Technical Assistance Consultant’s Report
Project Number: 42078-012 September 2011
REG: Promoting Energy Efficiency in the Pacific (Phase I) (Financed by the Asia Clean Energy Fund under the Clean Energy Financing Partnership Facility)
Prepared by Econoler International
Econoler International Quebec, Canada
For the Asian Development Bank (Executing Agency)
This consultant’s report does not necessarily reflect the views of ADB or the Government concerned, and ADB and the Government cannot be held liable for its contents. (For project preparatory technical assistance: All the views expressed herein may not be incorporated into the proposed project’s design.
Asian Development Bank TA 6485-REG: Promoting Energy Efficiency in the Pacific - Contract No. COSO/90-492 Final Report
ASIAN DEVELOPMENT BANK
TA 6485-REG: PROMOTING ENERGY EFFICIENCY IN THE PACIFIC Contract No. COSO/90-492
FINAL REPORT - May 2011 -
Econoler 1 Ref.: 5505 Asian Development Bank TA 6485-REG: Promoting Energy Efficiency in the Pacific - Contract No. COSO/90-492 Final Report
ABBREVIATIONS AND ACRONYMS
AUD Australian Dollar ADB Asian Development Bank ADO Automotive Diesel Oil or Distillate APEC Asia-Pacific Economic Cooperation CCI Chamber of Commerce and Industry CFL Compact Fluorescent Lamp CI Cook Islands CIF Cost, Insurance, Freight
CO2 Carbon Dioxide COP Coefficient of Performance CSO Community Service Obligation (under PNG law) DEC Department of Environment and Conservation DF Department of Forestry (PNG) DNPM Department of National Planning and Monitoring (PNG) DPE Department of Petroleum and Energy (PNG) DPRP Diesel Power Replacement Programme (PNG) DSM Demand-Side Management ECM Energy Conservation Measure ED Energy Division (DPE, PNG) EE Energy Efficiency EESCOs Energy Efficiency Service Companies EEZ Exclusive Economic Zone EI Energy Intensity ELCOM Electricity Commission of PNG (now PPL) EPU Energy Planning Unit EPC Electric Power Corporation (Samoa) ESCO Energy Service Company GDP Gross Domestic Product GEF Global Environment Facility – a funding source for EE projects in developing countries GHG Greenhouse Gas GNP Gross National Product GoPNG Government of Papua New Guinea HPS High Pressure Sodium (lamp) ICCC Independent Consumer and Competition Commission (PNG) IGA Investment Grade Audit IMF International Monetary Fund IPCC Intergovernmental Panel on Climate Change IPP Independent Power Producer JICA Japan International Cooperation Agency
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Ktoe Kilotonnes of Oil Equivalent kWe Kilowatt Electric, Output LED Light-Emitting Diode (lamp) LPG Liquefied Petroleum Gas MCA Millennium Challenge Account MDGs Millennium Development Goals MEPS Minimum Energy Performance Standards MHDP Micro-Hydro Development Programme (PNG) MLSNR Ministry of Lands, Survey, Natural Resources (Kingdom of Tonga) MNRE Ministry of Natural Resources and Environment (Samoa) MV Mercury Vapor (lamp) MT Medium Tension (medium voltage power distibution) NCD National Capital District (PNG) NEC National Energy Committee (Cook Islands) NISIT National Institute of Standards and Industrial Technology (PNG) NSO National Statistical Office NZ New Zealand NZD New Zealand Dollar, also used as Cook Islands Currency OCCES Office of Climate Change and Environmental Sustainability (PNG) PDF Project Development Facility (a project grant funding source from GEF) PDMC Pacific Developing Member Country (of ADB) PEEP Promoting Energy Efficiency in the Pacific (this RETA) PF Power Factor PFC Power Factor Correction Power Factor Correction System (e.g capacitors to correct for lagging power factor PFCS from inductive loads) PGK Kina, PNG Currency PDMC Pacific Developing Member Country (of ADB) Pacific Islands Energy Policy and Strategic Action Planning (a project under the EU PIEPSAP Energy Initiative implemented from 2004 to 2008) Pacific Islands Greenhouse Gas Abatement and Renewable Energy Project (of UNDP- PIGGAREP GEF being implemented from 2008 for a scheduled 5 years) Pacific Island Renewable Energy Project (of UNDP-GEF, implemented from 2003 to PIREP 2006 and serving as the preparatory phase of PIGGAREP) PNG Papua New Guinea POM Port Moresby (PNG) POMCCI Port Moresby Chamber of Commerce and Industry (PNG) PPL PNG Power Limited (public electric utility) PPP Purchasing Power Parity R&D Research and Development RE Renewable Energy REEEP Renewable Energy and Energy Efficiency Partnership
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RETA Regional Technical Assistance (of ADB) RRP Report and Recommendation to the President (of ADB) S&L Standards and Labeling SHA Samoa Hotel Association SOPAC South Pacific Applied Geoscience Commission SPC South Pacific Commission SPREP Pacific Regional Environment Programme TA Technical Assistance Te Uponga Uira – the electricity utility in Rarotonga (the main population island), Cook TAU Islands TERM Tonga Energy Road Map toe Tonnes of Oil Equivalent toea Subunit of PGK, PNG Currency TOP Pa’anga, Tonga Currency TPF Third-Party Financing TPL Tonga Power Limited UNDP United Nations Development Programme UNELCO Union Electrique du Vanuatu Ltd UNEP United Nations Environment Programme UNITECH PNG University of Technology (City of Lae) USD United States Dollar VAGST Value Added Goods and Services Tax VHRA Vanuatu Hotels and Resorts Association VSD Variable Speed Drive VUV Vatu, Vanuatu Currency WST Tala, (Western) Samoa Currency
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Exchange Rates
Local Currency to United States Dollar (USD) at February 2011
Country Local Currency USD
Cook Islands New Zealand Dollar (NZD) 0.749
Tonga Pa’anga (TOP) 0.639
Samoa Tala (WST) 0.419
Papua New Guinea Kina (PGK) 0.381
Vanuatu Vatu (VUV) 0.0108
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TABLE OF CONTENTS EXECUTIVE SUMMARY ...... VII 1 PROJECT OBJECTIVES AND ENERGY EFFICIENCY OVERVIEW ...... 1 1.1 Introduction ...... 1 1.2 Project Objective ...... 2 1.3 importance of ENERGY EFFICIENCY ...... 2 1.4 Energy Efficiency Definition ...... 3 2 ENERGY EFFICIENCY ASSESSMENT OF PARTICIPATING COUNTRIES ...... 5 2.1 Energy Sector Comparison ...... 5 2.2 Socio-Economic Comparison ...... 14 2.3 Past and Ongoing EE/DSM Experience ...... 20 2.4 Barriers to EE/DSM Implementation ...... 26 3 POLICY AND INSTITUTIONAL RECOMMENDATIONS ...... 31 3.1 Government energy efficiency management organization ...... 31 3.2 electric utility DSM organization ...... 32 3.3 General information/awareness programs ...... 33 3.4 Education and training ...... 34 3.5 Energy labeling and Minimum energy performance standards ...... 36 3.6 Building code and enforcement ...... 39 3.7 Public sector procurement ...... 40 4 RECOMMENDATIONS FOR FUTURE EE PROGRAMS ...... 41 4.1 Government Buildings ...... 42 4.2 Street Lighting ...... 44 4.3 Residential CFLs ...... 46 4.4 Hotel Sector ...... 47 4.5 Power Factor CORRECTION ...... 49 4.6 Water Sector ...... 50 4.7 Energy Labeling and MEPS ...... 51 5 PILOT PROJECTS ...... 54 5.1 CFLs in Cook Islands ...... 54 5.2 PFC installation in PNG ...... 59 5.3 PFC installation in SAMOA ...... 64 5.4 Street Lighting LED Implementation in Tonga ...... 69 5.5 EE in Hotel Sector in Vanuatu ...... 74 CONCLUSIONS ...... 81 APPENDIXES: (SEPARATE DOCUMENTS) ...... 85
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EXECUTIVE SUMMARY
The Promoting Energy Efficiency in the Pacific (PEEP) ADB Regional TA (RETA) was approved in September 2008, and it was financed on a grant basis by the Clean Energy Fund under the Clean Energy Financing Partnership Facility. The RETA arose from a consultation process conducted in 2007 on behalf of the Global Environment Facility (GEF) Pacific Alliance for Sustainability. Five ADB PDMCs (Pacific Developing Member Countries - Cook Islands, Papoa New Guinea, Samoa, Tonga, and Vanuatu) expressed keen interest and assigned high priority to reducing their consumption of fossil fuels. Similar interest and priority was expressed by Papua New Guinea (PNG). The PEEP project therefore covers these five PDMCs. This RETA follows the work undertaken in the ADB REEP (Renewable Energy and Energy Efficiency in the Pacific) project operated from 2004 – 2006. The PEEP RETA is complementary to the Pacific Island renewable energy sector scoping work undertaken by the GEF funded PIREP project and the practical renewable energy project implementation focus of the current GEF funded PIGGAREP project.
The overarching purpose of this PEEP RETA was to identify a pipeline of specific energy efficiency assistance projects for funding or cofinancing by ADB, GEF, or other sources, with particular emphasis on follow-on project funding under the GEF-4 funding round. This has been successfully achieved with the GEF endorsement of a follow-on PEEP Phase 2 (PEEP-2) project with nearly $8 million of funding approved by GEF and ADB, to implement a range of practical and tangible energy efficiency measures in the power sector of the five applicable PDMCs.
The specific envisaged outputs of this PEEP-1 as stated in the approved RETA were1: - 1. Assessment of the EE policy and regulatory framework and past EE assistance in the Pacific, with dissemination of lessons
2. EE policy and regulatory frameworks recommended for adoption in five selected PICs [now PDMCs] 3. Recommended best way of promoting and setting up structured energy management systems to sustain EE initiatives, including possible EESCOs [Energy Efficiency Service Companies]
4. Training needs assessments and services and other assistance with regulatory/ institutional reform to promote a viable market for EE services in each country
5. Pipeline of assistance projects for funding by ADB, GEF, or other relevant financing sources
6. A strategy for public awareness raising and education
1 From the September 2008 PEEP-1 RETA RRP’s Design and Monitoring Framework
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In the PEEP RETA, as it was implemented, the objectives were narrowed to primarily focus on the main island electricity grids in each PEEP PDMC, and the objectives were restated and simplified to: -
(i) establishment of baseline of energy use in the five PDMCs, (ii) develop energy efficiency policy recommendations, (iii) identification of a pipeline of energy efficiency initiatives/projects for subsequent funding, (iv) implement a pilot energy efficiency project in each of the five PDMCs.
In this PEEP-1 project there was a strong emphasis on implementing a suitable high priority, relevant and real energy efficiency pilot project in each of the applicable five PDMCs, to provide the solid basis to underpin the development of the practical implementation components of the envisaged successor GEF-funded project (the PEEP-2 project that is now approved and in the process of recruiting consultants). The PEEP-1 project faced a number of challenges and delays in its implementation, but ultimately achieved most of the objectives sought. As found in similar previous Pacific regional energy projects (such as REEP and PIREP), the ADB PEEP-1 project found that there was a general lack of available and comparable basic inter-PDMC energy data. Energy supply data at the national level is not generally gathered and recorded on a systematic basis, and inconsistencies and yearly changes (for example in the timing of oil product tanker deliveries) mean that times series data is generally highly suspect. The baseline energy data inadequacies in the Pacific are a long standing problem, and one that the PEEP-1 project was not able to overcome. The project also faced a range of other constraints including i) a lack of capacity in counterpart government energy agencies; ii) a general lack of focus on energy use breakdowns by economic sector in the applicable energy utilities; and, iii) difficulty recruiting and motivating suitably qualified and motivated local consultants to implement energy efficiency measures.
This PEEP-1 RETA successfully identified and implemented a priority energy efficiency pilot project in each of the five PDMCs covered in this project. Four energy efficiency technologies (LEDs for street lighting in Tonga, CFL distribution in Cook Islands, hotel EE in Vanuatu, and power factor correction (PFC) in both Samoa and PNG were successfully demonstrated in this RETA. Three of the demonstrated pilot technologies have been chosen as key energy efficiency actions to be implemented in the follow-on ADB PEEP Phase 2 project that has now successfully obtained its funding approval from GEF and ADB. The remaining PFC energy efficiency measure is clearly a highly relevant and useful measure in terms of power network efficiency and stability. However, upon further detailed analysis, it was found that it did not lead to sufficient GHG reductions to be funded by GEF and is thus not considered in the follow-on implementation project to this RETA.
Working on regional energy projects in the Pacific is always a challenge due to the huge distances between countries and regions/islands with only limited populations, major differences between countries and often between different islands and regions in many countries. Not to mention a general lack of national capacity. Energy efficiency is even more of a challenge to implement in PDMCs than in energy supply-side projects as energy efficiency involves more than simple engineering. Indeed, it also involves institutions, the motivation of utilities and energy users, and a range of project-specific implementation details that cannot be fully specified upfront but which have to be tailored to individual circumstances during implementation.
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Ultimately, this TA project successfully identified and implemented residential CFL, LED street lighting and hotel energy retrofit measures that are at the core of the approved GEF-funded PEEP Phase 2 successor project.
Where data availability permitted, this TA also developed a baseline of energy use and a summary of applicable energy efficiency measures for the five PDMCs that will provide a useful background for its successor ADB-GEF PEEP Phase 2 implementation project.
With the recent (late 2010 and early 2011) rise of world crude oil prices back up to USD 100/barrel and beyond, the affordability of diesel fuel for power generation is once again a highly topical issue for PDMCs. As has been demonstrated in the recent best practice multi-donor Tonga Energy Road Map (TERM) development phase, reductions in the economic impact of diesel fuel use for power generation requires the implementation of an integrated and long-term focused mix of renewable energy, supply-side energy efficiency, fuel purchase supply chain measures and, last but not least, energy efficiency measures. This project provided the basis for the ADB contribution to the energy efficiency measures of TERM, as well as to specific energy efficiency measures implemented in the Cook Islands, Papua New Guinea, Samoa and Vanuatu. More detailed country level implementation design, management and procurement challenges lie ahead but this ADB TA project provides a solid basis from which to go forward. It is also important to recognize that even though energy efficiency in PDMCs has been the subject of many studies and analyses, the latter have not resulted in concrete pilot project implementation. Thus, this project is a useful starting point for a future that hopefully includes more actual real world implementation of energy efficiency than has been the case in the past.
Table 1: Electricity Savings Potential for Five PEEP Countries
Simple Annual 2011-2020 Annual Savings Peak Load paybac Number Emission CO Potential Reduction 2 kfor all Country of Reduction Reduction ECMs ECMs % MWh USD M kW % TCO2 TCO2 Years Cook 5 14.4 3,800 1.4 900 24% 2,450 20,100 2.4 Islands PNG 7 4.1 29,500 9.9 5,550 4% 53,600 396,900 2.2
Samoa 7 9.8 8,600 2.8 1,640 11% 5,580 44,430 3.2
Tonga 5 13.4 5,010 1.8 1,310 20% 3,406 26,960 2.3
Vanuatu 6 9.9 5,400 2.1 1,290 12% 3,100 24,900 2.9
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1 PROJECT OBJECTIVES AND ENERGY EFFICIENCY OVERVIEW
1.1 INTRODUCTION
In a consultation process conducted in 2007 on behalf of the Global Environment Facility’s (GEF) Pacific Alliance for Sustainability, four Pacific Developing Member Countries (PDMCs) – the Cook Islands, Samoa, Tonga, Vanuatu – and also subsequently Papua New Guinea (PNG) - expressed a keen interest in assigning high priority to reducing their consumption of fossil fuels.
The Pacific region and its many island countries are highly dependent on imported petroleum2 for their residential and commercial energy requirements. This makes them extremely vulnerable to price fluctuations in the international oil market. Two negative effects of fossil fuel dependency are deeply felt across the region. First, high international crude oil and refined petroleum product prices have severe consequences on PDMC economies and, second, future oil prices are expected to increase steadily as oil demand grows (in particular from developing countries) and conventional low-cost light sweet crude oil supplies continue to decrease, and the world increasingly relies on higher cost deepwater and other oil supply sources. In 2008, and again from late 2010, the unprecedented high cost of petroleum fuel has placed an increasing strain on PDMC economies and their trade balances with both the cost of oil products for electricity generation and the cost of transportation rising sharply for imported goods, including food. These higher fuel, electricity and food costs exert considerable pressure on household budgets resulting in an intensification of poverty in the five target PEEP countries. Moreover, the phenomenon of climate change, primarily driven by worldwide fossil fuel use, places the fragile PDMC environments in the front line of vulnerability to the adverse impact of climate change on water supply, agricultural capacity, natural disasters and rising sea levels. Pacific leaders recognize that PDMCs must take a strong stand against global climate issues. They also recognise that they need to quickly come to grips with the region’s energy and environmental vulnerabilities through sound policies and initiatives regarding Energy Efficiency (EE).
This Promotion of Energy Efficiency in the Pacific Phase 1 (PEEP-1) project report comprises five main chapters organized as follows:
Chapter 1 presents project objectives and provides an introduction to EE. Chapter 2 presents the establishment of the base lines and a comparative assessment of the energy consumption and energy efficiency of all five participating PEEP PDMCs. It also features estimates showing the potential economic impact of EE on PDMCs. EE and Demand-Side Management (DSM) experiences are detailed to address identified DSM barriers. Chapter 3 presents policy and institutional recommendations to be further investigated prior to implementation to initiate and increase actions toward a sustainable EE market.
2 Petroleum product imports account for over 90% of these countries’ energy supplies.
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Chapter 4 presents a summary of the estimated savings potential for proposed Energy Conservation Measures (ECMs) that were identified in the five countries. Details of each proposal are presented in the country appendicies attached to this report Chapter 5 presents a summary of the implemented pilot projects including their impacts and lessons learned. Appendixes 1 to 5 include the report for each participating country. Each country appendix is split into three sections: i) a description of energy consumption characteristics, a review of their legal and organizational frameworks and recommendations to bring them to effectively support a sustainable EE policy; ii) an analysis of the EE pilot project implemented in each country and an evaluation of its impact; and iii) recommendations for future EE program design and implementation.
1.2 PROJECT OBJECTIVE
The ADB RETA 6485 “Promoting Energy Efficiency in the Pacific” Phase 1 project (PEEP-1) was designed to address energy resource and environmental issues in the PDMCs. This project aimed to establish the policies, regulatory environment and energy initiatives that are necessary to assist energy end-users in the reduction of unnecessary energy consumption through improved energy efficiency in the five PEEP countries. The development and implementation of such policies, regulations and initiatives will require a reinforcement of institutional and private sector capacities. These are preliminary steps necessary to provide the required support to the market transformation process and the associated introduction of EE technologies, products and management processes. The PEEP project targeted the power sector as PDMCs largely, and sometimes totally, depend on fuel oil imports to meet their electricity demand. Consequently, electricity savings will bring multiple benefits to the countries including i) savings on end-user electricity bills; ii) savings on fuel oil imports; and iii) Greenhouse Gas (GHG) emission reductions.
Econoler International was engaged to implement this project with the following specific objectives: i) assess energy use and existing demand-side energy efficiency initiatives in each participating PDMC; ii) analyze existing policy and regulatory frameworks for demand-side energy efficiency and provide country-specific recommendations for institutional strengthening and policy and regulatory changes; iii) prepare a pipeline of energy efficiency projects for subsequent funding; and iv) implement a pilot energy efficiency project in each participating country.
1.3 IMPORTANCE OF ENERGY EFFICIENCY
Energy efficiency is generally considered as the lowest cost option to tackle the current and future constraints in energy supply, and to achieving the necessary reductions in GHG emissions. The Stern Review report3 was a wake-up call to world economic leaders in estimating the impact of climate change on the economy as a potential loss of 5% to 20% of global Gross Domestic Product (GDP) per year.
3 Stern Review Report on the Economics of Climate Change, Nicholas Stern, fall 2006,
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The Stern Review also confirmed that any stabilization of CO2 levels in the atmosphere will require a reduction of 80% in world emissions. The Intergovernmental Panel on Climate Change (IPCC) 2007 report4 stated the need for deeper and faster responses than initially expected from previous work of the IPCC in 20035. It is now becoming widely understood that much stronger GHG mitigation responses are required than those included in the 2007 IPCC report, as new evidence is emerging that climate change impacts are occurring at a much faster pace than envisaged even in the most extreme earlier accepted scenarios.
On top of the growing consensus of the global need for serious CO2 emission mitigation actions, the growing realization that the world is now at or very close to the peak of convention oil production is fueling a steady increase in world oil prices. While peak oil driven higher oil prices, and the parallel need for strong ongoing GHG emissions abatement, constitute a large concern for most countries in the world, it is a particularly acute concern to PDMCs where total or near total dependence on fossil fuel imports for all energy needs creates an important economic burden for end-users and the government. Implementing EE policies, strategies and programs is thus considered a top priority by PDMC governments to reduce the negative impacts of steadily increasing oil prices and to contribute to global efforts on GHG emissions abatement.
1.4 ENERGY EFFICIENCY DEFINITION
Energy efficiency refers to a reduction in the energy used to provide a given level of energy services (lighting, refrigeration, cooling or electric motor power, etc.) to a household, building or facility. The optimization of end-user energy consumption is usually associated with technological changes but can also be achieved by improving energy management processes or by adjusting operational procedures (e.g., readjusting temperature set-points of thermostats to a higher level to save on air conditioning energy use). Energy efficiency is first of all a matter of societal or individual choice and reflects the response of government, utilities and energy consumers to energy costs and their derivation in energy demand and energy prices. Energy efficiency also addresses the growing personal and societal concerns about the protection of scarce resources and protection of the environment. Avoiding unnecessary energy consumption or choosing the most efficient equipment reduces energy consumption and costs without weakening individual welfare or energy services provided. Efficient energy use is achieved by selecting appropriate equipment and modern regulation systems. Examples of EE measures applicable in PDMCs include shutting off lighting and air conditioning in unoccupied hotel rooms, introducing efficient street lighting based on the latest Light-Emitting Diode (LED) technology or replacing inefficient incandescent lamps with Compact Fluorescent Lamps (CFLs).
Because of financial constraints imposed by high energy prices in PDMCs, consumers may elect to reduce their energy consumption by completely turning off energy-consuming equipment and
4 Assessment Report of the Intergovernmental Panel on Climate Change, 2007 by Solomon, S., D. Qin, M. Manning, Z. Chen, M. Marquis, K.B. Averyt, M. Tignor and H.L. Miller (eds.).
5 Integrating Sustainable Development and Climate Change in the IPCC Fourth Assessment Report, Colombo, Sri Lanka, March 5-7, 2003.
Econoler International 3 Ref.: 5505 Asian Development Bank TA 6485-REG: Promoting Energy Efficiency in the Pacific - Contract No. COSO/90-492 Final Report appliances, e.g. turning off fridges and freezers or using a fan instead of an air-conditioner. Although these actions reduce energy costs, they are generally considered to be an undesirable alternative to the use of energy efficiency fridges, freezers, air-conditioners, etc. Turning off useful energy using devices through lack of affordability is not generally considered as energy efficiency.
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2 ENERGY EFFICIENCY ASSESSMENT OF PARTICIPATING COUNTRIES
2.1 ENERGY SECTOR COMPARISON
In PDMCs, the most important rationales for new EE policies and for program implementation activities are in alleviating the large financial burden of oil imports, reducing energy investment requirements, and making the best use of existing power supply capacities to maintain and improve access to affordable electricity supplies. Any efficiency improvement in fossil fuel usage, especially for countries without fossil fuel resources (only PNG from the five PDMCs involved in the PEEP project has its own oil production), would result in:
Direct benefits to the national balance of trade; Increased financial resources available for other purposes by electricity users; More consumers supplied with the same electricity production and distribution capacity; and A decrease in electricity demand growth and a reduction in investments needed for the expansion of the electricity generating plant and transmission and distribution grids. Following the steep increase in oil prices from 2003 to mid 2008 and again from 2009 (Figure 1), oil import costs have soared, with severe consequences on PDMC import and export balances.
Figure 1: Average CIF Cost of Imported Crude Oil
Source: IEA Oil Market Report – April 12, 2011 © OECD/IEA 2011 To show how significantly international oil prices impact PDMC economies, the value of diesel oil imports for electricity production was calculated and compared to total imports as well as goods and services exported for the five PEEP PDMCs. The results of this comparison are shown in the
Econoler International 5 Ref.: 5505 Asian Development Bank TA 6485-REG: Promoting Energy Efficiency in the Pacific - Contract No. COSO/90-492 Final Report table below6. The value of these imports represents 3.3% to 31.4% of total imports, while it represents 3.3% for PNG to 2071.1% for CI of goods and services exports. As electricity generation accounts for the largest single component of oil demand in all of the applicable PDMCs, except for PNG which has its own domestic oil production electricity savings would bring down these figures and contribute to the economic development of all the PDMCs, with the greatest potential impact in the Cook Islands, Tonga, Samoa and Vanuatu respectively.
Table 2: Oil Imports for Five PEEP Countries
Oil Component Oil Component Participating Total Oil of Imports of of Goods and Oil Imports PDMCs Consumption Goods and Services as % of (Ktoe) Services exports GDP % % Cook Islands 19.4 31.4 2070.1 28.8 Papua New 840 3.3 3.3 2.1 Guinea Samoa 69.2 17.9 30.1 9.4
Tonga 45 29.6 103.1 15.1
Vanuatu 33 14.3 15.9 6.9 Sources: Local power companies for diesel oil imports and annual power production based on diesel fuel; CIF diesel oil price: ADB ((FuelElecMonitor_v4_25july10.doc); prices are without taxes and duties; Import and export data: Macroeconomic Impact of Energy Prices in the Pacific, ADB, 2009 All five PEEP PDMC energy balances include oil products used for transport, diesel used for electricity generation, and Liquefied Petroleum Gas (LPG) used for cooking. The scope of this project is restricted to electricity end-use due to the unavoidable high cost to generate and reticulate electricity in PDMCs and in the wider Pacific, primarily from the reliance on diesel based generation plant (PNG and to a lesser amount Vanuatu and Samoa have some hydro generation but power generation is still diesel at the margin) and from the high per unit cost of electricity grids with relatively small loads. Oil is also used to meet nearly all transport energy needs (there is some emerging use of biofuels, primarily coconut oil, but this is still minor) and in the industrial and commercial sectors. Transport energy efficiency and biofuels would be an interesting separate project topic, but it would require quite separate policy and regulatory frameworks, institutions and human resources to this PEEP project with its emphasis on electricity use and EE. LPG usage is almost exclusively devoted to cooking in the residential and commercial sectors. LPG energy saving potentials were not considered in this project as potential savings would be modest as LPG uses are limited to cooking appliances which are already generally quite energy efficient, and better cost-effectiveness can be achieved by introducing EE programs targeting electricity end- uses.
6 Diesel oil prices are for 2009 and most recent IMF data are for 2008. It is assumed that 2009 IMF data is not significantly different from 2008.
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2.1.1 Electricity production and related oil imports
Oil products are the most important primary energy source used in all PEEP PDMCs. Oil products are generally, used for electricity production, as well as in the transportation sector, and along with natural gas or LPG, to cover industry thermal needs.
Electricity production in the Cook Islands and Tonga depends entirely on diesel while it represents only 35 % in PNG with the remaining part provided by hydro stations. Table 3 below shows electricity production mix proportions for diesel and hydro for the five PEEP countries.
Table 3: Electricity Production Mix for Five PEEP Countries
Countries Diesel (%) Hydro (%)
Cook Islands 100 0
PNG 35 65
Samoa 53 47
Tonga 100 0
Vanuatu 96 3 Source: Estimates based on information from PDMC utilities Table 4 below shows total oil product imports along with the fraction used for electricity generation and the percentage this represents out of total oil product imports7. Available import data do not allow for a more in-depth analysis by consumer segment.
Table 4: Oil Usage for Power Production for Five PEEP Countries, 2007
Country Oil Used for GHG Countries Consumption Electricity % Emission (Ktoe) (Ktoe) (TCO2)
Cook Islands 19.4 8.7 45 2,028
Papua New Guinea 840 180 21 196,702
Samoa 69.22 13.8 20 44,200
Tonga 45 10 22 52,733
Vanuatu 33 12.6 38 39,000 Source: ADB Energy Indicator Tables (2009), CIA for PNG import data; PPL and Econoler for total diesel oil used in power generation in PNG by PPL and private sector.
7 PNG data do not incorporate national oil production which is assumed to be exported (consistent with CIA oil data in 2009). Diesel oil consumption data are for 2008-2009 for PPL and private consumption is estimated assuming the power generating system is operating 320 days per year.
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The Cook Islands use 45% of their oil imports for electricity production, which is the highest proportion amongst the five PDMCs in the PEEP project. This may be explained by the small size of the main island, Rarotonga, with a relatively low number of cars, the high number of scooters and motorcycles, the good public transport system, and the small population of the outer islands compared to Rarotonga. There is a total dependence on oil products for electricity production as there is no hydro or other renewable energy sources yet being used for power generation, although PV systems are being planned for grid power generation in the outer islands with Japanese funding support. A similar situation of a high percentage of oil products being used for power generation is observed in Vanuatu, but in Vanuatu the reason is probably that a lower GDP per capita leads to only a limited demand for fuel being used for transportation. The large quantity of oil used for electricity production in each country provides a rationale for strong government involvement in electricity EE issues to limit the financial burden on national economies of oil imports. Table 4 shows how PDMC electricity production relies on oil products in part or in totality.
Savings on electricity consumption will have a direct impact on diesel oil imports in the Cook Islands, Tonga and Vanuatu, which rely heavily on fossil fuel for electricity production. For PNG where hydroelectricity is widely used for power generation, EE actions may not lead to direct diesel reductions in all cases, although most regional grids have diesel back-up units for dry season power generation and many of the hydro units are old and in need of refurbishment. In Samoa, the existing hydro power plants provide mostly base load power to the main Upolo grid but are essentially run-of-river systems, so EE gains will generally lead to diesel savings as diesel generators generally are operating at any given time. Strong drivers for the introduction of electrical EE measures therefore exist in all five participating PEEP countries.
2.1.2 Electricity distribution systems
All PEEP PDMCs use multiple electricity grids in different regions or islands. The power system in PNG, the largest population and area PDMC, has two main independent power grids in its main geographical area of the eastern half of the island of New Guinea. PNG also has many smaller grids in isolated areas of New Guinea. In the numerous offshore islands in PNG and Vanuatu only a small part of the population is supplied with grid electricity due to low average income levels and generally extremely challenging mountainous terrain with very dispersed settlement patterns. The other three smaller PEEP PDMCs have very high levels of electrification on the main island where the majority of their people live (with two main islands for Samoa). Tonga and the Cook Islands have generally lower levels of electrification and less reliable supply on their many outer islands.
Grid electricity is primarily provided by diesel generators (Cook Islands, Tonga and Sava’ai Island in Samoa, or a combination of diesel generators and hydro in parts of PNG, the main island of Upolo in Samoa, and in parts of Vanuatu. Offshore islands’ electricity grids are primarily powered by diesel generators, although PV is becoming more common for smaller and more remote islands.
There are also significant differences between PEEP PDMCs and within different areas of PEEP PDMCs in terms of the scale, condition of generating equipment and grids, daily hours of supply, load profiles, and local technical capacity for O&M and for EE/DSM program implementation. Therefore, load management programs will differ from one grid to the other based on the EE/load– shape objective, resulting in higher average EE/DSM program development costs.
Econoler International 8 Ref.: 5505 Asian Development Bank TA 6485-REG: Promoting Energy Efficiency in the Pacific - Contract No. COSO/90-492 Final Report
For example, peak clipping (reduction in the peak demand) would be very relevant for outer island grids with very peaky loads leading to generators running inefficiently and with high O&M costs most of the time at low loads; and valley filling (increased demand at off-peak) and load shifting (demand shifting to non-peak period) would be very relevant for grids with significant proportions of run-of-river hydro capacity. So different EE/DSM programs should be targeted at specific grids, islands or sectors. In general, more specific EE/DSM programs should be concentrated on main islands, as they represent the highest absolute potential for energy savings and hence specific EE actions will generally be more cost-effective to design and implement on main islands. EE/DSM programs of a more universal nature, such as the replacement of incandescent lamps or the dissemination of general EE/DSM awareness materials, would then be implemented on both main islands and outer islands, and indeed across all five PEEP PDMCs - although some tailoring of messages and translation into different local languages would be needed.
2.1.3 Electricity tariffs
Figure 2 below presents the electricity tariffs in effect in participating countries for the 2009-2010 period. As it was not possible to get access to billing data to evaluate average tariffs by customer category, the tariffs shown are the actual median residential, commercial and industrial tariffs. These figures exclude fixed and/or maximum power demand charges for large customers.
Figure 2: Electricity Tariffs in the 5 PDMCs
0.60
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0.30 Residential USD/kWh Commercial USD/kWh 0.20 Industrial USD/kWh
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0.00 Cook Papua New Samoa Tonga Vanuatu Islands Guinea
Source: Power companies; Vanuatu: Econoler estimates For all customer categories, PNG and Samoa have the lowest tariffs. This results from lower landed costs for diesel oil and a useful percentage of electricity from hydroelectric installations. For comparison purposes, during the same period, the average tariff in the USA was USD 0.12/kWh. The high price of electricity in all five applicable PEEP PDMCs is a strong argument in favor of implementing EE/DSM initiatives that will generally support cost-effective measures for customers.
Econoler International 9 Ref.: 5505 Asian Development Bank TA 6485-REG: Promoting Energy Efficiency in the Pacific - Contract No. COSO/90-492 Final Report
The context for EE/DSM program introduction in all PDMCs is generally favorable as comments and feedback received from stakeholders and informal surveys shows that customers in all economic sectors are keen to learn more about energy efficiency to save on their power bills. However, while EE/DSM measures can be cost-effective for customers, additional costs for program implementation and management are also important in the overall cost-effectiveness of EE/DSM programs. These additional costs have to be considered in the program economic structure and are generally more relatively significant than in developed countries, given the relatively low populations connected to particular grids in the five applicable PEEP PDMCs.
Only the PNG industrial tariff and the Vanuatu commercial and Medium Tension (MT) tariff include a charge for maximum power demand and a low power factor. In Vanuatu, minimum power factors for large customers are fixed at 80% and are closely controlled by UNELCO, the privately owned power utility. In other PDMCs, minimum power factors are generally included in existing service conditions to large customers but are not enforced and carry no actual penalty for non-compliance. Uncorrected low customer power factors reduce transmission and distribution grid capacities. Improving power factors from 80% to 95% will reduce line losses by 29%. As line losses generally amount to around 2% of electricity supply, improved power factors will provide overall savings of approximately 0.6%. Cook Islands, Samoa, and Tonga have no provision for reactive power charges at the present time. All PEEP PDMCs should therefore consider setting and enforcing minimum power factors of 90%-95%, as is generally the case for utilities in developed countries.
