Discussion of Isolated Small Scale Electrical Power Enterprise Regulations

Discussion of Isolated Small Scale Electrical Power Enterprise Regulations Nay Pyi Taw, March 2018 Jakob Schmidt-Reindahl Page 1

Regulatory authorities granted by the Electricity Law to Regions/States/SAD/SAZ Relevant Region and State Governments and Leading Bodies of SAD/SAZ shall grant permission for Small Scale Electric Power Generation and Distribution Projects, which are not connected to the National Grid Chapter 4 Authorized Persons and their Responsibilities , Section 9. (a) prescribe the tariffs rates and service charges for Electric Power Generation and Distribution in their respective regions Chapter 10 Tariffs Rates and Service Charges , Section 42. 11.03.2025 Page 2

Overview of regulatory functions for Isolated Small Scale Electrical Power Enterprises Protection of interests of Electricity Consumers Protection of interests of Electricity Providers Performance standards must be met to ensure safe consumption of electricity Electricity tariffs must be affordable Quality of service must meet respective standards Permitting is simple and predictable Electricity tariffs allow economic viability Economically viable exit strategy in case of connection of National Grid 11.03.2025 Page 3

Proposal for Isolated Small Scale Electrical Power Enterprise Regulations Arrangement of Sections PART I General PART II Characteristics of Isolated Small Scale Electrical Power Enterprises PART III Certificate of Exclusivity PART IV Permitting PART V Commissioning PART VI Compensation Certificate PART VII Interconnection PART VIII Reporting Requirements PART IX Tariff Requirements PART X Miscellaneous SCHEDULES 11.03.2025 Page 4

Definitions Small Scale Electrical Power Enterprise means a project wich can generate and/or distribute no more than ten (10) MW of electric power. Electricity Authority means the [State/Region/SAZ] authority which may grant permission to conduct a small scale electric power generation or distribution project. Large Distribution Network (LDN) means a Distribution Network that is part of the National Grid with peak load exceeding ten (10) MW [e.g. ESE, YESC, MESC] 11.03.2025 Page 5

$ $ SMALL DISTRIBUTION NETWORK (SDN) $ $ $ $ $ $ $ $ $ $ $$ $ $ $$$ $ $$$$$ $ $ $ $$$ $ $ $ $ SMALL $ $ $ ELECTRICITY RETAILER $ $$$$ SMALL POWER PRODUCER (SPP) $$ $ $ $$$ $ $$$ (SER) $ $ $ 11.03.2025 Page 6

$ $ $ $ $ $ $ $ $ $ $ $ $$ $ MINI-GRID $ $$$ $ $$$$$ $ $ $ $$$ $ $ $ $ $ $ $ $ $$$$ $$ $ $$$ $ $$$ $ $ $ 11.03.2025 Page 7

Characteristics of Isolated Small Scale Electrical Power Enterprises (Part II) Generation Distribution Sale Type of Small Scale Electrical Power Enterprises Abbr. Isolated Mini-Grid - Isolated Small Power Producer SPP Isolated Small Distribution Network SDN Isolated Small Electricity Retailer SER Isolated = not connected to the National Grid 11.03.2025 Page 8

Exclusive rights to carry out project development activities at a specific site optional Certificate of Exclusivity (CoE) Permission to operate systems up to 100 kW (simplified process) or up to 10 MW Permitting Permission to charge tariffs that allow for economically viable operation Tariff approval Guarantee to receive financial compensation in the event of national grid arrival optional Compensa- tion Certificate Inspection of installations and commencement of operations Commis- sioning 11.03.2025 Page 9

Certificate of Exclusivity Request Process (7) 1 2 3 4 5 Consumer engagement signature of No Objection Certificate Receive notification of receipt of complete request within 7 days Receive CoE within 30 days from date of receipt of complete request Submit Request for CoE to Electricity Authority Identification of suitable project site Accompanying documentation: GPS coordinates of the proposed location of project assets Description of the project and site details Proposed maximum power capacity, in kilowatts, to be generated, distributed and/or sold to the Electric Power Consumers No Objection Certificate issued by the relevant Electric Power Consumer Association. Certificate of Exclusivity: provides exclusive rights to carry out project preparation activities (e.g. feasibility studies, environmental impact assessments, financial arrangements, land acquisition, etc.) in a designated Service Territory Request is voluntary is initially valid for 12 months, but can be extended for a period of up to 6 months at a time. 11.03.2025 Page 10

