Curaçao, “the solar energy Caribbean paradise” Dr. Arnoldus M. van den Hurk Mir arnold@vandenhurkmir.com
Arnold Holding Ltd. -‐ Curaçao, "The Solar Energy Caribbean Paradise"
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Comments about the video • ... 970 Trillion of kWh of energy falling from the skies every day ... • That means about .... 200 Trillion of USD falling from the skies every day – Or … 3.13 Smes 2011’s world GDP
• That means about ... 6,200 Trillion every month – Or about … 100 Smes the 2011’s world GDP
• That means about ... 52 quadrillion of US dollars falling every year – Or about … 800 Smes the 2011’s world GDP
• During 25 years of the average of an investment Solar PV project,
– over than 1.3 quinSllion of dollars of potenSal income are waiSng for investors
Arnold Holding Ltd. -‐ Curaçao, "The Solar Energy Caribbean Paradise"
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What is a solar energy paradise? • In technical terms, a paradise in solar energy is the region with a combinaSon of … – HIGH SOLAR IRRADIATION – HIGH ELECTRICITY PRICES
• But in “financial terms”, a solar energy paradise needs another keystone … – LOW “WACC” which means
• RelaSve low “Cost of Debt” • Moderate to Low “Return of Equity”
• Let's see if the island of Curaçao meets these requirements Arnold Holding Ltd. -‐ Curaçao, "The Solar Energy Caribbean Paradise"
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What are the key points to become a Solar Photovoltaic Paradise ? • The following keystones must be mastered in order to succeed in the investment of a solar photovoltaic plant 1. 2. 3. 4. 5. 6. 7. 8. 9. 10.
•
Solar Resources -‐ IrradiaSon kWh/m2 Electricity Prices, present and future Right selecSon of type of solar energy technology and EPC A good system Performance RaSo Professional OperaSon & Maintenance Land /Roohop Rental Insurances Corporate Tax Loan amounts and interest rates Debt / Equity RaSo and WACC
Would you like to know how these key issues affect the Internal Rate of Return on an investment in a 1 MWp installaSon at Curacao? –
Shall we go!!
Arnold Holding Ltd. -‐ Curaçao, "The Solar Energy Caribbean Paradise"
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1. Solar Resources: kWh/m2 • The model is based on 1 MW installaSon – Debt/Equity RaSo of 50/50% – Cost of Debt 5.72% -‐ Return of Equity 11.43%
Arnold Holding Ltd. -‐ Curaçao, "The Solar Energy Caribbean Paradise"
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2a. Electricity current Prices •
Average electricity prices can be derived for market segments. In general, electricity prices are a funcSon
– of fuel cost, capital cost, labour cost, grid cost, energy taxes, energy subsidies, greenhouse gas (GHG), emission cost and profit margins of generaSon, transmission and distribuSon companies.
•
We’ll compare how the electricity tariffs of other ciSes would affect the IRR in a PV Solar Curaçao
Arnold Holding Ltd. -‐ Curaçao, "The Solar Energy Caribbean Paradise"
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2b. Electricity Prices … future trends • Future trends on electricity price in Curaçao
– Based on tariff evoluSon of last decade, the current tariff prices trend based on the evoluSon of last decade points to a yearly basis increase of 4.793% during next 25 years
• How sensible it the IRR to other changes in tariff evoluSon in 1 MW PV Solar plant?
Arnold Holding Ltd. -‐ Curaçao, "The Solar Energy Caribbean Paradise"
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3. SelecSon of the appropriate solar energy technology and EPC
Arnold Holding Ltd. -‐ Curaçao, "The Solar Energy Caribbean Paradise"
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4. System Performance RaSo • How the Performance RaSo affect on the Profitability of a PV System and, consequently, the IRR:
Arnold Holding Ltd. -‐ Curaçao, "The Solar Energy Caribbean Paradise"
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5. OperaSon & Maintenance • O&M are not so important than in other power electricity generaSon opSons (wind, fossil fuels, etc.)