Tariff structures are generally simple and are not structured to achieve the load reduction objectives developed by utilities with specific DSM programs. The introduction of more sophisticated tariff strategies will contribute to load reduction outcomes when proper cost signals are sent to end-users. This will create favorable economic conditions and positive impacts on electricity demand and consumption. For instance, demand charges or time-of-use rates would also support EE/DSM objectives.
2.1.4 Energy Intensity
Table 6 shows Energy Intensity (EI) indicators for all five PEEP PDMCs. EI is the ratio of primary energy (total energy) used in a country in Kilotonnes of Oil Equivalent (Ktoe) divided by the GDP expressed in Purchasing Power Parity (PPP) terms. This indicator measures how much energy each country requires to generate one unit of GDP8. It is therefore more an indicator of "energy productivity" than a true indicator of energy efficiency from a strictly technical viewpoint. Lower EI’s are desirable, as this means that less energy is required per unit of GDP. The EI value reflects the nature of the country’s economic activity (the "economic structure"), the structure of the energy mix and technical energy efficiency. The EI indicator is widely used as a surrogate measure to monitor how efficiently energy is used in countries or regions.
8 World Energy Council, Energy Policies and indicators, http://www.worldenergy.org/wec- geis/publications/reports/eepi/progress_achieved/performance.asp
Econoler International 10 Ref.: 5505 Asian Development Bank TA 6485-REG: Promoting Energy Efficiency in the Pacific - Contract No. COSO/90-492 Final Report
Table 5: Energy Intensities for the Five PEEP Countries
Participating GDP/Capita Electrification Energy Intensity Population Countries USD (PPP) Rate (2006) kgoe/USD 000
Cook Islands 13,000 9,650 >90 90
Papua New Guinea 6,331,000 2,300 <10 153
Samoa 187,000 4,700 >95 75
Tonga 100,000 4,600 >90 130
Vanuatu 226,000 4,800 27 42 Source: EIA, International Energy Statistics/Indicators; Energy Intensity 2007 using purchasing power parities Cook Islands: CI Government data 2008 adjusted at PPP using NZD exchange rate World urbanization prospects, 2007 Revision, UN Compared with developed countries (Figure 3) all five PEEP PDMCs have very low energy intensities, being below the most generally recognised most energy-efficient economies such as Ireland, Japan and Germany. However, this comparison must be put in context as most PEEP PDMC countries have an economic structure that makes comparisons difficult with developed countries. For instance, EI estimates do not include traditional energy use, which is generally still a significant component of the energy balance in PEEP PDMCs.
Figure 3: Energy Intensity – Selected Countries
Source: A. Sarkar, World Bank - Energy Efficiency in the Global Context: Role and Opportunities for Enhancing Energy Security; Workshop, Bangkok August 28, 2006 adjusted with data from the applicable five PEEP countries.
Econoler International 11 Ref.: 5505 Asian Development Bank TA 6485-REG: Promoting Energy Efficiency in the Pacific - Contract No. COSO/90-492 Final Report
Energy Intensity results show significant variations among the five PEEP PDMCs. As this indicator reflects economic activity, among other things, reviewing the economic structure of the five PDMCs provides some explanation. Table 6 shows the economic structure of the five PDMCs. A certain level of homogeneity is found among the four small countries where services represent a major part of the Gross National Product (GNP). In PNG, the three sectors are more balanced. Table 6 highlights the importance of the service sector for the economic structure of the five PDMCs, and indicates the importance of targeting the services sector for the introduction of EE initiatives.
Table 6: Economic Structure of the 5 PEEP Countries (% GNP)
Countries Agriculture Industry Services
Cook Islands 15.1 9.6 75.3
PNG 32.6 36.8 30.6
Samoa 11.5 13.5 75
Tonga 25 17 58
Vanuatu 26 12 62 Source: CIA, the World Fact Book PNG is the least developed country (USD 2,300 per capita) and shows the highest EI indicator. This is explained by its major energy-consuming mining industry and associated services, such as large office buildings in main cities balancing the majority of the population living on subsistence farming with little or no connection to the formal money-based economy and often no connection to electricity grids either. On the other hand, Vanuatu has a very low EI of 42 and Tonga has the highest among the four small PDMCs with 130. Such differences may be due to Vanuatu having a very low overall electrification rate and a limited industrial sector, so its electricity use per electrified household will be much higher than the average value shown in Figure 4. In Tonga, industrial refrigeration is a major activity for imported and exported food in Nuku’alofa harbor. This system is well-known in the community as being highly inefficient and has a significant influence on Tonga’s EI indicator.
Another simple way to represent and compare energy intensity is to divide total electricity consumption by the population (Figure 4). The Cook Islands has the highest average consumption per capita, being more than twice as high as other PDMCs. This is consistent with its status as having the highest GDP per capita, the predominance of an energy-intensive tourism sector, and near universal levels of electricity connections per capita.
Econoler International 12 Ref.: 5505 Asian Development Bank TA 6485-REG: Promoting Energy Efficiency in the Pacific - Contract No. COSO/90-492 Final Report
Figure 4: Average Yearly Electricity Consumption per Capita
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400 kWh/year 300
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0 Cook Islands PNG Samoa Tonga Vanuatu
By household, the average monthly electricity consumption (Figure 4) shows that the Cook Islands has the highest electricity use per capita. The very low average consumption of Samoa is significant and is likely to be caused, at least in part, by the prevalence of the “fale,” a common housing construction particular to Samoa, which is fully open on the exterior and so does not require lighting during daylight hours or air-conditioning. As economic development takes place, any turning to “closed houses” as a preferred option will increase consumption, which will become more comparable to other PDMCs. Further investigation is required to establish precisely the impact of this factor.
Figure 5: Average Monthly Electricity Consumption by Household
200 180
160 140
120 100
80 kWh/month 60 40
20 0 Cook Islands PNG Samoa Tonga Vanuatu
In 2008, household electricity bills accounted for 4.6% to 7.27% of total household expenditures, although this figure needs to be interpreted with care in countries that have lower levels of electrification of households, as the cost per electrified household will be much higher. Electricity bills constitute an important component of household consumption and electricity savings could definitely improve household disposable incomes. This issue is particularly important when electrification is extended to households that are only weakly if at all connected to the cash economy.
Econoler International 13 Ref.: 5505 Asian Development Bank TA 6485-REG: Promoting Energy Efficiency in the Pacific - Contract No. COSO/90-492 Final Report
In many cases, electrification brings with it a new source of household costs but no extra revenue as fostering productive uses of the new electricity supply is generally ignored in such well-meaning “energy for all” electrification initiatives9. So higher levels of electrification do not necessarily lead directly to poverty reduction. Equally, high levels of income spent on electricity supply does not necessarily imply higher levels of poverty. However, one can be confident that higher oil prices generally lead to higher electricity prices (or unreliable supply or unsustainable subsidies) and this will be a contributing factor to higher overall poverty levels.
Table 7: Household Expenditure on Electricity
Total Household Total Household Participating PDMCs Expenditures on % Expenditures(USD) Electricity (USD) Cook Islands 114,611,122 8,327,854 7.27
Papua New Guinea 4,522,148,289 261,903,656 5.79
Samoa 496,255,346 23,680,464 4.77
Tonga 302,695,654 17,579,779 5.81
Vanuatu 340,378,450 15,674,257 4.60 Source: IMF and Econoler
2.2 SOCIO-ECONOMIC COMPARISON
Table 8 highlights significant differences between the five participating PEEP PDMCs. Levels of population, GDP and electrification rates are particularly diverse and this leads to unavoidable added complexity when designing, implementing and evaluating EE/DSM programs. Everything else being equal, program costs in the Cook Islands will be particularly high given its small population, whereas economies of scale will be much greater in Samoa and Tonga which have similar electrification rates and much higher numbers of customers, including on their main islands. PNG and Vanuatu will present different challenges as they have low electrification rates, and PNG has the added complexity of nearly 1000 different languages amongst generally very physically isolated communities. In addition, since all five PEEP PDMC grids cover relatively small communities, energy savings per program will generally necessarily be low as well. It will therefore be a challenge to keep EE/DSM program development and implementation costs low enough to ensure an attractive cost/benefit ratio to utilities or governments. External donor financial support and/or collaborative regional approaches to share program development costs will therefore generally be required for EE/DSM programs in the PEEP PDMCs.
9 Energy and Poverty in the Pacific Island Countries, Regional Energy Programme for Poverty Reduction (REP-PoR), UNDP Regional Centre in Bangkok, 2007
Econoler International 14 Ref.: 5505 Asian Development Bank TA 6485-REG: Promoting Energy Efficiency in the Pacific - Contract No. COSO/90-492 Final Report
Table 8: Socio-Economic Data for the 5 PEEP Countries
GDP (PPP) Participating USD Electrification Population Countries GDP per Rate (2006) 2009(million) Capita Cook Islands 11,400 205 9,650 >90
Papua New Guinea 5,940,775 13,420 2,300 <10
Samoa 219,998 1,025 4,700 >95
Tonga 120,898 552 4,600 >90
Vanuatu 218,519 654 4,800 27 Source: CIA, The World Fact Book; 2009 estimates Cook Island: Statistics office Electrification rates: Energy and Poverty in the Pacific Island Countries, UNDP, 2007 Vanuatu electrification rate: Trembath and PWC, Scoping Study on Luganville Power Concession and the Sarakata Hydropower Fund Population mobility also influences applicable EE/DSM strategies. In some PDMCs, inhabitants have easy access to foreign labor markets (in particular Cook Islands, Samoa and Tonga) and therefore these countries face human resource scarcities, in particular for skilled people. This will be a significant barrier to the recruitment and retention of quality human resources to manage EE/DSM programs or to join the EE services industry to deliver implementation services. In addition, staffing public administration agencies with suitably qualified and experienced people is generally a challenge as foreign educated professionals often leave for higher paid jobs in developed countries. In the short term, international assistance will be required to initiate EE/DSM activities but, in the long term, a local permanent staff will be needed to ensure that ongoing EE/DSM activities continue.
One way to help relieve this human resources issue includes sharing EE/DSM components between PDMCs by undertaking regional projects with the involvement of appropriate regional organizations. Another option consists of creating dedicated national and regional bodies and giving them a detailed mandate for EE/DSM.
2.2.1 Electricity Consumption by Economic Sector
The next table (Table 9) presents electricity demand by economic sector. The data in Table 9 show that the commercial and public service sectors represent the largest portion of energy usage for Samoa and Vanuatu as well as a significant portion for the Cook Islands and Tonga. The residential sector represents an important percentage of electricity end-use in the Cook Islands, Tonga and Vanuatu. In PNG, residential energy usage is low, which is consistent with its very low overall electrification level and the larger relative size of the industrial and service sectors. Where data is available, it shows that except for PNG, the industrial sector consumes a limited portion of the energy of PEEP countries and indicates a limited potential for industrial sector EE compared to the commercial and public sectors.
Econoler International 15 Ref.: 5505 Asian Development Bank TA 6485-REG: Promoting Energy Efficiency in the Pacific - Contract No. COSO/90-492 Final Report
Table 9: Electricity Demand Structure (%)
Services Countries Residential Industrial Public Total Commercial Other Services Services Cook Islands 42 9 18 8 22 48
Papua New 18 22 6010 60 Guinea
Samoa 25 8 39 20 8 67
Tonga 41 1 30 13 15 58
Vanuatu 23 5 59 13 0 72
It is difficult to reconcile and compare such data for individual countries due to a general lack of available data and differences in customer categorization. The table above represents the common categorization that could be considered as the electricity demand share by sector.
During the PEEP-1 project execution, the lack of publicly available data and statistics had to be supplemented by obtaining information from utilities and field research. Some utilities provided limited access to billing data (e.g., one-month records or data organized in different formats), while other utilities did not participate in the data collection process due to stated confidentiality issues.
Table 10 below shows monthly average electricity consumption in kilowatt-hours per customer for different customer categories. However, the data basis for table 10 is unfortunately not as comprehensive as would be desirable for robustness of any conclusions to be drawn, although power customer billing data analyses were conducted for the Cook Islands, Samoa and Tonga (albeit on limited sample sizes) and may thus be considered reasonably robust for those countries. Average electricity consumption in the residential sector is generally low and is probably associated with small individual potential savings per household. The average electricity consumption in public services, industry, and hotel sites (and churches in Samoa) is higher and hence more promising for cost-effective specific ECM (Energy Conservation Measure) EE/DSM consideration. These market segments deserve close attention for individual EE/DSM program applicability, and should also be top priorities when establishing information gathering strategies and developing detailed EE/DSM programs.
10 Includes commercial, public services and others.
Econoler International 16 Ref.: 5505 Asian Development Bank TA 6485-REG: Promoting Energy Efficiency in the Pacific - Contract No. COSO/90-492 Final Report
Table 10: Monthly Average Energy Consumption per Customer for Selected Sectors (kWh)
Public Countries Residential Commercial Industrial Hotels Churches Services
Cook Islands 186 590 1,506 788 2,220 180
Papua New 147 - - 162,600 - - Guinea
Samoa 68 8671,461 4,003 8,264 972
Tonga 113 1,0231,011 1,266 2,638 335
Vanuatu 104 2,3151,579 4,088 - n/a
Source: Power companies and Econoler. Dashed lines indicate data is not available.
The difficulty encountered collecting and organizing electricity and other relevant data in the five countries for this PEEP-1 project highlights one of the key concerns that will need to be considered when developing the specifics of any EE/DSM program implementation phase. Properly designed market research surveys will need to be conducted for the priority market sectors of interest to determine the average energy efficiency of existing technologies and equipment in use in each sector, as well as the operational profile of such equipment and the proportion of different equipment types in each PEEP PDMC and market.
2.2.2 Residential sector
The residential sector represents a significant percentage of total electricity consumption in all five PEEP PDMCs and therefore must be a key sector for EE/DSM policies and activities. However, Table 10 shows a low average consumption per customer which is an indication of the current limited usage of existing equipment and/or a low saturation of major energy using appliances and other equipment in the household sector. The potential for residential EE activities will increase in the future as household incomes rise along with economic development. Currently, only a limited portion of households use or have access to all the electrical appliances and equipment that are typically usually used in houses in developed countries. In particular, houses in the five applicable PEEP PDMCs do not generally use air-conditioners or heat hot water, although these energy intensive end uses can be expected to grow steadily as economies develop. EE/DSM strategies focusing on lighting and energy-efficient electric appliances (through energy labeling and/or MEPS programs) should therefore be seriously considered as all households use electric lighting and most households have appliances such as washing machines, TVs, and fridges and freezers.
Many PDMC economies obtain considerable support sent as remittances by expatriates to their families back in the PDMC home islands, although the importance of such remittances differs between economies. Most of the smaller PEEP PDMC countries experience a substantial merchandise trade deficit, with imports almost five times higher than the value of exports. The difference is financed by remittances, tourism revenues and foreign aid. The remittance component can also have a significant impact on energy demand as well as on EE/DSM program planning and implementation.
Econoler International 17 Ref.: 5505 Asian Development Bank TA 6485-REG: Promoting Energy Efficiency in the Pacific - Contract No. COSO/90-492 Final Report
When downturns or crises occur in the international economy, remittances sent by families living abroad decline (down 20% in Tonga in 2009). International economic downturns or crises are thus “imported” through decreasing transfers, creating economic instability and increasing poverty. Sometimes islanders have no choice but to stop consuming commercial energy through lack of remittance income. This may explain, in part, why a number of electric meters showed zero consumption in 2009. This trend cannot be classified under “energy savings” as consumption generally resumes when the world economy recovers and remittances are back to normal. Therefore, electricity load curves should be adjusted to “normal” situations when EE/DSM programs are designed.
In addition to monetary remittances, there is also a significant transfer of appliances and equipment for PDMC nationals working in developed countries and relations living back on their home islands. Informal surveys show that many of the appliances sent as in-kind remittances are generally older second-hand products with low energy efficiency. It has not been accurately established yet how important this in-kind remittance supply chain is in supplying the appliance market in the various PEEP PDMCs, but anecdotally it can be a significant part of overall appliance supply. Assuming that in-kind appliance remittances are meeting a significant percentage of local demand, this energy efficiency leakage may have to be tolerated as an exemption to energy performance standards for imported appliances, depending on the remaining life of the in-kind remittance appliances. An exemption for one-off in-kind remittance appliances may be needed as strong regulations to reduce or forbid the importation of all used equipment may prove to be a politically challenging issue if PEEP PDMC household budgets are insufficient to enable inhabitants to purchase new and efficient equipment.
To improve the efficiency of this sector, EE/DSM programs targeting more efficient equipment for lighting, refrigerators and freezers, TVs, general house appliances, and air conditioners would be needed to achieve substantial energy savings and reductions in household energy bills.
2.2.3 Industrial sector
In Table 9, electricity demand in the industrial sector varies from 1% in Tonga to 22% in PNG. This proportion is small compared to developed countries. For example, in Australia industry represents 44% of total electricity demand in 200711
The PNG industrial energy percentage is the highest among the five reviewed PEEP PDMC countries. However, the PNG industrial electricity use percentage may still be underestimated. PNG is richly endowed with natural resources including oil and gas while boasting a large and important mining industry. Large mines are generally located in remote areas and often operate their own electricity supply systems. As a result, their energy consumption is not included in Table 9. As these industries are not presently connected to the national power supply grids, they will not be considered for government- or utility-implemented EE/DSM programs.
11 International Energy Agency, Electricity/Heat in Australia in 2007.
Econoler International 18 Ref.: 5505 Asian Development Bank TA 6485-REG: Promoting Energy Efficiency in the Pacific - Contract No. COSO/90-492 Final Report
Moreover, these company headquarters (local or abroad) are considered sufficiently staffed to efficiently manage their own EE/DSM programs due to rising oil prices et al, which is why the mining sector is not considered in further EE/DSM analyses in this PEEP-1 project.
The remaining non-mining PNG industries are generally located in large cities. In the short and medium term, electricity demand for this PNG urban industrial segment is anticipated to increase. Private investment in PNG is currently picking up as planning for the large LNG project has been moving forward, which in turn will generate business opportunities across the economy. More information is required to develop EE/DSM programs addressing specific energy savings measures that fit this urban PNG industrial sector. For the time being, and based on available information, two specific DSM program concepts deserve closer attention. First, urban industrial activity coupled with large office buildings may justify the development of local Energy Efficiency Service Companies (EESCOs). Second, as the industrial, office and service building market segment is rapidly growing along with the LNG export project in PNG, promoting energy-efficient building construction should be considered. This would allow avoiding a lock-in effect which would have serious repercussions for several decades should low energy efficiency buildings continue to be built.
Small PDMCs face limitations such as smallness, remoteness from major production and consumption centers which imposes various geographical and logistical issues, as well as vulnerabilities to various ecological and economic shocks. These limitations make small PEPE PDMCs less attractive for international investments. The only significant manufacturing activity in the five PEEP PDMCs outside PNG is located in Samoa where there is a medium sized auto wiring looms assembly plant. Other industrial activities are mostly related to food imports and/or exports. As shown in Table 9, the smaller PEEP PDMCs’ industrial sectors generally represent a low percentage of the total economy and offer limited scope for the implementation of EE/DSM initiatives.
To improve the efficiency of the industrial sector, widely applicable programs should be developed targeting systems operation optimization, efficient motor-drive systems including variable speed drives for motors and pumps, heat recovery and energy management systems.
2.2.4 Service sector
Table 9 has a “Services” column which includes the commercial, public services and other sectors. As “Services” primarily comprises office buildings, retail stores, government offices, public services (education, health) and religious buildings, energy usage in this sector is largely related to building operations. Lighting, ventilation and air conditioning end-uses are common to all such building operations and would therefore constitute the basis of applicable EE/DSM programs for this sector. The services sector represents an important segment of electricity consumption with 48%-72% of total consumption, and hence constitutes a significant sector for realizing energy savings. The number of customers in the service sector is much lower than in the residential sector. As a result, an EE/DSM program would be easier to manage with fewer stakeholders and intermediate organizations to coordinate, and could also utilise natural ally bodies that would assist such as chambers of commerce or sectoral associations (e.g. for hotels/tourism).
Econoler International 19 Ref.: 5505 Asian Development Bank TA 6485-REG: Promoting Energy Efficiency in the Pacific - Contract No. COSO/90-492 Final Report
A survey was conducted in the “Office Buildings” sub-category to determine existing energy management capacities. It was clear from the survey that, for all five PEEP PDMCs, building operators generally lack the capacity to properly identify and implement EE measures. Furthermore, there is presently inadequate local expertise to fill this gap. Various stakeholders (including architects in Port Moresby, (with a population of around 300,000 being larger than any other PDMC in the PEEP project except PNG itself) have insisted that there is a demand for such expertise, evidencing a latent demand for energy audit training and energy management implementation skills and expertise.
The hotel/tourism industry is one of the most electricity-intensive segments within the service sector. For example, the hotel/tourism sector represents 25% of total electricity demand in the Cook Islands. As the tourism industry makes the largely single contribution to the development of small PDMC economies, EE/DSM programs targeted at the hotel/tourism sector are both important and will also foster wider movement towards wider sustainability goals, including but not ,limited to EE. Climate change has become a major political issue in nearly all the countries which are the key source markets for the South Pacific tourism sector, including Australia, New Zealand, the USA and Europe. To appeal to increasingly “green focused” international tourists and grow PDMC tourism markets , the small PDMC tourism industry is already working at improving its “green image”, and clearly energy efficiency can be an integral part of this. Hotel associations in the Cook Islands and Samoa support such an approach. In Vanuatu, the Chamber of Commerce mentioned that important developments are presently taking place in the tourism industry, including a higher demand from foreigners to live their retirement years in Vanuatu. Energy efficiency programs in the hotel and accommodation industry definitely deserve special attention as they not only provide energy savings but would also be an important marketing argument in the development of the tourism industry. ECMs in the hotel sector that can be implemented by O&M staff with a relatively low investment and payback period include efficient lighting, pool circulating pump optimization, and hot water controllable flow rate devices for showers and sinks. More complex energy efficient technologies that require experienced service providers for design/sizing and implementation include solar water heaters, inverter air conditioning units, air curtains and building management systems, although there seems to already be private sector service providers in all the PEEP PDMCs that can provide such expertise and relevant hardware and installation services.
2.3 PAST AND ONGOING EE/DSM EXPERIENCE
Many programs related to EE and RE have been undertaken in the past in the Pacific Region, with some still under implementation. The following Table 11 summarizes the relevant regional programs that have been implemented or are currently still ongoing.
Econoler International 20 Ref.: 5505 Asian Development Bank TA 6485-REG: Promoting Energy Efficiency in the Pacific - Contract No. COSO/90-492 Final Report
Table 11: Summary of Major Activities Related to RE & EE/DSM in the Pacific Region12
Name Summary Comments on RE / EE Activities
ADB Promotion of ADB; 2001-06, $5 M co-funded PREGA undertook capacity building activities, national studies and pre-feasibility Renewable Energy by the Netherlands. In Pacific studies in specific RE and EE applications in 18 ADB developing member countries, Efficiency and Greenhouse PREGA was only active in including Samoa. In Samoa, PREGA undertook a social survey of the issues around Gas Abatement Samoa. expanding hydropower. (PREGA)
ADB Renewable Energy ADB; 2004 – 2006; $0.6 M REEP provided assistance and training, and developed RE and EE investment and funded by Denmark; RE and EE projects. It developed RE standards, EESCOs and a biofuels project for further funding Energy Efficiency Program support for Fiji and Samoa consideration. (REEP)
In addition to PIEPSAP (below), SOPAC implemented a large number of RE and EE South Pacific Applied SOPAC was the lead agency in programs, projects and activities. These include a UNDESA demand-side management Geoscience Commission the Council of Regional project ($0.2 M; 2002-2005) and providing energy audits and training to Fiji and Samoa (SOPAC) Organizations of the Pacific power utilities. Progress in this project was slow and intermittent and highlighted the (CROP) for energy sector challenges in getting utilities to implement cost-effective EE measures. SOPAC has issues a wide range of RE and carried out numerous studies on geothermal, biomass, biofuels in Fiji and Samoa, EE activities (the lead agency is ocean thermal and wave energy. It had the largest core of energy experts in the PIC now SPC) region. SOPAC is now a Division of SPC (2011)
Assisted PICs in developing and applying energy policies, including: development of Pacific Island Energy UNDP/SOPAC; utility regulatory policy in Fiji; examination of the problematic PREFACE installed RMI Policies and Strategic $1.6 M funding by Denmark PV project; and development of RE/EE polices, plans and regulatory structures. Action Planning project under EUEI program; 2004- Both Fiji and Samoa had draft energy policy documents developed by the project for (PIEPSAP 2007 consideration by the respective Governments.
12 Updated table extracted from ADB Renewable Energy and Energy Efficiency Programme (REEP), RETA-6102, April 2006.
Econoler International 21 Ref.: 5505 Asian Development Bank TA 6485-REG: Promoting Energy Efficiency in the Pacific - Contract No. COSO/90-492 Final Report
Name Summary Comments on RE / EE Activities
Pacific Power Association The PPA has advised the PPA carried out a supply-side EE study for PIC power utilities (including Kosrae, (PPA) RE and EE activities region’s power utilities since its Pohnpei and Palau) in 2001; assessed potential RE projects in Nauru and FSM in 2002; establishment in 1992 and has and held workshops in 2005 on RE for Pacific utilities with support from the E7 utilities. carried out several RE and EE studies
Secretariat for Work on Biofuels, Wind and PV SPC implemented regional energy programs and renewable energy projects such as the Pacific for outer island communities. biofuel (Fiji), PV (Vanuatu, Tonga, RMI) and Wind (Cook Islands) between 2000 and Community Lead regional energy program 2004. SPC is now the lead energy program coordination agency for the Pacific. (SPC) coordination agency
Support to the Energy European Union €11,4 million The project is being implemented through utilities in the respective countries. The project Sector in Five ACP Pacific funding for investment in is still underway in FSM (Federated States of Micronesia), Nauru, Niue, Palau and RMI Island Countries (REP-5) renewable energy and energy (Republic of the Marshall Islands.. efficiency technologies
Pacific Islands Renewable UNDP-GEF; $0.76 M; 2003 - Assessed energy sector issues with opportunities and constraints for RE investments to Energy Project (PIREP) 2005. Undertook RE reduce GHG emissions. 15 national reports and regional overview published in 2005. assessments for 15 PICs PIREP was the design phase of the subsequent PIGGAREP project that is now being implemented for RE in support in PICs
UNDP Strong ongoing involvement in Development of RESCO structure for Fiji (2000-2003, evaluation of Fiji hybrid project, wider Pacific EE and RE (2004) grid-connected PV in Tokelau (2004-2005), PV SHS in Samoa (2004-2006, studies, capacity building and feasibility studies for coconut oil biofuel for existing power generators in Samoa and grid- projects. Often utilises external connected wind in the Cook Islands (2004-2005), and many other projects. Has led (e.g. GEF) funding. various energy surveys as well as very useful work on energy and poverty links.
Econoler International 22 Ref.: 5505 Asian Development Bank TA 6485-REG: Promoting Energy Efficiency in the Pacific - Contract No. COSO/90-492 Final Report
Name Summary Comments on RE / EE Activities
UN Economic and Social Various technical assistance Reviewed RE energy activities in Tuvalu, Kiribati, Tonga and Cook Islands with Commission for Asia & the projects and capacity building recommendations for future activities. Sponsorship of training activities and studies Pacific (UN-ESCAP) program directed toward capacity building for RE in the Pacific. A review of renewable energy capacity building requirements and facilities in PICs was prepared in 2004.
UNDP Asia-Pacific Regional project managed by Very useful work focusing on RE developments and links to productive uses for poverty Regional Energy UNDP Regional Office in reduction, rural development and GHG control.. Programme for Poverty Bangkok Reduction (REP-PoR)
UN Educational, Scientific From 2002, provided RE UNESCO developed a “toolbox” of training material for RE development in PICs and Cultural Organization training materials including texts, videos and other media for decision makers, energy planners, those who (UNESCO) install and maintain RETs and the general public. UNESCO has also co-funded with UNDP small-scale RET activities in the region.
UNESCO / ESCAP rural UNESCO, ESCAP & others; A survey of small-scale rural power generation at Fiji sites with 5 or more years electrification study 2005-2006 Rural electrification operational experience to provide useful information on patterns of rural energy use, experience in Fiji electrical appliance use, productive uses of energy, actual costs, O&M problems, etc.
AGO Fiji Energy Australian Greenhouse Office The AGO project developed an energy labeling and MEPS system for Fiji based on the Standards and Labeling (AGO); Intermittently from late Australia and New Zealand scheme. Initial coverage was limited to household Scheme 1990s. EE appliance guidelines refrigerators, and was to be later extended to other appliances including AC. In 2005, an and labeling. Modest funding. agreement was signed between the Fiji Government and AGO to survey imported appliances and to develop policies relating to appliance labeling and efficiency. EE effectiveness of activity is unclear as apparently only minimal implementation funding has been available.
Greenpeace Pacific Studies on sustainable energy Greenpeace has prepared studies on opportunities for RE and EE for Niue, Fiji and in the PICs Samoa.
Econoler International 23 Ref.: 5505 Asian Development Bank TA 6485-REG: Promoting Energy Efficiency in the Pacific - Contract No. COSO/90-492 Final Report
Name Summary Comments on RE / EE Activities
Pacific Islands UNDP/SPREP-GEF $5.25 M PIGGAREP is the follow-up to the PIREP design stage project. Covers most PICs. Greenhouse funding; operational from 2008. Implementation has been slow. Mid-term evaluation completed and mid-course Gas Abatement Supporting RET for productive uses corrections recommended to return focus to productive uses of RE and private sector through for GHG abatement involvement as per project design. Wide range of soft support funded smaller RE projects Renewable Energy in 15 applicable PICs, including all 5 PEEP countries. Project (PIGGAREP)
REEEP Energy EE labeling for Samoa and Vanuatu Project includes feasibility study for an appliance labelling programme in Samoa and Efficiency, Auditing (also energy auditing). €163,500.00 Vanuatu, as well as energy auditing in Palau, the Marshall Islands (RMI) and Vanuatu. and Appliance funding from Australia and New Funding does not include any signficant implementation support. labeling Programme Zealand, incl. co-funding by SPC. (EEAAL) Tonga Energy Road ADB, World Bank, IRENA, NZAid, TERM is a ground-breaking ten year road map to reduce Tonga’s vulnerability to oil price Map (TERM) 2010- Pacific Region Infrastructure Facility, shocks in an environmentally sustainable manner. TERM has been approved by the 20 2010 Tongan government and different elements are being implemented by donors who fully and jointly supported TERM’s development.
Econoler International 24 Ref.: 5505 Asian Development Bank TA 6485-REG: Promoting Energy Efficiency in the Pacific - Contract No. COSO/90-492 Final Report
Reviewing DSM policies and programs in the electricity sector for the five participating countries shows that only limited activities have taken place in the recent past. In addition, wherever a program has been implemented, very little trace is left of those activities a few years later. This is largely due to the fact that previous DSM initiatives involved limited time and effort and few institutional structures or government policies were established to make these efforts sustainable post-project end. Energy efficiency Standards and Labeling (S&L) feasibility studies have been undertaken in Samoa and Vanuatu with support from the Renewable Energy and Energy Efficiency Partnership (REEEP). However, both currently lack implementation funding, and a similar program is presently on hold in Tonga.
Thus, in all five participating PDMCs, making EE/DSM a permanent integrated resource planning13 tool and a component of national strategies to limit the impact of international oil price shocks should be a priority. Governments and market actors must also adopt a long-term vision and provide continuous support to ensure that EE improvements become a part of the national culture. Minimizing customer energy expenditures will require a broad portfolio of initiatives to ensure that awareness and general information is diffused to the market in parallel with practical implementation focused EE initiatives and programs aiming at specific technologies or market segments. In order to determine which sector and potential initiatives should be addressed in priority, it is necessary to review the key characteristics of each unique PEEP PDMC market segment, as follows.
2.3.1 Electric equipment supply market in PDMCs
In all five PEEP PDMCs, electric equipment providers are generally large local companies that dominate equipment importation and supply in the market. Because of small market size, their number is often limited to fewer than five, and they sometimes enjoy a quasi-monopoly position. In many key EE programs, the retail industry is a key partner in supplying energy-efficient appliances to the market. The limited number of market players in the PEEP countries means that the local service industry often comprises an insufficient number of appropriate companies to make genuine competitive procurement bidding possible. More critically, as large local retailers are generally influential people in their local communities, their support for EE programs, such as EE-related import regulations, is vital. Energy efficiency program managers should carefully involve such key stakeholders with all stages of EE policy and program development to provide the necessary ‘buy- in’ to the subsequent policies and programs. In terms of EE program development, this implies that a key early task would be to identify local key players and convince them to participate in the program or negotiate agreements to obtain their full support. The success of any EE/DSM initiative often depends as much on public relations and marketing as on formal regulations and policies.
13 Integrated resource planning is an approach used by utilities to meet growing energy demands of consumers with an integrated combination of new power plants and a portfolio of energy efficiency programs that will ultimately allow the balancing of demand and supply in the future.
Econoler International 25 Ref.: 5505 Asian Development Bank TA 6485-REG: Promoting Energy Efficiency in the Pacific - Contract No. COSO/90-492 Final Report
Energy efficiency labeling and MEPS
A significant number of electric appliances are shipped to the Pacific Islands with an energy label already affixed abroad in the country of origin. Without any control structure in place to ensure energy labels are appropriate for the model involved, or any media or marketing campaign to educate buyers to buy more energy efficiency models, the information contained on labels can easily be confusing for end-consumers. Labels affixed in developed countries like New Zealand and Australia may be the most common, and hence directly comparable across available competing models. But a comprehensive information campaign is still needed to explain the significance of energy labels in general, as well as how to compare the various different labels from different countries of origin found on different appliances available in the applicable PEEP market. A properly integrated energy labeling program will require first establishing the credibility of the energy labeling concept, and then maintaining this credibility in the long run. This will require significant funding for several years, something that was lacking in Fiji (the only PIC where energy labeling has been seriously introduced) and that is also lacking in existing efforts. A potential approach could consist of: holding retailers accountable for the accuracy of the energy labels (regardless of their country of origin) displayed on their appliances; on-the-spot fines for applicable equipment imported without the relevant energy labels or for misleading or inapplicable labels; and a significant media and marketing campaign along the lines of “the more stars the better, whatever their color”. Energy performance labeling is also generally a necessary first step before MEPS( Minimum Energy Performance Standards) can be considered, and to some extent energy labeling often reduce the benefits from MEPS introduction and enforcement as in many S&L programs only products that meet MEPS levels are legally allowed to display labels. Chapter 4 presents a preliminary estimation of energy labeling and MEPS impacts in PEEP countries.
