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Mini Hydro Prefeasibility Reports RETA 7329: PROMOTING ACCESS TO RENEWABLE ENERGY IN THE PACIFIC SOLOMON ISLAND COMPONENT Technical Assistance (ADB RETA 7329) MINI HYDRO PRE-FEASIBILITY STUDIES Prepared for Asian Development Bank TA 7329- Promoting Access to Renewable Energy in the Pacific MINI HYDRO PRE-FEASIBILITY STUDIES Contents Executive Summary i 1. Introduction 1 1.1 Background 1 1.2 Problems and Objectives 1 1.3 Objectives and Scope of Report 2 1.4 Limitations of the Report 2 1.5 Structure of Report 3 1.6 Project Team 4 1.7 Acknowledgements 4 Part I 5 2. Methodology 6 2.1 Overview 6 2.2 Review of Existing Data and Information 7 2.3 Financial Analysis 8 2.4 Stakeholder Analysis: Unserved Potential Customers 8 2.5 Counterparts, Capacity Building and Training 9 2.6 Data Availability and Data Quality 9 3. Mini Hydropower in Solomon Islands 10 3.1 Definitions 10 3.2 Hydrology and Hydro Resources 10 3.3 Collection of Hydrological Data 12 3.4 Ongoing Data Collection 13 3.5 Project Design 14 4. Implementation and Financing Modalities 21 4.1 The Choices 21 4.2 Independent Power Producer 21 4.3 Enabling Environment 22 4.4 Risk Management in Hydro IPPs 23 4.5 Procurement and Implementation of IPP Projects 26 5. Financial Viability of Mini Hydropower in SI 28 5.1 Analysis of SIEA’s Financial Situation 28 5.2 Fuel Supply Cost at SIEA Outstations 30 31/25866 February 12 TA 7329- Promoting Access to Renewable Energy in the Pacific MINI HYDRO PRE-FEASIBILITY STUDIES 5.3 Supply Cost and Benefits of Hydropower 31 5.4 Carbon Finance 32 Part II 34 6. Identification of Sites 35 6.1 Overview 35 6.2 Consultations and Preliminary Site Selection 36 6.3 Site Specific Investigations and Field Missions 36 7. Auki Malaita 38 7.1 The Auki Power System 38 7.2 Auki Load Forecast 41 7.3 System Expansion Planning Auki 44 7.4 Hydro Options for Malaita Province and Auki 45 7.5 General Description Fiu 47 7.6 Hydrology 48 7.7 System Layout 48 7.8 Variations 50 7.9 Cost Estimates 51 7.10 Financial Analysis 52 8. Lata, Temotu 55 8.1 The Lata Power System 55 8.2 Lata Load Forecast 58 8.3 System Expansion Planning Lata 62 8.4 Hydro Options for Lata 64 8.5 General Description Luembalele 64 8.6 Hydrology 65 8.7 System Layout 66 8.8 Cost Estimates 68 8.9 Financial Analysis 68 9. Ringgi, Noro and Munda, Western Province 71 9.1 The Noro/Munda Power System 71 9.2 Load Forecast 73 9.3 Noro/Munda System Expansion Planning 77 9.4 Hydro Options for Western Province 79 9.5 General Description Vila 80 9.6 Hydrology 82 9.7 System Layout 84 9.8 Variations and Least Cost Option 86 31/25866 February 12 TA 7329- Promoting Access to Renewable Energy in the Pacific MINI HYDRO PRE-FEASIBILITY STUDIES 9.9 Cost Estimates 86 9.10 Financial Analysis 87 9.11 IPP Financial Analysis: Bulk Energy Transfer Price 91 10. Taro 94 10.1 The Taro Power Supply 94 10.2 Load Forecast 95 10.3 Taro System Expansion Planning 98 10.4 Hydro Options for Taro 99 10.5 Hydrology 100 10.6 System Layout 101 10.7 Cost Estimates 104 10.8 Financial Analysis 105 11. Mataniko and Lungga, Honiara 108 11.1 The Honiara Power System 108 11.2 Load Forecast 111 11.3 System Expansion Planning 116 11.4 Hydro Options for Honiara 