AA ConceptConcept PlanPlan forfor AllocationAllocation ofof MethaneMethane ResourcesResources forfor LakeLake KivuKivu’’ss OptimalOptimal DevelopmentDevelopment
•PrinciplesPrinciples ofof ConcessioningConcessioning •AllocatingAllocating GeographicGeographic ZonesZones •AllocatingAllocating GasGas--bearingbearing ResourcesResources The Authority created to develop Lake Kivu must, through a process of concessioning, ensure that the available resource is allocated and used in a way that ensures fair, safe, competitive and responsible development. This process is the primary tool in governing the social contract between gas developers, their host countries and their riparian populations. • Process must enable and encourage investment on Lake Kivu • Protect each country’s economic and social interests • Provide for an appropriate spectrum of viable energy (power, gas & fuel) • Provide for cost-effective energy supply to people, commerce & industry • Maximise resource value delivered through its efficient utilisation • Enable long-term, sustainable resource use • Provide a fair, secure & equitable allocation of resource to concessionaires • Ensure that the resource is neither damaged, abused or destroyed • Ensure compliance by concessionaires to the Management Prescriptions Historically concessions have been applied for and granted on the basis of output, i.e. MW of Power. This form of allocation is subject to abuse through the use of low-technology, inefficient gas extraction and power conversion equipment. This approach can result in wastage of the resource and deliver less energy each year, and over the life of the resource, than is possible or desirable. The total concessionable resource cannot be determined. For this reason, the resource must be allocated and measured in its original form, as a volume of gas-bearing water. Efficient use is thus rewarded. •Geographic zones in a radial model •Centred on the deepest part of the lake •Allows each concessionaire access to all depth zones •Spacing between plants will be specified •Concession area will show the plant siting options Uganda
Rwanda DRC Rwanda
Goma Gisenyi
NASANASA SatelliteSatellite PhotosPhotos –– LakeLake KivuKivu Uganda
Rwanda DRC Rwanda
Goma Gisenyi
Power Plant Sites
Gas Plant Sites
NASANASA SatelliteSatellite PhotosPhotos –– LakeLake KivuKivu Concessions Map (Conceptual only) — Rwanda — A – Gisenyi — B – Cap Rubone — C – Rambo — D – — E – Kibuye — DRC — A – Goma — B – Goma West — C – Kabuno — D – Ishungu — E – Kalehe — E1 – Idjwi (east) • Methane Resources are allocated as illustrated on a “pie-chart” model • Quantum based on equally distributing each level of methane resource • “pie-slice” shows the total allocation of methane in each zone • Allocation based on a percentage of the country’s share of the bilaterally agreed maximum rate of extraction (see graphics) • Power output from a concession is a function of the plant efficiencies Resource Depletion Models
Moderate Yield Case - Conservative High Yield Case – High Power Scenario Resource Depletion Models — Maximum Potential Case – High Recovery, Highest Power Efficiency
Power Output - Duration Options for Lake Kivu MWe (Maximum Potential Case - Highest Efficiency)
40 1 200 45
1 000 50 55
800 60
70 600
400 Targeted Years of Operation 200
- 0 20 40 60 80 100 Years of Extraction Resource Accumulation Resource Allocations based on 50 yrs @640MW
DRC A, 20% Rwanda A, 20%
PeakPeak PowerPower DRC B, 20% PotentialPotential (MW)(MW) Rwanda B, 20% LakeLake ZoneZone AllocationAllocation
DRC C, 20% Rwanda C, 20%
Rwanda D, 20% DRC D, 20% km33of CH in each kmkm ofof CHCH44 inin eacheach concessionconcession byby zonezone
DRC E,E1, 20% Rwanda E, 20% Resource Distribution for 50 years @640MW
Rwandan or DRC 50 year A B C D E Kivu Concessions Total Distribution (for example) 20% 20% 20% 20% 20% 100%
3 LRZ Resource (km CH4) 3.55 3.55 3.55 3.55 3.55 35,5 3 URZ Resource (km CH4) 1.78 1.78 1.78 1.78 1.78 17.8 3 PRZ Resource (km CH4) 1.34 1.34 1.34 1.34 1.34 13.4 3 IZ Resource (km CH4) 1.60 1.60 1.60 1.60 1.60 16.0 3 Total Resource (km CH4) 8.27 8.27 8.27 8.27 8.27 82.7
Peak Power @40% eff.(MWe) 64 64 64 64 64 640
Peak Power @60% eff.(MWe) 96 96 96 96 96 960
Res. Zone Power only (MWe) 51 51 51 51 51 510 Guidelines for Concessioning
— Geographic Allocation — Radial slices of lake’s surface — mapped with origin at lake’s deepest point — Concession areas to include shore access for power plant & facilities — Geographic concession area independent of size of resource allocation — All concessions can access every depth of lake with this “pie” layout Guidelines for Concessioning — Resource Allocation — Resource “slices”, each of say 20% of available resource — Concessions to be volumetric allocation of resource water from each of
LRZ, URZ, PRZ and IZ (not as previously stated in MWe) — Differentiated Gas Royalties rates may be determined for each of LRZ, URZ, PRZ and IZ to encourage maximum resource use — Time limit on concessions to be set, at say 25 years, renewable for 25 yrs Concessioning Issues
— Process for concessioning: — Bidding is a common practice to distribute concessions — Defaulting concession agreements need retraction & re-issue — Funds raised must be allocated to infrastructure & capacity building — Protection or reorganisation of any existing rights to be evaluated — Bid documents to include MP’s to clarify requirements — Trade-ability of successful concession bids to be controlled — Number of bids allowed per bidder to be capped at 1 or 2 — Bid docs to request time-line of implementation Concessioning Issues
— Infrastructure — GoR is to provide road and 110/220kV power-line access — Power interconnection studies are required — Milestones — Time bounds to be set for concession development — Concession milestones to be proposed in bid documents — Negotiations will finalise concession milestones Concessioning Issues
— Financial — Tax and duty concessions & incentives to be provided in bid documentation as applicable to local and foreign investors — Guarantees required on removal of plant & pipeline at end-of-life to be specified. — Clarity is required on repatriation of investments and profit for foreign investors DRC A, 20% Rwanda A, 20%
DRC B, 20% Rwanda B, 20%
DRC C, 20% Rwanda C, 20%
Rwanda D, 20% DRC D, 20%
DRC E,E1, 20% Rwanda E, 20%
•The protection of Lake Kivu as a productive asset and ongoing resource for the people of the region is dependent on a proper concessioning policy that rewards responsible and efficient use. •Without resource-based definition, the governments will never know how much resource they can put out to concession. •High yield and high output ~960MW can be made possible from Lake Kivu •Policy needs to be written accordingly