2.4 BARRIERS TO EE/DSM IMPLEMENTATION
Implementing effective EE/DSM policies in PEEP PDMCs faces a number of complex and inter- related barriers. The most significant EE/DSM barriers that need to be addressed in the five participating countries are listed below.
Common barriers to energy efficiency
Many barriers to energy efficiency in PDMCs are generally similar to such barriers worldwide, in particular: -
Customers’ propensity to “shop for lowest first cost” rather than select the lowest overall life- cycle cost option when looking to purchase appliances and/or electrical equipment. This effect is particularly important in PEEP PDMCs considering their lack of knowledge of operating costs, limited financial means to buy higher first cost appliances and equipment, and generally limited household incomes. Lack of general information and awareness about the practical ways and means to use energy more efficiently.
Econoler International 26 Ref.: 5505 Asian Development Bank TA 6485-REG: Promoting Energy Efficiency in the Pacific - Contract No. COSO/90-492 Final Report
Public administration lack of human and financial resources
Presently, no PEEP PDMC country has sufficient capacity to adequately design, implement and manage EE/DSM activities. International experience shows that EE policy and program design, management and evaluation requires a dedicated group of suitably qualified and experienced people. As small, physically isolated countries, all five PEEP PDMC public administrations have more high priority challenges to solve than they can tackle with their limited budgets and available human resources.
One of the prerequisites for EE/DSM initiatives to succeed is that governments recognize EE issues as a national priority and allocate adequate budget and human resources to put in place a permanent structure to manage those programs, this is needed even if the funding is supplied by donors as there needs to be local ownership, which still takes real resources and commitment. Establishing effective EE/DSM program design and management teams requires a capacity building strategy, and in the case of the PEEP PDMCs this will need suitable medium to long-term external technical assistance. Such medium term technical assistance has been included in the subsequent PEEP full-scale GEF project design and includes developing suitable EE programs, databases, processes and tools. The necessary technical support will also include the provision of hands-on training to the local EE/DSM unit through a full program cycle including initial design, implementation and evaluation.
Lack of human and financial resources in electric utilities
Electricity utilities are run by government owned public enterprises in four of the participating PDMCs. In Vanuatu a privately owned utility operates under a long-term concession agreement under the guidance of an independent regulator. There may be a greater private sector role in some or all electricity utility matters in the future as the legal framework for private sector involvement in the electricity sector is already in place in a number of PEEP PDMCs or is included in policy documents that still need to be translated into appropriate formal legal frameworks. At the present time, public utilities are generally aware of EE/DSM and the benefits it could bring to their country, the utility, and their customers. Streamlined procedures for human resource assignment, program development, procurement and project implementation often make it easier for private utilities to implement DSM activities than it is for publicly owned utilities. To date, PNG and the Cook Islands have already implemented, or are in the process of implementing, EE/DSM units. All of the PEEP PDMC utilities will need capacity building support as well as tools and hands-on training in energy efficiency and DSM load management programs.
Lack of capacity to analyze customer databases in support of program development
In Chapter 2.1, it was mentioned that there are presently large differences in customer categorizations among individual PEEP country databases which made inter-country comparisons very problematic. As EE/DSM units are put in place and as they start implementing practical EE/DSM programs it would be very useful to have a joint and coordinated effort to determine customers’ characteristics from in-depth database analyses. This would allow for improved comparisons and data sharing among PEEP PDMCs.
Econoler International 27 Ref.: 5505 Asian Development Bank TA 6485-REG: Promoting Energy Efficiency in the Pacific - Contract No. COSO/90-492 Final Report
In developed countries, sharing key common DSM components (market research, program concepts, etc.) through periodic meetings among utilities has been and still is one of the most efficient approaches for individual DSM managers to improve their skills and stimulate creativity. The joint coordination of PEEP PDMC customer database analyses is recommended as a good starting point for further exchanges on EE/DSM matters among participating PDMCs. Such detailed data is very useful in the analysis of electricity consumption behavior for specific end- users. Such analysis facilitates the tailoring of specific DSM initiatives, answering sector specificities, and achieving the intended savings.
Lack of effective building codes
In PEEP PDMCs, addressing energy efficiency in new buildings should be a priority to ensure that fundamental design or materials based energy inefficiencies are not locked in for decades in new buildings. However addressing building energy efficiency solely through EE provisions of building codes is unlikely to be the whole answer in PEEP PDMCs as government building code implementing agencies are often unable to fully control new building compliance with existing codes. So building code related EE initiatives need to be tailored to a level that local building inspectors can realistically check and enforce, i.e. the measures must be kept simple so only simple compliance checks are required. Complex requirements such as the use of computerized building thermal modeling are unlikely to be enforced, rather simpler check list or yes/no question approaches are needed.
Alongside simple and actually enforced building code EE provisions, training on best EE design and construction practices adapted to local environments is required. Some form of recognition of outstanding EE/green new and existing buildings can be a useful complementary approach.
Tariff structures do not send EE price signals to customers
Tariff structures are generally not adapted to support energy efficiency actions or behaviors in the PEEP PDMCs. For example, in Samoa and Tonga, a single tariff rate applies to all customers. Other power utilities apply different tariffs to different customer categories, but these tariffs do not necessarily reflect the different costs of supplying the different customers. When power utilities are better oriented towards implementing EE/DSM programs, more sophisticated tariff strategies (such as charging by time of use, maximum kW/kVA, or power factor) should be developed to send proper cost signals to end-users and thus create favorable economic conditions for their participation in EE/DSM programs.
One specific tariff design deserves attention: the interruptible or time-of-use (TOU) tariff. In PDMCs, where power failures often significantly adversely affect business operations, many large customer premises are already equipped with stand-by diesel generators. In developed countries, power utilities commonly make special arrangements with these customers to run their diesel generators when required, for a suitable reduction in the average tariff or for avoiding a very high premium tariff for adding to system peaks. Such load peak load interruptible or TOU tariffs could be used in the PEEP PDMCs and could be structured to make such arrangements profitable for both parties.
Econoler International 28 Ref.: 5505 Asian Development Bank TA 6485-REG: Promoting Energy Efficiency in the Pacific - Contract No. COSO/90-492 Final Report
While pricing is an important component ensuring EE/DSM policy sustainability in any country, it is outside the scope of this paper to analyse or specify related recommendations for participating countries as the project focus is on electrical end-use improvement.
Taxation regime penalizes high-efficiency equipment
A taxation regime may be detrimental to energy-efficient appliances and equipment, as is the case in Samoa14. Samoa imposes an excise duty of 8% on electrical appliances and equipment, including the price differential on high-efficiency equipment that costs more than low-efficiency equipment. Additionally, Samoa imposes a 15% Value Added Goods and Services Tax (VAGST) on this type of equipment. As a consequence, these taxes increase the price differential between energy-efficient and non-efficient equipment. Introducing a tax rebate in a specific DSM program can provide the necessary incentive to encourage customer participation in an appropriate EE/DSM program.
Lack of appropriate financing or market mechanisms for energy efficiency
Four of the most important EE barriers for commercial and industrial customers are i) lack of specialized enterprises to identify and implement energy efficiency measures; ii) lack of financial resources to implement EE projects; iii) lack of human resources and expertise to execute EE projects; and iv) lack of confidence that predicted energy savings will be actually realised.
These common market barriers are present in all five participating PEEP PDMCs and in principle can be addressed by the introduction of Energy Service Companies (ESCOs). ESCOs are generally private companies that provide comprehensive EE or load reduction services to customers who own or operate facilities such as factories and buildings. Performance contracting is central to the ESCO concept and refers to the practice of providing a guarantee that a certain level of energy savings will be generated for a customer for a fixed or an open-book fee. Any energy saving shortfall will be covered by the ESCO. ESCOs are also often instrumental in providing access to Third-Party Financing (TPF) where the investment is covered exclusively from generated savings.
While the ESCO concept has been quite successful on some parts of the world to mitigate multiple EE barriers, the number and scale of customers required for a profitable ESCO operation is generally present in most PEEP PDMCs to justify a full TPF operation or to allow a formal ESCO to operate successfully.
However, in PNG, the market size seems to be sufficient in principle for an ESCO to be established and to operate a profitable performance contracting operation, in Port Moresby and in large industrial sites elsewhere. Although TPF may also be usefully considered, this type of financing scheme often fails due to payment problems, even in developed countries where the legal support for business operations is fully developed. Reviewing the legal support and business
14 ADB TA 4994 SAM: Implementing the Samoa National Energy Policy. Component 3 - Regulatory and Policy Reform in the Power Sector – Demand-Side Management Strategy, February 27, 2009, p. 4-1.
Econoler International 29 Ref.: 5505 Asian Development Bank TA 6485-REG: Promoting Energy Efficiency in the Pacific - Contract No. COSO/90-492 Final Report operation context in PNG is a critical first step before any effort is made to promote ESCO and/or TPF activities. In the meantime, a prioritized EE financing support program would help EE implementation in each country through training and education. It would also increase the capacity to perform ‘bankable’ energy audits to assist small or large customers in building their own specific energy saving programs. This expertise is a critical element of any EE/DSM strategy and is a basic component to any ESCO or performance financing developments.
Econoler International 30 Ref.: 5505 Asian Development Bank TA 6485-REG: Promoting Energy Efficiency in the Pacific - Contract No. COSO/90-492 Final Report
3 POLICY AND INSTITUTIONAL RECOMMENDATIONS
This section presents a series of recommendations that are applicable to all participating PEEP PDMCs. It is recognized that the five participating countries have a similar baseline with minimal institutional structures in place to support energy efficiency in a sustainable way and no established EE/DSM unit with properly trained and experienced human resources. Consequently, the proposed EE program management organization is a necessary initial step before each country can incorporate energy efficiency as a permanent component of its national energy policies. These recommendations are designed to mitigate the management barriers identified in Chapter 2.4. They are of a generic nature as they apply to all five PEEP PDMCs. More specific organizational aspects are discussed in individual country analyses in the appendixes to this report. 3.1 GOVERNMENT ENERGY EFFICIENCY MANAGEMENT ORGANIZATION
From a government perspective, energy efficiency is a way to improve productivity in the economy through improved energy use. These kinds of changes require commitment along with a economy- wide and long-term approach. In addition to EE program development, management, financing and regulation activities, a key government role is to assume leadership for the development and implementation of EE policies and regulations. Suitable government EE organisation and leadership is also critical for energy efficiency market data gathering and analysis, including establishing realistic and useful sector benchmarks. Table 12: Energy Department EE Organization
Energy Department Institution in Activity Profile of Activity International Support Charge Create an EE Division Energy Lead and coordinate EE Technical assistance: with capacities in: Department policies, regulations and Deliver training in enforcement Leadership Key Partners: EE management Economic analysis Local Develop and implement EE Improve data and Public sector stakeholders policies statistics for EE management Traditional Liaise with donors purposes Technical analysis leaders Conduct market surveys Assist in market Sub-contractor Churches Conduct energy audits survey design and management Conduct and monitor execution Communications training programs Assist in production and awareness Produce EE resource plan of EE national Produce awareness resource plan(s) programs Produce education programs Lead EE activities in the public sector Develop EE regulations and standards
Econoler International 31 Ref.: 5505 Asian Development Bank TA 6485-REG: Promoting Energy Efficiency in the Pacific - Contract No. COSO/90-492 Final Report
In this scheme, the Energy Department will be involved in a large spectrum of EE activities, including EE program management. Another scheme would be for the EE division to outsource EE program management and evaluation to private organizations whose management systems are often more flexible than the public sector. Such a strategy would likely be better adapted to market- oriented program management. A third option would have the government mandate the public electricity utility as the implementing agency of its EE policy and program plan. The public electricity utility could provide the technical capacity in market research and program design. Its customers’ listing and the regular contact with them through billing would provide the required market data and an access channel to clients for EE marketing purposes. When a utility is mandated by government to implement EE programs, it is usually allowed to recoup the cost of program implementation through an increase in electricity rates.
3.2 ELECTRIC UTILITY DSM ORGANIZATION
Governments can and frequently do mandate the electric utility to be the implementation arm of EE programs. However, electricity utilities often view EE/DSM programs as counter-productive activities to their profit making objectives as successful EE/DSM activities reduce electricity sales while money has to be invested to run the EE/DSM program. To be attractive to the electricity utility, EE/DSM has to be a profitable activity. There are two concrete ways to achieve this objective. The first is to select only EE/DSM programs where the utility’s benefits per energy unit are higher than its unit energy selling price. In this first scheme, the electricity utility has a direct incentive to reduce electricity production. A second approach allows the electricity utility to recoup the cost invested in EE/DSM programs through a small increase in the tariff. This second approach is more common and is applicable to a larger proportion of successful EE/DSM programs worldwide than the first option. DSM should be effectively integrated into the supply strategy of a utility’s with as much scrutiny as are traditional fossil power supply, renewable energy options and transmission and distribution system upgrades and their links to tariffs.
This business approach has three key requirements:
One is methodological. The utility must precisely determine its production cost for each load curve segment. It must accurately determine the end-use demand structure behind the load curve to identify which group of customers and usage are responsible for this demand and build its EE/DSM strategy from this basic information. Another requirement relates to EE/DSM investment management. As for any investment in power supply and/or distribution systems, EE/DSM program design needs to be supported by high-quality “bankable” feasibility studies. The third and by no means least requirement is that the utility can recover its costs and a reasonable margin of the EE/DSM program. In practice, this is a matter for governments to consider and agree to with publicly owned utilities, and for independent power regulators to consider and agree to for privately owned utilities that operate under monopoly power supply concessions.
Econoler International 32 Ref.: 5505 Asian Development Bank TA 6485-REG: Promoting Energy Efficiency in the Pacific - Contract No. COSO/90-492 Final Report
Table 13: Electric Utility DSM Organization
Electric Utility Institution Activity Profile of Activity International Support in Charge Create an EE/DSM Power Get financing resources from Technical assistance: unit with capacities in: utility business activities or from a Train staff in EE Economic analysis raise in tariff management from and planning Hire technical staff utility point of view Database and load Gather and analyze customer Assist in production research data on electricity of EE resource plan Technical analysis consumption Implement EE/DSM Program design, Identify and develop programs implementation relationships with large Evaluate and management customers effectiveness of Program evaluation Identify key market players EE/DSM programs and develop positive Review and modify relationships EE/DSM programs Develop and implement in light of actual internal communication performance program Develop and implement external communication program Proceed with market research and potential energy savings analysis Design, implement and evaluate EE/DSM programs
3.3 GENERAL INFORMATION/AWARENESS PROGRAMS
EE/DSM awareness programs have been stressed as a priority by all public and private organizations in the PEEP PDMCs. Awareness programs are critical as they assist consumers on how best to achieve energy savings and save on their electricity bills.
Econoler International 33 Ref.: 5505 Asian Development Bank TA 6485-REG: Promoting Energy Efficiency in the Pacific - Contract No. COSO/90-492 Final Report
Table 14: EE Information and Awareness Programs
Information and Awareness
Activity Institution in Charge Profile of Activity International Support Information Energy Department Includes: PDMC regional centers to information monitoring disseminate Key partners : Books and center information on Electric equipment leaflets Regional organizations energy efficient importers/retailers Technical staff The South Pacific technologies and answering Applied Geoscience the efficient use of energy technical Commission (SOPAC) questions NGOs
Awareness Energy Department Includes: TA to assist in: programs Key partners : EE advertising Designing awareness Electric equipment Educational strategic plan retailers material for Designing awareness Public utility schools programs Education sector Producing initial material
Beyond activities that meet specific EE/DSM program requirements, the content of the information and awareness programs should be tailored to mainstream energy efficiency as part of the PEEP PDMCs’ organizational and behavioral culture.
The information center material and structure of operation would benefit from a regional approach where these are jointly developed by participating PEEP PDMCs, translated into local languages and then diffused in their respective countries. Information dissemination could be carried out through a website accessible by all PEEP PDMCs, which would also be a good way to share similar tools at reduced costs. This website would allow for networking and promoting shared information on EE technologies as well as on EE program design, management, results and evaluation. Potential regional partners to host the website include SPC (Secretariat of the Pacific Community) and PPA (Pacific Power Association). Individual PEEP PDMC contributions would be through local coordinators responsible for national contributions to the Web page.
3.4 EDUCATION AND TRAINING
Education and training would be a prerequisite in all PEEP PDMC EE/DSM efforts, and should not be limited to just short training sessions but rather be integrated into existing education and training curriculums wherever possible.
Econoler International 34 Ref.: 5505 Asian Development Bank TA 6485-REG: Promoting Energy Efficiency in the Pacific - Contract No. COSO/90-492 Final Report
Table 15: Education and Training in Energy Efficiency
Education and Training Activity Institution in Profile of Activity International Support Charge Primary Energy Coordinate the Technical Assistance: school level Department production and Assist in producing EE education dissemination of EE education plan and strategy Key partner : education material along with initial education Dept. of Outsource to Dept. of materials Education Education Partner: SPC/Donors Countrywide activity
Energy audit Energy Mobilize and involve the Technical Assistance to: Department private sector in EE program design and Prepare EE work plan and implementation strategy Key partner : Conduct training Produce initial EE education
sessions on energy material Chamber of audits including financial Commerce Conduct EE training analysis and reporting to and Industry sessions customers (CCI) Train local staff in delivering Periodically update and EE training sessions upgrade EE capacities
Energy Energy Mobilize and involve the Technical Assistance to: management Department private sector in EE program design and Prepare work plan and implementation strategy Conduct training Produce initial education sessions on energy material management for large Conduct training sessions buildings’ staff Train local staff in delivering Periodically upgrade training sessions capacities
Energy- Energy Mobilize and involve the Technical Assistance to: efficient Department private sector in program building design and Prepare work plan and construction Key partners implementation strategy practices CCI Conduct training Produce initial education Architect and sessions on energy- material contractor efficient building Conduct training sessions associations construction practices for Train local staff in delivering large building training sessions
constructors Periodically upgrade capacities
Econoler International 35 Ref.: 5505 Asian Development Bank TA 6485-REG: Promoting Energy Efficiency in the Pacific - Contract No. COSO/90-492 Final Report
Primary school education
SOPAC have produced a manual to be released in schools in Tonga, Samoa and Vanuatu. In the first instance, this material should be reviewed and, where necessary, also adapted to the specificities of the Cook Islands and PNG. However, the distribution of manuals alone may not have a permanent impact on youngsters’ attitude towards energy efficiency. Each government should also consider developing its own specific EE education program and then consider obtaining assistance for material design and production as required.
Energy audit training
Building in-house capacities for energy auditing and related expertise is critical for EE policy and program development. In the long run, local expertise is required to periodically conduct audits and meet local demand for EE advice. EE training should be addressed first to the private sector and in particular to electric equipment importers and retailers. Involving the latter in energy auditing would make them aware of EE potentials and positively contribute to getting them to support energy labeling and MEPS strategies as and when they are introduced.
Building sector energy efficiency training
In the building sector, education and training constitute an immediate option to meeting existing demands for more EE building guidelines specific to the tropical climates of the PEEP participating countries. A useful example is the new “Energy Efficiency Home Loan”15 of the National Development Bank of Palau, which includes technical concepts for improved home energy efficiency and deserves review within the context of a model training program design for PEEP PDMCs.
3.5 ENERGY LABELING AND MINIMUM ENERGY PERFORMANCE STANDARDS
A clear priority EE program for PEEP PDMCs would be energy labeling and/or suitable MEPS levels for key significant types of electricity-consuming equipment imported into the applicable PEEP countries and/or for which forecasts show a large projected energy demand from in the future. Properly designed, resourced and enforced energy labeling and/or MEPS would give consumers the information they need (or ban the import altogether for applicable energy inefficient products and appliance under MEPS) to avoid consumers buying energy inefficient appliance models.
15 The Palau Energy Efficiency Home Loan is a program that will offset part of the marginal cost of including energy efficiency measures in new homes, such as tinted windows, radiant barriers under roofs, proper sealing of door jambs and thresholds, etc. With the money saved on electricity bills the homeowners can repay their loan faster than had they built a standard, energy inefficient home.
Econoler International 36 Ref.: 5505 Asian Development Bank TA 6485-REG: Promoting Energy Efficiency in the Pacific - Contract No. COSO/90-492 Final Report
Depending on the exact program design, energy labeling and/or MEPS would be enforced by on- the-spot administrative fines or similar mechanisms for appliance importers who import unlabelled or too inefficient products or mislabel or misrepresent products as more energy efficient than they really are.
Table 16: Energy Labeling and MEPS Management Organization
Energy Performance Labeling and/or Minimum Energy Performance Standards Institution in Activity Profile of Activity International Support Charge Lighting Energy Introduce and administer Technical Assistance: Products Department energy labeling and/or MEPS Key partners : Assist in program design Appliances Review market situation and and implementation Electric develop policy case Work on design and equipment Implement related regulations implementation design and appliance Inform and train stakeholders with other interested retailers (customs staff, retail sector, partners, such as REEEP Power utility contractors, etc.) and Australia and New Customs Administer or link to existing Zealand energy labeling Department product registration databases and MEPS authorities Inspect imported products Liaise with energy labeling Enforce administrative fines for and MEPS authorities in non-compliance with countries of appliance and regulations product manufacturing and/or exports to PEEP PDMCs
Energy labeling and MEPS are a set of procedures and energy performance limits and criteria that define the energy performance of applicable appliances/product types and classes. The first step is generally energy labeling, where applicable products must display an appropriate energy performance label at the point of sale, there can also be a requirement that an appropriate energy label value must be declared in any advertising. Energy performance labels can be a comparative label (e.g. the Australia - New Zealand (A-NZ) star rating label commonly already found on appliances in PEEP PDMCs) where the energy performance of the product can be compared with others in the market. Energy performance labels can also be an endorsement label where products with greater energy performance levels than a benchmark are allowed to display the endorsement label (e.g. Energy Star). Both types of label can be used and displayed on a the same appliance. Labeling can initially be voluntary, but to be really effective and to make a significant impact on energy efficiency of applicable products, then appliance energy performance labeling really needs to be mandatory. The next step following the introduction and effective implementation of mandatory labeling is Minimum Energy Performance Standards (MEPS). MEPS generally makes use of the energy performance information gathered for energy performance labeling to set a lower limit below which applicable products or appliances are not allowed to be sold as they are deemed to be too energy efficient to meet minimum acceptable levels of energy efficiency.
Econoler International 37 Ref.: 5505 Asian Development Bank TA 6485-REG: Promoting Energy Efficiency in the Pacific - Contract No. COSO/90-492 Final Report
For products and appliances in PEEP PDMCs, MEPS, and would effectively prohibit the sale of the worst energy performers on the local appliance, air-conditioner and lighting markets.
A critical component of energy labeling and/or MEPS is enforcing its effective application in the market. The first point of enforcement is when applicable products and appliances are imported, where the imported products and appliances are inspected by Customs. Ideally there would also be a further step of visiting retailers and checking each appliance or product in retail shops, but this may prove to be difficult for the public inspection agencies with a mandate for food and electrical safety who would have the responsibility and who generally have limited human resources and budgets. The following scheme is suggested:
Mandatory energy performance labeling and/or MEPS adoption at national level. Energy labels and/or MEPS control: in the regulations, make importers/retailers responsible for proving compliance of material displayed for sale with the applicable energy performance levels. Penalties for non-compliance need to be included in the regulations. Energy labeling and/or MEPS control generally requires that the results of suitable laboratory tests will be made available on request to demonstrate the energy performance of the applicable products or appliances. As PEEP PDMCs import all their electrical products and appliances, the administration scheme needs to make use the results of internationally recognized laboratory energy performance tests in applicable other countries.. The in-kind remittances of used equipment by foreign relatives will impact on the full effectiveness of energy labeling and/or MEPS in PEPE PDMCs. This remittance issue needs special attention when evaluating the feasibility of such a program by addressing issues such as:
Administrative effort and cost versus energy savings Energy labeling and/or MEPS enforcement in practice Market: targeted equipment penetration rates, size of new imported equipment, size of the 2nd-hand importation (in-kind remittances in PDMCs) Implementation strategy: increasing awareness level about EE and efficient equipment and collaboration with importers/retailers Funding for program design, implementation, monitoring and follow up. Depending on the answers to the above and other questions, energy performance labeling, and perhaps MEPS should be considered for refrigerating appliances (fridges and freezers and display refrigerators as used in retail stores), air conditioners, lighting products and other likely product classes. It is almost certain that the priority labeling and MEPS product classes would be refrigerating appliances, lighting products, and air-conditioners as they are widely used and standard consumer products where there are generally significant differences in energy efficiency between commercially available different models that give the same energy service (liters of capacity and cooling capacity or light output), and their energy efficiency is only weakly related to price, i.e. energy efficient models do not always cost more than energy inefficient models.
Econoler International 38 Ref.: 5505 Asian Development Bank TA 6485-REG: Promoting Energy Efficiency in the Pacific - Contract No. COSO/90-492 Final Report
3.6 BUILDING CODE AND ENFORCEMENT
In the PEEP PDMCs, current building regulations do not include any specific provisions for energy efficiency. Clients, architects, building services engineers and builders are aware of energy efficiency in general terms and, when required by clients, attempt to implement EE principles and include more energy efficient hardware in their designs and construction. Achieving energy efficient buildings requires the client, designers, and builder to be not only be aware of energy efficiency issues but generally to spend more up-front for subsequent lower energy bills. Integrating the often conflicting EE requirements within available budgets is not simple and therefore rarely happens without building code energy efficiency requirements and their enforcement, as well as way fo recognizing energy efficiency levels above minimum code requirements.
Table 17: Building Code Energy Efficiency
Building Code
Activity Institution in Charge Profile of Activity International Support Introduce EE Energy Department Prepare EE TA to: considerations Key partners : specifications adapted in building code to local environment to Produce policy and effectively Department in charge be introduced in arguments for enforce of building code building code (for government sign- requirements Architects, building building envelope, off, develop code services engineers, lighting, HVAC, requirements, initial contractors/builders, insulation, shading technical material equipment suppliers, etc). Conduct training clients, and tenants Conduct actual sessions in EE Agency that implementation of new building design and administers building EE code requirements code compliance code and inspects Inform/train architects, inspection buildings for engineers and Train local staff in compliance with code contractors delivering ongoing requirements training Power utility
To update existing building code requirements to also include energy-efficiency, a practical strategy would be to use a code from a country with similar environment conditions. The Palau project mentioned may be a good starting point.
As the PEEP PDMCs have similar tropical climates, and to limit revisions and code updating costs, building code technical information should be shared with other participating PDMCs through the PEEP project information web page already proposed.
Econoler International 39 Ref.: 5505 Asian Development Bank TA 6485-REG: Promoting Energy Efficiency in the Pacific - Contract No. COSO/90-492 Final Report
3.7 PUBLIC SECTOR PROCUREMENT
As part of their normal operating activities, PDMC governments annually purchase considerable amounts energy consuming products and equipment. The adoption of EE considerations into the public sector procurement process would provide significant energy savings. Furthermore, it will send a clear signal to the community that the EE policy is really being taken seriously by the government itself. Additional benefits include promoting government leadership in energy efficiency and influencing local importers and retailers to opt for more energy-efficient products and practices.
Table 18: Public Procurement Energy Efficiency Organization
Public procurement Institution in International Activity Profile of Activity Charge Support Public sector Energy Department Introduce EE considerations into TA to: procurement Key partners : procurement procedures (esp. introduce in the bidding Assist in program All public sector evaluation procedures EE related design, stakeholders specifications like energy implementation Energy using performance labeling, MEPS, life and monitoring equipment and cycle cost minimisation, high part product suppliers load coefficient of performance for AC units, etc) Introduce monitoring and control mechanisms
Econoler International 40 Ref.: 5505 Asian Development Bank TA 6485-REG: Promoting Energy Efficiency in the Pacific - Contract No. COSO/90-492 Final Report
4 RECOMMENDATIONS FOR FUTURE EE PROGRAMS
This section provides a summary of the estimated savings potentials from the energy conservation measures (ECM) that were identified in the five PEEP countries. Details of each proposal are presented in the country appendices attached to this report.
At the first stage, a baseline was established for each of the PEEP countries, based on the available energy consumption data for each sector. The evaluation for each PEEP country was built on the results obtained from the pilot projects implemented in other PEEP countries and adapted to the local context of each country for each proposed ECM.
A compilation was then made with respective to the country data and information that was gathered during the various missions performed by the PEEP consultancy team. Adjustments were based on the following factors: -
Data availability and level of existing detail pertaining to the energy balance and energy consumption per sector; Information availability in the country from previous EE experience; Site visits and preliminary energy audits to evaluate the potential for energy savings in the government buildings and hotel sectors; Surveys in the residential, commercial and governmental sectors; Data gathered from suppliers on energy technologies used and their availability in the market; Meetings with equipment and service providers; Discussions with stakeholders. The proposals were limited by the level of information available and the identified ECMs that were relevant within the PEEP country context, and consequently estimates were established conservatively. The summary of the five country proposals presented in Table 19 below shows potential savings ranging from 0.4% to 66.2%.
Econoler International 41 Ref.: 5505 Asian Development Bank TA 6485-REG: Promoting Energy Efficiency in the Pacific - Contract No. COSO/90-492 Final Report
Table 19: Total Energy Savings per ECM for Participating Countries
Total Annual 2011-2020 Annual Savings Simple Estimated Emission CO Potential 2 PBP ECM Investment Reduction Reduction 16 % MWh USD M USD M TCO2 TCO2 Years Energy Efficiency in 10.2 7,121 2.1 7.3 4,583 36,690 3.5 Government Buildings Energy Efficiency in 66.2 4,396 1.5 8.1 2,877 23,011 5.5 Street Lighting CFL in Residential 5.0 9,315 1.7 0.75 5,976 53,830 0.5 Sector Energy Efficiency in 20.7 8,786 2.7 24.6 5,524 44,190 4.0 Hotel Sector Energy Labeling and 2.0 18,145 5.8 6.0 11,758 93,400 1.0 MEPS Power Factor 0.4 423 0.1 0.8 275 2,480 5.7 Correction Systems Energy Efficiency in 5.0 267 0.1 0.47 184 1,650 4.7 Pumping Stations
A summary for each proposed ECM is presented below.
4.1 GOVERNMENT BUILDINGS
The proposed ECMs focus on all major energy using systems found in government buildings. Table 20 below presents the main actions proposed to reduce energy consumption.
Table 20: Major Actions to Reduce Energy Consumption in Government Buildings
Average Savings Energy Conservation Measures for Selected Buildings Potential (%)
HVAC optimization 5-15 Air compressor O&M 10-20 Variable-speed drives 5-15 Efficient lighting fixtures and lamps 10-20 Fan system improvements 5-10 LCD monitors 10-20 AC replacement 15-20 O&M and energy management 5
16 Including Network Losses
Econoler International 42 Ref.: 5505 Asian Development Bank TA 6485-REG: Promoting Energy Efficiency in the Pacific - Contract No. COSO/90-492 Final Report
The savings potential in government buildings in the five PEEP countries ranges from 8.4% to 16.2%. The figures are conservative to account for the low level of detail available.
Table 21: Annual Energy Savings Potentials in Government Buildings
Energy Efficiency in Cook Selected Government Unit PNG17 Samoa Tonga Vanuatu Total Islands Buildings Buildings Baseline MWh/Year 1,743 47,781 11,250 4,430 4,892 70,096 Consumption % 16.2 8.4 13.4 13.4 14.4 10.2 MWh 282 4,035 1,504 595 705 7,121 Annual Savings 18 Liters of Potential 70,600 1,008,700 419,600 148,800 182,900 1,830,600 Diesel USD M 0.1 1.0 0.5 0.2 0.3 2.1 Annual Emission TCO 184.0 2,623.0 978.0 405.0 397.0 4,583.0 Reduction 2 MWh 2,259 32,278 12,031 4,761 5,640 56,969 Program Savings from USD M 1 7,912 3,762 1,708 2,266 15,649 2011 - 2020 TCO2 1,470 20,980 7,820 3,240 3,180 36,690 Total Estimated USD M 0.3 3.3 2.0 0.8 0.9 7.3 Investment Investment/kWh USD/kWh 0.15 0.102 0.168 0.16 0.164 0.1488
Simple Payback Period Years 2.9 3.3 4.3 2.3 3.3 3.5
The cumulative savings of a future PEEP government buildings EE program for the 2011-2020 period are assumed to be completed within a maximum of five years with an annual progress toward full implementation of 20% per year during the implementation period.
The investment per saved kWh is obtained by dividing the total investment by the saved kWh during the 2011-2020 period, which is considered as the average life cycle for the installed equipment for the proposed ECMs. The energy savings program in government buildings can clearly be considered as attractive as the investment per kWh is less than half of the average electricity price as sold by utilities.
17 Only Port Moresby was considered. 18 Including Network Losses.
Econoler International 43 Ref.: 5505 Asian Development Bank TA 6485-REG: Promoting Energy Efficiency in the Pacific - Contract No. COSO/90-492 Final Report
4.2 STREET LIGHTING
Most of the existing assessed street lighting fixtures in the five countries present one or more of the following deficiencies: -
Old fixtures in bad condition Rusted due to salt in the air Lack of internal reflectors Opaque lenses Lack of metering points Very low lighting levels Poor light quality Poor light color rendering High maintenance costs from the need to regularly replace lamps and fixtures Light-Emitting Diode (LED) technology was selected as offering the best overall solution to address these problems. The key advantages of high quality LED street lights include: -
Improved night time visibility due to higher color rendering, higher color temperature and increased luminance uniformity Significantly longer lifespan between lamp replacements Lower energy consumption once lumen depreciation (the fall off in light output over time) is taken into account Reduced maintenance costs Instant-on with no run-up or re-strike delays No mercury, lead or other known lamp disposal hazards Lower environmental footprint An opportunity to implement programmable controls (e.g. bi-level lighting) The proposed program seeks to implement LED street lighting systems to replace existing street lights. Existing street lights are primarily High Pressure Sodium (HPS), some old Mercury Vapor (MV), some fluorescent lamps and even in some cases incandescent lamps.