Permitting of Isolated Small Scale Electrical Power Enterprises (Part IV) The Electricity Law, Chapter 12, Section 44: No person shall engage in Electricity Related Business without having a permit. A Permit means the permission granted by the Electricity Authority to any local or foreign individual or entity to engage in Electricity Related Business. Capacities up to 10 MW Capacities up to 100 kW The Permit Holder is authorized to engage in electricity generation, distribution and/or retail with capacities up to 100 kW The Permit Holder is authorized to engage in electricity generation, distribution and/or retail with capacities up to 10 MW Simplified permitting procedure Full permitting procedure 11.03.2025 Page 11

Permitting Application and Approval Procedure for projects 100 kW ( 15) 1 2 3 4 5 5 Consumer engagement signature of No Objection Certificate Receive notification of receipt of complete Application within 14 days Notification is equivalent to issuance of a Permit Submit Application for a Permit to Electricity Authority Identification of suitable project site Carry out system design Accompanying documentation: Prescribed fee Description of the project No Objection Certificate issued by the respective Electric Power Consumer Association For Mini-Grid, Isolated SPP/SDN projects, a certified copy of the CoE, if any Evidence that the applicant meets minimum environmental, health, and safety standards Permit for projects 100 kW: The Permit Holder is authorized to engage in electricity generation, distribution and/or retail with capacities up to and including 100 kW 11.03.2025 Page 12

Permitting Application and Approval Procedure for projects > 100 kW and 10 MW ( 15) 1 2 3 4 5 6 Consumer engagement signature of No Objection Certificate Receive notification of receipt of complete Application within 14 days Receive Permit within 30 days from date of receipt of complete request Carry out system design and obtain permits/approvals Submit Application for a Permit to Electricity Authority Identification of suitable project site Accompanying documentation: All documents for Application 100 kW, plus Evidence that the applicant meets statutory requirements Certified copies of the business registration documents, if applicable Business plan Proof of the financial capability for the proposed electricity related business Additional documents depending on the type of project developer (Mini-Grid/Isolated SPP/SDN/SER) Permit for projects > 100 kW and 10 MW: The Permit Holder is authorized to engage in electricity generation, distribution and/or retail with capacities larger than 100 kW and up to and including 10 MW 11.03.2025 Page 13

Tariff Requirements (Part IX) The Electricity Law, Chapter 10, Section 41.: Region or State Governments, Leading Body of SAD or SAZ, may, through coordination with the Ministry, prescribe the tariffs rates and services charges for Electric Power Generation and Distribution for Regional Electric Power System. A Retail Tariff means any charge, fee, price or rate that must be paid by Electric Power Consumers to purchase electricity Determination of Retail Tariffs for Permit Holders ( 28) Allowing for reasonable return on investment Tariffs may be adjusted for inflation and changing fuel prices 11.03.2025 Page 14

Application Process for Compensation Certificate (25) 2 3 1 4 5 Receive notification of receipt of complete Application within 7 days Receive Certificate within 60 days from date of receipt of complete request Submit Application for Compensation to Electricity Authority Carry out engineering studies Obtain Permit Accompanying documentation: Prescribed fee Description of the project, site details Engineering design specifications of the electrical portions of the project Engineering studies such as load flow or fault studies, if applicable Compensation Certificate: provides the right to receive financial compensation in the event of the arrival of the Large Distribution Network to the Permit Holder s Service Territory. 11.03.2025 Page 15

Arrival of LDN to Service Territory of Permit Holder (26) Transfer all assets to LDN for compensation Convert to grid connected SPP, SDN or SER* Decomission and remove all assets With Compensation Certificate Without Compensation Certificate *as per Union Ministry of Electricity and Energy Grid Connected Small Scale Electric Power Enterprise Regulations, 2018 11.03.2025 Page 16

Feedback from State/Region consultation workshop Proposed Isolated Electrical Power Enterprise Regulations are highly welcomed by State/Region representatives Proposed Regulations shall be used as template to be adapted to respective policy and legislative frameworks in the States/Regions/ SAD/SAZ In some States/Regions/SAD/SAZ, electricity laws are already existing or in preparation, in others support for the development of respective frameworks would be welcomed Once finalized, the States/Regions Governments will submit the Regulations to their parliaments for ratification, after which they will be signed and enacted by the Chief Minister 11.03.2025 Page 17

Guiding questions for group discussion 1. Thresholds Would you agree to the proposed thresholds for simplified permitting ( 100kW) and normal permitting (>100kW and 1MW)? 2. Application processes Do you consider the proposed application processes (for Certificate of Exclusivity, Permit, Compensation Certificate) appropriate? 3. Compensation Certificate Do you consider the proposed Compensation Certificate a feasible protection measure for private investors? 4. Other protection measures What are the protection measures you would want to see in these regulations to cover the main risks for private investors? 11.03.2025 Page 18

Thank you for your attention! Q&A 11.03.2025 Page 19