Renewable Energy in the Pacific Region: Opportunities for the CTCN

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1 Renewable Energy in the Pacific Region: Opportunities for the CTCN

2 About ITP Established in 1981 Global leader in renewable energy and energy efficiency consulting and project management Expertise spanning the breadth of renewable energy and energy storage technologies Over 2,000 consultancy contracts in over 100 countries

3 Renewable energy on small islands Island nations face energy sector challenges: Demand > supply. Existing infrastructure - unreliable, poor quality, expensive, polluting Smaller-scale, off-grid systems = shift to larger scale gridconnected systems Technology improving Cost falling Experience - increasing Widespread opportunities for developmental gains Reduced ghg emissions

4 Economic benefits Reduced exposure to diesel price fluctuations Improved balance of payments Reliable and inexpensive electricity boosts economic growth Improved power quality Local employment and capacity building

5 Social benefits Reliable power supply with predictable costs = ability to plan business Significant benefits on indoor air quality, health, education and fertility reduction. Local employment, construction and operation

6 Environmental benefits Avoided marine and terrestrial diesel spills Avoided local air pollution Avoided greenhouse gas emissions Greatly reduced noise pollution

7 Investment case Diesel imports often 20-40% nation s outgoings Levelised cost of utility scale solar can be around 15-20c/kWh avoided diesel costs about 30+ c/kwh Independent Power Producers are seeking Power Purchase Agreements

8 Challenges to successful renewable energy projects on islands Well understood challenges: High capital cost Intermittency (wind and solar) Reliability, especially in tropical marine environments Lack of local engagement and project ownership Weak governance Poor regulatory framework for attracting private sector investment Difficulty in long-term maintenance planning Lack of local capacity Brain drains

9 Challenges to successful renewable energy projects on islands Less well-known challenges ITP has seen over the years: Logistics can be very complicated Getting accurate data and information is difficult (eg powerhouse data, shipping schedules) Limited market for companies with experience in designing and building renewable energy systems on island environments

10 The future high penetration renewables? On many islands >90 per cent renewable energy is technically achievable. Capital cost of displacing diesel with a range of complementary renewable energy technologies is falling LCOE already better than diesel ITP was involved in a study of 100 per cent renewable energy for Samoa showed a combination of hydro, wind, biomass, PV and short-term battery storage would minimize electricity cost and greatly increase % RE. The falling cost of battery storage in particular may soon lead to a paradigm shift away from diesel generation.

11 Case study 1 Tonga Tonga Energy Roadmap Institutional & Regulatory Framework Strengthening Project

12 Case study 1 Tonga Preparation of systems to enable renewable energy projects to be implemented in TPL networks a least-cost generation and associated network development plan for renewable energy plants scheduled to achieve a target of 50% reduction in imported fuel for electric generation by 2020 Develop a guiding plan for system development to 2030 Provide planning tools, instructions and training of TPL staff so that the plans may be updated by TPL

13 Case study 1 Tonga Policy Reviews Independent Power Producers Connection Agreements Network Extension, Customer Contribution and Asset Ownership Policy Feasibility Study Findings Conversion of Generators from Diesel to Gas Utility-Scale Energy Storage Electric Vehicles Energy Efficiency and Demand-Side Management Climate Proofing Tariff Modelling Modelling the tariff impacts The fuel component The non-fuel component Load Impacts Asset ownership options

14 Case Study 1 Tonga - Recommendations 1. Residential DSM and EE measures including efficient lighting, MEPS, replacement of old appliances and installation of water heater controls 2. Commercial DSM, including MEPS, energy audits, tax changes to encourage efficient equipment, peak load reduction via awareness, case studies, trials, agreements, TOU tariffs and controlled loads 3. Standardised connection agreements, gross metering with power purchase price based on avoided cost of generation for small-scale (0-5 kva) and medium-scale (5-200 kva) private DG 4. Smart meter rollout to facilitate control options and new tariff structures 5. Staged tender or reverse auction for RE generation capacity (MW) (if TPL owned) or generation (MWh) (if IPP)

15 Case Study 1 Tonga - Recommendations cont. 6. Tender for energy storage in line with increased RE and DSM 7. Develop new tariff model with integrated fuel and non-fuel components based on LCOE costings 8. Examine replacement of older MaK generator with LNG or another diesel, if price of diesel increases and when the generator needs replacement 9. Use sea level rise maps and projected temperature rises when specifying and siting new infrastructure 10. Consider EV demonstration and V2G opportunities as part of network upgrades and smart grid deployment

16 Case Study 2 - Tokelau

17 Case Study 2 - Tokelau ~1,400 people on three atolls GDP per capita ~$1,000 USD no significant land > 2m above sea level most food and drink is shipped to the islands using NZAID funding to pay for diesel

18 Case Study 2 - Tokelau - system details PV with storage minigrid system ~1 MW of PV distributed across three atolls 2.5 days of battery storage Existing generator grid used Systems installed in Q3 Q4 2012, and have been providing 90%+ of atolls energy needs from solar power Cost of total project was roughly NZD 8.5 million

19 Case Study 2 - Tokelau - Results Social, Governance and Environmental outcomes Informed community Greater understanding of: energy generation and use principles the need to charge and collect an appropriate tariff how a tariff might be set to assist economic growth governance and reporting structures Energy education now in the school curriculum Technical staff well trained on management of the generation assets Risk of environmental damage greatly reduced

20 Case study 3 MFAT Pacific Islands Energy Panel Samoa Renewable Energy Roadmap Feasibility studies and site identification for projects identified in the Renewable Energy Roadmap Client s Engineering services for a 2.2MW gridconnected PV system and a 250kW roof-mounted system

21 Case study 3 MFAT Pacific Islands Energy Panel Cook Islands Feasibility study for 100% renewable energy hybrid systems for the Cook Islands Southern Group Assessment of existing energy supply and distribution systems Feasibility study for stand-alone hybrid solar energy systems for each island Design of stand-alone hybrid solar photovoltaic systems for all four islands

22 Case study 3 MFAT Pacific Islands Energy Panel Tuvalu Client s Engineering services for 200kW-400kW stand-alone solarhybrid power systems for four of Tuvalu s very remote outer islands, including: Feasibility studies Design Tender specifications Client s Engineering services for 170 kw of grid-connected PV systems on buildings in Funafuti.

23 CTCN TA possibilities Technology assessments: generation, storage, energy efficiency, DSM, networks etc Energy demand analysis and projections Network stability studies: how much renewable energy capacity can be added, where and when.. Least cost energy supply studies (Roadmaps) Feasibility studies Technical design to assist with tendering tender reviews Owners engineering roles Smart grids

24 CTCN TA possibilities Strategic or policy advice Regulatory regime reviews tariff modelling Electricity sector governance reform Financing options Enabling private sector investment Legislative drafting Asset management Capacity Building / Training

25 Thanks very much for your time and interest IT Power Renewable Energy Consulting Southern Cross House, 6/9 McKay St, Turner, ACT PO Box 6127 O Connor, ACT 2602 info@itpau.com.au p +61 (0) f +61 (0) itpau.com.au