FURTHER REPLIES TO QUERIES

on RAE's Call for Tenders for the project

"Long Run Marginal Costs (LRMC) of generation, transmission and distribution in the electricity sector of Greece"

 

1.      QUESTION No. 3

1.   Optimisation tools to calculate the marginal cost: These are usually commercially available planning models for generation, transmission and distribution.

To calculate LRMC, these models are used in at least two runs, which simulate the system without and with a pre-determined demand increment. The incremental cost resulting from the two simulations, i.e. cost difference between two optimally planned system development states, should be the basis for long-run marginal cost.

-     Is there any need to develop the tools, when such tools exist?

-     Does RAE insist on the development of these tools or will RAE accept selection, purchase and usage of available models?

In this case what should be modelled is: (1) the necessary interfaces between the LRMC models and (2) the cost allocation tool necessary to compute tariffs. Does RAE accept this approach?

2.   The implementation of demand side programs leads to the improvement the utilization of generation capacities, postponing of new construction, reduction of energy production and environmental pollution. The evaluation of demand side programs could be carried out from different point of views. Different tests are possible:

- Total Resource Test – from total economic point of view

- Societal Tests – from societal point of view

- Utility Cost Test – from the point of view of utilities

- Non-participant Test – from the point of view of non-participants in demand side programs.

- Participant Tests – from the point of view of participants in demand side programs.

-  Can RAE specify more specifically the requirements to the required cost benefit analysis?

 

 

REPLY to QUESTION No. 3

Regarding question 1, the answer is the same with the Reply to Question No. 2, point 13, that can be found at RAE’s website “REPLIES TO QUERIES on RAE's Call for Tenders for the project Long Run Marginal Costs (LRMC) of generation, transmission and distribution in the electricity sector of Greece”, dated 26/6/2006.

Regarding question 2, RAE will discuss every alternative test carried out from different point of views and will decide during the project for the most appropriate one, upon the proposals of the Consultant.

 

2.      QUESTION No. 4

1.   In Section 2.1, page 6, the main tasks of the project include: “(i) Presentation of a detailed up-to date overview of the methods followed by other EU member states for estimating the long run marginal costs of generation, transmission and distribution and for the design of electricity tariffs.”  However, in Section 2.2.1, where the task of Methodological Framework Overview is elaborated, the stated scope of the work does not specifically refer to overview of usage of long run marginal costs methods in EU member states but is rather general: “….provide an overview of the different pricing policies followed by the EU-15 member states in the electricity sector…….for specific member states, as agreed between RAE and the Consultant, a further analysis of pricing policy and their tariffs will be undertaken……….the Consultant will also review and present alternative methods for the design of tariffs (i.e. average versus marginal cost)…..the Consultant will submit a detailed up-to date description of the principles underlying marginal cost estimation in the electricity sector, referring separately to the generation, transmission and distribution businesses.”  Given this discrepancy, if the focus of the work is on LRMC, and given the limited time available for this task, please confirm if this task be focusing on identifying which EU countries have adopted LRMC in electricity pricing and in which areas, on identifying the principles of LRMC and on listing the application methodologies (as well as differences and variants) between countries in applying LRMC methods in electricity pricing?

2.   In Section 2.2.4 (c), an “optimization tool that considers the future development of the Greek electricity distribution system is required”. Which of the following two apply with regard to RAE’s requirements for this tool?

  1. does RAE require the Consultant to develop a software tool that will do detailed analysis of specific one-off transmission and distribution problems (e.g. to analyse the connection requirements where an industrial consumer has a small cogeneration plant that wants to export power to the distribution grid and seeks to run the plant in parallel with the grid)?  This type of tool could be of value added to RAE for resolving network (third party) access disputes and access pricing; or
  2. does RAE require the Consultant to develop a software tool for general distribution planning for a utility, and where the investment decisions are based more around operating rules (a 100 kVA transformer for every 20 houses of type X in a village, etc) rather than detailed individual studies? This type of tool is useful for RAE to undertake PPC price reviews and where PPC’s aggregate distribution investment plan needs to be reviewed/ questioned.

3.   In Section 2.2.4, it is stipulated that: “It is envisaged that the software, as well as each of its components, will be offered to RAE with perpetual license and optionally with annual maintenance and support fees. Such fees, after the first year of the deliverance, related to the maintenance, support or upgrading of the software, will be covered by RAE”. Can you please inform on the number of users (licenses) that will be provided by the Consultant for the S/W? Also, does the Consultant have to quote the cost of annual maintenance and support fees involved in the proposed software after the first year, and if so where (there is no such provision in the financial proposal contents).

4.   In Section 2.2.5(a), Long Run Marginal Costs of Generation, it is stipulated, inter alia that the “Consultant will provide simple formulas to quantify the effect of each cost driver on the long run marginal costs. The Consultant will incorporate these estimations in the software tool described in 2.2.5”. Do you mean the software tool described in Section 2.2.4?

