Rural Electrification NAMA for Vanuatu. Asia Carbon Forum, Macao, 27 th March
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1 Rural Electrification NAMA for Vanuatu Asia Carbon Forum, Macao, 27 th March 1
2 Country Context Island nation in South Pacific Ocean - more than 80 islands - 65 inhabited. Population 234,000 in more than 47,000 households Around 28 % of the population lives on the main island of Efate - 75 percent live in rural areas Key economic Sectors: subsistence agriculture, tourism, offshore financial services, and raising cattle. Highly vulnerable to natural disasters, such as cyclones, flooding, earthquakes, landslides, tsunamis and volcanic eruptions 2
3 Energy Sector Background Characterized by low access, high relative prices Significant reliance on imported fuels (80%) Only 27 % of households have access to a permanent source of electricity. Key energy sector public and private institutions: Ministry of Climate Change and Natural Hazards (Department of Energy) Utilities regulatory Authority and Electricity Utility Companies (UNELCO & VUI) and Private RE Companies. Renewable energy sources ( Solar, Geothermal, Hydro, Wind) are substantial, although not yet utilized according to its potential. Solar has been shown in Vanuatu and other parts of the Pacific to be a reliable and cost effective approach to basic electrification for rural areas 3
4 Energy Sector Specific Challenges Many landowners, and often unclear land ownership including complex procedures to use land for RE projects and reticulation of electricity Gaps in regulatory framework for IPPs to have PPAs with concession holders, or for concession holders to include the cost of power purchased under these PPAs in tariff calculations High upfront capital costs for most renewable energy projects (remote and dispersed islands). 4
5 National Energy Road Map (NERM) Launched in April 2014 Vision: To energise Vanuatu s growth and development through the provision of secure, affordable, widely accessible, high quality, clean energy services for an Educated, Healthy, and Wealthy nation. Goal: to increase electricity access (65% by 2020) of rural population and extend the existing grid to reach an increasing number of people. 5
6 NAMA Objectives Key Objective: Support GoV in achieving the NERM Targets NERM Targets includes: Achieving a connection rate of 100% for households close to concession areas by grid extensions Achieve 100% electrification for off-grid households through micro-grids and individual solutions (Solar Home Systems). Overarching target of the Vanuatu NAMA is to provide off-grid electrification for off-grid communities and households, public buildings and institutions as well as businesses. 6
7 NAMA Intervention 1 Solar PV Micro-grids Province Name Tafea Tafea Malampa Penama Tafea Island Tanna Tanna Malekula Pentecost Aniwa Area Council Whitesands Whitesands North West Malekula Central Pentecost South Aniwa Village Name Ipikel Ipkangien Unmet + Uri Loltong Ikaukau Population serviced No of households Potential income generating activities Other facilities connected Coastal Fishing, Tourism, Handicraft, Agricultural Produce (Peanut, Coffee and Cocoa) Health Centre, Coastal Fishing, Tourism, Handicraft, Agricultural Produce (Peanut, Coffee and Cocoa) Health Centre, Coastal Fishing, Tourism, Agricultural Produce (Kava, Copra, Logging) Health Centre, Coastal Fishing, Tourism, Women Handicraft Association, Agricultural Produce (Kava, Copra, Logging) Health Centre, Coastal Fishing, Tourism, Handicraft, Agricultural Produce (Orange Juice) Source of energy Backup system Installed capacity Estimated annual consumption Capital costs Solar PV Solar PV Solar PV Solar PV Solar PV Battery and/or Diesel Battery and/or Diesel Battery and/or Diesel Battery and/or Diesel Battery and/or Diesel 34.5 kw 22.2 kw 62.1 kw 28.5 kw 26.7 kw 49 MWh 31 MWh 88 MWh 40 MWh 38 MWh USD 362,528 USD 233,403 USD 652,500 USD 298,726 USD 280,088 7
8 NAMA Intervention 1 Eligibility Criteria Eligibility criterion Location Technology Connections Service level Income generation activities Additional producers Implementation All islands Description Energy supply: the mini-grid will be operated with solar (PV) Battery: Batteries are recommended for a steady electricity supply. Backup: Fossil-fuel back-up systems are allowed, however, the share of electricity from renewable energies must be at least 75 percent. The mini-grid must connect a minimum of 20 households. Dwellers: the minimum service level provided to dwellers needs to include at least 2 sources of lighting, radio and phone charging. The mini-grid must provide electricity for 24 hours per day. Income generation activities: the mini-grid must include opportunities for income generation activities. The following type of activities are recommended to be included but not limited to: Coastal fishing (Refrigeration of Fish Catch) Tourism Facilities (Lodges) Agricultural Facilities (preparing, processing and packaging produces) Handicrafts (lighting for women/women associations to make handicrafts) Commercial establishments (Small shops, warehouses etc) The operator of the micro-grid needs to connect private producers of electricity from renewable energy sources up to a maximum of at least 25% of the installed capacity in the micro-grid. The feed-in tariff granted to private producers needs to be in line with the requirement of the URA, as amended from time-totime. Mini-grids must be operational within 18 months of contract award. 8
