Solar Energy Production
Solar Energy Production
Business Model Description
Investment in an additional 40MW of utility scale solar in which project developers will be paid for energy sold to the grid at a predetermined price set out in a Power Purchase Agreement.
Expected Impact
Positively contributes to global share of renewable energy and reduces reliance on fossil fuels that contribute to global warming and other negative impacts on the environment.
How is this information gathered?
Investment opportunities with potential to contribute to sustainable development are based on country-level SDG Investor Maps.
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Country & Regions
- Belize: Southern and central region
Sector Classification
Renewable Resources and Alternative Energy
Almost half of the energy in Belize comes from hydropower and from Mexico's Federal Energy Commission- average domestic renewable energy supplies accounted for 49% of total generation, while energy imports from Mexico accounted for 43% and fossil fuel generation the remaining 8% which indicates that there is a high dependence on energy from external sources, identifying the need to transition to cleaner and and alternative energy
Alternative Energy
Utility-scale solar projects have the potential of providing affordable and clean energy for Belizeans while also reducing the dependency on foreign energy supply. As an independent power producer (IPP) a long-term power purchase agreement (PPA) can establish the Levelized Cost of Electricity (LCOE) which is based on the total installed cost (TIC), financing costs and the required operational and maintenance costs. This forms the rate at which the IPP/Developer will sell energy to the grid.
Solar Technology and Project Developers
Pipeline Opportunity
Solar Energy Production
Investment in an additional 40MW of utility scale solar in which project developers will be paid for energy sold to the grid at a predetermined price set out in a Power Purchase Agreement.
Business Case
Market Size and Environment
103,000 customer accounts in Belize
103,000 customer accounts
As of the end of 2020, Belize Electricity Limited currently serves 103,000 customers who could potentially utilise solar energy.
Indicative Return
5% - 10%
The returns are based on secondary research (IRENA and Belize Electricity Limited) that were used to develop a financial model for the utility scale solar project.
Investment Timeframe
Long Term (10+ years)
Given the size of the investment, the investment timeframe may take from 10-12 years.
Ticket Size
USD 1 million - USD 10 million
Market Risks & Scale Obstacles
Capital - CapEx Intensive
Market - Highly Regulated
Impact Case
Sustainable Development Need
Purchasing power from CFE exposes Belizean consumers to price shocks and disruptions that arise in Mexico. Increasing domestic generation would help to reduce cost of power volatility and in particular solar generation would help to reduce/offset carbon emissions.
Gender & Marginalisation
Single parent households which are primarily headed by women, would have access to more affordable electricity rates.
Expected Development Outcome
A utility-scale solar project to increase the share of renewable energy consumption as share of total energy consumption - currently stands at 55% in Belize. The completed project can increase the share of renewable energy consumption by 10 percentage points under current demand scenarios. Additionally, a utility-scale project would improve access to affordable energy rates
Gender & Marginalisation
Will contribute to more affordable electricity rates which will benefit underserved and low income households.
Primary SDGs addressed
13.2.2 Total greenhouse gas emissions per year
Total greenhouse gas emissions (kt of CO2 equivalent) in Belize was 1,194.71 in 2017
Reduce GHG emissions and increase GHG removals related to land use change totalling 2,053 KtCO2e11 cumulative over the period from 2021 to 2030
7.2.1 Renewable energy share in the total final energy consumption
7.b.1 Installed renewable energy-generating capacity in developing countries (in watts per capita)
7.2.1 - The share of renewable energy in the total final energy consumption is 55%. 7.b.1Currently 90kW per capita of renewable energy produced.
7.2.1 -75% share of renewable energy in the total final energy consumption. 7.b.1107kW per capita once project completed.
Directly impacted stakeholders
People
Planet
Public sector
Outcome Risks
Limited potential for negative impacts.
Impact Risks
Potential for external risks such as high capital costs and procedural difficulties for solar installation may slow down project development and energy production.
Impact Classification
What
Affordable energy distribution.
Risk
Limited potential netagive risk.
Impact Thesis
Positively contributes to global share of renewable energy and reduces reliance on fossil fuels that contribute to global warming and other negative impacts on the environment.
Enabling Environment
Policy Environment
Greater recognition of the need to increase renewable energy production to minimize dependence on foreign energy which exposes Belizean consumers to external-market shocks. In addition Belize’s Nationally Determined Contributions (2021) call for: 75% of generation from renewables by 2030 Installation of 40MW of utility-scale solar by 2025
Financial Environment
Long-term Power Purchase Agreements (PPAs) reduce risk for investors and ensure steady returns over the life of the investment.
Regulatory Environment
The PUC is responsible for regulating all public utilities in Belize (electricity, water and telecommunications). Regulatory authority for the electricity sector is derived from the Public Utilities Commission Act, Belize Electricity Act Belize Electricity Limited is licensed to transmit and distribute electricity throughout Belize IPPs are licensed to generate electricity by the PUC
Marketplace Participants
Government
Ministry of Public Utilities (Ministry of Energy) - responsible for setting national energy policy.
Public-Private Partnership
Belize Electricity Limited is the country's transmission and distribution company maintains and operates a national grid. The Government of Belize (GOB) has direct ownership of 32.6% interest in the Company, whilst the Social Security Board (SSB) owns 31.2% resulting in public sector interest of 63.8%. Fortis Cayman Inc. owns 33.3% interest and over 1,500 small shareholders own the remaining 2.9% interest in ordinary shares.
Target Locations
Belize: Southern and central region
References
- ("1) Belize Electricity Limited. (2020). Annual Report. Retrieved from https://www.bel.com.bz/annual_ reports/ Annual%20Report%202020.pdf " "2) International Renewable Energy Agency. (2018). Renewable Capacity Statistics 2018. Retrieved from https://www.irena.org/-/media/Files/IRENA/Agency/Publication/2018/Mar/IRENA_RE_Capacity _Statistics_2018.pdf " "3) Belize Electricity Limited. (2018). Annual Report. Retrieved from https://www.bel.com.bz/annual_ reports/Annual%20Report%202018.pdf " "4) Bunker, Kaitlyn, Roy Torbert, et al., (2018). Belize Consolidated Project Plan. Rocky Mountain Institute. Retrieved from http://www.rmi.org/Belize-consolidated-project-plan " "5) Energy Transition Initiative. (2015). Energy Snapshot: Belize. Retrieved from https://www.nrel.gov/docs/ fy15osti/62707.pdf " "6) CO2 Scorecard. Retrieved from https://co2scorecard.org/countrydata/Index/4136.Retrieved on August 2021" "7) Belize Electricity Limited. (2018). Annual Report. Retrieved from https://www.bel.com.bz/annual_ reports/Annual%20Report%202018.pdf "
- ("8) International Renewable Energy Agency. (2016). End-of-Life Management Solar Photovoltaic Panels. Retrieved from https://www.irena.org/-/media/Files/IRENA/Agency/Publication/2016/ IRENA_IEAPVPS_End- of- Life_Solar_PV_Panels_2016.pdf "
- (9) The World Bank Group. (2021). Global Photovoltaic Power Potential. Retrieved from https://www.worldbank.org/en/topic/energy/publication/solar-photovoltaic-power-potential-by-country "10) Sunpower. (2015). Solar Financing Overview. Retrieved from https://us.sunpower.com/sites/default/ files/ sp-education -solar-financing-overview_0.pdf"