Econoler International 44 Ref.: 5505 Asian Development Bank TA 6485-REG: Promoting Energy Efficiency in the Pacific - Contract No. COSO/90-492 Final Report
Table 22: Energy Savings Potential in Street Lighting
Energy Efficiency in Unit Cook PNG19 Samoa Tonga Vanuatu Total Street Lighting Islands
Street Lighting Baseline MWh/Year 199 2,573 2,423 1,261 184 6,640 Consumption
% 69.3 71.7 64.3 63.0 33.7 66.2%
MWh 138 1,844 1,558 794 62 4,396 Annual Savings Potential20 Liters of 34,500 461,100 434,800 198,400 16,100 1,144,900 Diesel
USD M 0.08 0.46 0.56 0.35 0.04 1.49
Load Reduction (kW) kW 32 375 226 194 31 858
Annual Emission TCO 90 1,199 1,013 540 35 2,877 Reduction 2
Program Savings from MWh 920 14,754 10,984 5,520 450 32,628 2011 - 2020 USD M 0.3 2.74 2.93 1.51 0.65 8.13
TCO2 718 9,590 8,104 4,320 279 23,011
Total Estimated USD M Investment 0.3 2.74 2.93 1.51 0.65 8.13
Investment/kWh USD/kWh 0.33 0.19 0.27 0.27 1.45 0.502
Simple Payback Period Years 3.7 6 5.3 4.3 15 5.5
The savings range from 33.7% to 71.7% based on the power of the LED street lamps that would need to be installed to give equivalent light output levels to the currently installed light fixtures. The simple payback period varies from 3.7 years for the Cook Islands to 15 years for Vanuatu. This mainly relates to the number of operating hours of street lighting, which is reported to be 3,650 hours/year for the Cook Islands and only 1,825 hours/year for Vanuatu.
19 Only Port Moresby is considered. 20 Including Network Losses.
Econoler International 45 Ref.: 5505 Asian Development Bank TA 6485-REG: Promoting Energy Efficiency in the Pacific - Contract No. COSO/90-492 Final Report
The street lighting program in Vanuatu is not attractive with a payback period of about 15 years. This is reflected in the high investment per saved kWh (around USD 1.45) and a low relevant electricity tariff of USD 0.3 per kWh (street lighting tariff). For street lighting, program implementation is expected to be completed within a maximum of five years with an annual progress completion of 20% during the implementation period. Meridian mena seachi
4.3 RESIDENTIAL CFLS
Residential electricity consumers in the five PEEP countries account for significant proportion of total energy use, ranging from 18% in PNG to 41% in Tonga. Any savings in the residential sector will have a direct impact on the peak load, which occurs during the early evening in all five PEEP countries.
A significant proportion of household electricity consumption is attributable to lighting. Surveys conducted for this program found that the average incandescent lamp energy consumption proportion of total household electricity use ranges from 18% in PNG to 35% in the Cook Islands. The number of incandescent lamps per house varies between 1 and 4 units, which represents a significant potential for savings per lamp.
The program targets the replacement of incandescent lamps with CFLs, with an average potential saving of at least 73.4% over the original incandescent lamps.
The overall impacts of a residential CFL program, on energy consumption will be:
A reduction in individual domestic energy consumption and in energy costs. A reduction in electrical energy generated nationally and reduced costs to the power authority. A reduction in the importation of diesel fuel and reduced national foreign exchange requirements for fuel purchase.
A reduction in CO2 emissions from diesel generators.
Econoler International 46 Ref.: 5505 Asian Development Bank TA 6485-REG: Promoting Energy Efficiency in the Pacific - Contract No. COSO/90-492 Final Report
The table below highlights basic parameters for the proposed residential CFL program.
Table 23: Energy Savings Potential for CFLs in the Residential Sector
CFL in Residential Unit Cook PNG Samoa Tonga Vanuatu Total Sector Islands
Residential Baseline MWh/Year 5,967 131,828 22,003 15,293 12,565 187,656 Consumption % 15.4 4.1 3.6 6.4 9.6 5.0 MWh 919 5,401 800 986 1,209 9,315 Annual Savings 21 Liters of Potential 229,800 1,350,300 223,200 246,600 313,700 2,363,600 Diesel USD M 0.13 0.96 0.21 0.16 0.22 1.68 Load Reduction kW 525 2,570 644 790 684 5,213 (kW) Annual Emission TCO 597 3,511 520 671 677 5,976 Reduction 2 Program Savings MWh 8,271 48,609 7,200 8,876 10,882 83,838 from 2011 - 2020 USD M 1.13 8.63 1.86 1.40 2.02 15.04
TCO2 5,400 31,590 4,680 6,039 6,120 53,830 Total Estimated USD M 0.05 0.40 0.14 0.08 0.08 0.75 Investment Investment/kWh USD/kWh 0.006 0.008 0.019 0.009 0.008 0.01 Simple Payback Years 0.15 0.36 0.57 0.10 0.16 0.45 Period
The simple payback period varies between 2 and 7 months based on operating hours, CFL costs and the electricity tariff for the residential sector in each country. Program implementation is expected to be completed within a maximum of three years with an annual progress completion of 33% during the implementation period. Compared to other proposed programs, the CFL program is the best project for all the countries with the lowest investment per kWh saved, ranging from USD 0.006 to 0.019 per saved kWh.
4.4 HOTEL SECTOR
Hotels, motels and resorts in the five PEEP countries are significant electricity consumers. Surveys of sample hotels have shown that major energy inefficiencies exist in lighting, air conditioning and water pumping. Interesting potentials for energy efficiency in the hotel sector have been identified and could be achieved through the implementation of appropriate ECMs.
Based on results from the pilot project carried out in Vanuatu and the walk-through energy audits performed in some hotels in other countries, the hotel sector energy saving potential is estimated at 18%, including all energy types.
21 Including Network Losses
Econoler International 47 Ref.: 5505 Asian Development Bank TA 6485-REG: Promoting Energy Efficiency in the Pacific - Contract No. COSO/90-492 Final Report
The electrical savings potential is about 16% (primarily from CFLs, room switches, timers, reduced hot water temperatures, and reduced water pumping costs) and water savings around 26% (low flow shower heads, optimized garden watering systems). The reduction in LPG usage is estimated at 21% with the installation of Solar Water Heaters (SWHs).
Table 24: Estimated Energy Savings Potential in the Hotel Sector
Total Savings Energy Cost Electrical Energy Savings (%) 16% 20% Water Energy Savings (%) 26% 37% LPG Energy Savings (%) 21% 20%
Considering the average energy savings potential of 18% with a maximum payback period of four years, the investment needed for each country is mainly related to the number of hotels and their sizes.
The reduction of energy costs in the hotel sector will reduce overall costs and hence increase tourism sector competiveness in the region.
Econoler International 48 Ref.: 5505 Asian Development Bank TA 6485-REG: Promoting Energy Efficiency in the Pacific - Contract No. COSO/90-492 Final Report
Table 25: Energy Savings Potentials in the Hotel Sector
EE in Hotel Sector Unit Cook PNG Samoa Tonga Vanuatu Total Islands
Hotels Baseline MWh/Year 6,622 17,905 6,347 760 10,762 42,396 Consumption % 21.6 21.1 20.4 20.7 19.8 20.7% MWh 1,430 3,771 1,297 157 2,131 8,786 22 Annual Savings Potential Liters of 357,599 942,701 361,800 39,300 552,800 2,254,200 Diesel USD M 0.20 1.08 0.41 0.02 0.94 2.65
Annual Emission Reduction TCO2 930 2,451 843 107 1,193 5,524 Program Savings from MWh 9,536 30,166 9,140 1,258 17,046 67,146 2011 - 2020 USD M 4.67 8.65 3.24 0.52 7.53 24.61
TCO2 7,438 19,608 6,743 856 9,544 44,190
Total Estimated Investment USD M 2.3 4.3 1.6 0.3 3.8 12.3 Investment/kWh USD/kWh 0.245 0.143 0.177 0.206 0.221 0.198 Simple Payback Period Years 4 4 4 4 4 4.00
Despite the relatively high investment cost per saved kWh, the proposed measures are still below the utility electricity tariff and the program is thus economically attractive. The hotels that implement EE measures will not only benefit from reduced energy bills, but also will benefit from installed new equipment with increased comfort levels and optimized operating conditions. Program implementation is expected to be completed within a maximum of five years with an annual progress completion of 20% during the implementation period.
4.5 POWER FACTOR CORRECTION
The power factor improvement program aims to reduce the commonly found large reactive power component in transmission and the distribution networks in PEEP PDMCs. A low Power Factor (PF) is due to the inductive nature of loads in different sectors, including industrial, commercial, services and institutional.
The proposed program targets the installation of Power Factor Correction Systems (PFCS) to increase the PF to 95%. Among the five PEEP countries, the power factor correction (PFC) program was evaluated for PNG and Samoa, where initiatives were undertaken under the PEEP project to improve the PF situation in the respective utilities. For Tonga and the Cook Islands, no
22 Including Network Losses.
Econoler International 49 Ref.: 5505 Asian Development Bank TA 6485-REG: Promoting Energy Efficiency in the Pacific - Contract No. COSO/90-492 Final Report data on the power factor situation was available to be considered in this evaluation, while in Vanuatu the local utility was already applying penalties for low PF.
Power factor improvement enhances voltage regulation, reduces losses and transformer loadings and increases network capacities. The calculation anticipates around 1 MW for Samoa and about 2.4 MW for PNG in increased network power transport capacities.
Table 26: Energy Savings Potential for PFCS Implementation
Power Factor Correction Unit PNG Samoa Total Systems Baseline Consumption MWh/Year 39,114 69,918 109,032 Annual Savings Potential % 0.5 0.3 0.4 Potential Savings MWh 208 215 423 Liters of 52,000 60,100 112,100 Diesel USD M 0.06 0.08 0.14 Increased Transmission and kVA 2543 2716 5,259 Distribution System Capacity
Annual Emission Reduction TCO2 135 140 275 Program Savings from 2011 - MWh 1,872 1,939 3,811 2020 USD M 0.54 0.69 1.22
TCO2 1,220 1,260 2,480 Total Estimated Investment USD M 0.405 0.395 0.80 Investment/kWh USD/kWh 0.216 0.203 0.210 Simple Payback Period Years 6.8 4.6 5.7
A low power factor at customer premises results in excess current in the upstream electrical distribution and transmission system. The excess line current from low power factors (i.e. power factors below 1.0 from inductive loads) results in increased resistive losses, hence heat gain, in the electricity customers’ wiring and electrical distribution equipment, along with increased network wire and transformer losses for the electricity utility. By increasing the PF to closer to 1.0, the losses are reduced, thereby leading to energy savings for both customers and the utility.
The main benefit goes to the utilities as increased network capacity, and all electricity customers benefit from a more stable network and increased power quality. The difference in the payback period between PNG and Samoa is mainly due to the equipment and installation costs, which are relatively high in PNG compared to Samoa. Program implementation is expected to be completed within a maximum of three years with an annual progress completion of 33%.
4.6 WATER SECTOR
Very little information was available about water pumping in the five PEEP countries. Only Samoa and Vanuatu were considered for water pumping EE evaluation. Based on EE projects in pumping stations in the EE literature for small island countries and from general experience, 5% savings can be expected by reducing leaks, installing high-efficiency motors, reviewing pump curves and better
Econoler International 50 Ref.: 5505 Asian Development Bank TA 6485-REG: Promoting Energy Efficiency in the Pacific - Contract No. COSO/90-492 Final Report matching of motors and pumps, and optimizing operating hours according to actual water demand profiles.
Table 27: Savings Potential for EE in Pumping Stations
EE in Water Pumping Stations Unit Samoa Vanuatu Total Baseline Consumption MWh/Year 3,064 2,275 5,339 % 5 5 5 MWh 153 114 267 23 Potential Savings Liters of 48,500 32,400 80,900 Diesel USD M 0.05 0.05 0.10
Annual Emission Reduction TCO2 113 70 184 Program Savings from 2011 - MWh 1,379 1,023 2,402 2020 USD M 0.49 0.45 0.94
TCO2 1,020 630 1,650 Total Estimated Investment USD M 0.27 0.20 0.47 Investment/kWh USD/kWh 0.197 0.196 0.197 Simple Payback Period Years 5 4 4.50
The cumulative savings relative to the EE improvement of pumping systems for the 2011-2020 period for both countries are estimated at 2.4 GWh, resulting in CO2 emission reductions of about
1,650 TCO2. Program implementation is intended to be completed within a maximum of 3 years with an annual progress completion of 33% during the implementation period.
4.7 ENERGY LABELING AND MEPS
ECMs relative to air conditioning and appliances in the residential and commercial sectors could not be directly assessed due to lack of information and data in the participating PEEP countries. Unfortunately, no detailed information on residential and commercial appliances is available from the relevant statistics departments of the PEEP PDMCs, which constitutes a major barrier to potential energy labeling and MEPS assessment and to accurate program design proposals. However, to establish preliminary estimates on appliance use and to calculate the savings potential for energy labeling and MEPS applications the PEEP-1 project undertook surveys and estimates with local consultants based on the last census from statistics departments in the residential sector only. Only statistics on refrigerators, freezers and ACs (air conditioners) were used to estimate energy savings.
23 Including Network Losses.
Econoler International 51 Ref.: 5505 Asian Development Bank TA 6485-REG: Promoting Energy Efficiency in the Pacific - Contract No. COSO/90-492 Final Report
Annual savings per refrigerator and freezer were estimated based on the Australian figures for refrigerators and freezers24, considering the 2005 annual consumption of the country for refrigerators and freezers as a baseline for the current situation in the five PEEP countries. The AC estimated current COP of 2.76 is also based on the 2005 situation in Australia, assuming an average targeted COP of 3.33 (the 2011 new MEPS levels in Australia for units of less than 4 kW cooling capacity, noting that small inverter ACs are commercially available from mainstream manufacturers with COP’s of over 4.0, and even over 5.0 in commercially available high efficiency units).
Table 28: Energy Savings Potential for MEPS Application
Cook MEPS Unit PNG Samoa Tonga Vanuatu Total Islands Whole Country MWh/Year 26,079 713,016 87,544 37,394 55,130 919,162 Baseline Energy Use % 3.8% 1.5% 3.5% 6.6% 2.2% 2.0% MWh 995 10,419 3,030 2,475 1,226 18,145 Annual Potential 25 Liters of Savings 248,894 2,604,541 84,5167 619,513 318,139 4,636,254 Diesel USD M 0.51 2.57 1.08 1.02 0.58 5.76 Annual Emission TCO 647 6,772 1,969 1,683 687 11,758 Reductions 2 MWh 7,905 85,835 22,724 18,562 ,9,198 144,224 Program Energy USD M Savings - 2011 - 2020 4.0 21.1 8.1 7.7 4.3 45.2 TCO2 5,100 55,800 14,800 12,500 5,200 93,400 Total Estimated USD M 0.4 1.9 1.59 1.56 0.54 5.99 Investment Investment/kWh USD/kWh 0.051 0.022 0.07 0.084 0.059 0.057
Total savings over a 10-year period are presented in table 28. Program implementation is expected to take five years. The savings are considered constant throughout the period since there is no available data on the annual penetration and growth rate of refrigerators, freezers and ACs in the residential sector.
Total estimated investment includes only the cost to government of establishing a validation and control unit, along with international support for a regional (across the five PEEP PDMCs) energy labeling and MEPS scheme’s development and implementation. The main costs to the public associated with the purchase of more efficient equipment and appliances has not been defined owing to insufficient data availability. It is recommended that detailed studies in each PDMC be
24 Costs and Benefits of proposed revisions to the method of test and energy labeling algorithms for household refrigerators and freezers, prepared by Energy Efficient Strategies Pty Ltd for the Australian Greenhouse Office, November 2007. 25 Including Network Losses.
Econoler International 52 Ref.: 5505 Asian Development Bank TA 6485-REG: Promoting Energy Efficiency in the Pacific - Contract No. COSO/90-492 Final Report undertaken during Phase 2 to estimate the full cost of MEPS and labelling requirements. The only study to date, estimates these costs to be between 10% and 25% of the value of the benefits.26
26 The Costs and Benefits of Energy Labelling and Minimum Energy Performance Standards for Refrigerators and Freezers in Fiji, George Wilkenfeld and Associates for the Australian Greenhouse Office, February 2006.
Econoler International 53 Ref.: 5505 Asian Development Bank TA 6485-REG: Promoting Energy Efficiency in the Pacific - Contract No. COSO/90-492 Final Report
5 PILOT PROJECTS
5.1 CFLS IN COOK ISLANDS
This project in the Cook Islands involved the replacement of incandescent light bulbs with more energy-efficient CFLs for residential power customers. All residential customers across the country received a number of replacement CFLs free of charge. The project’s implementation was complemented by a media campaign involving advertising in print, TV and radio. The objective of the media campaign was to achieve public awareness of the need for energy efficiency, its environmental benefits, the promotion of CFLs as replacements for incandescent lamps, and clear product identification for the project.
5.1.1 Key Program Parameters
Program rationale
Residential electricity consumers in the Cook Islands are major energy consumers accounting for 25.4% of the total kWh consumption in Rarotonga (the main populated island), 75% in the outer islands and 32.6% across the Cook Islands as a whole. As all grid electricity in the Cook Islands is generated from diesel engines, all types of electricity efficiency projects will directly result in reduced costs to the consumer and the power authority, and reduced national fuel imports and GHG emissions.
A significant proportion of household electricity consumption is attributable to lighting. A survey conducted for this program showed average lighting electricity consumption per household of 449 kWh per year. Of that total, 35%, or 153 kWh, was still used by low light efficacy incandescent lamps. Incandescent lamps are readily replaceable with CFLs or other energy-efficient lamps with energy savings of around 75%. In addition, CFL’s last for 6,000 – 15,000 hours which is much longer than incandescent lamps -which are generally rated at only 1,000 hours life.
Program scope
The pilot project provided for the widespread replacement of incandescent lamps with CFLs in residential homes in the Cook Islands. The awareness campaign promoted the ultimate objective of replacing all incandescent lamps (and not only those in the domestic sector) throughout the wider electricity consumer base.
The overall impacts on energy consumption were: -
A reduction in individual domestic electricity consumption and energy costs. A reduction in electrical energy generated nationally and reduced costs to the power authority. A reduction in Cook Islands diesel fuel imports and reduced national foreign exchange requirements for fuel purchase.
A reduction in the CO2 emissions from the diesel generators.
Econoler International 54 Ref.: 5505 Asian Development Bank TA 6485-REG: Promoting Energy Efficiency in the Pacific - Contract No. COSO/90-492 Final Report
Technical specifications
It was requested that all CFLs would comply with the ELI (Electric Lighting Initiative) standard and would be rated to operate within a voltage range of 240VAC+/- 6% and a frequency range of 48.5~51.5 HZ. A minimum rated lifetime of 6,000 hours were specified but 10,000 hours was indicated as the preferred CFL minimum lifetime.
Budget and procurement
Tenders: Tender documents were drawn up requiring bidders to meet exact criteria regarding technical standards, delivery time and method, warranty, lifetime and other commercial requirements. Separate documents were used for the outer islands and for Rarotonga tenders.
The project was split into two sections – outer islands and Rarotonga – and separate bidding documents were drafted for both sections.
Separate documentation was prepared for the two tenders on the following basis: -
i). Lamps for the outer islands would be delivered CIF to the relevant islands and be a direct 100% purchase. ii). Lamps for Rarotonga would be made available for resale on a subsidized basis with a fixed retail price. The rationale was to foster more competitive bidding as bidders could put in a price for one or both tenders.
All three bidder’s offers were found to have complied sufficiently with the technical specifications requested. Pricing was analyzed between the various bidders, and was normalized to ensure freight and other components were accurately compared. The best price offered was 3.13 USD for a 12 W CFL and 3.31 USD for the 20 W CFL, both for a 10,000 hours lifetime lamp.
Distribution mechanisms
When landed in Rarotonga, all CFLs purchased for the program were presented to TAU (Te Uponga Uira - the Rarotonga electricity utility) for a compliance check with tender specifications and for promotional campaign purposes (photographing and filming).
Outer islands: The respective power utility of each outer island was responsible for the household CFL for incandescent exchange program. In each island, except Aitutaki, the power utilities decided to hand-deliver the CFLs to each household, install the CFLs and retrieve the used incandescent lamps. A schedule of quantities had previously been prepared based on surveys conducted with each power utility in the outer islands. A total of 6,000 CFLs were shipped to the outer islands.
Rarotonga: A total of 12,000 lamps were counted and distributed to four retail outlets in Rarotonga, comprising: Foodland Supermarket, CITC Supermarket, CITC Building Centre and the Oasis Energy Centre.
Econoler International 55 Ref.: 5505 Asian Development Bank TA 6485-REG: Promoting Energy Efficiency in the Pacific - Contract No. COSO/90-492 Final Report
Pre-prepared vouchers were distributed to all Rarotonga households in parallel with the second phase of the advertising campaign.
The distribution was determined as follows:
A list of all domestic-tariff power consumers in Rarotonga was obtained under a non- disclosure agreement with TAU. The list was edited to remove non-residential consumers, leaving a list of all private households in Rarotonga.
Using TAU customer records, a total of 4,115 households were identified on Rarotonga. Vouchers were distributed by TAU to each unique power connection number and a total of 3,885 vouchers were delivered in this way. The remaining consumers were deemed to be not traceable within a reasonable period of time and their vouchers were returned to TAU. Each household was entitled to receive three CFLs with the voucher provided.
Consumers received their vouchers by a number of methods.
i). Consumers who presented themselves at the TAU counter to settle a power account were given their voucher and their corresponding Connection Number was checked against a master list.
ii). Meter readers engaged in their rounds during the first two weeks of February 2010 were issued vouchers, also checked against the master list, to be delivered with the power accounts to relevant consumers.
iii). Vouchers not delivered through options 1) or 2) were sorted out using the most recent address available and mailed directly to consumers.
iv). Consumers who could not be reached using any of the previous methods were traced by phone or word-of-mouth. Those working for government departments had their vouchers delivered directly to their place of work.
To ensure complete lamp distribution in Rarotonga, a subsequent advertising program was launched. It allowed those consumers who had already received three CFLs and who needed more to bring in their old incandescent lamps to TAU offices and exchange them for CFLs. Thanks to this last initiative, the full 12,000 CFLs were distributed to homeowners.
Marketing and awareness: A marketing campaign was prepared with a multimedia approach. Two campaign aspects were covered – awareness of energy efficiency aspects and specific details of the CFL replacement project.
Bilingual TV and radio advertisements were also prepared. Bilingual print advertisements were designed for local newspapers.
Disposal and recycling
In addition, the participating retailers imported approved CFL disposal containers which were distributed to each retail outlet in Rarotonga and to each outer island. The retailer committed, as part of the CFL supply agreement, to provide a self-funded recycling channel including exporting
Econoler International 56 Ref.: 5505 Asian Development Bank TA 6485-REG: Promoting Energy Efficiency in the Pacific - Contract No. COSO/90-492 Final Report used CFLs to a recycling facility in New Zealand (NZ). Used CFLs are consolidated in the approved packaging and shipped to InterWaste in NZ to be recycled.
5.1.2 Impact Evaluation
Rarotonga
An analysis of the TAU billing record for the three months following completion of the CFL distribution (Q2 2010) was chosen as the minimum evaluation period to level out short-term demand fluctuations. This was compared with the same period in 2009, prior to the distribution of the CFLs.
A total of 3,002 consumers were identified as using electricity during both periods, and they also appeared on the master list as being CFL recipients. The monthly demand of these consumers fell by an average of 14.5 kWh/month compared to the same period in 2009.
Further analysis showed that the power consumers in the low-consumption bracket made the greatest savings. Consumers in the 1-200 kWh/month bracket averaged a reduction of 30 kWh/month.
While many large consumers were seen to have actually increased their consumption, the net reduction for all domestic households in the group studied was 43,505 kWh/month. This translates to a projected annual saving of 522,060 kWh for the 3,002 consumers surveyed. Extrapolated to the 4,000 Rarotonga households that received CFLs, a saving of 695,616 kWh is thus shown to have been achieved with an annual reduction in diesel consumption of 173,900 liters - representing an emission reduction of 452 TCO2 per year.
Outer Islands
A number of obstacles prevented the gathering of the necessary data from the outer islands and negated the precise assessment of energy savings. The lack of base line and historical data and records for energy use and demand after the CFL distribution prevented confirming the estimated savings with the desired assurance levels. However, feedback gathered from the power system operators after the distribution of CFLs in some outer islands, confirms a reduction in energy consumption and demand. The island of Mitiaro reported a drop in peak load of 6 kW for the island. A total of 380 CFLs were installed in Mitiaro which is in close agreement with the load reduction reported when based on standard lighting use diversity factors. Assuming a monthly diesel saving of 200 liters per month as reported by the operator, this translates into an annual saving of 2,400 liters of diesel per year, or 6.24 TCO2.
The situation in Mitiaro with regards to engine efficiency and variable fuel consumption is representative of the majority of the outer islands. Extrapolating the Mitiaro island results, the estimated savings for the 6,000 CFLs installed across the outer islands would result in a saving of approximately 38,000 liters of diesel per year, or 99 TCO2 per year. The savings seem lower compared to Rarotonga, this is probably due to a lower number of CFLs per household and the lower average residential lighting operating hours per day in the outer islands.
Econoler International 57 Ref.: 5505 Asian Development Bank TA 6485-REG: Promoting Energy Efficiency in the Pacific - Contract No. COSO/90-492 Final Report
A closer analysis of the situation in the outer islands will be possible once a longer baseline for fuel consumption and energy use is available. There is a non-linear relationship between generator loading and specific fuel consumption, so if diesel generators are operated for much of their time at very low load levels then diesel savings will be higher than for the more appropriately loaded diesel generators such as those in Rarotonga.
5.1.3 Lessons Learned
The very competitive CFL pricing achieved through the bulk procurement tender process allowed for the original budget to provide a 100% subsidy on the CFLs provided for both Rarotonga and the outer islands. This allowed all CFL lamps to be distributed free of charge, which made their distribution very much simpler, if not almost universal. There was essentially no resistance to the concept and to participation in the program.
CFL quality is an important issue, with some householders having had a past bad experience with cheap low quality CFLs leading to short and/or inconsistent life. The CFLs used in the Cook Islands program exceeded ELI standards (with 10,000 hour rated life lamps supplied versus the 6,000 hour ELI minimum specification) which helped to gain back household trust toward CFLs and make available on the market affordable good quality CFLs that can also withstand the 240V +/- 6% voltage variation found in the Cook Islands without affecting their lifetime. 180 to 280V CFL’s are now also available, and these are particularly suitable for outer island installations where long low voltage distribution system networks can lead to very low voltage at times of peak demand.
The participating retailer imported approved CFL disposal containers which were distributed to each retail outlet and outer island. The retailer committed, as part of the CFL supply agreement, to providing a self-funded recycling channel and to export the no-longer-working CFLs to an approved recycling facility in New Zealand (NZ). The recycling incremental cost of CFL disposal was included in the CFL selling price.
In a traditional CFL market transformation program, a mass distribution of high quality CFLs would be an integral component of a wider program that would include policy and implementation arrangements around CFL recycling and incandescent lamp importation restrictions or special taxes, along with some technical requirements on CFLs such as a minimum power factor. There would also possibly need to be support for lighting applications where existing incandescent lamp simple wave-chopper dimmers would need to be changed to accommodate dimmable CFLs, or other new dimmable lamps would have to be supported that could use existing dimmers. Such incandescent lamp phase out policy and implementation aspects will be considered in the upcoming PEEP Phase 2 project’s activity on energy efficient lighting.
In the Cook Islands CFL pilot program, both the public and private sectors showed considerable willingness to support wider EE promotion and specific CFL project aspects. All media organizations were willing to give much more exposure than had originally been contracted, for the best interests of the community.
Econoler International 58 Ref.: 5505 Asian Development Bank TA 6485-REG: Promoting Energy Efficiency in the Pacific - Contract No. COSO/90-492 Final Report
TAU, which funded all the advertising, promotion, printing and local logistics, committed more funds than originally promised and met a number of additional incidental costs associated with the program. This allowed the ADB contribution to be spent 100% on the supply of CFL lamps, without any attached overhead costs.
5.2 PFC INSTALLATION IN PNG
In PNG two programs were initially identified and considered for the pilot project in Port Moresby, namely street lighting energy efficiency and PFC (Power Factor Correction) programs. The PFC option was selected for implementation over street lighting energy efficiency since PPL (PNG Power Ltd) had already initiated power system power factor parameter measurements for their key customers.
Implementation of PFC initiatives in PNG had been overlooked until 2007, when increases in grid electricity demand and poor quality of service raised the need to properly manage reactive power requirements through improved PF (power factor) in customer facilities.
PPL’s (PNG Power Limited’s) PFC project was initiated during the 2007 Rouna hydro power station’s rehabilitation. To assist with meeting peak demand, load shedding and PFC programs were both considered. Load shedding was successfully implemented. Surveys conducted on PF showed significant levels of reactive power on the PPL Network and therefore significant potential for deployment of PFC equipment. PPL then began the installation of power factor correction systems (PFCS) at a small number of customer locations - Brian Bell Plaza in Boroko, the downtown Credit Corporation Building and the PPL HQ in Hohola. However, PPL was still slow in implementing the program as customers were generally not receptive to the PFC program.
5.2.1 Key Program Parameters
Program rationale
The level of reactive power on the PPL network was estimated to be 16% of total real power, representing approximately around 11 to 12 Megawatts of capacity reduction in the grid. However, it should be stressed that power generation facilities are generally designed for a 0.8 PF, so with an overall grid power factor of 0.84, then PF correction would not be expected to raise PPL’s power generation capacity.
Low power factor in a particular customer’s site or grid feeder line requires an increase in the electric utility’s transmission and distribution grid and transformer capacity to that customer or grid feeder line, in order to handle the reactive power component caused by inductive loads. Improving power factor will also reduce voltage drop at the point of electricity use for the grid feeder line involved. Voltages below the equipment’s rating will cause reduced efficiency, increased current, and reduced starting torque in electric motors. Under-voltage also reduces the load electric motors can carry without overheating or stalling. Under-voltage also reduces output from lighting and resistance heating equipment. Worldwide, many power utilities charge large commercial and industrial customers an additional fee when power factor is typically less than 0.9 to 0.95.
Econoler International 59 Ref.: 5505 Asian Development Bank TA 6485-REG: Promoting Energy Efficiency in the Pacific - Contract No. COSO/90-492 Final Report
For example, if power factor is improved from 80% to 95%, the line loss percent savings would be around 29%. If electrical circuits are fully loaded, power factor correction will help free up capacity. Although PFC can provide useful power savings, overall system-wide energy savings from PFC are typically small since line losses are generally low in percentage terms. For example, if overall line losses are 2% of the total power draw, the total power savings from correcting the overall power factor from 80% to 95% would be around 0.58%. However, this would still represent a useful opportunity for overall energy savings as the savings are applicable to the entire grid energy demand, rather than making larger savings from conventional energy efficiency measures for a few customers - which would make a lower overall energy savings impact.
In Port Moresby, the 250 industries and general service category customers with loads from 250kVA to 2MW make up to 68% of the total power consumption. Their PF is generally well below the new minimum requirement, leaving a large potential for PFC savings. In 2009, PPL launched its PFC program promoting a PF of 95% efficiency to most of its large industry and General Supply Customers (GSC). This program has had some successful realizations; however only a small portion of the total potential was realized due to limited customer participation in PFCS installations at their businesses. PPL has adopted new power supply conditions for existing and new customers to meet the minimum PF requirement of 95%. As PPL is determined to have its large customers meet this new requirement, pilots projects represented a good opportunity to benefit from ADB assistance for program initiation. However, an important constraint to PFC in PNG is that customers are not yet charged for low power factor, so it is not an important issue for customers, although it is important to PPL as the electricity utility.
Customer Selection
PPL had originally started their PFC program with customers connected to the Kone feeder in Port Moresby (downtown) because that feeder was overloaded. Other customers were subsequently selected based on their high maximum demand.
The ADB PEEP supported PFC program carried out design and installation of suitable PFC units for major customers. Fifty of the large commercial and industrial customers in Port Moresby were ranked according to both the size of their loads and the level of their power factor. Those customers having the greatest potential energy and power factor savings through PFC installation were selected. Initially, this included 18 customers, totaling 34 separate facilities.
Despite the fact that customer consultation and agreement to proceed with the project was time consuming, the Port Moresby Chamber of Commerce and Industry (POMCCI) was helpful in organizing meetings with customers. Upon completion of a thorough consultation process, 10 consumers, totaling 11 different installations expressed an interest in taking part in the project, and PFCS equipment installation proceeded at their sites.
Econoler International 60 Ref.: 5505 Asian Development Bank TA 6485-REG: Promoting Energy Efficiency in the Pacific - Contract No. COSO/90-492 Final Report
Table 29: List of Customers Who Agreed to PFCS Pilot Project Enrollment
Average Average Location Category Elect. Use PFCS Load PF kVA % GWh/Year KVAR TELIKOM GENERAL 1,019 67 2.1 625 RUMANA SUPPLY PACIFIC PLACE INDUSTRIAL 921 72 1.71 500
GARDEN CITY INDUSTRIAL 755 71 2.05 450 DELOITTE INDUSTRIAL 1,166 83 4.27 440 TOWER PARADISE INDUSTRIAL 546 73 1.90 300 FOOD LTD PACIFIC MMI INDUSTRIAL 490 75 1.38 240
SNS WAIGANI INDUSTRIAL 422 75 2.59 240 STEAMSHIP INDUSTRIAL 432 79 2.18 240 PLAZA GATEWAY INDUSTRIAL 462 81 3.04 360 HOTEL KENMORE GENERAL 176 75 1.33 150 INVESTMENT SUPPLY BOROKO INDUSTRIAL 108 69 2.19 60 FOODWORLD
Technical specifications
PPL undertook the necessary customers’ PF measurement using a power analyser. For each of the customers over a one week period, the power analyser was connected on the different bus bars to measure voltage, current, apparent power, real power, and reactive power. Sampling was done by the power analyser every 15 minutes over a one-week period, and both high and low values were recorded. The profile of the electricity consumption, maximum electricity demand and power factor was assessed to determine and calculate the required system and KVAR needed to reach a PF of 95%.
For each customer, a pre-installation report was produced for discussion and approval prior to proceeding with the installation of the PFCS units. When the pre-installation report was accepted by the customer, work began for the procurement of PFCS equipment and for their subsequent installation.
The PFCS technical specifications were general for phases, voltage and frequency and then emphasised the specific requirements of KVAR rating, and isolation circuit breaker rating and communications according to PPL procedures and requirements.