116 11.5 General Description Mataniko 117 11.6 Hydrology 118 11.7 System Layout 118 11.8 Variations 120 11.9 Cost Estimates 122 11.10 Financial Analysis 123 12. Environmental Aspects 128 12.1 Methodology 128 12.2 Project Description 129 12.3 Local Environment Auki, Malaita Province 129 12.4 Local Environment Taro, Choiseul Province 131 12.5 Local Environment Lata, Temotu Province 133 12.6 Local Environment Ringgi, Western Province 135 12.7 Local Environment Mase River, Western Province 136 12.8 Local Environment Mataniko River, Guadalcanal 138 12.9 Screening of Environmental Impacts 138 12.10 Environmental Management Plan and Monitoring 143 12.11 Conclusion and Recommendations 144 13. Social and Poverty Analysis 145 13.1 Introduction 145 31/25866 February 12 TA 7329- Promoting Access to Renewable Energy in the Pacific MINI HYDRO PRE-FEASIBILITY STUDIES 13.2 Methodology 145 13.3 Stakeholder Analysis 146 13.4 Poverty and social exclusion 147 13.5 Management of Social risks and Vulnerabilities 150 13.6 Social safeguards 151 13.7 Site Specific Findings 153 14. Conclusions and Recommendations 160 Picture Index Picture 3.1: Data Recording Equipment 12 Picture 3.2: Features of SI Rivers 14 Picture 7.1: Auki Power Generation 39 Picture 7.2: Pulalaha Limestone Gorge at Afio 46 Picture 7.3: Fiu River 47 Picture 8.1: Luembelele River, Santa Cruz 65 Table Index Table 2.1: Sites Selected for Pre-Feasibility Studies 6 Table 2.2: Shortlisted Sites and Variants 7 Table 4.1: Risks for a Hydro IPP during Construction 24 Table 4.2: Risks for a Hydro IPP during Operation 25 Table 5.1: Summary of Operational Financial Results for all Stations, ($SBD) 2003-2007 30 Table 5.2: Delivered Diesel Fuiel Cost by Outstation (SBD$/litre, June 2010) 31 Table 6.1: Potential Impact of Hydro Projects on Electrification Rates of Provinces 37 Table 7.1: Generation Assets Auki Power Plant, April 2011 38 Table 7.2: New Domestic Loads Expected in Auki following System Extension 41 Table 7.3: Auki System Load Forecast, Generation Requirements, Fuel Requirements and Generator Scheduling 43 Table 7.4: Potential Loads in Afio 45 Table 7.5: Characteristics Ruala’e Site Auki 46 Table 7.6: Design Variations for Fiu Hydro Site 50 Table 7.7: Design Parameters of Variations 51 Table 7.8: Investment Cost Fiu River Hydropower Scheme 51 Table 7.9: Sensitivity Analysis, Auki 53 Table 8.1: Population, Lata 55 Table 8.2: Generation Assets - Lata Power Pant 56 Table 8.3: New Loads expected in Lata following System Upgarde 59 Table 8.4: Lata System Load Forecast, Generation Requirements, Fuel Requirements, and Generator Scheduling 61 31/25866 February 12 TA 7329- Promoting Access to Renewable Energy in the Pacific MINI HYDRO PRE-FEASIBILITY STUDIES Table 8.5: Distribution Cost Summary Option B 63 Table 8.6: General Information - Luembelele Hydro Plant 67 Table 8.7: Variations 67 Table 8.8: Cost Estimates 107 kW Hydro Scheme 68 Table 8.9: Sensitivity Analysis 70 Table 9.1: Industrial Demand Growth Noro by end of 2011 74 Table 9.2: Ringgi System Load Forecast (Varian A), Generation Requirements, Fuel Requirements and Backup Generator Scheduling 75 Table 9.3: Ringgi Noro Munda System Load Forecast (Variant B), Generation Requirements, Fueld Requirements