Evaluation of energy storage options and procurement in Jordan

Country: Jordan
Language: EN
Number: 2327756
Publication date: 01-06-2017
Source: The European Bank for Reconstruction and Development (EBRD)
Tags: solar and nuclear energy Energy

Description

Country:

Jordan

Business sector:

Power and energy

Project number:

69392

Funding source:

EBSF - EBRD Shareholder Special Fund

Contract type:

Consultancy Services

Notice type:

Invitation for expressions of interest (CSU)

Issue date:

01 Jun 2017

Closing date:

21 Jun 2017 at 17:00 London

Access eSelection

Project Description
Jordan is characterised by a lack of fossil fuels and has traditionally relied on imported fuels to meet its energy needs, including crude and products, pipeline gas and, more recently, Liquefied Natural Gas as well (LNG). Price spikes and import dependency have accordingly made fuel diversity a priority for the country. Renewable energy sources (RES) seem to be well placed to meet needs as Jordan’s topography is highly conducive for solar and wind. 117 MW of wind capacity became operational in the country in 2015, with an additional 80 MW of wind and 303 MW of solar added in the course of 2016. A large number of other renewable projects in excess of a combined 2,000 MW are currently under consideration.

Energy storage will likely need to become a part of the energy services toolkit of the Jordanian system, as a means of ensuring the provision of stable, high quality power supplies, in particular in the context of increased penetration of variable renewable energy sources. The Jordanian authorities with support from USAID recently undertook an energy storage situation review, and are currently also reviewing power systems operations and integration of renewables. The latter focusses on determining overall grid service needs including reliability studies, system operation requirements, economic valuation of the various options including energy storage, and supporting systems (forecasting, commitment, and dispatch) and it is being undertaken in collaboration with, and with the support of, USAID and the EU.

Against this background, Jordan’s Energy and Minerals Regulatory Commission (EMRC), the Ministry of Energy and Mineral Resources (MEMR) and the National Electric Power Company (NEPCO) have requested support from EBRD in their current efforts to put together a more detailed energy storage roadmap for the country, with a particular focus on enabling regulation (the Assignment).

Assignment Description
The Bank intends to engage a consultant (the Consultant) to undertake the following main tasks for the Assignment:

1. Review of available data and information
The Consultant will familiarise themselves with available data and information impacting on energy storage needs in Jordan, both at the beginning of its assignment as well as it becomes available throughout the course of the assignment, especially:
• The General Electricity Law (Temporary Law 64 of 2003), which sets the broader regulatory framework in Jordan and will also govern the development of energy storage assets in the country.
• The “Energy Storage Situation in Jordan – A Review Report”, completed in January 2017 with USAID support which, amongst others, establishes an energy storage roadmap for Jordan with the following steps (a) determining grid services needs; (b) enabling frameworks, (c) supporting systems; and (d) procurement.
• The ongoing USAID/ESCB-funded “Power Systems Operations and Renewables Integration Advisory Services for NEPCO”, especially Task 3 which is focussed on energy storage with the following deliverables:
o Estimates of the amount of energy storage as a least-cost source of frequency regulation, load following, and contingency response for 2017-2020;
o Feasibility study of energy storage for short-term storage of excess renewable production as an alternative to curtailments due to minimum load conditions;
o Feasibility study of whether the same energy storage capacity could provide multiple grid services in the Jordanian grid context;
o Advice regarding the parameters and pricing for a potential energy storage pilot project to be procured through the Round 3 Direct Proposal process
• The upcoming World Bank-funded study on Concentrated Solar Power (CSP) and storage “Possible Role of CSP in Jordan’s Future Electric Power System”, which will analyse the mid- and longer-term perspectives for the energy sector in Jordan; review the different energy technologies, existing or expected to emerge in Jordan (including storage); and analyse the price estimates for a selection of technologies such as thermal storage vs. batteries. The study will also generate an energy model that will evaluate how much the CSP storage component is used for CSP plants to run in baseload mode and will represent energy storage with constraints in injection and withdrawal rates.
• The Consultant shall also seek additional information or clarification at the beginning and also during the course of its engagement as may be necessary for the successful completion of this assignment.