Econoler International 61 Ref.: 5505 Asian Development Bank TA 6485-REG: Promoting Energy Efficiency in the Pacific - Contract No. COSO/90-492 Final Report
Manuals for installation, operation and maintenance, electrical schematics and other relevant product documents were requested as a key part of equipment delivery.
Budget and procurement
Proposals were requested from four different PFCS manufacturers and suppliers. Three technically compliant and complete bids were received and evaluated and two suppliers were selected on a price basis in accordance with ADB selection procedures. Equipment was purchased from two suppliers based on the lowest cost and the closest kVAR rating available for each installation.
Supplying such equipment in PNG required a long lead time. The delay between placing an order in the PPL system and having the equipment delivered on site took up to six months. About three months was necessary to go through PPL approval procedures and obtain the necessary paperwork and payments for equipment and service suppliers. Unfortunately, PPL staff responsible for procurement and finance appeared to have no great sense of urgency to meet deadlines.
The ADB agreement with PPL was to support implementation and installation on a cost sharing basis with a maximum ceiling of USD 62,000. The total project cost, as listed in table 30, was about USD 288,600 with USD 113,000 for installation costs.
Installation
Under the above circumstances, it was necessary to have more than one contractor working on the different installations. As all installations were different, a scope of work was drafted for each installation and five contractors were approached to provide a quotation. Contractor selection was based on the price and their performance from previous PFCS projects
Meetings were regularly called between PPL/ADB and the various contractors to follow up on implementation issues and emphasize deadlines.
All PFCS equipment was installed at the clients’ premises. However, only ten installations were able to be fully commissioned and put in operation during the ADB PEEP supported project phase. For the remaining installation, by the end of the ADB supported pilot, PPL was still waiting for the client’s approval to shut down the facilities, install the PFCS, and then reconnect the system.
5.2.2 Impact Evaluation
So far, only 10 of the 250 customers in Port Moresby (POM) have completed the PFCS installation process. As such, it would be difficult to identify any tangible improvements in the Port Moresby power grid from the ten PFCS systems installed. However, if the new PF is maintained at 95% as measured after PFCS equipment implementation, the expected savings for each installation are presented in Table 30 below.
Econoler International 62 Ref.: 5505 Asian Development Bank TA 6485-REG: Promoting Energy Efficiency in the Pacific - Contract No. COSO/90-492 Final Report
Table 30: Expected Savings for Pilot Projects
Average Line Customer Elect. Use PFCS Savings PBP Load Losses KVA GWh/Year KVAR KWh KVA kWh USD Years
TELIKOM RUMANA 1019 2.10 625 42,000 300 21,109 6,054 7.9
PACIFIC PLACE 921 1.71 500 34,180 223 14,547 4,172 9.1
GARDEN CITY 755 2.05 450 40,920 191 18,064 5,180 6.5
DELOITTE TOWER 1166 4.27 440 85,400 147 20,212 5,797 5.8
PARADISE FOOD LTD 546 1.90 300 38,000 126 15,562 4,463 5.1
PACIFIC MMI 490 1.38 240 27,600 103 10,398 2,982 4.6
SNS WAIGANI 422 2.59 240 51,800 89 19,515 5,597 2.4
STEAMSHIP PLAZA 432 2.18 240 43,680 73 13,474 3,864 4.7
GATEWAY HOTEL 462 3.04 360 60,800 68 16,600 4,761 5.8 KENMORE 176 1.33 150 26,660 37 10,044 2,8801.6 INVESTMENT BOROKO 108 2.19 60 43,880 30 20,732 5,9451.2 FOODWORLD
For the 11 installations the annual savings are estimated at 180,000 kWh, or USD 51,500 with about 1.387 KVA in increased electricity distribution system capacity achieved.
5.2.3 Lessons Learned
The following points need to be considered as a way forward and to ensure that energy efficiency (including but not limited to PFC) is effectively implemented in PNG.
Improved Human Resourcing: PPL’s EE/ DSM capacity was observed in the course of the PFC project and related activities to be inadequate to mount and sustain any serious and effective EE/DSM program. Therefore, for future efforts, one option is to establish a proper EE/DSM cell solely dedicated to EE program design, implementation and monitoring. The personnel employed in such an EE/DSM cell would need to be adequately trained in project and contractor management, among other skills required. This training should first and foremost include appropriate technical and social interaction skills in dealing with EE/DSM issues with customers. PPL could also consider the possibility of hiring private consultants as program managers to act on behalf of PPL for EE/DSM project development, design and implementation, operating with clear objectives and defined timeframes. This option appears to be the best EE/DSM alternative for PPL to make inroads in achieving EE/DSM gains in the short term.
Expanding the PFC Project to PPL’s Wider Large Customer Base: Communication channels between PPL and customers have traditionally been poor. This project has helped to improve the dialogue between customers and PPL, with support from the POMCCI. PPL should capitalize on
Econoler International 63 Ref.: 5505 Asian Development Bank TA 6485-REG: Promoting Energy Efficiency in the Pacific - Contract No. COSO/90-492 Final Report the success of this pilot PFC initiative to expand PFCS implementation not only in POM (Port Moresby) but also in other big cities with significant commercial and industrial loads, such as in Lae and Madang. There is a potential to increase distribution system capacity by a total of around 10 MW additional production and distribution capacity with the current equipment, which PPL could achieve by expanding the PF correction program throughout PNG.
PPL need to consider the implementation of a control and follow up procedure to ensure minimum PF levels are both achieved and maintained over time. Under PPL regulations, revised in October 2009, the required power factor at a consumer premises should be about 90%. However, PPL needs to enforce this regulation by establishing a cost or other penalty system for low PF. This could be achieved by the installation of PF monitoring devices or changing the current electrical meters to new ones permitting PF reading and logging as is done by many utilities, or by changing tariffs to be partly based on KVA, which would require existing revenue meters to be changed to ones that measure both maximum KVA and kWh used.
It is clear that customers and the wider business community support projects which create energy savings and improve financial returns, and the business community is particularly keen to assist PPL in all actions to ensure reliable power supply. However, raising awareness on energy efficiency in general and the benefit of PFCS implementation in particular is an important action that needs to be introduced and continuously maintained by PPL. At present, PFCS has very little direct impact on the power factor on the client side of the electricity meter, since no substantial benefit for customers is gained, comparing to the distribution system capacity benefits to PPL.
Therefore, other arguments need to be used to support higher PF such as network stability, voltage drop reduction, and improved power delivery quality. If minimum PF requirements are not enforced, as seem highly likely to continue to be the case in PNG, then ultimately the way to ensure higher PF on the PPL network is to set financial penalties for low PF. The easiest and most direct way to raise power factors is to charge for both maximum KVA demand and kWh used - for all larger customers who have the ability to keep their PF above a certain level, in PPL’s case a PF of 0,9 or 0,95.
5.3 PFC INSTALLATION IN SAMOA
Prior to the start of this ADB PEEP-1 project, EPC had already conducted a power factor analysis of the electric system of Savaii as part of the EPC Power Sector Expansion Project. That power factor analysis study found that there was a 14% system loss on the Low-Voltage (LV) distribution system, from transformers to customer facilities. Low power factors in the commercial customer and large government building sectors contributed to EPC’s higher than desirable technical loss levels. Although EPC has a power factor lower limit requirement of 85% for customer installations; there is currently no way for EPC to enforce penalties for customers with a low power factor.
Given the pre-existing focus by EPC on low power factor, power factor correction system (PFCS) implementation was selected as the pilot project in Samoa for ADB support under the PEEP-1 project.
Econoler International 64 Ref.: 5505 Asian Development Bank TA 6485-REG: Promoting Energy Efficiency in the Pacific - Contract No. COSO/90-492 Final Report
5.3.1 Key Program Parameters
Program rationale
Surveys conducted on PF showed significant levels of VAR (reactive power) on the EPC network and therefore significant potential for a PFC program, as EPC’s average PF is only 80%. EPC’s current tariff structure only charges for kWh (kilowatt-hours). There is currently no provision for EPC to charge for KVAR
PF improvement on the demand side could increase EPC transmission and distribution capacity by around 2.5 MVA, reduce system technical losses, and improve customer electricity use efficiency through improved voltage control.
A large portion of EPC power is delivered to commercial sector customers, where the majority do not comply with the minimum specified PF limit of 85%. In addition, in 2009 EPC requested and was approved to raise the PF minimum limit to 95%. EPC is also starting to deploy new electronic revenue meters that greatly facilitate the analysis of customer power demand characteristics, including power factor. The implementation of PFC programs by the ADB PEEP-1 project thus helped promote the new requirement for the PF to be a minimum of 0.95 by implementing PFCS in the premises of selected large commercial and industrial customers.
As EPC is very keen to have its large customers meet its 95% minimum PF requirement, high level enrolment was expected in this program. EPC are working to formulate and obtain approval of new supply regulations that would enable EPC to charge penalties to customers with lower power factors than the new specified minimum power factor standard of 95%.
Customer selection
EPC’s large commercial customers and large government departments were targeted for improved the power factor, and then this was to be replicated to other EPC customer sectors.
The top 150 largest customers were selected from EPC’s billing system. EPC then conducted a spot measurement of the power factor for most of these customers. The 10 customers with the lowest power factor were selected and included in the pilot project list for power factor improvement to 95%.
The implementation was planned in two phases. Phase one included the replacement of induction meters with electronic meters that read not only the kWh but also the KVAR, the maximum demand in kilowatts, the power factor, and the current and voltage. Phase two included the design, supply, installation and commissioning of power factor correction capacitors within the facilities of the 10 selected customers. The 10 customers selected for the pilot project with their respective pre-implementation average power factors are listed below:
Econoler International 65 Ref.: 5505 Asian Development Bank TA 6485-REG: Promoting Energy Efficiency in the Pacific - Contract No. COSO/90-492 Final Report
Table 31: List of Selected Customers
Transformer Average Location Consumption PFCS capacity PF
kVA % GWh/Year KVAR Aggies Greys 1000 80 0.998 150 Resort Yazaki Samoa 1000 70 0.553 225 Aggie Greys Hotel 500 80 0.683 90 Farmer Joe 200 67 0.350 90 DBS 750 71 0.384 225 CBS 500 73 0.389 100 LDS Temple 500 79 0.492 90 Ah Liki Wholesale 350 53 0.212 90 Frankie 500 70 0.264 60 Wholesale Apia Bottling 200 79 0.281 60
Technical specifications
It was agreed with EPC to implement and manage the project through EPC’s Project Management Unit (PMU) for the Samoa Power Sector Expansion project.
EPC installed load loggers within the facilities of the 10 selected customers to measure kW, KVAR, kVA, kWh, harmonics, power factor, voltage and current. Data logging was performed over three weeks. The results of data logging were analyzed and used to design the power factor correction equipment to be installed in the facilities of the 10 customers.
As part of the PEEP-1 power factor project, new electronic revenue meters were also fitted to the meter boards for the selected customers to facilitate monitoring of the ongoing effectiveness of the power factor correction system (PFCS) installations. The technical specifications of the electronic meters were agreed with the PMU, taking into consideration their requirements for reading parameters and precision. The main new electronic meter parameters were as follows:
Internal measurement of active and reactive power in each direction. Can store up to sixteen channels of load profile for various base quantities. Multi-rate billing for energy and demand. Ten base quantities for billing. 32 energy-rate registers and 24 demand-rate registers available. Rate switching mainly performed by internal clock. Two communication channels.
Econoler International 66 Ref.: 5505 Asian Development Bank TA 6485-REG: Promoting Energy Efficiency in the Pacific - Contract No. COSO/90-492 Final Report
The technical specification for PFCS, was drafted following EPC’s standards. The requested offers from potential providers included the design, fabrication, supply, installation and commissioning of automatic power factor correction panels with capacitor banks suitable for a network voltage of 400/415 V. The panel enclosures were specified for indoor and weather-proofed type, free standing compartmentalized with ventilation and mounting fans with air filters for forced air cooling.
Budget and procurement
Three bid proposals were received for the supply of electronic meters and a supplier from New Zealand was selected based on the lowest price for the supply of programmable electronic meters with capability to monitor PF and record load profiles. EPC covered the installation costs of the new electronic meters. For PFCS, proposals were requested from four different suppliers. The received bids were evaluated and one supplier was selected on a price basis in accordance with ADB selection procedures. The equipment purchased is indicated in the table below:
Table 32: Cost of PFCS in Samoa
PFCS Total Cost QTY Location (kVAR) (USD)
1 Aggies Greys Resort 150 13,705
1 Yazaki Samoa 225 15,959
1 Aggie Greys Hotel 90 5,635
1 Farmer Joe 90 5,635
1 DBS 225 16,519
1 CBS 100 8,331
1 LDS Temple 90 5,635
1 Ah Liki Wholesale 90 5,635
1 Frankie Wholesale 60 4,960
1 Apia Bottling 60 4,960
The supply of the PFCS and their installation took longer than proposed in the offer; this was due to delays in equipment delivery.
It was agreed with EPC that the ADB contribution would not exceed a maximum of USD 67,500 and that EPC would cover the remaining total amount for the 10 pilot projects investment for PFCS and meters that was initially estimated to USD 97,500. The final total project cost was approximately USD 92,900.
Econoler International 67 Ref.: 5505 Asian Development Bank TA 6485-REG: Promoting Energy Efficiency in the Pacific - Contract No. COSO/90-492 Final Report
Installation
Phase one: The electronic meters were installed in the client premises upon receipt from the suppliers. EPC was responsible for the installation and verification of accuracy of the new electronic meters.
Phase Two: Upon securing consent from clients, the EPC PMU issued a tender for the design, supply, installation and commissioning of suitable power factor correction equipment sets (PFCS). The proposals requested bidders to conduct their own analysis using the data provided as the basis for sizing the power factor correction capacitors. The successful bidders were asked to guarantee a power factor of at least 95%.
The local contractor did most of the installations while the supplier did the design and final commissioning of all the panels.
5.3.2 Impact Evaluation
The Power Factor Correction (PFC) project will clearly have a positive impact on both EPC and its customers. An improved power factor will greatly reduce transmission and distribution system currents, and make a small but useful reduction in overall transmission and distribution system losses. Hence, EPC will save on required transmission and distribution capacity upgrades. The table below shows the savings generated from the selected customers under the pilot project.
Table 33: Expected Savings for Pilot Projects
GWh/Year KVAR kWh kVA kWh USD Years
Aggies Greys Resort 0.998 150 19958 46 5,805 1,761 7.8
Yazaki Samoa 0.553 225 11059 48 5,055 1,533 10.4
Aggie Greys Hotel 0.683 90 13651 31 3,971 1,204 4.7
Farmer Joe 0.350 90 6998 36 3,517 1,067 5.3
DBS 0.384 225 7690 68 3,395 1,030 16.0
CBS 0.389 100 7776 29 3,184 966 8.6
LDS Temple 0.492 90 9850 24 3,038 922 6.1
Ah Liki Wholesale 0.212 90 4234 35 2,916 884 6.4
Frankie Wholesale 0.264 60 5270 23 2,409 731 6.8
Apia Bottling 0.281 60 5616 14 1,732 525 9.4
For the ten implemented projects, EPC annual energy savings are estimated at 35,000 kWh for a cost savings of USD 10,600 with about 335 kVA in increased transmission and distribution capacity for EPC
Econoler International 68 Ref.: 5505 Asian Development Bank TA 6485-REG: Promoting Energy Efficiency in the Pacific - Contract No. COSO/90-492 Final Report
5.3.3 Lessons Learned
The PEEP-1 pilot project implementation presented a good opportunity for EPC and the PMU to initiate the PFCS program.
EPC should now capitalize on this initiative to expand PFCS project implementation with other key customers. There is a gain of about 2.5 MVA additional transmission and distribution capacity that PPL could reach by expending the PEEP PFCS pilot program throughout Samoa.
Alongside the ongoing generalization and installation of new electronic revenue meters, EPC can seek regulatory agreement and then adopt a new and more stringent power factor standard as industry practice (from 85% to 95%), and can develop and introduce a new PF tariff component to encourage customers to install capacitors in their electrical facilities to avoid penalties due to low power factor.
EPC has now realized the need to start installing electronic revenue meters for all large customers so that it can get more information on customers’ actual electricity consumption and demand profiles. During the installation of the new electronic revenue meters, EPC found several cases of incorrect information being used for customer installations, such as incorrect current transformer (CT) multipliers that led to EPC charging their customers less than what was really due. In addition, the introduction of the new meters will provide EPC with the opportunity to consider introducing another tariff component specific to maximum demand charges (kW or KVA), as well as a Time of Use (TOU) tariff. EPC has gained useful experience in PFC project implementation, mainly in terms of technical issues, monitoring and financial analyses which will help it expand the PFC initiative. EPC has also recognized the need to collaborate with its large customers who have a very low power factor to raise awareness on energy efficiency in general and the benefit of PFCS implementation in particular. The impact of PFCS installation on the EE of the client is generally minimal, however, EPC clients are concerned about network stability, voltage drop and electricity, delivery quality, and those factors will be improved by higher PFs across the whole electricity system. These benefits can be used as arguments to raise client interest and involvement in future EPC related programs alongside the establishment of suitable penalties for low PF and/or high peak demands.
5.4 STREET LIGHTING LED IMPLEMENTATION IN TONGA
The Light-Emitting Diode (LED) Street Lighting pilot project in Tonga was developed as a way to reduce street lighting electricity use as well as maintenance costs, through the use of lower power lamps and through increasing the time interval before the lamps need to be replaced. The new LED street lighting units will produce better quality street lighting and hence a better all-round street lighting system. As street lights are generally operated for 3,500 – 4,500 hours a year, and thousands of units of a common design are used even in PDMCs, the payback for street lighting upgrades will be generally better than for lighting upgrades in most other applications.
At the time of the project, there were 3,208 street lights installed and in use throughout Tonga. A number of different lighting technologies were used in Tonga, including primarily high pressure sodium (HPS) lamps, some fluorescent tubes and few residual obsolete-technology mercury vapor
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(MV) lamps. Most of the lamps’ fixtures were old, rusted and in bad condition, and used more electricity than good modern street lighting practice, while at the same time generally producing poor street level lighting levels and quality of light and also had high maintenance costs. To withstand the often high salt weather conditions and its associated corrosion in Tonga, street lighting fixtures need to be well protected and adapted to maritime environment salt conditions, as well as to high tropical temperatures and humidity, and regular and frequently devastating cyclones.
The new LED street lights installed under the PEEP-1 pilot project in Tonga give off a distinctive clear white light compared with the poor-color rendering nearly monochromatic orange light of the existing older HPS lights - although the overall energy efficiency (or more accurately the overall lighting efficacy in lumens per watt) is broadly similar between the best fluorescent lamps (around 100 lumens/watt), the best HPS (usually around 100 lumens/watt, but can be up to 150 lumens/watt27) and LED street lights (around 80 lumens/watt although this is increasing as the technology matures), and much better than the remaining MV units (which are now a dated technology and banned for use in new fittings in some markets such as the US). However, LED lamps’ light output only falls off slowly over its lifetime (i.e. high lumen maintenance) so in practice this means that for the same minimum amount of useful street lighting illumination, an LED street lighting unit will use less electricity than a comparable high pressure sodium unit. A high efficiency fluorescent fitting gives good color rendering and can be as energy efficient as an LED unit, but the life of a fluorescent lamp is too short and the maintenance cost of replacing tubes too high for fluorescent tubes to be cost-effective for street lighting applications. Fluorescent tubes are inexpensive but only have an around 10,000 – 15,000 hour rated life, and HPS units generally have a life of 24,000 hours28 and up to 32,000 hours, but this still falls short of the rated life of 50,00029 - 100,000 hours for LED lamps (but LED street lights and fixtures are still too new for this 100,000 hour lifetime to be fully proven in practice yet).
With the lower actual electricity use by LED street lights, there will also be a consequential reduction in Greenhouse Gas (GHG) emissions. The PEEP-1 pilot project was used to quantify the savings and other benefits of LED street lighting technology in the Tongan context, for post pilot project wider deployment in Tonga and elsewhere in the Pacific. The savings in operating and maintenance costs could also potentially allow more street lights to be installed without increasing the annual cost to the respective government.
27 E.g. GE Lucalox™ XO High Pressure Sodium lamps, see http://www.gelighting.com/eu/lighting_applications/street.html#lucaloxHPS 28 See http://smud.apogee.net/comsuite/content/ces/?utilid=smud&id=1175 29 E.g. see GE Iberia LED Street Lamp systems at http://www.gelighting.com/eu/resources/literature_library/catalogs/lighting_fittings_catalog/downloads/Fitting_LED_Ib eria_sellsheet_en_2009oct.pdf
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5.4.1 Key Program Parameters
The network selected for the implementation of the LED street lights comprised three routes along Vuna road, which runs East to West along Nuku’alofa’s waterfront. These routes were chosen because of the ease of access and the large amount of vehicle and pedestrian traffic on the corresponding roads.
Before the implementation of the project, not all street lights were working on these routes. This was rectified during the preliminary stages of the project to provide an accurate measurement baseline.
The street lights used previously on these routes comprised 109 street lighting fixtures with 150 W Sylvania HPS lamps for a total measured electricity consumption of 56,720 kWh/year. The total electricity consumption of the 109 LED street lights installed along the same routes will be reduced to 36,800 kWh/year, with savings of 19,920 kWh per year for a cost savings of around USD 12,720/year.
Technical specifications
Technical specifications were developed based on the best practices for LED street lighting use and quality, and taking into consideration product reliability and longevity. The specifications included options for further energy savings through time-based and/or dimming controls, as well as the potential for future remote control options.
The LED street lamp specifications were as follows:
Light color temperature of around 2,700k (warm white) Improved light deployment on road surface with an effective light angle of 150°. Luminous flux (light output) greater than 7,500 lumens and a luminous efficacy greater than 80 lumen/Watt Power factor greater than 0.95 and a power supply efficiency greater than 90% Minimum life of 50,000 hours - with a well-designed heat sink enhancing output and prolonging the expected life of the unit Weather resistance to IP 65, hence reducing internal fitting corrosion
Budget and procurement
Quotes were requested from five suppliers who were shortlisted from a wide search of possible suppliers. The five prospective suppliers were asked to provide quotes for 109 LED street light units in accordance with the specifications provided.
The results of the analysis of the three offers complying with the technical requirements ranked in the top of the list the provider having the lowest price of USD 679 for its 100 W LED fixtures. Furthermore, the supplier included proof of technical testing and the light pattern of the two-way directional LED design of their 100 W street lighting units. The lead time for delivery was quite long since the LED lamps were supplied from China, and the equipment was only received in October 2010.
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It was agreed that a maximum of USD 41,500 would be provided by ADB as its contribution for equipment procurement for the LED street lighting pilot project in Tonga. TPL (Tonga Power Ltd) agreed to cover the rest of the investment needed for the LED street lighting acquisition and also cover all installation costs. The final project cost for the equipment was about USD 75,000 where the TPL contribution was approximately USD 32,500 (excluding installation costs which TPL also separately covered).
Installation
The installation of the 109 LED fixtures was provided by TPL. The old light fixtures were removed (including the ballast) and were replaced with the new LED lamp fixtures and required accessories. In general only the vertical columns and lighting extended arms were retained. The installation of the 109 street lighting units was completed by the end of December 2010
Figure 6: Route (RED) where LED Street Lights were installed
5.4.2 Impact evaluation
Measurement of the relevant daily street lighting electricity use was undertaken prior to the installation of the LED lights to establish the energy consumption of the pre-existing lighting fixtures. After their replacement with new LED fixtures, the same measurement of the electricity use was undertaken for the same time period and under the same operating conditions. A direct comparison was used to calculate the energy savings.
The comparison of the existing 150 W Sylvania HPS street lights and the same number of new 100 W LED street lights shows a consumption reduction of 0.7 kWh per day per lamp, representing a saving of 35.1%.
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Table 34: Energy Savings for the Selected Network with New LED Lamps
Energy Energy Consumption Consumption for LED for Old Fixture fixture Power kW 0.168 0.109
Annual consumption per fixture kWh 613 398
Annual consumption for the selected Network kWh 66,839 43,362
Total Annual Cost USD 36,272 23,534
% 35.1% Savings USD 12,738
For the 109 new fixtures installed, measurements taken before and after installation show annual savings of USD 12,738 in energy costs alone. Maintenance savings will amount to approximately 60% from an annual cost of USD 960 to about USD 384, due to LED lights not requiring as much maintenance as HPS lights.
5.4.3 Lessons learned
The major problem met during the project was the long lead time for the delivery of the selected LED lamps which met the technical requirements for light distribution, light color and expected life.
The technical requirements were somewhat more demanding than those typically found in the LED street lighting market. The warm color requested was close to that for the existing HPS lamps - which was a little challenging since existing LED lamps are generally closer to the white than to the warm color end of the light spectrum.
Effective light angle is an important parameter that needs to be taken into consideration, as it represents the light distribution on road surfaces that avoids concentrated pools of light. The requested effective angel of 150° provides an improved lighting distribution along the road width.
Since LED street lights are a relatively new technology and can be considered to not yet be fully mature, a 2 years guarantee was required to be provided by the LED manufacturer. It is recommended to assess the pilot project’s reliability for at least for the guaranteed period before a large scale implementation of LED street lights is undertaken in Tonga.
Installation of the new LED fixtures was quite straightforward as it did not require any major changes compared to the HPS fixture fittings.
It is recommended that the Tonga LED street lights’ performance and operational experience be reviewed and discussed in appropriate workshops to increase awareness about new energy efficient technologies in general, and more specifically for LED street lighting applications in the Pacific.
Econoler International 73 Ref.: 5505 Asian Development Bank TA 6485-REG: Promoting Energy Efficiency in the Pacific - Contract No. COSO/90-492 Final Report
5.5 EE IN HOTEL SECTOR IN VANUATU
5.5.1 Key Program Parameters
Rationale
The hotel sector in Vanuatu accounts for 20% of overall electricity consumption. The Vanuatu government, through its executing agency, the Energy Unit, with support from the power utility company (UNELCO) and the private sector recognizes the economic significance of this sector and requested support for an energy efficiency project in the hotel sector. Hence, an EE project was implemented at a hotel complex in the capital, Port Villa, to illustrate the impact of energy conservation and energy cost reduction through the adoption of a suite of energy conservation measures (ECMs).
Selection of hotel
Consultation with Vanuatu Hotel and Resort Association (VHRA) members during the initial planning phase of the project was initiated and there followed discussions with a number of hotels to explain the benefits they could reap from implementing EE projects at their hotels. An invitation for participation in the project was launched to present the project to potential participant hotels. The three first hotels who expressed their willingness to participate in the pilot project and who committed to invest if the Investment Grade Audit (IGA) results would show a promising and cost effective EE potential, were then followed up as candidates for the pilot hotel EE project.
Capacity building and training
Since appropriately trained human resources are needed to conduct and implement IGAs, the training of Vanuatu Institute of Technology (VIT) students and teachers was singled out as the best option to support the IGAs realization and at the same time address the issue of lack of knowledge of EE programs and energy auditing in Vanuatu. A total of 50 students and two teachers were offered three days training on the basic techniques and general knowledge in conducting IGA through the application of the appropriate methodology. The participation of VIT students in this capacity building component was considered as an essential element for future initiatives, and their involvement was seen as a positive step in addressing the wider issue of lack of knowledge of EE in Vanuatu.
The team also launched awareness programs within the VHRA members who showed keen interest in the project and its benefits. Maintenance personnel were also invited to a one day capacity building workshop. The local electricity utility (UNELCO) was also involved in the training exercise, their participation also made a positive contribution to the project’s implementation by acquiring the necessary electrical use data.
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Investment grade audit methodology and findings
Investment Grade Audits were conducted with the assistance of the Vanuatu Institute of Technology (VIT) to gather the required information based on the template provided by the PEEP-1 consulting team during the training session. The maintenance and management staff of the three selected hotels were fully involved during the IGA process.
The IGA development was initiated by a complete survey of all hotel equipment and operational schedules. Energy balances were established and invoices analyzed. For the identified ECMs, investment and savings potentials were estimated. However, only one IGA was completed in the planned timeframe, and the results presented to the hotel owner for implementation approval.
The IGA recommended eight ECMs to be implemented, as follows: -
Solar water heating for 27 rooms; General key switch for 27 rooms; Hotel lighting optimization for the entire hotel (installation of CFLs); Reducing air-conditioning (AC) temperature setting points for the entire hotel; Review of UNELCO contracts for the electric meters installed in the 12 apartment’s bloc; Low flow shower head replacements for the entire hotel; Optimization of garden watering; Optimization of pool motors. The first five ECMs were approved by the hotel owner for immediate implementation, with the remaining three ECMs to be considered later for implementation by the hotel’s O&M staff.
Procurement & budget
An advertisement was placed in the major newspaper to provide equipment and services for the approved ECMs, and a request to provide proposals was also sent directly to selected suppliers.
Four suppliers responded to the requests and submitted proposals. Suppliers were selected according to ADB procurement procedures and each supplier was approved to provide one item.
Total ADB Invoiced Items Amount Contribution Amount
(USD) % (USD) Compact Fluorescent Lamps (CFL's) 1,535 50% 767 Room Key Tag Switches 7,587 50% 3,793 Supply and Install underground electric cable from main switch to 12 apartments block opposite 5,644 50% 2,822 the laundry Supply and installation of (6) units of Roof 32,252 50% 16,126 mounted Solar Water Heaters (SWH) Total 47,017 50% 23,508
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It was agreed with the hotel owner that the ADB contribution for equipment procurement and installation would be 50% of the total amount invested with a maximum ceiling of USD 35,000. The final project cost for the equipment and installation was USD 47,017 with a client contribution of USD 23,508.
Installation
Implementation of the ECMs project in the hotel were carried out in close collaboration with the hotel staff and with the equipment and service providers for the SWH and underground electric cabling. The CFLs, room key tag switches and adjustment of AC remote controls were installed by the hotel’s O&M staff. No significant difficulties arose during the implementation of the ECMs, however there were some delays from a lack of availability of the required number of CFLs and the rooms key tags. The maintenance staff of the hotel played an important role on a daily basis to ensure that the recommended work planned as part of the ECMs was implemented successfully and performed as intended.
Description of ECMs
The ECMs implemented were as follows: -
Table 35: Implemented ECMs
Implemented ECM’s Recommended Energy Description Conservation Measures (ECMs Installation of solar water heaters for the 27 apartments i). Solar Water Tendering for three quotes for six SWH units of 300 liters storage each (turn- Heating (SWH) key project) Installation - including piping and interface with LPG heating system Supplier to design the SWH reticulation network to be connected to the existing LPG hot water system in the hotel Replacement of all incandescent light bulbs with CFLs (warm color) within ii). Lighting the hotel Optimization for External & internal lighting replaced with CFLs the Entire Hotel Placement of orders for key switches for the rooms. iii). General Key Switch for the 27 apartments Minor modifications to remote control units for apartment AC units. iv). Reduce AC Remote temperature controls disabled to prevent guests from changing the Temperature Set temperature preset to 24 C Point for the Entire Hotel Removing the two existing electric meters and using only one meter for the Review v). whole hotel to considerably reduce energy bills compared to the current UNELCO status quo. The additional monthly fixed cost is a contributing factor to the Contacts high cost of monthly bills. Re-connecting the 12-room apartment block to the main existing switch box by supplying and installing an underground cable.
Econoler International 76 Ref.: 5505 Asian Development Bank TA 6485-REG: Promoting Energy Efficiency in the Pacific - Contract No. COSO/90-492 Final Report
5.5.2 Impact Evaluation
The eight proposed ECMs for the hotel were recommended to address the increasing rate of electricity and LPG consumption by the hotel sector.
Based on the baseline scenario of 2009, and the preliminary energy consumption data gathered after the project’s implementation, the savings expected from the eight proposed ECMs for the hotel would generate a financial savings of VUV 5,138,410 per annum (USD 51,440). Considering the value of investment in implementing the ECMs, the payback period would not exceed 1.1 years. The total investment of VUV 5.5 million would be recovered within a year and would generate savings of VUV 5 million per year, representing 10% savings from electricity, 12% savings from water and 13% savings from LPG, which in total represents a 13% savings in the hotel’s energy bills.
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Table 36: Real Savings from Implemented ECMs
Estimated Simple Estimated Savings Investment PBP Description Electricity LPG Electricity LPG (VUV) (VUV) (Years) (kWh) (kWh) (VUV) (VUV) Solar Water Heating 4,151,250 0 17,530 0 506,710 506,710 8.2
General Key Switch 270,000 2,520 0 86,280 0 86,280 3.1
Hotel Lighting 476,240 36,820 0 1,259,070 0 1,259,070 0.4
Head Shower Replacement 272,020 0 37,900 0 1,095,420 1,327,760 0.2
Optimization of Pool Motors 53,800 7,320 0 250,340 0 250,340 0.2
Reducing Temperature Setting of AC 100,000 30,140 0 1,030,890 0 1,030,890 0.1
Optimization of Garden Watering 37,950 0 0 0 0 32,240 1.2
Reviewing Electricity Meter Contracts 157,500 0 0 645,120 0 645,120 0.2 with UNELCO
Total 5,518,760 76,800 55,430 3,271,700 1,602,130 5,138,410 1.1
USD 55,240 USD 32,750 USD 16,040 USD 51,440
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5.5.3 Lessons Learned
The following issues are relevant for future EE/DSM projects in Vanuatu:
During the initial phase of the project, identifying a national consultant to comply with the project TORs was not as easy as envisaged. The necessary national capacity is nearly non-existent and represents a common issue in the region. Difficulties in identifying and recruiting suitable people with the required technical background and experience are clearly reflected in the implementation progress of the project, which was rather slow. Part of the problem regarding this barrier relates to a lack of understanding of the nature of the project. This time requirement for recruitment of suitable national consultants needs to be seriously considered in the planning of future EE projects.
A low capacity on EE/DSM within government further delayed progress and the meeting of project deadlines. While the Energy Unit should be the driving agency for such projects, the lack of resources and technical capacity poses a serious problem to identifying an effective government institution that could become a national focal point to execute future EE projects. Capacity building of energy specialists to be employed by the Energy Unit is a critical national issue. Other prospective energy projects in the pipeline from various funding agencies will have very limited chances of achieving success should the current deficiencies within the administrative and government system not be resolved.
Accessing technical data is time consuming. There is no energy data base within the government executing agency while technical data from utility suppliers is also not easily available. There is a lack of energy use and cost data within all government agencies and sectors. Therefore, energy planning and budgeting is usually done on an ad hoc basis, and depends on inconsistent assumptions and estimates.