– This factor also implies a lower impact over the IRR than in other studied variables Sensi&bily*analysis*O&M*vs*IRR* 35,00%) 30,00%) 25,00%) 20,00%) 15,00%) 10,00%) 5,00%) 0,00%)
Scenario)1)
Scenario)2)
Scenario)3)
Scenario)4)
O&M)(%)Net)Income))
9,50%)
7,04%)
3,52%)
2,50%)
IRR)
28,75%)
29,54%)
30,23%)
30,98%)
Arnold Holding Ltd. -‐ Curaçao, "The Solar Energy Caribbean Paradise"
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6. Land /Roohop Rental • How land rental affect on the profitability of 1 MW PV system at Curaçao?
Arnold Holding Ltd. -‐ Curaçao, "The Solar Energy Caribbean Paradise"
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7. Insurances • How cost of insurances affect on the profitability of 1 MW PV plant – Three examples
Arnold Holding Ltd. -‐ Curaçao, "The Solar Energy Caribbean Paradise"
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8. Corporate Tax
Arnold Holding Ltd. -‐ Curaçao, "The Solar Energy Caribbean Paradise"
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9. Interest rates • How the interest rates affect the IRR of an solar PV investment in …
Arnold Holding Ltd. -‐ Curaçao, "The Solar Energy Caribbean Paradise"
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10. Debt / Equity RaSo • How Debt/Equity RaSo affects on the investment structure for 1 MW PV and the WACC rate: – 5.33% cost of debt and 10.66% return on Equity
Arnold Holding Ltd. -‐ Curaçao, "The Solar Energy Caribbean Paradise"
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PV Americas Paradise Map 2010 • GRAPHIC OF THE STUDY OF Q-‐Cells
Curaçao (0.235)
Arnold Holding Ltd. -‐ Curaçao, "The Solar Energy Caribbean Paradise"
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PV Americas Paradise Map 2020 Curaçao (0.342)
Arnold Holding Ltd. -‐ Curaçao, "The Solar Energy Caribbean Paradise"
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CONCLUSIONS – The Candidates and the winner is … FRANKFURT LOS ANGELES IRR IRR
BARCELONA Equity IIR
CURAÇAO IRR
1. RadiaSon
4
2
3
1
2. Electricity Prices
3
2
4
1
5. O&M
3
4
1
2
6. Land costs
4
1
2
3
7. Insurances
3
4
1
2
8. Corporate Tax
3
4
2
1
9. Interest Rate
1
2
4
3
10. Debt /Equity
2
1
4
3
76,19%
100,00%
RATIO
69,57%
80,00%
Arnold Holding Ltd. -‐ Curaçao, "The Solar Energy Caribbean Paradise"
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Coming back to video • •
... 2.70 billion of kWh of energy fall from the skies every day to Curaçao ... .... 829 millions of USD fall from the Curaçao’s skies every day – Which means the 28% of the Curaçao GDP (2008)
•
... 24.8 billion of dollars every month
– Which means close to 10 Smes the Curaçao GDP. – Or 176 million dollars per capita (Curaçao)
•
... 302,54 billion of dollars every year to Curaçao
•
During 25 years of the average of an investment Solar PV project, over than 7.56 trillion of dollars will fall to Curaçao Island in terms of potenSal solar electricity at current prices
– Which means … 0.5% of 2011’s world GDP with only the 0.002% of the world populaYon – Or 2,153 million dollars per CAPITA (Curaçao)!!
– Thanks to the energy of the sun, during next 25 years, the 11.6% of current World GDP will fall in this Caribbean Paradise named Kursao.
•
Good we can’t see it – Bad we don’t use it
Arnold Holding Ltd. -‐ Curaçao, "The Solar Energy Caribbean Paradise"
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EPILOGUE: Alexander & Diogenes Corinth, Greece, 340 B. C. Alexander the Great addressed Diogenes with greeSngs, and asked if he wanted anything … Diogenes replied "Yes, stand a li^le out of my sunshine.” An then, Alexander says: If I were not Alexander, I should wish to be Diogenes Arnold Holding Ltd. -‐ Curaçao, "The Solar Energy Caribbean Paradise"
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Mi sSma Kòrsou!!! Dank u wel Thank you Gracias Obrigado
Danki !! Arnold Holding Ltd. -‐ Curaçao, "The Solar Energy Caribbean Paradise"
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