2. Review of Jordan’s regulatory framework and proposed reforms
The Consultant will review the current regulatory framework in Jordan, especially regarding licensing arrangements under the General Electricity Law (Temporary Law 64 of 2003), compare it with international experience, and offer recommendations aimed at establishing a level playing field for energy storage and facilitating integration into the power sectors’ regulatory structure. The Consultant will further develop a practical set of Regulations for energy storage license applications and a model Licensing Arrangement that could be put into use by the Jordanian authorities, if they so choose. Successful completion by the Consultant of this Task 2 will accordingly include:
• Reviewing the current regulatory framework in the country, especially licensing arrangements the General Electricity Law (Temporary Law 64 of 2003) and identification of key gaps;
• Comparing the Jordanian framework with international experience and offering examples of energy storage regulation from at least five (5) jurisdictions highlighting how these treat energy options, integration with wider systems etc.;
• Propose reforms that would ensure a level playing field for energy storage, taking into account the option’s specific characteristics (i.e. its ability to offer multiple services and operate as both a demand and supply unit), as well as the need to ensure cost minimisation for both the Jordanian system and electricity consumers. The consultant’s recommendations will therefore include, but not be limited to:
o How to deal with energy storage in the Jordanian system, including value of treating as a grid asset and optimal structures for ensuring third party access;
o How should provision of grid/multiple services by storage be compensated, with the aim of preserving commercial viability and ensuring affordability;
o Who should be allowed to develop and own energy storage in the system, with the aim of facilitating the multiple benefits of storage to be captured whilst pre-empting potential conflicts of interest or dominant positions.
• Develop a specific set of Regulations that could govern energy storage license applications in Jordan and could be put into practical use by EMRC and MEMR, with minimal reworking if so elected by them.
• Develop a model Licensing Arrangement for storage assets owners and services providers which will take into account the unique attributes of storage and the need to be able to provide multiple services in order to be commercially viable; and which EMRC and MEMR could similarly put into practical use.
• On the basis of best international experience, propose KPIs that will be focussed on quality of service and be suitable and relevant for the specific energy storage types and uses most pertinent for Jordan; and which could be included in Licensing Arrangements to facilitate EMRC’s regulatory oversight of energy storage assets in Jordan.

3. Review and recommendations on Power Purchase Agreement (PPA) technical and commercial terms
The Consultant will review current practices in Jordan and international best practices for the procurement of energy storage and flexibility services, and it will provide recommendations on how to structure the technical and commercial aspects of a PPA for energy storage assets, with an aim of ensuring the PPA’s bankability through appropriate risk allocation and reward. Specifically, under Task 3 the Consultant will:
• Review technical and commercial terms in current PPA structures for renewable projects in Jordan.
• Offer examples of technical and commercial terms focussing on risk allocation in PPA for energy storage services from at least five (5) jurisdictions using different approaches, highlighting the advantages and disadvantages of each approach.
• Consider if and specifically how PPA mechanisms for energy storage in Jordan should seek to compensate sponsors for the full range of potential services that can be provided like load following, frequency response, ancillary services etc.
• Propose appropriate risk allocation for an energy storage PPA in Jordan including but not limited to areas such as PPA compatibility with local system operations, delivery point and obligations on either side to accept electricity flows, invoicing and payments, curtailment and force majeure, enabling provisions (scheduling, metering, planned and unplanned maintenance, access, inspections etc.)
• Propose alternative compensation schemes for storage asset owners based on international experience and including tolling and other two-part arrangements (capacity and per-use).
• Develop an Interconnection Agreement that will be appropriate for the Jordanian context and encompass technical issues of connecting to the local electricity grid, which EMRC and MEMR could put into practical use.
• Develop a model PPA for energy storage including compensation formulae, which EMRC and MEMR could likewise put into practical use.
• On the basis of best international experience, propose KPIs that will be focussed on quality of service and be suitable and relevant for the specific energy storage types and uses most pertinent for Jordan; and which could be included in the Interconnection Agreement and/or PPA to facilitate EMRC’s regulatory oversight of energy storage assets in the country.

4. Advisory on design of pilot storage projects
The Consultant will offer recommendations on the regulatory design of pilot energy storage projects. This Task 4 under the scope of this Assignment aims at complementing from a regulatory point of view the recommendations that will be made available under Task 3 of the USAID/ESCB scope mentioned above (“Power Systems Operations and Renewables Integration Advisory Services for NEPCO”), which focusses on the size, placement, type of energy storage, and functional capabilities of a pilot project, with the aim of facilitating the design of future procurements. Specifically, under this Task 4 the Consultant will:
• Propose potential licensing regulations and arrangements that would be useful to test as part of Jordan’s pilot deployment of energy storage under Round 3.
• Propose potential interconnection agreement parameters to test as part of Jordan’s pilot deployment of energy storage under the Round 3 pilot.
• Propose potential PPA parameters for storage to test under the Round 3 pilot, including compensation formulae such as tolling and other two-part arrangements to test as part of Jordan’s pilot deployment of energy storage under Round 3.