The low technical level and the lack of know-how for IGA development was a major barrier to the completion of ECM reports. The few participants from the private sector with higher technical knowledge could not participate continuously to assist the students involved due to their other work commitments. This was a major constraint to producing the reports required for assessing the EE potential of assigned hotels. Although each group was assigned a group leader, the IGA exercises were never completed.
The procurement of materials to implement the project was slow, due mainly to the limited number of local suppliers. The, bidding on tenders for the supply of electrical items clearly reflected the situation where a number of these items were highly priced due to lack of competition in the local market.
Future energy projects require full-time management support with clear objectives and responsibilities. The pilot project’s experience shows that recruiting a suitable full-time local consultant would have resolved nearly half of the issues raised above. This implies an effective project set-up with enough resources to address the key issues that might come up during EE project management.
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Te hotel sector will clearly need ongoing support and incentives to create a sustainable EE market. The legal framework could be strengthened by the requirement for mandatory energy audits to investigate relevant ECM options.
The building code does not include EE requirements or performance norms for new hotels and/or for the refurbishment of exiting hotels.
Energy services companies could be a useful market catalyst since minimal expertise is currently available for the identification, implementation and verification of ECMs. Capacity building for existing services and equipment providers could lead to the use of Energy Performance Contracts.
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CONCLUSIONS
This ADB PEEP RETA was undertaken to: (i) establish a baseline of energy use in the applicable five PEEP PDMCs, (ii) develop energy efficiency policy recommendations, (iii) identify a pipeline of energy efficiency initiatives/projects for subsequent funding, (iv) implement a pilot energy efficiency project in each of the five PDMCs.
Establishing a Baseline of Energy Use
With the exception of PNG which has its own oil reserves and production, the five PEEP countries are highly dependent on oil imports. As a percent of GDP, oil imports in 2009 are estimated to be: 2.1% for PNG; 6.9% for Vanuatu; 9.4% for Samoa; 15.1% for Tonga; and 28.2% in the Cook Islands. In terms of the percentage of oil used for electricity production: Samoa, PNG and Tonga range from 20% to 21% to 22%; Vanuatu is 38%; and the Cook Islands is 45%. The large quantity of oil used for electricity production in each PEEP country provides the core rationale for the PEEP project’s focus on electricity energy efficiency. In terms of the electricity demand structure, the most notable feature is that the only PEEP country with an appreciable industrial sector is PNG. A key issue with the work on establishing a baseline of energy use in the five PEEP countries was the general lack of accurate, comparable and consistent time-series energy supply and demand data. This problem has also been well recognised in previous projects that attempted to examine energy supply and use, most notably the UNDP-GEF PIREP project. To address this problem would take a comprehensive multi-year energy data gathering project across the wider Pacific, unfortunately this task was beyond the scope resources and timescale of this PEEP project.
Policy and Institutional Aspects
In institutional terms, all five PEEP countries were found to share key basic features, notably: the electricity utilities had only limited involvement in comprehensive electricity energy efficiency activities; limited staff resources and weak capacity in government agencies responsible for energy efficiency; limited policies supporting energy efficiency; and limited enforcement or actual implementation of the energy policies that are in place. The one notable recent exception has been Tonga where the Tonga Energy Roadmap (TERM) project has set a clear target to halve oil use for electricity generation in 10 years, taken ownership and worked with key donors in the formulation of TERM, and some key parts of TERM are now underway with donor support.
In terms of energy efficiency related policies, the PEEP project has reviewed the major options and concluded that the most promising energy efficiency policy options include: (1) adding energy efficiency provisions to building codes; (2) energy labeling and perhaps minimum energy performance standards (MEPS); and (3) incentivising electricity utilities to undertake energy efficiency programs by enabling electricity utilities to earn a (regulated) profit margin on approved energy efficiency program costs.
Public sector procurement of energy efficient appliances and equipment was not examined in detail but may be worth considering as a symbolic and practical leadership example of governments being serious about improving energy efficiency, starting in their own operations..
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Pilot Projects
The PEEP RETA identified a priority pilot project in each of the five PEEP countries, and successfully implemented the pilot projects with local partners. The LED street lighting project in Tonga, the high quality and low cost CFL project in the Cook Islands, and the existing commercial building (hotel) energy efficiency project in Vanuatu are now all key components of the PEEP successor GEF and ADB TA funded PEEP phase 2 project (PEEP-2) that has had its funding approved and is now being operationalised. The power factor correction (PFC) projects in PNG and Samoa produced useful energy savings and formed useful operational links with the local electricity utilities, but were found to produce too limited GHG reduction gains for the scale of funding required to be suitable for GEF funding in the successor PEEP-2 project. The Tonga LED street lighting project, along with a separate similar project undertaken in the Cook Islands has sufficiently demonstrated the value of LED street lights and is therefore included as a project to be replicated in all five PEEP countries in the PEEP-2 project. The Cook Islands CFL project was very successful, and will be widened and extended into a comprehensive energy efficiency lighting component in the PEEP-2 project. The hotel energy efficiency project in Vanuatu was very useful in revealing that its scope had to be further extended into improving the energy efficiency of key new buildings (including but not limited to hotels) and extended to deal with energy efficiency retrofit support for all significant energy using existing buildings, and not just limited to hotels. The energy labeling and MEPS component was not directly targeted during the pilot projects, but it became clear as the pilots were implemented that the focus of a labeling and MEPS project in the PEEP-2 successor project had to be much more on a pragmatic enforcement approach based on the use of existing energy labels rather than an attempt at a policy-led simple adoption of the Australia-New Zealand approach as has previously been implicitly assumed.
Energy Efficiency Potentials in Each Country
For each of the PEEP countries, the results of the pilot projects and basic energy sector data were combined to show the energy conservation measure (ECM) potentials from a range of priority energy efficiency policy and implementation options. The proposals were limited by the level of information available and the identified ECMs that were relevant within the PEEP country context, and hence the energy savings estimates in Table 37 as below were established conservatively. The first five ECMs represent the largest prospective energy savings potentials and these first five ECMs are all the basis of components in the successor PEEP-2 project that has now had its funding approved and is currently being operationalised.
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Table 37: Total Energy Savings per ECM for Participating Countries
Total Annual 2011-2020 Annual Savings Simple Estimated Emission CO Potential 2 PBP ECM Investment Reduction Reduction
% MWh USD M USD M TCO2 TCO2 Years Energy Efficiency in 10.2 7,121 2.1 7.3 4,583 36,690 3.5 Government Buildings Energy Efficiency in 66.2 4,396 1.5 8.1 2,877 23,011 5.5 Street Lighting CFL in Residential 5.0 9,315 1.7 0.75 5,976 53,830 0.5 Sector Energy Efficiency in 20.7 8,786 2.7 24.6 5,524 44,190 4.0 Hotel Sector Energy Labeling and 2.0 18,145 5.8 6.0 11,758 93,400 1.0 MEPS Power Factor 0.4 423 0.14 0.8 275 2,480 5.7 Correction Systems* Energy Efficiency in 5.0 267 0.10 0.47 184 1,650 4.7 Pumping Stations
The project faced a range of constraints and delays, but this project must be judged a success as it identified and implemented real and practical residential CFL, LED street lighting and energy retrofit measures that are at the core of the approved GEF successor PEEP-2 project. The PEEP-2 project has had its GEF and ADB funding of nearly $7.5 million approved (including $5.255 million from GEF), and the recruitment of a consulting firm to manage and implement a three year duration project is now underway to building on the work of this PEEP-1 ADB RETA.
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APPENDIXES: (SEPARATE DOCUMENTS)
Appendix A: Cook Islands Report
Appendix B: PNG Report
Appendix C: Samoa Report
Appendix D: Tonga Report
Appendix E: Vanuatu Report
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ASIAN DEVELOPMENT BANK
TA 6485-REG: PROMOTING ENERGY EFFICIENCY IN THE PACIFIC CONTRACT NO. COSO/90-492
APPENDIX A - COOK ISLANDS - May 2011 - Asian Development Bank TA 6485-REG: Promoting Energy Efficiency in the Pacific - Contract No. COSO/90-492
Cook Islands Report
ABBREVIATIONS AND ACRONYMS
CCI Chamber of Commerce and Industry CIREC Cook Island Renewable Energy Chart DSM Demand Side Management ECM Energy Conservation Measures EE Energy Efficiency ELI Electric Lighting Initiative GHG Green House Gases HPS High-Pressure Sodium LPG Liquid Propane Gas MV Mercury Vapor NEC The National Energy Committee NES The National Environment Service NZ New Zealand PDMC Pacific Developing Member Country (of ADB) RE Renewable Energy SWH Solar Water Heaters TAU Te Aponga Uira
Econoler International ii Ref.: 5505 Asian Development Bank TA 6485-REG: Promoting Energy Efficiency in the Pacific - Contract No. COSO/90-492
Cook Islands Report
TABLE OF CONTENTS 1 COUNTRY PROFILE ...... 1 1.1 Fossil Fuels...... 1 1.2 Power Supply Sector ...... 3 1.3 Tariff Structure ...... 6 1.4 Energy Efficiency Policy Implementation ...... 7 1.5 Policy and Institutional Recommendations ...... 11 2 CFL PROJECT IMPLEMENTATION AND IMPACT EVALUATION ...... 22 2.1 Key Program Parameters ...... 22 2.2 Impact Evaluation ...... 25 2.3 Lessons Learned ...... 26 3 FUTURE EE PROGRAM DESIGN AND IMPLEMENTATION ...... 28 3.1 General Assumption and Parameters ...... 31 3.2 Energy Efficiency in Government Buildings ...... 32 3.3 Street Lighting ...... 35 3.4 Energy Efficiency in the Hotel Sector ...... 37 3.5 Energy Efficiency in the Residential Sector – CFLs ...... 39 3.6 Energy Labeling and MEPS ...... 40 3.7 Power Factor Correction ...... 43 3.8 Energy Efficiency in the Industrial Sector ...... 43 3.9 Water Distribution Network ...... 43 4 OTHER RECOMMENDATIONS ...... 44 APPENDIX A.1: COOK ISLANDS - ESTIMATED SAVINGS PER SECTOR IN GOVERNMENT BUILDINGS, REFERENCE TABLES ...... 48
Econoler International iii Ref.: 5505 Asian Development Bank TA 6485-REG: Promoting Energy Efficiency in the Pacific - Contract No. COSO/90-492
Cook Islands Report
1 COUNTRY PROFILE
Named after Captain James Cook, who sighted them in 1770, the Cook Islands became a British protectorate in 1888. in 1900, administrative control was transferred to New Zealand. In 1965, the residents of the Cook Islands chose self-government in free association with New Zealand. The northern Cook Islands are seven low-lying, sparsely populated, coral atolls. The southern Cook Islands consist of eight elevated, fertile, volcanic isles, including the largest, Rarotonga, at 67 km2, where approximately 75% of the Cook Islands population of just over 10,000 people lives1.
The Cook Islands is one of the best performing Pacific economies, with a USD 9,650 GDP/Capita (PPP). However, the small economy is, and will most probably remain, heavily reliant on the tourism industry. Similarly, economic development is, and will continue to be, hampered by young generations attracted away from the country, which is illustrated by the ongoing overall population loss from the Cook Islands from net out-migration. From a business community perspective, improving energy efficiency in the Cook Islands would increase the competitiveness of the tourism industry while also promoting the islands' “green image” on the international scene. This would also align the Cook Islands with international concerns for clean and sustainable development. Improving economic development through a more energy efficient economy would reduce eh high cost of energy and hence provide improved employment opportunities. Improved energy efficiency in the Cook Islands would play a significant role in country development and is therefore worthy of careful and immediate consideration.
1.1 FOSSIL FUELS
The impact of crude oil price rises and/or price instability on the Cook Islands economy is of critical importance due to the Cook Islands’ extremely high dependence on imported fossil fuels for its energy needs (noting however that it is estimated that 90-95% of homes already have solar water heaters (SWH) for water heating and that PV units are now starting to be installed on private houses in Rarotonga and in grid connected configurations in the outer islands. These imported petroleum products include diesel, kerosene (JetA1), unleaded petroleum and Liquid Propane Gas (LPG). Table 1 shows the quantities of fuels imported into the Cook Islands in 2008.
1 Total resident population is currently estimated at 11,400 for September 2010 quarter, Cook Island government, see http://www.stats.gov.ck/CurReleases/popnestVital/popnestvital.htm
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Table 1: Fossil Fuel Imports, 2008
Weight Oil Products Volumes (liters) % (M tons) Diesel (ADO) 8,578 7,800,00 45.8
Kerosene (JetA1) 6,784 8,629,756 36.7
Petroleum (ULP) 2,185 2,970,911 12.6
LPG 632 1,157,824 4.9 Source: Cook Islands Government 86% of the 7,800,000 liters of total Cook Islands diesel oil imports (45.8% of all oil products imported), was used at the Rarotonga power station in 2008. This 86% of all Cook Islands diesel being used for Rarotonga’s power production highlights why the PEEP project for the Cook Islands has focused on the energy efficiency of electricity use in Rarotonga. The remaining 14% balance of total diesel imports is used for vehicles, shipping and power generation in the outer islands. The extreme importance of fossil fuels used for electricity generation in the Cook Islands explains why the government is taking a strong interest in the promotion of energy efficiency and renewable energy for electricity uses. In the Cook Islands, LPG is used primarily for cooking.
Table 2: Retail Fuel Prices in June 2009 shows the retail fuel prices for Rarotonga and for the outer islands. There is a significant difference between the price of diesel, petrol and LPG on the main island of Rarotonga and on the outer islands.
Table 2: Retail Fuel Prices in June 2009
Wholesale Retail Type (NZD) Rarotonga Rarotonga Southern Group Northern Group
Petrol (ULP) 2.10/liter 2.26/liter 2.80/liter 2.85/liter
Diesel (ADO) 1.84/liter 2.10/liter 2.64/liter 2.68/liter
LPG 4.40/liter 6.15/liter 6.70/liter Source: Cook Islands Government The total value of these fuel imports was over NZD 30 million, or 19% of total imports in 2008. Taxes on these imports are an important source of revenue for the Government of the Cook Islands, and are applied as follows:
Fuel imported into Rarotonga: wharfage fee of NZD 0.25/liter + VAT 12.5%.
ULP: Import duty of NZD 0.26/liter + VAT 12.5%.
ADO: NZD import duty of 0.22/liter
ADO imported by the power authority is exempt from import duty.
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Total fiscal revenues on imported fossil fuels in 2009 were approximately NZD 7 million, representing 10% of government revenues.
Any energy efficiency (EE) strategy leading to savings on diesel (ADO) imports used for electricity generation will reduce wharfage fee revenues, although this effect will be minor compared to the national benefits arising from such fuel savings.
1.2 POWER SUPPLY SECTOR
Te Aponga Uira (TAU) is the government owned electricity utility on the main island of Rarotonga and runs a sound commercial operation with a reliable 24/7 electricity supply using high efficiency diesel engines. The outer islands each have their own electricity utilities that are generally struggling commercially and generally do not provide a reliable or 24/7 electricity supply. Commercial consumers have, for the most part, reached the conclusion that when available, grid power is much more convenient than self-generation using their own diesel generators, so self- generation is rare unless there is no grid power supply available at the relevant site. Nearly all electricity savings by end-users will therefore reduce revenues for the relevant utility, however this is not expected to be a major constraint on TAU implementing EE as it is government owned and any necessary increases in tariffs will be small from reduced electricity sales. In the outer islands EE will generally reduce the level of commercial losses and hence EE will generally be supported by the utilities and their local government owners. All grid electricity savings will translate into reductions in the Cook Islands’ diesel oil imports, and hence will be strongly welcomed by the government and the wider population.
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1.2.1 TAU Market Demand Structure
Demand by Sector
The sectoral breakdown of annual electrical consumption for 2009 as presented in the table below.
Table 3: Annual Electricity Consumption by Sector for 2009
Cook Islands Energy Balance
Consumption % Customers/No
Hotels 6,622,200 25% 68
Commercial 6,702,500 26% 482
Government 1,952,700 7% 84
Industry 1,575,600 6% 74
Street Lighting 2,575,400 10% 701
Religious 175,000 1% 81
Water Pumping 6,200 0.02% 11
Residential 5,966,500 23% 3,509
Other 503,000 2% 104
Total 26,079,100 100% 5,114
Source: TAU and Econoler Considering that the domestic sector accounts for about 23% of the total electricity distributed, the domestic sector must therefore be a key element to consider in any EE strategy. Energy savings would reduce the estimated 7% of household budgets spent on energy and also greatly benefit the national economy. In the outer islands, where economic activity is less developed, the cost of supplying electricity to each household is very high and is supported financially by the whole local community as well as transfers from the central government that are largely paid by taxpayers on the main island of Rarotonga. Since electricity is mainly used for lighting, replacing all incandescent bulbs by CFLs and possibly replacing old fluorescent tubes and electro-magnetic ballasts by modern and more efficient technologies would bring about the immediate and most significant savings.
There are potential energy savings to be achieved in the Rarotonga and Aitutaki island (the main tourist island other than Rarotonga) tourism industry where nearly all hotels and resorts are located. The hotel sector should be included in any EE/DSM strategy as management of these establishments expressed a strong interest to save on energy bills. Moreover, the tourism industry is unfolding a strategy promoting the Cook Islands as a green destination in its natural tourism markets of New Zealand and Australia. The National Energy Committee (NEC) is considering “leveraging” the value of the existing Green Globe/Green Tick accreditation programs and using these to stimulate the interest of the tourism sector in improved EE.
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1.2.2 Rarotonga Load Curve
An average weekly load curve was prepared based on the period between May 1, 2009 and May 7, 2009. This curve shows two different peaks of almost similar magnitude. The first peak occurs during the day when business operations commence at around 8 am - 8:30 am and ends with the working day at 4 pm. The peak load for this period is in mid-afternoon which is consistent with an air conditioning load that peaks around that time due to accumulated heat from solar and internal loads. The second peak starts when people return home and lighting, fans, electronic equipment and AC units are needed. A detailed end-use analysis would reveal a more precise description of these peaks and needs to be included in the first steps of any future EE/DSM planning activities. This weekday curve shows that peak demand savings would require two simultaneous groups of EE initiatives: one for commercial and institutional buildings to reduce their daytime peak and the other for households to reduce their evening peak.
Figure 1: Average Weekly Electricity Load in Rarotonga
Average weekly Load
4500
4000
3500
3000
2500 Weekday Weekend 2000
1500
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0 0 30 30 30 30 30 30 30 30 0 130 33 5 630 8 930 0 130 3 430 5 630 8 930 13 3 0 0 0230 0 0430 0 0 0730 0 0 1 1 1230 1 1 1 1 1730 1 1 2030 2 2230 2
1.2.3 Electricity Demand Forecast
In Rarotonga, TAU forecasts electricity demand at a minimum of negative 3% to a maximum of zero growth. This is due to several factors:
A continuing trend towards depopulation – the resident population emigrates at a rate of approximately 8% per year, and is being only partially offset by low-income immigrant workers. A projected load reduction due to EE measures (e.g., CFL adoption, LED streetlights). A trend towards greater uptake of private renewable energy, particularly grid-connected PV solar (already underway as it is already cost-effective at current electricity tariffs). New and refurbished installations using more energy-efficient equipment – e.g., rack refrigeration, inverter air conditioners (already observed in the market).
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To meet this demand, TAU operates a powerhouse which is around 40 years old. It is being upgraded from 2011 with more efficient engines and improved automated engine management. This will help increase generation efficiency, and reduce fuel consumption and CO2 emissions. TAU plans to remove the most inefficient engines and at least one is scheduled to become a pilot for biofuel trials.
1.3 TARIFF STRUCTURE
Te Aponga Uira has three basic tariffs: domestic, commercial and demand.
1.3.1 Domestic Tariff
The domestic tariff is further broken down into three tiers:
Tier 1 applies to the first 60 units consumed in a 30-day period and is charged at NZD 0.47/kWh (USD 0.30). Tier 2 applies to consumption between 60 units and 240 units per 30-day period and is charged at NZD 0.67/kWh (USD 0.43). Tier 3 applies to consumption above 240 units per 30-day period and is charged at NZD 0.71/kWh (USD 0.46).
The average monthly electricity consumption per household is estimated at 186 kWh. Thus, the average household marginal price belongs to tier 2 of the tariff structure. The high cost of this tier will provide a short payback period on EE upgrades for most lighting uses. It will also allow significant savings on white-ware appliances and air conditioning, two sectors where retrofits of working equipment are notoriously difficult to achieve. The high tier 2 tariff marginal cost will help convince buyers of new appliances and AC equipment to select equipment with a better EE rating.
Low-income and low-consumption households consuming all their electricity at tier 1 pricing will be interesting targets for any program as the low applicable electricity tariff does not allow the utility to fully recoup its supply costs on this category of consumers. Thus any reduction in demand from this category of customers would be very beneficial to the utility.
1.3.2 Commercial Tariff
There is a NZD 5.6 monthly charge (USD 3.66)
All electricity consumption under this tariff is charged at NZD 0.68/kWh (USD 0.44)
The average kilowatt-hour cost for the commercial rate is very close to the second tier of the residential sector and the value of savings per kWh will therefore be similar for both sectors for lighting and AC EE programs.
All prices are exclusive of 12.5% VAT.
These tariffs became effective from February 2010 and are overall significantly lower than previous tariffs, (due to the lower diesel prices applicable in Jan 2010) as shown in Table 52.
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Table 4: Tariff Comparison (NZD)
30-Day Old 30-Day New Domestic Change Cycle Rate Cycle Rate
Tier 1 0-60 units 0.52 0-60 units 0.47 Down 0.05 (10%) 61-240 61-300 Tier 2 0.87 0.67 Down 0.20 (23%) units units Over 240 Over 300 Tier 3 0.73 0.71 Down 0.02 (3%) units units Business Commercial 0.73 0.68 Down 0.05 (7%) Demand 0.64 0.59 Down 0.05 (8%) Source: TAU In arriving at the decision to change the tariff structure, the Board of Te Aponga Uira was sensitive to the impact of energy costs on households and restructured the tariffs to the benefit of the majority of domestic consumers. This was achieved by reducing the tier 2 rate to a price below the tier 3 rate and increasing the number of units that can be consumed at this lower rate from 240 units to 300 units, over a 30-day reading cycle. The majority of Rarotonga households consume an average of 300 units of electricity per month (higher than the national average). Therefore, a reduction in the tier 2 rate – from NZD 0.87 to NZD 0.67 – means that the greatest benefit from this reduction goes to the greatest number of households.
In addition, the new domestic tariff structure rewards energy efficiency measures and promotes the use of renewable energy generation (net-metering) by ensuring that customers pay for a higher proportion of their energy at a lower rate as they reduce their consumption. For example, domestic consumers who use 700 units per month will now pay an average rate of NZD 0.68 per unit. If they reduce their consumption to 450 units per month the average rate drops to NZD 0.66 while a monthly consumption of 200 units averages NZD 0.60 per unit. This structure provides a triple incentive to conserve electricity. The less energy people use, the lower the rate they pay and the more attractive renewable generation (net-metering) becomes.
1.4 ENERGY EFFICIENCY POLICY IMPLEMENTATION
1.4.1 Current EE Activities in the Cook Islands
A number of EE activities have taken place in the recent past or are presently under consideration.
A (private) program to introduce CFLs into domestic homes on the island of Mitiaro failed to deliver long-term results as the lamps purchased and distributed were of a substandard quality and had a very short life cycle.
The National Environment Service (NES) recently completed qualitative energy audits in the domestic and commercial sectors. It proposed generic energy saving recommendations to that effect.
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In the lighting sector, the Ministry of Energy is planning the phase-out of incandescent lighting in the Cook Islands, culminating in a legislated ban on incandescent lamps.
TAU continuously promotes safety and energy efficiency on TV and in the print media.
TAU is in the process of recruiting an engineer to take care of its EE/DSM and renewable energy (RE) strategy and program management.
Energy efficiency activities are presently scattered among various private or public operators. The Energy Department is not specifically involved in this sector and has presently no resources dedicated to it.
1.4.2 Cook Islands National Energy Policy – 2003
A general observation relates to the institutional arrangement of the power sector in the Cook Islands. Each island has its own independently managed power supply system, and this constitutes a barrier to EE/DSM development and implementation, as transaction costs are higher than centralized management would provide with its increased economies of scale.
Energy Efficiency policy and regulatory frameworks (defined as a set of specific laws and regulations, economic and information tools, EE programs, and enforcement) are in place in principle, but in practice the only tangible EE activity in the Cook Islands is the work of TAU promoting safety and energy efficiency on TV and the print media.
The 2003 Cook Islands National Energy policy in principle is supportive of EE initiatives, as it includes a number of relevant articles such as: -
Under Chap. 1 — Planning and Management, the policy includes: "Provide ongoing education programs relating to energy sector issues including in particular safety, conservation and efficiency."
Under Chap.2 — Power Sector, the policy specifically mentions: “Promote sound energy efficiency and conservation practices for all consumers.”
Under Chap. 4 — Petroleum, the law stipulates: "Encourage fuel conservation and efficient end- use thereby reducing dependence on imported petroleum products."
In Chap. 6 — Environment, "Integrate environmental regulations into all energy-related plans, including transportation, electricity supply, and building codes."
The strategic plan attached to the policy document includes a large number of initiatives that were to be implemented in 2003-2005, with some of them related to the items mentioned above. However, the actual realization of almost all initiatives is completely dependent on donor funding or regional assistance. Since the Energy Department has nowhere near the capacity to deliver these initiatives internally, and donor or regional funding for EE initiatives has been minimal (most donor or regional funding goes into RE projects) the majority of the proposed EE initiatives have not in fact been implemented to date.
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As this energy policy is still in principle current and applicable, ADB initiatives in the EE sector would then contribute to meeting the current Cook Islands national energy policy objectives.
1.4.3 National Sustainable Development Plan - 2007
The National Sustainable Development Plan2 developed in early 2007, includes an energy component with the objective to rationalize the management of the energy sector by developing and implementing a Cook Islands Energy Strategic Plan for all islands. This component includes the following objectives: -
Decreasing by 20% per capita the energy consumption by increasing efficiency in energy use through the adoption of new technologies and energy conservation practices by 2010 Reducing the reliance on high GHG based fossil fuels by identifying and adopting technically feasible and financial viable alternative energy sources Increasing by 30% the use of renewable energy by 2010
Since no noticeable progress has been achieved, the government has now set up an Energy and Renewable Energy Division in the Office of the Prime Minister to be in charge of RE and EE. Also, the government has set up a framework for developing the Cook Island Renewable Energy Chart (CIREC) to achieve the Government's energy policy of 50% of its electricity to be sourced from renewable sources in 2015 and 100% by 2020 (the 50/15 and 100/20 policies).
1.4.4 National Energy Committee
The National Energy Committee (NEC) was set up in May 2007. It is chaired by the Director of Energy and its members belong to the public and private sectors, with initial terms of reference to oversee the development of renewable energy in the islands. The committee has fully supported energy efficiency and made recommendations for further consideration such as:
Phasing out incandescent lighting in the Cook Islands culminating in a legislated ban on incandescent lamps. Adopting MEPS to control the energy efficiency of imported electric equipment. Providing assistance in raising product standards on the open market and developing a national energy labelling program for energy-efficient equipment.
The NEC, in conjunction with the Energy Department, is mandated to lead EE and electrical safety campaigns in schools.
As previously mentioned, the NEC is considering “leveraging” the value of existing Green Globe/Green Tick accreditation programs and using these to stimulate interest, particularly in the tourism sector.
The NEC will be a key stakeholder to incorporate into any DSM policy development.
2 Te Kaveinga Nui (Pathway for Sustainable Development in the Cook Islands) Living the Cook Islands Vision — A 2020 Challenge — National Sustainable Development Plan (2007- 2010)
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1.4.5 Stakeholder Capacity
Energy Department
The Energy and Renewable Energy Division in the Prime Minister’s Office is now responsible for the planning and implementation of EE and RE policy in the Cook Islands. In the past, there has been insufficient capacity to effectively provide the necessary EE leadership in the Cook Islands. Additional resources are required along with capacity building on the planning, development, implementation and evaluation of EE and RE initiatives and programs.
TAU Power Utility
TAU has been providing strong support for EE/DSM development in CI. TAU has demonstrated its interest through providing sustained and effective support to the CFL program implemented under this TA and investing its own money in communication campaigns. As this TA was progressing, TAU decided to develop its own capacity in EE/DSM and started the process of recruiting an EE expert. This initiative should be fostered by providing capacity building to this new resource. This capacity building will include support for the following activities:
Analysis of demand and energy consumption Program identification and impact evaluation Program development and design Financial resources and incentives Legal framework development
Business Community
The business community, through the Chamber of Commerce and Industry (CCI), is well aware of the necessity to promote EE policies and programs. The CCI plays a leading role in the strategy of the Cook Islands to develop a “greener” image and is fully behind DSM development and implementation.
Tourism Industry
The tourism industry is a key player in local economic development (at least in Rarotonga and Aitutaki). The Tourism Industry Council has confirmed the lack of EE promotion in the islands and has expressed its total support for any initiative that would fill this gap. The cost of electricity represents a significant portion of operating costs in the tourism industry and clearly deserves close attention. The Council made it clear that it would contribute, through its organization and website, to disseminating information to members and gathering technical data for any further EE initiatives.
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Efficient Lighting Material Suppliers in the Cook Islands
In a small community such as Rarotonga, large retail shop owners play a critical role in EE/DSM program success. This is definitely the case in the Cook Islands. Discussions held have demonstrated that there are no problems or restrictions associated with importers to support DSM programs or to offer in the local market energy-efficient electric equipment imported from their existing supply channels, generally located in New Zealand, but increasingly now also coming from China.
Financial Institutions
A quick review of lighting equipment was made in Club Raro Resort, a local resort in the capital city of Avarua, and showed that incandescent bulbs were responsible for 62% of energy consumption. Replacing them with CFLs and LEDs (for night parking area lighting) would represent a general 4- month payback period. Club Raro used its own funds to finance the replacement. However, going beyond this "easy" step and replacing AC and cooling systems could turn out to be more financially challenging leading the tourism industry to resort to the banking system. This may not be a problem in Cook Islands as the local financial institutions have no restrictions to considering lending on any “bankable” energy efficiency projects. The main deterrent will most likely be caused by the priority given by clients to all other investments required by their core business versus energy efficiency. Financial institutions provide regular loans to their eligible clients without particularly focusing on the project outputs or performance as long as the banks are getting their requested collateral for the loan.
National Environment Service
The NES is naturally supporting DSM as a significant component of its Green House Gases (GHG) strategy. The recent energy audit research conducted in the domestic and commercial sectors shows that appropriate energy auditing expertise is still somewhat lacking. Further training is thus required to improve this situation. This is a clear indicator of the relevance of introducing capacity building activities in the market to support EE initiative development and implementation.
1.5 POLICY AND INSTITUTIONAL RECOMMENDATIONS
1.5.1 Government EE Management Organization
From a government perspective, energy efficiency is a way to improve productivity in the economy through better energy use. These kinds of changes require commitment along with a macro and long-term approach. In addition to EE program development, management, financing and regulation activities, one of the key government contributions is to assume leadership for the development and implementation of EE policies and regulations. It is also paramount to oversee market data production and analysis including sector benchmarks. The following table presents the main recommendations for energy department organization summarizing the basic activities and programs to be put in place.
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Table 5: Energy Department EE Organization
ENERGY DEPARTMENT
Institution in Activity Profile of Activity International Support Charge
Create an EE Energy - Lead and coordinate EE Technical assistance: Division with Department policies and regulations - Deliver training in EE capacities in: - Develop and implement EE management - Leadership Key Partners: policies - Improve data statistics - Economic analysis - Local - Conduct market surveys for EE purposes - Public sector stakeholders - Conduct energy audits - Assist in market survey management - Traditional - Conduct and monitor design and execution - Technical analysis power leaders training programs - Assist in production of - Sub-contractor - Churches - Produce EE resource plan EE national resource management - Etc. - Produce awareness plan - Communication program - Produce education program - Lead EE activities in public sector - Develop EE regulations and standards
In this scheme, the Energy Department or Unit is involved in a large spectrum of EE activities, including EE program management. Since the energy division’s human resources are limited, it is recommended that the EE division outsource EE program management and evaluation to private organizations whose management systems are more flexible than the public sector. Such a strategy would likely be better adapted to market-oriented program management. Although the country’s EE market is relatively small, activities could be jointly performed with the utility if mandated by the government as the implementing agency of its EE policy and program plan. The public utility could provide the technical capacity in market research and program design. Its customers’ listing and periodical contacts with them through billing would provide the required market data and an access channel to clients for marketing purposes. When a utility is mandated by government to implement EE programs, it is usually allowed to recoup the cost of program implementation through a small increase in the electricity tariff.
The size of the Cook Islands’ current Energy Division, and more generally of the public administration, is too small to house a full-size EE division staff. A small EE cell needs to be created within the Energy Division to initiate EE implementation in the Cook Islands. The priority should be given to conducting a market study, preparing a detailed program design and carrying out an evaluation of the overall costs and benefits of such a policy for the government. The EE cell should also determine the annual budget required to operate those programs and ensure the overall supervision of EE activities. It may take a few years before the government can afford to invest a significant amount of its own financial resources in EE programs. However, in the meantime, it may rely on external assistance. Nevertheless, with a view to making energy efficiency a permanent component of its energy policy in the near future, as indicated, the government will still have to provide a leadership role. Furthermore, the government will be required to take responsibility for the EE sector and spend some public money on EE.
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Below are suggestions for priority Energy Division EE activities:
Review the NEC mandate introducing EE/DSM program development coordination. Create a stakeholders subcommittee, if necessary. Select and lead EE/DSM activities which are necessarily under public administration responsibilities. Those would include implementing energy labeling and MEPS and EE provisions in the building code, enhancing EE education and training, and improving the EE of government-owned buildings and infrastructure. Outsource activities whenever possible to allow local professionals and local organizations to develop and acquire relevant expertise to support EE program design and implementation. Coordinate public awareness campaigns with other stakeholders, TAU being a key partner. Consider with SOPAC if their education booklet (2010) for children can be used in the Cook Islands. Locally subcontract EE program design, implementation and evaluation in close collaboration with TAU. Build a permanent energy demand database with TAU as a prioritized EE activity and hence critically contribute to an immediate and long-term EE/DSM policy. Maximize the impact of international assistance by outsourcing activities and, for instance, having all EE operations conducted by the NEC.
