Abstract
Abstract
Feed-in Tariff (FiT) policy is proven to be an effective mechanism for enabling and accelerating the growth of wind energy industry. The determination of remuneration level in designing FiT system is a critical component that governs the extent of success for adoption of the policy. This study conducts a generation cost-based approach, applying the Net Present Value method, to determine the baseline FiT rate for the case of onshore wind energy in Myanmar. The analysis result indicates that USD 0.1453/kWh is required as a baseline rate to attract the energy producers for investing in Myanmar wind energy sector at the weighted average cost of capital of 11.25%, with debt-to-equity ratio of 70%. The sensitivity analysis is carried out to minimize the uncertainties associated with parameterization. It is found that baseline FiT rate is very sensitive to initial investment cost, and capacity factor whereas it is less sensitive to operation and maintenance cost. It is also found that lower cost of debts and higher debt-to-equity ratios could result in lower FiT values.