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Cacao Intensification in Sulawesi: a Green Prosperity Model Project K

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Cacao Intensification in Sulawesi: a Green Prosperity Model Project K Cacao Intensification in Sulawesi: A Green Prosperity Model Project K. Moriarty, M. Elchinger, G. Hill, J. Katz, and J. Barnett Produced under direction of the Millennium Challenge Corporation by the National Renewable Energy Laboratory (NREL) under Interagency Agreement IAG-12-1866 and Task No WFQ9.1017. NREL is a national laboratory of the U.S. Department of Energy Office of Energy Efficiency & Renewable Energy Operated by the Alliance for Sustainable Energy, LLC Work for Others Report NREL/TP-5400-62434 September 2014 Contract No. DE-AC36-08GO28308 Cacao Intensification in Sulawesi: A Green Prosperity Model Project K. Moriarty, M. Elchinger, G. Hill, J. Katz, and J. Barnett Prepared under Task No. WFQ9.1017 NREL is a national laboratory of the U.S. Department of Energy Office of Energy Efficiency & Renewable Energy Operated by the Alliance for Sustainable Energy, LLC National Renewable Energy Laboratory Work for Others Report 15013 Denver West Parkway NREL/TP-5400-62434 Golden, CO 80401 September 2014 303-275-3000 • www.nrel.gov Contract No. DE-AC36-08GO28308 NOTICE This manuscript has been authored by employees of the Alliance for Sustainable Energy, LLC (“Alliance”) under Contract No. DE-AC36-08GO28308 with the U.S. Department of Energy (“DOE”). The tables and figures in this report are limited to use in this report only and are not to be further disseminated or used without the permission of the sources cited. This report was prepared as an account of work sponsored by an agency of the United States government. Neither the United States government nor any agency thereof, nor any of their employees, makes any warranty, express or implied, or assumes any legal liability or responsibility for the accuracy, completeness, or usefulness of any information, apparatus, product, or process disclosed, or represents that its use would not infringe privately owned rights. Reference herein to any specific commercial product, process, or service by trade name, trademark, manufacturer, or otherwise does not necessarily constitute or imply its endorsement, recommendation, or favoring by the United States government or any agency thereof. The views and opinions of authors expressed herein do not necessarily state or reflect those of the United States government or any agency thereof. Cover Photos: (left to right) photo by Pat Corkery, NREL 16416, photo from SunEdison, NREL 17423, photo by Pat Corkery, NREL 16560, photo by Dennis Schroeder, NREL 17613, photo by Dean Armstrong, NREL 17436, photo by Pat Corkery, NREL 17721. NREL prints on paper that contains recycled content. Contacts For additional information about this report, please contact the primary authors: Kristi Moriarty [email protected] Michael Elchinger [email protected] Acknowledgments This work is sponsored by Millennium Challenge Corporation (MCC) Indonesia Compact on behalf of MCC and MCA-Indonesia. The authors appreciate the insights and assistance of Christopher Bennett of the University of British Columbia and Edi Setianto of Jakarta. The authors further appreciate the technical and editorial assistance of Donna Heimiller, Scott Gossett, and Lynn Billman in preparing this report. The authors would like to thank the following individuals and their organizations for their time and input into this study: Fay Fay Choo, Hussain, and Ruud Engbers of Mars, Incorporated; David Ngu and Pither Sutardji of Armajaro; Low Huat of PT. Tanah Mas Celebes Indah; Suharman Sumpala and his West Sulawesi team of Swisscontact; Darmanto of Bank BRI; Thomas Jasman of BT Cocoa; Ross Jaax of Amarta II; Diederik Van Kraailkamp of Cargill; Ade Rosmana and his Cocoa Research Group team of Hassanuddin University; and Virginia Sopyla of World Cocoa Foundation. iii This report is available at no cost from the National Renewable Energy Laboratory (NREL) at www.nrel.gov/publications. Abbreviations and Acronyms AMDAL full environmental assessment CF counterfactual CO2 carbon dioxide CO2e carbon dioxide equivalent CSP Cocoa Sustainability Partnership DOE U.S. Department of Energy ERR economic rate of return ESMS Environmental and Social Management System FAS Foreign Agriculture Services GP Green Prosperity ha hectare ICCO International Cocoa Organization ICCRI Indonesia Coffee and Cocoa Research institute IDR Indonesia rupiah IFC International Finance Corporation IPB Bogor Agricultural University IPCC Intergovernmental Panel on Climate Change IRR internal rate of return kg kilograms km kilometers m meters MCA-I Millennium Challenge Account – Indonesia MCC Millennium Challenge Corporation NGO non-governmental organization iv This report is available at no cost from the National Renewable