Status of Selection Process: Interested firms or groups of firms are hereby invited to submit expressions of interest.

Assignment Start Date and Duration: The assignment is expected to start in July 2017, and has an estimated overall duration of 9 months.

Cost Estimate for the Assignment: EUR 291,680 (exclusive of VAT).The Consultant must determine whether any VAT would be chargeable on the services and the basis for that determination, without taking into consideration the special status of the Bank as an IFI and state this to the Bank in their response to the Invitation for Expressions of Interest. To the extent that a Consultant incurs input VAT on goods and services purchased in connection with the provision of services (e.g. VAT on airline ticket) which is not otherwise recoverable by the consultant from the local tax authority, the gross cost to the consultant of such expenses shall be treated as a reimbursable expense.

Funding Source: It is expected that the Assignment will be funded by the EBRD Shareholder Special Fund (SSF).

Eligibility: There are no eligibility restrictions.

Consultant Profile: Corporate services are required. The Consultant will be a firm or a group of firms preferably with previous project experience related to:
• Technical and commercial aspects of energy (including battery) storage, power networks, and generation units;
• Electricity market design and regulatory aspects of energy storage;
• Drafting of Licensing Arrangements, PPAs, and other documents relevant to energy storage deployment including experience in setting KPI (quality of service) standards;
• The specific Jordanian energy market context.

The Consultant’s expert team is expected to include key experts as follows:
Key Expert No 1: Team Leader with a strong understanding of energy storage and market design issues, as well as project management skills.
Key Expert No 2: Technical/Commercial Expert with a background and track record in technical and commercial aspects of energy (including battery) storage, electricity networks, and power generation units (this role can be split amongst multiple experts)
Key Expert No 3: Local Sector Expert with previous project experience in Jordan’s power system including its renewables sector and regulation, as well as strong Arabic language skills.

All key experts are expected to have excellent written and spoken English language skills.

Submission Requirements: In order to determine the capability and experience of consultants seeking to be shortlisted for this assignment, the information submitted should include the following:
• Company/group of firms’ profile, organisation and staffing.
• Details of previous project experience or similar assignments particularly undertaken in the previous five years, including information on contract value, contracting entity/client, project location/country, duration (mm/yy to mm/yy), expert months provided (if different from duration), main activities, objectives.
• CVs of key experts who could carry out the Assignment detailing qualifications, experience in similar assignments, particularly assignments undertaken in the previous five years, including information on contracting entity/client, project location/country, duration (mm/yy to mm/yy), expert months provided, assignment budget, main activities, objectives.
• Brief action plan and technical approach explaining the Consultant’s understanding of the Assignment objectives as outlined above, the proposed technical approach, action plan and methodology for implementing the tasks to deliver the expected output(s) and team input table indicating the number of working days (home base/field) allocated to the Assignment for each key expert per task.
• Financial Proposal presented in the attached breakdown of costs format
• Completed Consultant Declaration Form and Contact Sheet, the template for which is available from the following web-link: http://www.ebrd.com/pages/workingwithus/procurement/notices/csu/contact_sheet.doc.

Proposals must be focussed and not exceed 20 pages, and/or 5,000 words in length, including CVs but excluding the Consultant Declaration Form and Contact Sheet.

The complete expression of interest (including CVs, Consultant Declaration and Contact Sheet) should be submitted, in English electronically through e-Selection, to reach the Bank not later than the closing date. The expression of interest shall be one file (pdf). The EBRD reserves the right to reject applications of firms submitting more than one file. Only if the permissible file size is exceeded (4MB), the Consultant may split the expression of interest into further files.

Bank Contact Person
James Yoo
European Bank for Reconstruction and Development
One Exchange Square
London EC2A 2JN
United Kingdom
Email: YooJ@ebrd.com (submissions should be sent through eSelection and not to this email address)

Notes:
1. The selection will normally be made from responses to this notification only. The highest-ranked Consultant will be invited to negotiate the contract, subject to availability of funding.
2. The shortlist criteria are:
• Technical and commercial aspects of energy (including battery) storage, power networks, and generation units – 10%
• Electricity market design and regulatory aspects of energy storage – 15%
• Drafting of Licensing Arrangements, PPAs, and other documents relevant to energy storage deployment (including experience in setting KPI standards) – 15%
• The specific Jordanian energy market context – 10%
• CVs of Key Experts - 20%
• Technical approach and methodology – 10%
• Financial proposal (total price) – 20%


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