1.5.2 TAU EE/DSM Management Organization
TAU has already decided to incorporate EE/DSM in its supply portfolio and is recruiting a professional for that purpose. However, as outward migration is a real challenge in the Cook Islands, this recruitment effort is facing difficulties. Innovative solutions should be explored and developed, such as establishing special relationships with universities in New Zealand and having students carry out research under the joint monitoring of their teachers and a local TAU resource. If TAU succeeds in filling the position, it will be important to develop capacity building activities for the newly hired resource. Twinning with international consultants in specific programs or establishing long-term relationships with targeted institutions are promising ways to achieve this essential training component.
However, TAU’s role could be strengthened and the government could mandate TAU to be the implementation arm of an EE program. Utilities often view DSM programs as counter-productive activities as they reduce electricity sales while money has to be invested to run the program. To be attractive, DSM has to be considered as a profitable activity. There are two concrete ways to achieve this objective. The first is to select only DSM programs where the utility benefits per energy unit are higher than the selling price of this energy unit. In this first scheme, the utility has a direct advantage to reduce electricity production. A second approach allows the utility to recoup the cost invested in EE programs through a small increase in tariff allowed by the government. This second approach is more frequent and applicable to a larger portfolio of EE programs than the first option. EE/DSM should therefore be effectively integrated into the supply strategy of a public utility with as much scrutiny as are traditional power supply and renewable energy options.
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This business approach has two requirements:
i) One is methodological. The public utility must precisely determine its production cost for each load curve segment. It must accurately determine the end-use demand structure behind the load curve to identify which group of customers and usage are responsible for this demand and build its EE/DSM strategy from this basic information. ii) The other refers to EE management. As for any investment in power supply and/or distribution systems, EE/DSM program design needs to be supported by high-quality “bankable” feasibility studies.
Table 6: Electric Public Utility DSM Organization
Electric Public Utility Institution International Activity Profile of Activity in Charge Support Create an EE/DSM Power - Get financing resources from Technical unit with capacities in: utility business activities or from a assistance: - Economic analysis small increase in tariff - Train staff in and planning - Hire appropriate technical staff EE - Database & load - Gather and analyze customer management research data on electricity consumption from utility point - Technical analysis - Identify and develop relationship of view - Program design, with large customers - Assist in EE implementation and - Identify key market players and resource plan management develop positive relationships production - Program evaluation - Develop and implement internal communication program - Develop and implement external communications program - Proceed with market research and potential savings analysis - Design, implement and evaluate EE programs
1.5.3 General Information/Awareness Programs
Sharing information in the EE sector is an efficient way to save on program development costs and take advantage of creative solutions developed elsewhere. As PDMCs (Pacific Developing Member Countries - Cook Islands, Papoa New Guinea, Samoa, Tonga, and Vanuatu) evolve in a specific environment, sharing technical information on energy savings in buildings, standards for air conditioning equipment or specifications for CFLs would provide large benefits for all participating countries. An information center is not necessarily physically required in the Cook Islands or in other PDMCs. Making use of the internet by creating a website dedicated to EE in PDMCs seems to be preferable. This website would promote shared information on EE technologies and appropriate specifications, program design, management, results and evaluation, and would allow for networking. Potential partners could be the Pacific Power Association, Pacific Islands Private Sector Organizations or SPC. The specific contribution of the Cook Islands would be to provide a local coordinator responsible for national contribution to the Web page.
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As far as raising awareness is concerned, TAU is conducting regular awareness campaigns and SOPAC has produced a booklet for children in Tonga, Samoa and Vanuatu.
The Energy Division has not been involved in this sector yet but needs to increase its presence in the government decision to get involved in this strategic sector of the economy and establish its leadership. This will require developing an awareness strategy, conducting market research to establish a baseline and the information to disseminate, producing and distributing informational material, and evaluating the impact on EE awareness level evolution for further consideration. In the short term, this approach may require support from external technical assistance.
Communication is crucial for the development of a successful and sustainable interest in EE by the population, enterprises and institutions. As a result, it needs to be managed accordingly. Technical support to design a more comprehensive and structured information and awareness program is required.
Table 7: EE Information and Awareness Programs
INFORMATION AND AWARENESS Activity Institution in Charge Profile of Activity International Support Information centers - Energy Department May include: - PDMC regional to disseminate - Books and leaflets information monitoring information on Key partners - Technical staff center efficient - Electric equipment answering technical - Regional organizations technologies and importers/retailers questions - SPC efficient use of - NGOs energy Awareness - Energy Department May include: TA to assist in: programs Key partners - EE advertising - Designing awareness - Electric equipment - Educational strategic plan retailers material for schools - Producing initial - Public utility material - Education sector
1.5.4 Education and Training
Education and training are a prerequisite in the Cook Islands to effectively support EE/DSM. They should not be limited to short training sessions but rather be integrated in existing education and training curriculums, wherever possible. As far as energy auditing and EE practices are concerned, it is recommended to consider outsourcing training to the private sector with twinning arrangements with foreign experts to reap the long-term benefits of this activity. The PDMC EE information center would assist in maintaining and upgrading the material used for education and training, ensuring the sustainability of this activity in the region.
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Table 8: Education and Training in Energy Efficiency
EDUCATION AND TRAINING Activity Institution in Charge Profile of Activity International Support Primary school Energy Department - Coordinate the production Technical Assistance: level and dissemination of - Assist in producing education, Key partners education material education plan and strategy targeting all Department of - Outsource to Department of along with initial education primary Education Education material schools pupils - Countrywide activity - Partner: SPC/SOPAC Energy audit Energy Department - Mobilize and involve the TA to: and energy private sector in program - Produce initial education management Key partners design and implementation material Chamber of - Conduct training sessions - Prepare work plan and Commerce Industry on energy audits including strategy - Engineering association financial analysis and - Conduct training sessions firms reporting to customers - Train local staff in delivering - O&M staff - Periodically update and training sessions - Associated upgrade capacities technical departments Energy- Energy Department - Mobilize and involve the TA to: efficient private sector in program - Produce initial education building Key partners design and implementation material construction Chamber of - Conduct training sessions - Prepare work plan and practices Commerce Industry on energy-efficient building strategy - Engineering association construction practices for - Conduct training sessions firms Architect and large building constructors - Train local staff in delivering - Architects contractor - Periodically upgrade training sessions - General associations capacities contractors
1.5.5 Energy Labeling and Minimum Equipment Energy Performance Standards
In the Cook Islands, technical recommendation for the CFL implemented project could be used as an initial proposal for a MEPS to be adopted for CFLs. Energy labeling and MEPS for appliances and AC equipment will need to be defined and adapted to the Cook Islands environment with support from international technical assistance. The next step will be to ensure its effective application in the market, which is a key component to ensure the success of any energy labeling and MEPS program. The following scheme is suggested for the Cook Islands control system:
Include into the energy labelling and MEPS regulations a provision making importers/retailers responsible for proving compliance of the material displayed on the shelves and include penalties for non-compliance. Establish rules to accept equipment testing from internationally recognized laboratories and define procedures to ensure specific unit compliance with the current energy labelling and MEPS requirements. Outsource to the private sector energy labelling and MEPS compliance control management. Accept the existing labeling and MEPS schemes from Australia-New Zealand and other major markets as a starting point for the development and implementation of the energy labeling and MEPS program in the Cook Islands.
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Importation of used equipment as in-kind remittances sent from overseas directly to relatives in the Cook Islands will need further investigation. Usually, energy labeling and MEPS regulations do not include imports of used appliances and AC equipment as it is difficult to determine the exact efficiency of each product imported. Section 3.6 on energy labeling and Energy Labeling and MEPS includes more details about proposed program features.
1.5.6 Energy Efficiency in Building Code and Enforcement
The cost of developing detailed stand-alone energy efficiency provisions for the building code may be too challenging financially for a small country like the Cook Islands to do on its own. It will be critical to develop strategies to reduce development costs and efforts when preparing the EE provisions of the building code for the Cook Islands. These strategies could include i) adapting the EE provisions of the building code from another country with similar environmental conditions, ii) limiting the scope of such EE provisions to simple measures like insulation, windows and external shading, which constitute the bulk of the potential for passive EE measures, iii) using a prescriptive approach including performance levels and benefits for adopting the code, and iv) using a collaborative approach with other similar PDMCs to share the level of effort required in the Cook Islands. If existing, EE building code provisions from abroad are used as a basis for development, then there is a need to make sure that all economic studies supporting the minimum level of performance of each component are properly updated to the Cook Islands context. The high cost of electricity and fossil fuel supply in the Cook Islands will necessitate an update of those economic studies and will likely result in a more stringent threshold for the minimum acceptable performance of building components than in large tropical countries with the benefits of economies of scale in their power sector and/or the benefit of using significant RE resources for power generation.
To limit revision and periodical update costs, technical information should be shared with other participating PDMCs through the information Web page already proposed.
The EE provisions of a building code like MEPS or labeling will only be as effective as the enforcement procedures introduced to ensure compliance. Experience around the world with voluntary EE building code provisions have shown generally minimal improvements in overall target market building EE. Those experiences suggest that, very early in the process, the government should be fully aware that financial and human resources will be needed to ensure compliance and should decide accordingly whether to develop mandatory EE provisions for its building code. If there is no serious and realistic commitment to enforce the EE provisions of the building code, then other types of programs and EE initiatives will generally be more cost-effective. However, if EE provisions of the building code are not put on the government’s priority list, this will result in an important lock-in energy inefficiency effect as new buildings will continue to be constructed with the “business-as-usual” approach and contribute for a very long period of time to inefficient energy usage in the building sector.
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Table 9: Building Code and Energy Efficiency
BUILDING CODE International Activity Institution in Charge Profile of Activity Support Introduce EE - Energy Department - Prepare EE TA to: considerations in Key partners specifications adapted - Produce initial building code - Department in charge of to local environment to technical material building code be introduced in - Conduct training - Architect and contractor building code sessions associations - Conduct actual - Train local staff in - Municipalities (if implementation of new delivering training involved in building code regulations in code sessions application) - Inform/train architects - Power utility and contractors
1.5.7 Creation of an Energy Efficiency Center
The first step often undertaken by countries with a low level of EE programs and activities is the establishment of a donor-funded energy center. These centers are typically non profit-making and supported by the government. They have independent authority to conduct research and analysis, raise awareness and recommend energy policies. Furthermore, they are mandated to design and implement EE programs, and play a central role in fostering market transformation where the implementation of energy-efficient products and services becomes standard practice. They provide a focal point for EE activities and have high credibility due to their nongovernmental, nonprofit status.
The government should consider establishing such an energy center. Subsequently, an EE/DSM cell could be established within the utility to ensure analysis, program development as well as management and implement end-use EE programs.
Alternatively, the energy center could be established as a unit within the utility. However, without an identity of its own separate from the utility, it runs the risk of being “captured” or controlled by the utility, which may not be supportive of aggressive EE efforts. In addition, an EE unit within the utility may not be regarded by the public as being a credible independent body for EE advice, especially as regards fuel substitution issues (e.g. LPG used as a cooking fuel or LPG used as a SWH backup energy source vis-à-vis electricity). Finally, locating the energy center within an electric utility may be seen as inappropriate if its mission will be to also address other uses of imported petroleum fuel use, in particular for transport, including as electric bikes are becoming a competitor for petrol powered scooters on Rarotonga roads. The establishment of an independent energy center does not preclude the establishment of an EE unit within the utility to oversee and coordinate utility EE activities. If such a unit is established within the utility, it should start out reporting directly to the chief executive of the utility to ensure that the concept of energy efficiency is given attention at the highest level and is not subjugated and “controlled” by lower level managers who may not support the EE mission.
An energy center with adequate independence and funding can review and evaluate existing EE efforts and ensure their implementation.
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The energy center can play the role of advocating proper implementation of energy labeling and MEPS and EE provisions of building code legal requirements, as well as presenting a blueprint of how to meet these legal requirements. Likewise, if the ban on incandescent bulbs is found to be problematic in any practical matters, the center could champion better implementation and enforcement of the ban and help determine the extent to which cheap, low-quality CFLs are dominating the market. Steps may be necessary to reduce or eliminate low-quality CFLs through a product labeling program or the establishment of EE standards for bulbs. This type of standards and labeling program is the kind of activity an energy center can support and even implement if it has adequate assistance from those with experience in implementing such programs in other countries.
By providing assistance in the design and implementation of EE policies and programs, an energy center helps strengthen the institutional capability of government institutions to carry out EE initiatives. Over time, staff from the energy center could even take management positions at government institutions thereby transferring EE management capacity directly to those institutions.
1.5.8 Legal Framework Development
To ensure the success of the proposed EE programs, an appropriate legal framework should be developed. Up to now, there has been no regulation related to the management of energy efficiency matters in the Cook Islands. Any legislation should take into consideration the context of the country and the different barriers to EE program implementation. This legislation should cover the following elements:
Establish the appropriate legislation to enforce technical specifications for new buildings and implement thermal insulation, heat gain (shading), maximum lighting power density, inverter and/or high efficiency AC and so forth standards. Develop an EE fund which will provide subsidies for EE projects in all sectors. Organize professional energy efficiency accreditation and define terms of reference for energy auditing. Define the conditions for energy labelling and MEPS implementation of energy-efficient appliances and products, including the energy consumption levels of prohibited appliances. Define the pre-consultancy conditions and processes for large energy consumption projects. Define certification conditions for manufacturers and installers regarding SWH systems. Define the list of energy-efficient appliances exempt from the VAT and customs fees. Install SWHs on a mandatory basis in hospitals and government buildings
Development of this legal framework and related technical specifications will require an overall budget of about USD 200,000 where about USD 50,000 will be used for the organization of seminars and marketing campaigns.
1.5.9 Nomination of Energy Managers in Government Buildings
It is recommended to designate energy managers in government buildings to closely track energy consumption levels in government facilities and improve their energy efficiency. These officers will
Econoler International 19 Ref.: 5505 Asian Development Bank TA 6485-REG: Promoting Energy Efficiency in the Pacific - Contract No. COSO/90-492
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These reports will provide the data needed to analyze and identify all energy consumption anomalies. This information will also contribute to creating an energy consumption database for the government sector. The database will help define the energy savings potential, establish a benchmarking tool to compare energy consumption between the country as a whole and a specific region and define objectives to be targeted for building EE improvement.
This action will require an investment in energy training estimated at USD 0.1 million calculated on the basis of training sessions for each semester over a three-year period. The expected savings are estimated at an average of 2% of the energy consumption level of the sector based on similar implemented projects in other countries. The estimated savings are mainly linked to the EE benefits of equipment operation optimization and improved maintenance practices. For current government buildings in the Cook Islands, additional savings could reach 39 MWh/year, resulting in emission reductions of 25 TCO2/year.
1.5.10 Development of an Energy Efficiency Fund
An energy efficiency fund would be a useful support mechanism for EE project implementation. Such a fund would be dedicated to energy efficiency project financing in all sectors. The fund could provide project financing up to 75% of total project costs, up to a maximum of USD 100,000. No collateral would be requested for the credit allocated to these projects if the latter are carried out under supervision of the energy unit.
A financial guarantee fund for energy efficiency projects would be an alternative solution to help promote EE investments in the sector and encourage commercial financial institutions to participate in market development. Collateral for loans requested for energy efficiency projects would be guaranteed by this fund which will not burden clients’ credit levels and will help develop energy performance contracting and ESCOs. Performance contracting could then be offered by service providers, not only for complete energy systems, but for specific efficient technologies (solar water heaters, efficient motors, efficient ACs, etc.). Local banks can manage the fund and provide the loan and credit guarantees required for the implementation of EE projects.
Under this component, the energy efficiency projects initiated could benefit from an around 10% subsidy program to encourage EE project implementation. The subsidy will help in prioritizing energy efficiency projects and increase the EE projects’ financial profitability. The level of subsidy could be set based on the country market barriers and market maturity. If the subsidy will be at the same level of the market credit interest rate, this will effectively give a zero interest rate for applicable EE investments.
The funds needed for an energy efficiency fund could be generated through taxes applied to high energy-consuming or polluting equipment like electrical water heaters, low-performance air conditioning units, incandescent lamps and vehicles used in the transportation sector.
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1.5.11 Public Sector Procurement
The adoption of regulations that incorporate EE considerations for all type of energy consuming equipment into the public sector procurement process can provide significant energy savings. Furthermore, it will send a clear signal to the community that the EE policy is taken seriously by the government. Additional benefits include promoting government leadership in energy efficiency and influencing local importers and retailers to opt for energy-efficient products and practices. An in- house feasibility study may detail what equipment is at stake, suggest adjustments for the procurement procedure and propose a strategy to disseminate information and training to public organizations to apply the revised procedure including EE considerations.
Table 10: Public Procurement EE Adjustment Organization
PUBLIC PROCUREMENT
Activity Institution in Charge Profile of Activity International Support
Public sector Energy Department Introduce EE TA to: procurement Key partners: regulations in Assist in program design All public sector procurement and monitoring stakeholders procedures Introduce control mechanisms
1.5.12 Banning Incandescent Lamps in the Cook Islands
The Cook Islands Minister of Energy has expressed his willingness in principle to adopt a policy banning incandescent lamps in the Cook Islands. The policy was considered with a view to complementing the CFL program that has been recently implemented. The policy would stipulate that incandescent lamps would no longer be available in the Cook Islands market for replacement when the CFLs introduced under the program reached the end of their life. Recent updates on similar incandescent lamp banning policy projects in Australia (being implemented) and New Zealand (proposed by previous government but dropped with the change of government in late 2008) show that further research is necessary before and incandescent lamp ban should be implemented in the Cook Islands. A least-cost option would consist in keeping track of any development to that effect in New Zealand and Australia introducing MEPS for lighting equipment, and launching an awareness campaign on efficient lighting technologies alongside any other EE initiative implemented. These initiatives will prepare the market for more stringent incandescent lamp banning decisions based on past experience and proven success in key overseas markets, in particular in New Zealand as New Zealand is the main trading partner and source of lighting products in the Cook Islands.
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2 CFL PROJECT IMPLEMENTATION AND IMPACT EVALUATION
This project in the Cook Islands involved the replacement of incandescent light bulbs with more energy-efficient CFLs for residential power customers. All residential customers across the country received three replacement CFLs free of charge. The project’s implementation was complemented by a media campaign involving advertising in print, TV and radio. The objective of the media campaign was to achieve public awareness on the need for energy efficiency, its environmental benefits, the promotion of CFLs as replacements for incandescent lamps, and clear product identification for the project
2.1 KEY PROGRAM PARAMETERS
2.1.1 Program Rationale
Residential electricity consumers in the Cook Islands are major energy consumers accounting for 23% of the total kWh consumption in the Cook Islands. As all grid electricity in the Cook Islands is generated from diesel engines, all types of electricity efficiency projects will directly result in reduced costs to the consumer and the power authority, reduced fuel imports and reduced GHG emissions.
A significant proportion of household electricity consumption is attributable to lighting. A survey conducted for this program showed average lighting electricity consumption per household of 449 kWh per year. Of that total, 35%, or 153 kWh, was used by incandescent lamps. Incandescent lamps are readily replaceable with CFLs or similar energy-efficient lamps with energy savings of around 75%. In addition, CFL’s last for 6,000 – 15,000 hours which is much longer than incandescent lamps -which are generally rated at only 1,000 hours life.
2.1.2 Program scope
The pilot project provided for the widespread replacement of incandescent lamps with CFLs in the Cook Islands in residential homes. The awareness campaign promoted the ultimate objective of replacing all incandescent lamps not only in the domestic sector but also throughout the wider electricity consumer base.
The overall impacts on energy consumption were: -
A reduction in individual domestic electricity consumption and energy costs. A reduction in electrical energy generated nationally and reduced costs to the power authority. A reduction in Cook Islands diesel fuel imports and reduced national foreign exchange requirements for fuel purchase. A reduction in CO2 emissions from diesel generators.
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2.1.3 Technical specifications
It was requested that all CFLs would comply with the ELI (Electric Lighting Initiative) standard and would be rated to operate within a voltage range of 240VAC+/- 6% and a frequency range of 48.5~51.5 HZ. A minimum rated lifetime of 6,000 hours were specified but 10 000 hours was indicated as the preferred CFL minimum lifetime.
2.1.4 Budget and procurement
Tenders: Tender documents were drawn up requiring bidders to meet exact criteria regarding technical standards, delivery time and method, warranty, lifetime and other commercial requirements. Separate documents were used for the outer islands and for Rarotonga tenders.
The project was split into two sections – outer islands and Rarotonga – and separate bidding documents were drafted for both sections.
Separate documentation was prepared for the two tenders on the following basis: -
i) Lamps for the outer islands would be delivered CIF to the relevant islands and be a direct 100% purchase. ii) Lamps for Rarotonga would be made available for resale on a subsidized basis with a fixed retail price.
The rationale was to foster more competitive bidding as bidders could put in pricing for one or both tenders.
All three bidder’s offers were found to have complied sufficiently with the technical specifications requested. Pricing was analyzed between the various bidders, and was normalized to ensure freight and other components were accurately compared, the best price obtained was 3.13 USD for a 12 W CFL and 3.31 USD for the 20 W CFL, both for a 10,000 hours lifetime lamp.
2.1.5 Distribution mechanisms
When landed in Rarotonga, all CFLs purchased for the program were presented to TAU (Te Uponga Uira - the Rarotonga electricity utility) for a check on compliance with tender specifications and for promotional campaign purposes (photographing and filming).
Outer islands: The respective power utility of each outer island was responsible for the household CFL for incandescent exchange program. In each island, except Aitutaki, the power utilities decided to hand-deliver the CFLs to each household install the CFLs and retrieve the used incandescent lamps. A schedule of quantities had previously been prepared based on surveys conducted with each power utility in the outer islands. A total of 6,000 CFLs were shipped to the outer islands.
Rarotonga: A total of 12,000 lamps were counted and distributed to four retail outlets in Rarotonga: Foodland Supermarket, CITC Supermarket, CITC Building Centre and the Oasis Energy Centre.
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Pre-prepared vouchers were distributed to all Rarotonga households in parallel with the second phase of the advertising campaign.
The distribution was determined as follows:
A list of all domestic-tariff power consumers in Rarotonga was obtained under a non-disclosure agreement with TAU. The list was edited to remove non-residential consumers, leaving a list of all private households in Rarotonga.
Using TAU customer records, a total of 4,115 households were identified on Rarotonga. Vouchers were distributed by TAU to each unique power connection number and a total of 3,885 vouchers were delivered in this way. The remaining consumers were deemed not traceable within a reasonable period and their vouchers were returned to TAU. Each household was entitled to receive three CFLs with the voucher provided.
Consumers received their vouchers by a number of methods.
Consumers who presented themselves at the TAU counter to settle a power account were given their voucher and their corresponding Connection Number was checked against a master list. Meter readers engaged in their rounds during the first two weeks of February 2010 were issued vouchers, also checked against the master list, to be delivered with the power accounts to the relevant consumers. Vouchers not delivered through options 1) or 2) were sorted out using the most recent address available and mailed directly to consumers. Consumers who could not be reached using any of the previous methods were traced by phone or word-of-mouth. Those working for government departments had their vouchers delivered directly to their place of work.
To ensure complete lamp distribution in Rarotonga, a subsequent advertising program was launched. It allowed those consumers who had already received three CFLs and who needed more to bring in old incandescent lamps to TAU offices and exchange them for CFLs. Thanks to this last initiative, the full 12,000 CFLs were distributed to homeowners.
Marketing and awareness: A marketing campaign was prepared with a multimedia approach. Two campaign aspects were covered – awareness on energy efficiency and specific details of the CFL replacement project.
Bilingual TV and radio advertisements were also prepared. Bilingual print advertisements were designed for local newspapers.
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2.1.6 Disposal and Recycling
In addition, the participating retailers imported approved CFL disposal containers which were distributed to each retail outlet in Rarotonga and to each outer island. The retailer committed, as part of the CFL supply agreement, to provide a self-funded recycling channel including exporting used CFLs to a recycling facility in New Zealand (NZ). Used CFLs are consolidated in the approved packaging and shipped to NZ to be recycled.
2.2 IMPACT EVALUATION
Rarotonga
An analysis of the TAU billing record for the three months following completion of the CFL distribution (Q2 2010) was chosen as the minimum evaluation period to level out short-term demand fluctuations. This was compared with the same period in 2009, prior to the distribution of the CFLs.
A total of 3,002 consumers were identified as using electricity during both periods, and they also appeared on the master list as being CFL recipients. The monthly demand of these consumers fell by an average of 14.5 kWh/month compared to the same period in 2009.
Further analysis showed that the power consumers in the low-consumption bracket made the greatest savings. Consumers in the 1-200 kWh/month bracket averaged a reduction of 30 kWh/month.
While many large consumers were seen to have actually increased their consumption, the net reduction for all domestic households in the group studied was 43,505 kWh/month. This translates to a projected annual saving of 522,060 kWh for the 3,002 consumers surveyed. Extrapolated to the 4,000 Rarotonga households that received CFLs, a saving of 695,616 kWh is thus shown to have been achieved with a reduction in diesel consumption of 173,900 liters - representing an emission reduction of 452 TCO2 per year.
Outer Islands
A number of obstacles prevented the gathering of the necessary data from the outer islands and negated the precise assessment of energy savings. The lack of base line and historical data and records for energy use and demand after the CFL distribution prevented confirming the estimated savings with the desired assurance levels. However, feedback gathered from the power system operators after the distribution of CFLs in some outer islands, confirms a reduction in energy consumption and demand. The island of Mitiaro reported a drop in peak load of 6 kW for the island. A total of 380 CFLs were installed in Mitiaro which is in close agreement with the load reduction reported when based on standard lighting use diversity factors. Assuming a monthly saving of 200 liters per month as reported by the operator, this translates into an annual saving of 2,400 liters of diesel per year, or 6.24 TCO2.
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The situation in Mitiaro with regards to engine efficiency and variable fuel consumption is representative of the majority of the outer islands. Extrapolating the Mitiaro island results, the estimated savings for the 6,000 CFLs installed across the outer islands would result in a saving of approximately 38,000 liters of diesel per year, or 99 TCO2 per year. The savings seem lower compared to Rarotonga, this is probably due to a lower number of CFLs per household and the lower residential lighting operating hours per day in the outer islands.
A closer analysis of the situation in the outer islands will be possible once a longer baseline for fuel consumption and energy use is available. There is a non-linear relationship between generator loading and specific fuel consumption, so if diesel generators are operated for much of their time at very low load levels then diesel savings will be higher than for more appropriately loaded diesel generators such as those in Rarotonga.
2.3 LESSONS LEARNED
The very competitive CFL pricing achieved through the bulk procurement tender process allowed for the original budget to provide a 100% subsidy on the CFLs provided for both Rarotonga and the outer islands. This allowed all CFL lamps to be distributed free of charge, which made their distribution very much simpler, if not almost universal. There was essentially no resistance to the concept and to participation in the program.
CFLs quality is an important issue, with some householders having had a past bad experience with cheap low quality CFLs leading to short and/or inconsistent life. The CFLs used in the Cook Islands program exceeded ELI standards (with 10,000 hours lamps supplied versus the 6,000 hour ELI minimum specification) which helped to gain back household trust toward CFLs and make available on the market affordable good quality CFLs that can also withstand the 240V +/- 6% voltage variation found in the Cook Islands without affecting their lifetime. 180 to 280V CFLs are now also available, and these are particularly suitable for outer island installations where long low voltage distribution system networks can lead to very low voltage at time of peak demand.
The participating retailer imported approved CFL disposal containers which were distributed to each retail outlet and outer island. The retailer committed, as part of the CFL supply agreement, to providing a self-funded recycling channel and to export the no-longer-working CFLs to an approved recycling facility in New Zealand (NZ). The recycling incremental cost of CFL disposal was included in the CFL selling price.
In a traditional CFL market transformation program, a mass distribution of high quality CFLs would be an integral component of a wider program that would include policy and implementation arrangements around CFL recycling and incandescent lamp importation restrictions or special taxes, along with some technical requirements on CFLs such as a minimum power factor. There would also possibly need to be support for lighting applications where existing incandescent lamp simple wave-chopper dimmers would need to be changed to accommodate dimmable CFLs or other new dimmable lamps would have to be supported that could use existing dimmers. Such incandescent lamp phase out policy and implementation aspects will be considered in the upcoming PEEP Phase 2 project’s activity on energy efficient lighting.
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In the Cook Islands CFL pilot program, both the public and private sectors showed considerable willingness to support wider EE promotion and specific CFL project aspects. All media organizations were willing to give much more exposure than had originally been contracted, for the best interests of the community.
TAU, which funded all the advertising, promotion, printing and local logistics, committed more funds than originally promised and met a number of additional incidental costs associated with the program. This allowed the ADB contribution to be spent 100% on the supply of CFL lamps, without any attached overhead costs.
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3 FUTURE EE PROGRAM DESIGN AND IMPLEMENTATION
This section provides a summary of the estimated savings potential for possible Energy Conservation Measures (ECMs) that were identified in the Cook Islands.
At the first stage, a baseline was established from the available energy consumption for each sector. The evaluation was built up using the results obtained from the pilot projects implemented in the five PEEP countries and adapted to the local context for each proposed ECM.
A compilation was then made using country data and information gathered during the various missions undertaken by the PEEP consultancy team. Adjustments were based on the following factors:
Data availability and level of existing detail pertaining to the energy balance and energy consumption per sector Information availability for the Cook Islands from previous EE experience Surveys performed in the residential sector Data gathered from supplier on technologies used, and their availability in the local Cook Islands market Meeting with equipment and service providers Discussions with stakeholders.
The data gathered from different sectors has enabled preliminary energy saving estimates to be made, noting that no detailed data on energy consumption and end-uses was available for the Cook Islands. The proposals have therefore been limited by the level of information available and the identified ECMs within the country context.
The five (5) major ECMs proposed and presented in Table 11 show potential energy savings equal to 14.4 % of total energy consumption (reference 2009). Annual savings are estimated at 3,800 MWh, representing savings of USD 1.4 million in diesel expenditure and emission reductions of
2,450 tons of CO2 per year.
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Table 11: Proposed ECMs for the Cook Islands, Savings and Investment
Baseline Savings Savings Peak Annual 2011- Savings Estimated Simple Inv./Saved Energy Potential Potential Load Emission 2020 CO Potential Investment PBP 2 kWh Use (Sector) (Country) Reduction Reduction reduction 3 MWh % % kW MWh USD M USD M Years TCO2 TCO2 USD/kWh Energy Efficiency in Selected 1,743 16.2% 1.1% 53 282 0.12 0.34 2.9 184 1,470 0.150 Government Buildings Implementation of LED for Street 199 69.3% 0.5% 32 138 0.08 0.30 3.7 90 718 0.328 Lighting CFL Program for 5,967 15.4% 3.5% 525 919 0.13 0.05 0.2 597 5,373 0.006 Residential Sector Implementation of EE projects in 6,622 21.6% 5.5% 200 1,430 0.58 2.33 4.0 930 7,438 0.204 Hotel Sector Energy Labelling 26,079 3.8 3.8% 91 995 0.51 0.40 0.8 647 5,100 0.051 and MEPS Total 14.4% 900 3,800 1.4 3.4 2.4 2,450 20,100
The investment per saved kWh is obtained by dividing the total investment by the saved kWh during the 2011-2020 period considered as average life cycle for installed equipment for the proposed ECMs.
The investment per kWh helps prioritize the ECM with the expected best return on investment. As shown in the above Table, the CFL program for the residential sector is ranked best at only USD 0.006/kWh followed by energy labeling and MEPS and then the implementation of EE in government buildings. Note that the investment cost for MEPS includes only the cost to government, and the cost to the public associated with the purchase of more efficient appliances has not been defined (see Section 3.6).
3 Including Network Losses
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The potential peak load reduction is estimated at 900 KW, which represents about 24% of the average (2009) registered maximum peak load of 3,820 kW
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3.1 GENERAL ASSUMPTION AAND PARAMETERS
The tables below show the general parameters used for calculations and estimates of ECM potentials. These parameters have been developed based on the TAU enerrggy billing database for 2009.
Figure 2: Cook Islands Electricity Consumption per Secctor
Energy Consumption per sector Other 2%
Water Residential Hotels pumping 23% 25% 0.02% Religious 1% Street Lighting 10%
Industry Commercial 26% 6% Government 7%
Table 12: Energy Balance for 2009
Cook Islands Energy Balance Consumption % Numberr Hotels 6,622,200 25% 68 Commercial 6,702,500 26% 482 Government 1,952,700 7% 84 Industry 1,575,600 6% 74 Street Lighting 2,575,400 10% 701 Religious 175,000 1% 81 Water Pumping 6,200 0.02% 11 Residential 5,966,500 23% 3,509 Other 503,000 2% 104 Total 26,079,100 100% 5,114
Econoler International 31 Ref.: 55 Asian Development Bank TA 6485-REG: Promoting Energy Efficiency in the Pacific - Contract No. COSO/90-492
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Table 13: General Parameters Used for the Cook Islands
Parameter Unit Value Conversion NZD-->USD 0.72 Diesel Consumption per kWh l/kWh 0.25 Incandescent Lamp Operating Hours Hours/day 4.0 TAU Diesel Cost NZD/l 0.76
TAU CO2 Emissions kCO2/l 2.6
CO2 Emissions kg/kWh 0.65 Street Lighting Hours/Year Hours/year 3,650 Average Domestic Electricity Tariff NZD/kWh 0.71 Average Street Lighting Electricity NZD/kWh 0.73 Tariff Average Hotel Electricity Tariff NZD/kWh 0.68 Average Building Electricity Tariff NZD/kWh 0.68 Average Commercial Electricity Tariff NZD/kWh 0.68 Network Losses Losses % 20% Cost/CFL NZD/Unit 5
3.2 ENERGY EFFICIENCY IN GOVERNMENT BUILDINGS
The list of all government buildings obtained from the TAU billing database shows 84 customers for the first quarter of 2009. The list has been divided into the following four groups based on monthly energy consumption, with hospitals as a separate group:
Hospitals Group 1: Buildings with a monthly energy consumption above 3,000 kWh Group 2: Buildings with a monthly energy consumption between 1,000 and 3,000 kWh Group 3: Buildings with a monthly energy consumption between 300 and 1,000 kWh Group 4: Buildings with a monthly energy consumption between 100 and 300 kWh. The groups have been selected based on the energy consumption which reflects the activities and notably the type of equipment and penetration level in these buildings.
For each group, walk-through energy audits were undertaken to assess the type of equipment used, determine operation parameters and estimate the energy balance (energy consumption per end-user). After the preparation of the energy balance, energy savings were estimated based on potential energy conservation measures to be implemented, considering a maximum payback period of 5 years.
From the sample taken for each group, extrapolations have been made within the group to estimate the energy saving potential.
