from the proposed integrated energy contract.
4.1. Guarantee Protection
4.2. Country Results of the Integrated Energy Contract
4.3. Discussion
5. Conclusions
Supplementary Materials
Author Contributions
Funding
Data Availability Statement
Acknowledgments
Conflicts of Interest
References
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Country | Natural Gas Reserves (Tcf) a | Access to Electricity b | Total Electricity Capacity (MW) b | Renewable Electricity Capacity (MW) b | Share of Renewable Electricity Generation b | Renewable Energy Targets in 2030 (MW or Share of Total Generation) c | |
---|---|---|---|---|---|---|---|
Hydro | Non-Hydro | ||||||
Angola | 12.1 | 45% | 5931 | 3729 | 64 | 72% | Hydro: 6310 Non-Hydro: 1740 |
Bolivia | 10.7 | 93% | 3537 | 736 | 321 | 36% | 81% |
Egypt | 63 | 100% | 59,420 | 2832 | 3139 | 9% | 42% |
India | 48.8 | 95% | 452,308 | 45,955 | 88,302 | 17% | 500,000 |
Indonesia | 49.7 | 99% | 70,387 | 6210 | 4344 | 16% | 21,650 |
Mozambique | 100 | 31% | 2915 | 2204 | 109 | 95% | NA |
Myanmar | 22.5 | 66% | 7336 | 3304 | 144 | 52% | Hydro: 5676 Non-Hydro: 3070 |
Nigeria | 203.4 | 57% | 13,154 | 2153 | 41 | 25% | Hydro: 17,653 Non-Hydro: 22,741 |
Pakistan | 20.9 | 73% | 39,428 | 10,002 | 2404 | 31% | 60% |
PNG d | 6.5 | 59% | 1037 | 258 | 75 | 63% | 78% |
Syria | 8.5 | 86% | 8625 | 1490 | 10 | 3% | 10% |
Ukraine | 39 | 100% | 57,643 | 4819 | 8945 | 8% | 13.2% |
Uzbekistan | 65 | 100% | 16,041 | 2005 | 4 | 11% | 25% |
Viet Nam | 24.7 | 100% | 69,355 | 18,165 | 17,484 | 43% | NA |
Yemen | 16.9 | 62% | 1947 | 0 | 253 | 14% | NA |
Energy Company | Renewable Energy Capacity Target in 2030 (GW) |
---|---|
TotalEnergies [40] | 100 |
BP [41] | 50 |
Eni [42] | 15 |
Repsol [43] | 15 |
Equinor [44] | 12 to 16 |
Parameter | Value |
---|---|
PV | |
Years of construction | 1 |
(Weight of debt) | 80% |
(Default spread of RE projects) | 2% |
(USD risk free rate) | 2.14% |
Upstream | |
Years of construction | 5 |
State | |
State discount rate a | 11% |
Country | Added PV Capacity (MW) | % of 2030 RE Target Capacity Additions Achieved | % Increase in Total Electricity Capacity | Positive FID Rate |
---|---|---|---|---|
Angola | 1369 | 32% | 23% | 49% |
Bolivia | 1934 | NA | 55% | 55% |
Egypt | 7904 | NA | 13% | 48% |
India | 14,187 | 4% | 3% | 76% |
Indonesia | 6635 | 60% | 9% | 64% |
Mozambique | 9792 | NA | 336% | 31% |
Myanmar | 3467 | 65% | 47% | 76% |
Nigeria | 26,762 | 70% | 203% | 61% |
Pakistan | 4135 | NA | 10% | 85% |
PNG | 985 | NA | 95% | 72% |
Syria | 1082 | NA | 13% | 53% |
Ukraine | 8235 | NA | 14% | 81% |
Uzbekistan | 10,965 | NA | 68% | 66% |
Viet Nam | 3906 | NA | 6% | 79% |
Yemen | 2138 | NA | 110% | 55% |
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Olleik, M.; Hamie, H.; Auer, H. Using Natural Gas Resources to De-Risk Renewable Energy Investments in Lower-Income Countries. Energies 2022, 15, 1651. https://doi.org/10.3390/en15051651
Olleik M, Hamie H, Auer H. Using Natural Gas Resources to De-Risk Renewable Energy Investments in Lower-Income Countries. Energies. 2022; 15(5):1651. https://doi.org/10.3390/en15051651
Chicago/Turabian StyleOlleik, Majd, Hassan Hamie, and Hans Auer. 2022. "Using Natural Gas Resources to De-Risk Renewable Energy Investments in Lower-Income Countries" Energies 15, no. 5: 1651. https://doi.org/10.3390/en15051651