Energy Laboratory (NREL) at www.nrel.gov/publications. NPV net present value NREL National Renewable Energy Lab RFP request for proposal SPPL letter of commitment to manage the environment t ton tCO2e ton of carbon dioxide equivalent UKL-UPL environmental management and monitoring plan UNFCCC United Nations Framework Convention on Climate Change USAID United States Agency for International Development WCF World Cocoa Foundation WP with-project yr year v This report is available at no cost from the National Renewable Energy Laboratory (NREL) at www.nrel.gov/publications. Preface This study supports the Millennium Challenge Corporation’s (MCC) Compact with Indonesia.1 The National Renewable Energy Laboratory (NREL) has contributed to the Compact in many areas including by formulating project evaluation guidance; participating in stakeholder forums; and developing studies of illustrative projects meeting Indonesian and MCC requirements and aspirations. Green Prosperity, the largest project of the Compact, seeks to address critical constraints to economic growth while supporting the government of Indonesia’s commitment to a more sustainable, less carbon-intensive future. An ambitious project, Green Prosperity seeks to contribute to some of Indonesia’s most prominent development priorities including increased access to clean and reliable energy in rural areas, and improved stewardship of natural resources. This report is one of a series evaluating eight model Green Prosperity projects on behalf of MCC and the Indonesian implementing organization, Millennium Challenge Account-Indonesia (MCA-I). Each report reviews the potential of a project centered on a defined geographic area or landscape. Ideal Green Prosperity projects will be designed to improve the economic conditions of the people living in the identified landscape, integrating some combination of renewable energy, natural resources management, and sustainable land-use activities. The eight studies are identified below in Table P-1. Note that two studies— centered on Rantau Suli village and Berbak National Park—are examples of integrated projects strongly linking renewable energy production, natural resources management and sustainable land use. The other six studies are also defined in a landscape context, but focus more on particular project types identified in the Compact. All of the project types explored in the series of eight model studies can be considered by project developers and sponsors for any landscape, and in any combination that makes sense in a local context. Each study includes a project description; technical analysis; economic assessment; environmental and land-use impacts; and social implications. Other potential energy or land-use activities are also often noted. The studies are intended to serve as examples for potential project sponsors, who may choose to propose something similar, or who may be inspired to propose some other innovative project. Further, the technical, economic, environmental/land use, and social discussions and analyses in these studies are intended to help guide the assessment of proposals submitted to MCA-I for Green Prosperity funding. This report does not constitute an endorsement of the identified projects by anyone and does not give the identified projects preferential status for funding. Additional detailed analysis of formal proposals would be needed prior to any investment decision. 1 Additional information about the Millennium Challenge Corporation’s Indonesia Compact is available at http://www.mcc.gov/pages/countries/program/indonesia-compact. vi This report is available at no cost from the National Renewable Energy Laboratory (NREL) at www.nrel.gov/publications. Table P-1. The Eight Model Green Prosperity Projects Model Project Kabupaten/Province Emphasis Rantau Suli Integrated Project Merangin, Jambi Mini-hydropower, with protection of forested catchment area Berbak National Park Integrated Muaro Jambi, Jambi Forest protection and restoration, Project with off-grid solar photovoltaic power production Methane Capture for Power Muaro Jambi, Jambi Power production from methane Generation captured from palm oil mill effluent Cacao Intensification Mamuju and Mamasa, Training to improve cacao yields, Sulawesi Barat as an example of agricultural intensification Karampuang Island Solar Mamuju, Sulawesi Barat Solar photovoltaic power for an Photovoltaic Electricity island, with project options including connection to the mainland grid Grid-Tied Mini-Hydropower Mamasa, Sulawesi Barat Assessment of a larger mini- hydropower project Community Agroforestry Mamuju, Sulawesi Barat Forest boundary protection through community-based peripheral agroforestry Aggregated Micro-Hydropower Mamasa, Sulawesi Barat Transaction/implementation cost reduction through aggregation of small projects vii This report is available
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