9 NAMA Intervention 2 Grid Extension Province Name Penama Torba Tafea Sanma Penama Island Ambae Banks Tanna Santo Maweo Area Council East, Lolowai to St Patrick's College Vanua Lava, Sola to Mosina (4km) Lowkotai, Launapkamei, Belchief Point to Matanras (21km) Nasawa to Vonda (3km) (2km) Lenasiliang, Lownel Apen, Leninik (5km) Name of grid PENAMA Provincial TORBA Provincial UNELCO VUI Talise Community operator Government Government To be connected Secondary school & 10 Communities 10 Communities 12 Communities 2 Communities Junior College Population serviced No of households Potential income generating activities Other facilities connected Additional capacity connected (kw) Estimated Investment costs (USD) for Grid Extension Power to School & Junior college facilities including computer labs and staff quarters Church Coastal Fishing, Tourism, Agricultural Produce (Coconutnut, Coffee and Cocoa) Health Center, Coastal Fishing, Tourism, Handicraft, Agricultural Produce (Peanut, Coffee and Cocoa) Health Center, Cattle Farms, Coastal Fishing, Tourism, Agricultural Produce (Coconut, Tropical Fruits) Health Center, Tourism, Agricultural Produce (Kava and Coffee) Health Center, , , , ,000 75,000 9
10 NAMA Intervention 2 Eligibility Criteria Location Connections Eligibility criterion All islands Description The grid extension must connect a minimum of 20 additional households. Service level Dwellers: the minimum service level provided to dwellers needs to include at least 2 sources of lighting, radio and phone charging. The mini-grid must provide electricity for 24 hours per day. Income generation activities Income generation activities: the mini-grid must include opportunities for income generation activities. The following type of activities are recommended to be included but not limited to: Coastal fishing (Refrigeration of Fish Catch) Tourism Facilities (Lodges) Agricultural Facilities (preparing, processing and packaging produces) Handicrafts (lighting for women to make handicrafts) Commercial establishments (Small shops, warehouses etc) Electricity from private producers Implementation Funding The operator of the grid needs to connect private producers of electricity from renewable energy sources. The feed-in tariff granted to private producers needs to be in line with the requirement of the URA, as amended from time-to-time. Mini-grids must be operational within 18 months of contract award. The maximum grant funding to be applied for is 70 percent. 10
11 NAMA Targets GHG ERs and SD benefits Target Indicator Means of Verification Reduce GHG emissions Generate maximum contribution to sustainable development benefits Tons CO2-equivalent. Expected emission reductions according to MRV framework are approximately 2,500tons of CO2 per year and 37,500 tons of CO2 over a period of 15 years. Sustainable Development Indicators: Improvement of health situation through avoiding burning petroleum for lighting in households Improvement of livelihood of poor through provision of light, which gives possibility to work and learn in the evening Income generation opportunities through Rural Productivity Zones (RPZ) Job creation Access to clean and sustainable energy, thereby reducing dependency on imported fossil fuesl MWh of electricity produced in mini-grids and grid extension. Grid emission factor in grid extension projects. Data from operators of mini-grids and grid (for grid extension projects) Data from NIE Interviews/surveys with consumers 11
12 NAMA Institutional Set-Up 12
13 NAMA Costs Calculation Cost component Costs in million USD Investment costs Intervention 1 (mini-grids) Investment costs Intervention 2 (grid extension) Operation and management Capacity building Marketing and promotion Feasibility studies Total Distribution between international and national financing is still to be discussed and agreed upon. In the light of the recent disaster, Vanuatu s possibility to contribute will be limited to covering some parts of operation and management as well as marketing and promotion. 13
14 NAMA Measurement, Reporting and Verification 14
15 NAMA Implementation Establishment of Institutional Structure National and International Financing Intervention 1 Confirmation of interest of communities Promotion of micro-grid Feasibility study Discussions on cooperation and contracts Project approval Tender for construction Announcement of tender results Release of payment Implementation Intervention 2 Information to potential consumers Application for connection from consumers Connection Assessment Financial Implications. Submission of Application Due Diligence of Application Approval Funds Disbursement Implementation Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 15
16 For more information, please contact: Benjamin Jesse, Director, Department of Energy or Alexandra Soezer, MDG Carbon Programme Manager 16
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