and Backup Generator Scheduling 76 Table 9.4: Options for Ringgi, Munda and Noro 80 Table 9.5: Location of Intakes and Powerhouses 82 Table 9.6: Catchment Run Off Vila River 83 Table 9.7: Capacity and Energy of Vila Options 84 Table 9.8: Cost Estimates 87 Table 9.9: Sensitivity Analysis, Ringgi (Variant A) 89 Table 9.10: Sensitivity Analysis, Ringgi (Variant B) 91 Table 9.11: Calculation of a Bulk Energy Price (SBD/kWh) that Achieves FIRR=15% 92 Table 9.12: SIEA Analysis, Hydro Energy Purchase from IPP (Ringgi, Variant B) 93 Table 10.1: Installed Generation in Taro 95 Table 10.2: Load Forecast Taro 97 Table 10.3: Calculated Runoff for Sorawe Catchments 100 Table 10.4: Characteristics of Sorawe Alternatives 104 Table 10.5: Cost Estimates Tarp Hydro 105 Table 10.6: Sensitivity Analysis, Taro 107 Table 11.1: Honiara Generator Status May 2011 109 Table 11.2: Honiara System Load Forecast, Generation Requirements, Fuel Requirements, and Backup Generator Scheduling (With Tina) 113 Table 11.3: Honiara System Load Forecast, Generation Requirements, Fuel Requirements, and Backup Generator Scheduling (Without Tina) 114 Table 11.4: Design Variations of Lungga Low Head Scheme 116 Table 11.5: Technical Characteristics of Mataniko Variations 121 Table 11.6: Cost Estimates Mataniko Hydro 121 Table 11.7: Sensitivity Analysis, Mataniko (with Tina) 125 Table 11.8: Sensitivity Analysis, Mataniko (without Tina) 126 Table 12.1: Public Consultations 127 Table 12.2: Environmental Categorisation 143 Table 13.1: Summary Stakeholder Analysis 146 Table 14.1: Summary of Hydro Projects 159 31/25866 February 12 TA 7329- Promoting Access to Renewable Energy in the Pacific MINI HYDRO PRE-FEASIBILITY STUDIES Figure Index Figure 3.1: Lata Rainfall 25 Years 10 Figure 3.2: Flow Duration Curves Lungga River 11 Figure 3.3: Typical Intake Structure 16 Figure 3.4: Recommended Sand Trap Design 17 Figure 3.5: Headrace Canal Cross Section 17 Figure 3.6: Peak Ground Acceleration 20 Figure 6.1: Location of Sites Considered and Studied 35 Figure 7.1: Auki Load Profile 39 Figure 7.2: Auki Load Forecast 41 Figure 7.3: Auki Capacity Requirements 44 Figure 7.4: Location of Fiu 47 Figure 7.5: Flow Duration Upper Fiu River 48 Figure 7.6: Fiu Branch Profile 48 Figure 7.7: Fiu Hydro Scheme Layout 49 Figure 7.8: Levelized Cost versus Installed Capacity 50 Figure 7.9: Auki Hydro Scenario 52 Figure 7.10: Auki All-Diesel Scenario 52 Figure 7.11: Profit/(Loss) after Tax and Finance Charges, Auki 53 Figure 8.1: Load Profiles, Lata 57 Figure 8.2: Lata Existing 415 V AC LV Distribution Single Line Diagram 57 Figure 8.3: Lata Power System Load Forecast 59 Figure 8.4: Generation Mix Lata with Hydro 60 Figure 8.5: Lata Peak Load, Installed Capcity and Firm Capacity 62 Figure 8.6: Location of Luembelele Hydro Site 65 Figure 8.7: Assumed Flow Duration Curve for Luembelele 66 Figure 8.8: System Layout 66 Figure 8.9: Revenue vs Expenses Lata Hydro 69 Figure 8.10: Revenue vs Expenses Lata All Diesel 69 Figure 8.11: Lata Profit and Loss Diesel and Hydro 70 Figure 9.1: Load Profiles Noro on Two Consecutive Weekdays 71 Figure 9.2: Load Forecasts Variant A and B 74 Figure 9.3: Mase and Vila Hydro Sites 79
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