5.   Section 2.2.8, Training. Does this Task also include Training for RAE’s staff on the S/W to be provided?

6.   Section 2.2.9, Examination of Tariffs of the Regulated Power Utilities. It is mentioned that: “The Consultant will analyze the tariff structure of the regulated utilities and compare it with the results of the marginal costs estimations completed in Phase A.”. Do you mean tariff structure and levels?

7.   In Section 6, Budget, it is stipulated that “the total estimated budget of this project shall not exceed the amount of € 1.249.500 for both phases A and B, and that this amount is inclusive of VAT, if applicable…”. In Section 12.3, it is stipulated that “prices must be quoted inclusive of applicable VAT”. Please specify whether, in the case of a company registered in another EU member state or outside Greece, or in the case of a consortium whose leading member is registered in another EU member state or outside Greece, VAT is applicable or not, and in the case VAT is not applicable whether the company/consortium is allowed to bid up to the total allowable budget of € 1.249.500 or whether the applicable maximum budget is € 1.249.500 less VAT. 

8.   Section 12.1.1, General Profile.  In point (7) a Valid abstract of the Tenderer’s criminal record is required to be issued by the competent administrative or judicial Authorities in the country of origin three months prior to the date of submission at the most”.  In the United Kingdom there is no competent authority to provide such a record.  Please advise whether a sworn statement can be submitted instead?

9.   Section 12.1.1, (12), Guarantee for participation. In case of a group of legal entities/consortium, can each member of the consortium submit a letter of guarantee to RAE for its respective share of the work to be undertaken?

10. Section 12.1.1 (12), Guarantee for Good Performance. Is there provision for this guarantee to be reduced during the project implementation, to reflect progress in the delivery of the project and acceptance by RAE of intermediate project deliverables?

 

REPLY to QUESTION No. 4

Regarding question 1, RAE expects from the Consultant to analyze both the pricing policy and tariffs and how the LRMC is applied in electricity pricing.

Regarding question 2a, the answer is the same with the relevant Reply to Question No. 2, point 13.

Regarding question 2b, RAE expects from the Consultant to develop a software tool for general distribution planning, dedicated for pricing policy.

Regarding question 3, the users of the software will be two to three. The Consultant must give an indicative annual support fee after the first year.

Regarding question 4, the answer is positive and RAE means the software described in section 2.2.4.

Regarding question 5, the answer is positive and RAE means also training on the software, for a limited number of RAE’s staff.

Regarding question 6, RAE expects the Consultant to analyze the tariff structure proposed by the regulated utilities and compare that structure with the one developed through LRMC method.

Regarding question 7, the total budget before VAT and/or other taxes is € 1,050,000.

Regarding question 8, a sworn statement should be issued instead in which it must be also declared that there is no such competent authority to provide the Tenderer's criminal record.     

Regarding question 9, the letter of guarantee should be issued for the participating companies in solidum.

Regarding question 10, the answer is that there is no provision for the guarantee to be reduced during the project implementation.

 

  1. QUESTION No. 5

1.      On page 20 of the RfP it is stated that "All documents to be submitted in original". Could you please confirm if, where we only have one original copy of a document and it is impossible to obtain a further original, a notarised copy of that document will satisfy the requirements?

2.      Could you also please confirm if the final paragraph of section 12.1 on page 22 of the RfP, "If the above noted documents and declarations are not issued in the country of origin, they may be replaced by the Tenderer's affidavit before a judicial or Administrative authority...", applies to section 12.1 in its entirety, or only to section 12.1.2?

 

REPLY to QUESTION No. 5

Regarding question 1, Consultant should provide a notarised copy of the original copy according the rules of the authentication of foreign public documents (Apostille).

Regarding question 2, the final paragraph of section 12.1 on page 22 of the RfB applies only to section 12.1.2. 

 

4.      QUESTION No. 6

1)         Αναφέρετε ότι ο προϋπολογισμός του έργου είναι 1.249.500 ευρώ συμπεριλαμβανομένου του ΦΠΑ.  

Στην  περίπτωση που η  εταιρεία  (ή ένωση εταιρειών) που θα αναλάβει το έργο έχει έδρα στην Ελλάδα και υπόκειται σε ΦΠΑ, ο προϋπολογισμός του έργου είναι 1.050.000 ευρώ.

Στην περίπτωση που η εταιρεία (ή ένωση εταιρειών) που θα αναλάβει το έργο έχει έδρα σε χώρα της Ευρωπαϊκής Ένωσης και δεν υπόκειται σε ΦΠΑ,  ο προϋπολογισμός του έργου είναι 1.249.500 ευρώ.

2)         Μπορεί η ένωση των εταιρειών που θα αναλάβει το έργο να έχει έδρα σε χώρα της Ευρωπαϊκής Ένωσης;

3)         Η εγγυητική επιστολή της συμμετοχής μπορεί να εκδοθεί από μία εταιρεία, της ένωσης εταιρειών,  που θα συμμετέχουν στον διαγωνισμό; 

 

REPLY to QUESTION No. 6

Regarding question 1, the answer is the same as that applying to Question 4 herein, point 7.

Regarding question 2, the answer can be found in the preamble of our Call for Tenders in paragraph 2 of page 4.

Regarding question 3, the letter of guarantee should be issued for the participating companies in solidum.