Econoler International 32 Ref.: 55 Asian Development Bank TA 6485-REG: Promoting Energy Efficiency in the Pacific - Contract No. COSO/90-492
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As energy demands in hospitals are generally very different from other buildings due to hospitals’ distinct energy demands (esp. 24/7 full fresh air AC required for operating theaters at central trauma/accident and emergency equipped hospitals), specific equipment and special operating conditions, estimates were made in a conservative way since no detailed investigation was able to be undertaken due to limited resources.
Energy saving potentials have been calculated based on the average of each group and considering the most common end-user, namely lighting and cooling, targeting simple ECMs as follows:
HVAC optimization: for centralized systems, optimization of operating hours and parameters. Efficient lighting fixtures and lamps: CFLs, electronic ballasts and T5 fluorescent tubes Air compressor O&M: operation optimization and leak reduction Variable speed drives: for motors and central HVAC plant Fan system improvements: efficient fans and motors LCD monitors for computers and entertainment systems AC replacement: replacement with efficient AC (esp. high efficiency inverter units) based on operating hours and existing equipment condition O&M and energy management: optimization of operation parameters (temperature, operating hours, automatic switches and clocks, preventive maintenance, etc.).
Nevertheless, other ECMs could be identified when in-depth energy audits are performed. The featured potentials should be considered only as preliminary estimates used to assess whether the sector represents a significant potential for energy efficiency.
Only 62 of the largest energy use buildings were considered, while the remaining buildings have a monthly consumption less than 100 kWh, which is considered too low to be included in an initial EE project. However, all buildings would be included in any EE awareness campaign launched within a comprehensive EE program.
Selected buildings from each group were visited in order to establish their preliminary energy balance and the savings potential used as a reference for extrapolation to the entire group. The results show a promising annual savings potential of 235,300 kWh (not including TAU losses) with an estimated investment of USD 0.338 million giving an average simple payback period of 2.9 years. The implementation of EE programs in government buildings will generate emission reductions of about 184 TCO2 annually. Details for each group are presented in Appendix A.1 showing estimation parameters and savings per end-user.
Econoler International 33 Ref.: 55 Asian Development Bank TA 6485-REG: Promoting Energy Efficiency in the Pacific - Contract No. COSO/90-492
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Table 14: Energy Savings Potential for Government Buildings
Consumption Current Situation Savings Category
NZD kWh/Month Number kWh NZD kWh %
Hospitals 3 540,900 367,800 72,500 13.4% 49,300 Group 1 over 3,000 10 592,100 402,600 94,700 16.0% 64,400 1,000 Table 15: Investment and Annual Emission Reductions for EE in Government Buildings % 13.5 Average Savings Potential kWh 235,300 % 16.2 kWh 282,360 Annual Potential Savings4 NZD 160,000 USD 115,200 USD 337,800 Total Estimated Investment NZD 469,200 Simple Payback Period Years 2.9 Annual Emission Reduction TCO2 184 Diesel Savings Liters 70,600 The proposed ECMs focus on all major energy using systems found in each group. Table 16 below presents the main actions that could be implemented to reduce energy consumption. Table 16: Major Actions to Improve Energy Efficiency Energy Conservation Measures for Selected Buildings Average Savings Potential HVAC optimization 5%-15% Air compressor O&M 10%-20% Variable-speed drives 5%-15% Efficient lighting fixtures and lamps 10%-20% Fan system improvements 5%-10% LCD monitors 10%-20% AC replacement 15%-20% O&M and energy management 5% The estimates are based on energy consumption data and some selected samples for potential energy savings in each category. However, an in-depth analysis needs to be conducted with larger 4 Including TAU losses Econoler International 34 Ref.: 55 Asian Development Bank TA 6485-REG: Promoting Energy Efficiency in the Pacific - Contract No. COSO/90-492 Final Report sample sizes taking into account the actual load per end-use with the monthly energy bill distribution to more accurately establish real EE potentials. The cumulative savings potential for the government building sector for the 2011-2020 period is estimated at 2.26 GWh, resulting in CO2 emission reductions of about 1,470 TCO2. Program implementation is expected to be completed within a maximum of 5 years with an annual progress completion of 20% during the implementation period. Table 17: Cumulative Savings for the 2011-2020 Period 2,258,880 kWh Savings Potential 1,280,000 NZD 921,600 USD 337,800 USD Total Estimated Investment 469,200 NZD Emission Reduction Period 1,470 TCO2 Investment/Saved kWh 0.150 USD/kWh 3.3 STREET LIGHTING The street lighting network in the Cook Islands is composed of 700 lamps as per the data provided from TAU and presented in Table 18 below. The street lighting network consists of different types of lamps (High-Pressure Sodium (HPS) and Mercury Vapor (MV)) and with an average power of 70 W per fitting. The total street lighting installed power is estimated at 55 kW with an annual energy consumption of about 199.3 MWh. Most street lighting network lamps are inefficient, old, decaying, costly to maintain and some need to be replaced as they are no longer functioning. Table 18: Street Lighting Network in the Cook Islands Cook Islands Number of Current Total Lamps Power Power W kW 700 70 55 The replacement of Mercury Vapor lamps with HPS is the obvious first choice to increase street lighting efficiency. However, many parameters need to be taken into consideration in technology selection, mainly regarding the type of lighting required, the condition of the existing fixtures and the distribution circuit of the street lighting network. Unfortunately, most existing fixtures present one or more of the following problems: Old fixtures in bad condition Rusted due to saline weather Lack of internal reflector Opaque lenses Lack of metering points Very low lighting level. Econoler International 35 Ref.: 55 Asian Development Bank TA 6485-REG: Promoting Energy Efficiency in the Pacific - Contract No. COSO/90-492 Final Report LED technology seems to be the best solution to address most of these problems. It can increase the lighting level while reducing energy costs since the existing fixtures already have a low lighting level. The rationale behind LED usage in street lighting is as follows: - LED lamps give average energy savings of 20% to 50% over HPS and mercury vapor lamps respectively. LED construction makes solid-state street lamps safe for landfills. They are mercury-free, without harm to the environment. The longevity of LED lamps is 60,000 or more hours and represents at least twice the life of HPS lamps. The longevity of LED lamps pushes back replacement cycles and, consequently, reduces the burden on the waste stream. LED street lights reduce pollution and carbon footprint via energy savings that lower carbon emissions not only from reduced power plant fuel consumption but also from reduced fuel usage by maintenance dispatched for bulb replacement. The annual maintenance cost for LED represents almost a fifth of the maintenance costs for regular mercury or HPS lamps. Even though the acquisition cost of LED fixtures is high comparing to conventional HPS fixtures (about 5 times more expensive) the project is still attractive. With operation and maintenance cost savings included, the investment of LED fixtures is paid back within less than 4 years, with the LED fixtures having an estimated life time of 15 or more years. The new LED lamps light distribution is improved, with greatly improved color rendering and a warm-white color temperature The proposed lamp replacement strategy is presented in Table 19: Table 19: Equivalent LED for HPS Lamps EQUIVALENT HPS LED WATTAGE 80 W 30 W 100 W 50 W 150 W 60 W 200 W 80 W 250 W 100 W Introducing LED lamps into the Cook Islands street lighting network will help reduce energy consumption by 58% and maintenance costs by 62%. Table 20: Energy and Maintenance Costs for the Existing Street Lighting Network Old System Number Old Fixture Total Total Total Total O&M of Energy Power Maintenance Energy Lamps Consumption Cost Cost kWh/Year kW NZD NZD NZD/Year 700 199,300 55 35,000 145,500 180,500 Econoler International 36 Ref.: 55 Asian Development Bank TA 6485-REG: Promoting Energy Efficiency in the Pacific - Contract No. COSO/90-492 Final Report The total required investment is estimated at USD 0.3 million for annual savings of USD 0.08 million and representing 3.7 years as a simple payback period. The implementation of the LED street lighting program will generate annual GGH emission reductions of 90 TCO2. Table 21: Investment and Emission Reductions for LED Implementation in the Cook Islands TOTAL INVESTMENT USD M 0.30 TOTAL SAVINGS USD M 0.08 TOTAL SAVINGS (kWh) kWh 115,000 TOTAL Energy Savings % 58 TOTAL Cost Savings (%) % 62 % 69 TAU Savings 5 kWh 138,000 TAU Savings (l) Liters 34,500 TAU Savings (Fuel Cost) USD M 0.02 Simple PBP (Years) Years 3.7 Annual Emission TCO 90 Reductions 2 Existing Street Lighting kW 55 Load (kW) Street Lighting Load with kW 32 LED fixtures (kW) The cumulative savings relative to the LED street lighting program for the 2011-2020 period is estimated at 920 MWh, resulting in CO2 emission reductions of about 718 TCO2. Program implementation is expected to be completed within a maximum of 5 years with an annual progress completion of 20% during the implementation period. Table 22: Cumulative Savings for the 2011-2020 Period 920,000 kWh Savings Potential 644,500 USD Total Estimated Investment 301,400 USD Emission Reductions 718 TCO2 Investment/kWh 0.328 USD/kWh 3.4 ENERGY EFFICIENCY IN THE HOTEL SECTOR The hotel sector in the Cook Islands is very significant with 68 hotels and a total sector consumption of 6.6 GWh, representing 25% of Cook Islands electricity consumption. Based on results from the pilot project carried out in Vanuatu and the walk-through energy audits performed in some hotels of Rarotonga, the Vanuatu hotel sector saving potential (estimated at 18% including all energy types) was used as a reference potential for Cook Islands as well. 5 Including Network Losses. Econoler International 37 Ref.: 55 Asian Development Bank TA 6485-REG: Promoting Energy Efficiency in the Pacific - Contract No. COSO/90-492 Final Report As shown in the Table below, the total utility cost saving potential for the Vanuatu pilot project stands at 18%, where electrical savings represent about 16% (CFLs, room switches, timers) and water savings around 26% of water utility bills (low shower head flow, reduced hot water, optimized garden watering systems, reduced water pumping costs). The Vanuatu pilot project also achieved LPG reductions of 21% with the installation of Solar Water Heaters (SWHs). Table 23: Savings Potential in the Hotel Sector for the Vanuatu Pilot Project Total Savings Energy (%) Electrical Energy Savings 16 Water Energy Savings 26 LPG Energy Savings 21 The main energy conservation measures targeted in the hotel sector are as follows: Efficient lighting, mainly CFLs, for interior and exterior lighting SWHs Reduced flow for shower heads, sinks and toilet flush Key tag switches for room electrical system Energy efficient air conditioning units Cooling setting point adjustments Pool pump operation optimization High-efficiency pumps and motors Installation of timers for equipment operation optimization Air curtain installation. With a maximum simple payback period of 4 years, and potential savings of 18%, the total investment for the hotel sector in the Cook Islands is estimated at USD 2.3 million. EE program implementation will generate annual electricity savings of 1191 MWh and annual GHG emission reductions of 930 TCO2. Table 24: Investment and Emission Reductions for the Hotel Sector in the Cook Islands Hotel Consumption kWh 6,622,200 Sector Estimated Savings % 18 Energy Savings kWh 1,192,000 Hotel Cost Savings USD 583,601 % 21.6 kWh 1,430,395 TAU Savings6 Liters 357,599 USD 195,678 Annual Emission Reduction TCO2 930 Investment USD M 2.3 Targeted Payback Period Years 4 6 Including Network Losses. Econoler International 38 Ref.: 55 Asian Development Bank TA 6485-REG: Promoting Energy Efficiency in the Pacific - Contract No. COSO/90-492 Final Report The cumulative savings relative to the EE program in the hotel sector for the 2011-2020 period are estimated at 9.54 GWh, resulting in CO2 emission reductions of about 7,438 TCO2. Program implementation is expected to be completed within a maximum of 5 years with an annual progress completion of 20% during the implementation period. Table 25: Cumulative Hotel Sector Savings for the 2011-2020 Period kWh 11,443,200 Savings Potential USD 4,668,800 Total Estimated Investment USD 2,334,400 Emission Reduction Period TCO2 7,438 Investment/kWh USD/kWh 0.204 3.5 ENERGY EFFICIENCY IN THE RESIDENTIAL SECTOR – CFLS As statistical data was lacking on lighting installed loads and usage in Cook Islands households, a random survey of 50 households in Rarotonga was undertaken to assess lighting usage. The results were extrapolated to give a preliminary estimate for the Cook Islands as a whole. Table 26: Lighting Distribution per Type of Lighting Type of Lamp Incandescent CFL Fluorescent Other Total/Day/House kWh 0.42 0.19 0.40 0.22 Installed/House W 180 63 74 17 Lamps/House Units 4.0 4.3 2.9 0.3 Lighting Weight % 35% 37% 25% 3% The percentage of incandescent lamps in Rarotonga is 35% compared with 37% and 25% for the much more energy efficiency CFL lamps and linear fluorescent tubes, which indicates a good initial awareness level of energy efficiency concerns. The pre-CFL project total installed power of incandescent lamps in the Cook Islands was estimated at 740 kW. According to the survey, the average 4 incandescent lamps installed per household (total number of 16,600 units across the Cook Islands) were used approximately 4 hours per day. For a complete change of incandescent lamps to CFL lamps with their energy savings potential of 75% (the existing lamps were on average replaced by 13 W CFLs), annual savings will reach 919 MWh with a peak load reduction of about 525 kW. Average annual savings per household are estimated at 186 kWh equal to NZD 132. Considering an average cost of NZD 5 per CFL, the payback period is just over 2 months. Since the Cook Islands is a small country, the pilot project targeted the purchase and implementation of 18,000 CFLs to completely replace all incandescent lamps across the whole country. About 12,000 units were distributed in Rarotonga and the rest distributed in the outer islands. Econoler International 39 Ref.: 55 Asian Development Bank TA 6485-REG: Promoting Energy Efficiency in the Pacific - Contract No. COSO/90-492 Final Report The post-implementation analysis in Rarotonga showed a decrease of 14.5% in energy consumption in the residential sector, comparing the second quarter energy consumption figures of 2009 and 2010. The results showed a positive project impact very close to the estimated energy savings of 15.4% for the sector. Table 27: Investment and Emission Reductions for CFLs in the Residential Sector Incandescent Total/Day/House kWh 0.420 Installed/House W 180 Lamps/House Units 4.0 Percent of Lamps per house % 35% Total kWh/Year/House kWh 153 Coincidence Factor % 100% Number of Houses Units 4,113 Peak Load Reduction kW 525 kWh 765,800 Savings % 13 kWh 919,000 Savings7 % 15 Country Diesel Fuel Reduction Liters 229,800 Fuel Saving Value USD 125,700 Annual GHG Emission TCO2 597 Reductions Savings/House W 128 kWh/Year 186 Payback Period Years 0.2 The cumulative savings relative to the implementation of the CFL program in the residential sector for the 2011-2020 period is estimated at 8.3 GWh, resulting in CO2 emission reductions of about 5,373 TCO2. The program was fully implemented in less than one year. Table 28: Cumulative Savings for the 2011-2020 Period kWh 8,271,000 Energy and Cost Savings USD 1,131,300 Total Estimated Investment USD 52,300 Emission Reductions in Period TCO2 5,373 Investment/kWh USD/kWh 0.006 3.6 ENERGY LABELING AND MEPS Unfortunately, no detailed information on residential and commercial appliances based on actual energy use characteristics and actual numbers by model or capacity was available from the Cook Islands statistics department, which constituted a major barrier to specific energy efficiency potentials assessments and the development of a specific appliance EE program design. No 7 Including Network Losses Econoler International 40 Ref.: 55 Asian Development Bank TA 6485-REG: Promoting Energy Efficiency in the Pacific - Contract No. COSO/90-492 Final Report government entity held accurate and up-to-date data on the country’s energy balance and energy consumption per end user or per sector. However, the PEEP consultants were able to ascertain some basic indicative data from the 2006 Cook Islands residential census, available through the department of statistics, and from this the PEEP consultants were able to develop indicative energy savings potentials estimates for energy labeling and MEPS application in the residential sector for refrigerators, freezers and AC. Available statistics presented in Table 29 shows the penetration rate for selected appliances in the 4,237 occupied dwellings of the Cook Islands in 2006. Table 29: Cook Islands 2006 Census Data Residential Appliances – Penetration Rate Refrigerators 56% Freezers 40% Air Conditioners 11% Clothes Washers 40% Occupied Dwellings 4,237 Potential annual energy savings for refrigerating appliances were estimated based on Australian figures for refrigerators and freezers8 considering the 2005 annual consumption for refrigerator and freezers in Australia as a basis for the current situation in the Cook Islands. The assumption is considered to be a reasonable initial assumption as most of the appliances in the Cook Islands are imported from Australia and New Zealand, and importers often bring in the cheapest available appliances in a particular size and features category, and these lowest price models usually also have the low energy efficiency ranking (i.e. a lower number of Australia-New Zealand energy performance stars). The annual average energy consumption of existing old refrigerators was therefore assumed to be about 640 kWh and 575 kWh/year for freezers. The refrigerators currently available on the Australian and New Zealand markets have an annual energy consumption ranging between 338 kWh and 537 kWh. Assuming that middle efficiency refrigerators with an average annual consumption of 450 kWh/year would replace existing refrigerators, an energy labeling (and back- up potential MEPS program) could generate energy savings of around 190 kWh/year per refrigerator. The freezers (upright and chest types) currently available on the Australian and New Zealand markets have an energy consumption ranging between 177 kWh and 825 kWh per year. Assuming that middle efficiency freezers with an average annual energy consumption of 377 kWh/year would replace average existing freezers, an energy labeling (and back-up potential MEPS program) could generate energy savings generated per freezer of around 198 kWh/year. 8 Costs and Benefits of proposed revisions to the method of test and energy labeling algorithms for household refrigerators and freezers, prepared by Energy Efficient Strategies Pty Ltd for the Australian Greenhouse Office, November 2007. Econoler International 41 Ref.: 55 Asian Development Bank TA 6485-REG: Promoting Energy Efficiency in the Pacific - Contract No. COSO/90-492 Final Report The number of installed ACs in the residential sector is very low with only 466 units as per the 2006 census. The estimated baseline COP of 2.76 is based on the 2005 AC COP situation in Australia. Assuming an average target COP of 3.33 for new AC units (which is the 2011 new MEPS level in Australia for units < 4 kW, noting that the best available units in New Zealand now have COPs greater than 5.0), the annual savings per unit would be 93 kWh. Based on the above, annual emission reductions from energy labeling and MEPS application for refrigerators, freezers and ACs are estimated at 650 TCO2 or 996 MWh, taking into consideration the current TAU kWh/litre of diesel and GHG emission factor and including network losses. Table 30: Investment and Savings for Energy Labelling and MEPS Country Consumption kWh 26,079,100 % 3.2 Estimated Annual Savings kWh 829,430 % 3.8 Potential Energy Savings9 kWh 995,900 Energy Cost Savings USD M 0.5 Annual GHG Emission Reductions TCO2 650 Investment USD M 0.4 The estimated investment includes only the cost to government of establishing a validation and control unit, along with international support for a regional (across the five PEEP PDMCs) energy labeling and MEPS scheme’s development and implementation. The establishment of a new energy performance testing laboratory does not seem necessary, since the Cook Islands appliance market is very small and most equipment is imported from New Zealand and Australia and other countries which already have energy performance labeling and MEPS schemes in place. The main costs to the public associated with the purchase of more efficient equipment and appliances than would be the case without energy labelling and MEPS has not been defined owing to insufficient data being available during Phase 1. It is recommended that detailed studies of the equipment and appliance markets in each PDMC be undertaken during Phase 2 to estimate the likely costs of MEPS and labelling requirements on imported appliances. The only study to date, conducted in Fiji, estimates these costs to be between 10% and 25% of the value of the benefits.10 Total savings over a 10-year period are presented in Table 31. Program implementation is expected to take 5 years. The savings are considered constant throughout the period since there is no available data on the annual penetration and growth rate of refrigerators, freezers and ACs in the residential sector. 9 Including Network Losses 10 The Costs and Benefits of Energy Labelling and Minimum Energy Performance Standards for Refrigerators and Freezers in Fiji, George Wilkenfeld and Associates for the Australian Greenhouse Office, February 2006. Econoler International 42 Ref.: 55 Asian Development Bank TA 6485-REG: Promoting Energy Efficiency in the Pacific - Contract No. COSO/90-492 Final Report Table 31: Projected Savings for the 2011-2020 Period kWh 7,905,000 Potential Savings USD M 4.0 Total Estimated Scheme Establishment and USD M 0.4 Operations Cost Emission Reduction Period TCO2 5,100 Investment/kWh USD/kWh 0.051 3.7 POWER FACTOR CORRECTION TAU does not hold any records about power factor and, consequently, no analysis has been done to assess power factor correction program suitability. Power factor correction program savings potential in the Cook Islands is likely to be modest since there is minimal existing industry, and there are few large energy using commercial clients. As per TAU received feedback, no perceived problems are detected on the network related to any low power factor. 3.8 ENERGY EFFICIENCY IN THE INDUSTRIAL SECTOR Industrial energy consumption accounts for approximately 3% of total energy consumption in the Cook Islands with about 18 clients. No data is available to assess the potential of the industrial sector and its low consumption level ranks it as a low priority for any EE program interventions. 3.9 WATER DISTRIBUTION NETWORK Energy consumption for water pumping activities is less than 1% of the total country consumption and thus offers little potential for EE. Econoler International 43 Ref.: 55 Asian Development Bank TA 6485-REG: Promoting Energy Efficiency in the Pacific - Contract No. COSO/90-492 Final Report 4 OTHER RECOMMENDATIONS Development of an Energy Balance and Energy Matrix: One of the barriers to EE program development in the Cook Islands (as it is generally throughout the Pacific) is the unavailability of information on energy consumption by sector, sub-sector and appliance type. Without an appropriate set of data on energy consumption and demand profiles it was not possible to accurately develop an energy efficiency program or define appropriate targets and objectives. An energy balance is an accounting system that describes the flow of energy through an economy (national, by island, by district, etc) during a given period, usually a calendar year. This combination of information is constructed from the most complete available sources of official energy statistics on imported fossil fuels, electricity production, conversion losses, consumption and energy end-use (e.g. lighting, refrigerating appliances, AC). The main objective of an energy balance is to provide information for the planning of investments in different sectors of the energy system. It should also present indications of where to direct investments in research and development for more efficient energy use. The energy balance consists of a matrix, also called an energy matrix, in which all forms of energy, their conversions, losses and uses in a given period are registered in the same unit of measurement. An energy balance can be presented in various forms, each with its own conventions and purposes. The most common form includes columns, with quantities of energy sources or carriers used, and rows with data on conversions and uses. An energy balance can also be expressed in terms of useful energy, aggregating data regarding the efficiency of final energy use. In order to calculate this efficiency, it is necessary to distinguish two steps in the process of final energy use. The first step occurs when energy is transformed into a final energy carrier (e.g. electricity) and the second step refers to the way in which this energy carrier is exploited to produce goods or provide services. For example, LPG or diesel can be used to produce steam in a boiler with an efficiency of say 60%. The steam produced will then be distributed to other pieces of equipment where its energy will be used. This second step can have a new efficiency related to the way in which the steam system is designed and operated. Often it is possible to increase the efficiency of this phase without major investments. An energy balance in terms of useful energy requires detailed data regarding end-use technologies and how they are utilized. Load Curve analysis: Electricity demand is not uniform throughout the day or for an entire year. Several electricity end-uses are related to the time of day, such as lighting and cooking. The hours of the day during which the highest demand occurs is known as the peak period. During the year, there is also a particular day when electricity demand is at its yearly peak. This yearly peak is typically both climate- and time-related. Some regions face their peak demand during the hottest days, when air conditioning is mostly responsible for the increased electricity demand. In other areas, residential lighting and other evening uses of electricity may be the main drivers of peak demand. Econoler International 44 Ref.: 55 Asian Development Bank TA 6485-REG: Promoting Energy Efficiency in the Pacific - Contract No. COSO/90-492 Final Report Projections for electrical energy (kWh) are typically made on an annual basis but it is also important to project the future load profile (daily or annually) to reflect the daily and seasonal fluctuations in demand. Peak demand is of particular interest to utilities because their capital requirements for building new generation capacity are normally driven by peak demand considerations. One aspect of Demand- Side Management (DSM) involves ways to change the shape of the load curve. Typically, utilities will strive to avoid the concentration of demand during peak hours of the day and will try to spread this demand throughout the day (or night). Data Requirements of Energy End-Use Models: Energy consumption analysis requires a breakdown by sector, activity and end-use. The estimation of end-use breakdowns is important to determine which end-users are most relevant. Once these are known, their magnitude is quantified more accurately to evaluate the opportunities for energy efficiency improvements. The table below illustrates one such possible breakdown. Econoler International 45 Ref.: 55 Asian Development Bank TA 6485-REG: Promoting Energy Efficiency in the Pacific - Contract No. COSO/90-492 Final Report Table 32: Energy End-Use Possible Breakdown Consumer Class End-use Technologies/Measures Incandescent lamps Compact fluorescent lamps Fluorescent tubes (with associated electronic or electromagnetic ballasts) Lighting Fixtures Improved lighting design Day lighting Improved lighting controls (e.g. daylight dimming) Residential Sector Ventilation, fans Cooling Air conditioners Natural ventilation Efficient refrigeration (e.g. cool stores, Refrigeration transport, retail food storage and display cabinets) Solar Water heating LPG Electricity Incandescent lamps Compact fluorescent lamps Low voltage halogen lamps and fixtures Fluorescent + electromagnetic ballasts Lighting Fluorescent + electronic ballasts Reflector fixtures Improved lighting design Day lighting Commercial Occupancy sensors Services Sector Ventilation, fans Air conditioners Cooling Natural ventilation Passive cooling Refrigeration Efficient refrigeration Solar Water heating Heat pump LPG Conventional electric motors Energy efficient electric motors Power Variable Speed Drives + motors Better sizing of motors and tasks Incandescent lamps Industrial Sector Fluorescent + electromagnetic ballasts Fluorescent + electronic ballasts Lighting Mercury vapor, HPS etc lamps Reflective fixtures Improved lighting design and day lighting Estimates of end-use equipment saturation and energy use can be made on the basis of aggregate indicators of major end-use categories, for example, information on appliance sales. Where comprehensive information of this type is not available, one might try to use existing information from other countries with similar socio-economic development characteristics to make estimates of end-use saturation and energy consumption. Econoler International 46 Ref.: 55 Asian Development Bank TA 6485-REG: Promoting Energy Efficiency in the Pacific - Contract No. COSO/90-492 Final Report Alternatively, a more reliable analysis can be performed through a bottom-up approach, which includes extensive questionnaire-based surveys, billing data analysis, energy audits and measurements. End-use projection models are very data intensive. Usually, energy end use models start with a base year for which detailed breakdown of the consumer classes and main end-uses are developed. Econoler International 47 Ref.: 55 Asian Development Bank TA 6485-REG: Promoting Energy Efficiency in the Pacific - Contract No. COSO/90-492 Final Report APPENDIX A.1: COOK ISLANDS - ESTIMATED SAVINGS PER SECTOR IN GOVERNMENT BUILDINGS, REFERENCE TABLES o Hospitals % Unit Energy Consumption 540,852 31% kWh Number of Buildings 3 Buildings Ventilation/Fan/Cooling Consumption 189,300 35% kWh Lighting Consumption 178,500 33% kWh Other Load Consumption 173,100 32% kWh Estimated Investment Average Savings 72,500 13% kWh NZD USD PBP Lighting 26,800 15% kWh 27,900 20,100 Estimated Cooling 28,400 15% kWh 76,900 55,380 2.8 Savings Other 17,300 10% kWh 32,900 23,700 Total 49,300 NZD 137,800 99,180 Group 1 3,000 kW/Month and More % Unit Energy Consumption 592,068 34% kWh Number of Buildings 10 Buildings Ventilation/Fan/Cooling Consumption 245,800 42% kWh Lighting Consumption 109,100 18% kWh Computer Consumption 205,300 35% kWh Other Load Estimated Investment Consumption 31,900 5% kWh Average Savings 94,700 16% kWh NZD USD PBP Lighting 21,800 20% kWh 22,800 16,400 Cooling 49,200 20% kWh 143,500 103,300 Estimated 3.3 Savings Other 23,700 10% kWh 45,100 32,500 64,400 Total NZD 211,400 152,200 Econoler International 48 Ref.: 55 Asian Development Bank TA 6485-REG: Promoting Energy Efficiency in the Pacific - Contract No. COSO/90-492 Final Report Group 2 Between 1,000 and 3,000 kW/Month % Unit Energy Consumption 443,448 25% kWh Number of Buildings 20 Buildings Ventilation/Fan/Cooling Consumption 99,800 23% kWh Lighting Consumption 150,200 34% kWh Computer Consumption 176,700 40% kWh Other Load Consumption 16,800 4% kWh Estimated Investment Average Savings 42,200 10% kWh NZD USD PBP Lighting 22,500 15% kWh 23,500 16,900 Estimated Cooling 10,000 10% kWh 29,200 21,000 2.5 Savings Other 9,700 5% kWh 18,500 13,300 Total 28,700 NZD 71,100 51,200 Group 3 Between 300 and 1,000 kW/Month % Unit Energy Consumption 155,520 9% kWh Number of Buildings 22 Buildings Ventilation/Fan/Cooling Consumption 38,600 25% kWh Lighting Consumption 31,700 20% kWh Computer Consumption 79,200 51% kWh Other Load Estimated Investment Consumption 6,100 4% kWh Average Savings 24,900 16% kWh NZD USD PBP Lighting 6,300 20% kWh 6,500 4,700 Cooling 5,800 15% kWh 16,900 12,200 Estimated 2.8 Savings Other 12,800 15% kWh 24,300 17,500 16,900 Total NZD 47,800 34,400 Group 4 Between 100 and 300 kW/Month % Unit Energy Consumption 11,064 1% kWh Number of Buildings 7 Buildings Ventilation/Fan/Cooling Consumption 1,700 15% kWh Lighting Consumption 5,500 50% kWh Computer Consumption 1,700 15% kWh Other Load Consumption 2,200 20% kWh Estimated Investment Average Savings 1,000 9% kWh NZD USD PBP Lighting 600 10% kWh 700 500 Estimated Cooling 200 10% kWh 30 20 1.6 Savings Other 200 5% kWh 400 300 Total 700 NZD 1,100 800 Econoler International 49 Ref.: 55 160, rue Saint-Paul, bureau 200, Québec (Québec) G1K 3W1 Canada Tel. : +1 (418) 692-2592 Fax : +1 (418) 692-4899 www.econoler.com Asian Development Bank TA 6485-REG: Promoting Energy Efficiency in the Pacific - Contract No. COSO/90-492 Papua New Guinea Report ASIAN DEVELOPMENT BANK TA 6485-REG: PROMOTING ENERGY EFFICIENCY IN THE PACIFIC CONTRACT NO. COSO/90-492 APPENDIX B – PAPUA NEW GUINEA -May 2011 - Econoler International i Ref.: 5505 Asian Development Bank TA 6485-REG: Promoting Energy Efficiency in the Pacific - Contract No. COSO/90-492 Papua New Guinea Report ABBREVIATIONS AND ACRONYMS ADB Asian Development Bank DNPM Department of National Planning and Monitoring DPE Department of Petroleum and Energy ECM Energy Conservation Measures ED Energy Division EE Energy Efficiency EIP Electricity Industry Policy GHG Greenhouse Gas ICCC Independent Consumer and Competition Commission LED Light Emitting Diode LNG Liquefied Natural Gas MEPS Minimum Energy Performance Standards PAC Pacific Consortium Architect PFC Power Factor Correction PFCS Power factor Correction System PNG Papua New Guinea POM Port Moresby POMCCI Port Moresby Chamber of Commerce and Industry PPL PNG Power Limited RE Renewable Energy SOPAC Pacific Island Applied Geoscience Commission Econoler International ii Ref.: 5505 Asian Development Bank TA 6485-REG: Promoting Energy Efficiency in the Pacific - Contract No. COSO/90-492 Papua New Guinea Report TABLE OF CONTENTS ABBREVIATIONS AND ACRONYMS ...... II TABLE OF CONTENTS ...... III 1 COUNTRY PROFILE ...... 1 1.1 Fossil Fuels...... 2 1.2 Power Supply Sector ...... 3 1.3 PPL Sales ...... 4 1.4 Electricity Demand Forecast ...... 4 1.5 Port Moresby ...... 6 1.6 Tariffs ...... 8 1.7 Energy Efficiency Policy Implementation ...... 10 1.8 Policy and Institutional Recommendations ...... 12 2 ENERGY EFFICIENCY PILOT PROJECT IMPLEMENTATION AND IMPACT EVALUATION ...... 25 2.1 Key Program Parameters ...... 25 2.2 Impact Evaluation ...... 29 2.3 Lessons Learned ...... 29 3 FUTURE EE PROGRAM DESIGN AND IMPLEMENTATION ...... 31 3.1 General Assumptions and Parameters ...... 34 3.2 Electricty Efficiency in Government Buildings ...... 35 3.3 Street Lighting ...... 38 3.4 Energy Efficiency in the Hotel Sector ...... 40 3.5 Energy Efficiency in the Residential Sector – CFLs ...... 43 3.6 Energy Labeling and MEPS ...... 44 3.7 Power Factor Correction Systems ...... 47 3.8 Energy Efficiency in the Industrial Sector ...... 48 3.9 Water Distribution Network ...... 52 4 OTHER RECOMMENDATIONS: ...... 53 APPENDIX B.1: PNG - ESTIMATED SAVINGS PER SECTOR IN GOVERNMENT BUILDINGS, REFERENCE TABLES ...... 57 APPENDIX B.2: PNG - ESTIMATED SAVINGS FOR STREET LIGHTING, REFERENCE TABLES ...... 60 APPENDIX B.3: PNG – PFCS CALCULATIONS ...... 61 APPENDIX B.4: PNG - INDUSTRIAL ENERGY EFFICIENCY ESTIMATION DETAILS ...... 64 Econoler International iii Ref.: 5505 Asian Development Bank TA 6485-REG: Promoting Energy Efficiency in the Pacific - Contract No. COSO/90-492 Papua New Guinea Report 1 COUNTRY PROFILE Papua New Guinea (PNG), officially named the Independent State of Papua New Guinea, is a country to the immediate North-East of Australia and south of the equator, occupying the eastern half of the island of New Guinea and numerous offshore islands (more than 600). The main island of New Guinea and larger islands are mountainous and rugged, with a string of active volcanoes dotting the north part of the mainland and continuing to the island of New Britain to the East. PNG has a population of more than six million spread across its total area of 462,840 square kilometers. Agriculture provides a subsistence livelihood for 85% of the population. PNG is richly endowed with mineral deposits including copper, gold and oil, accounting for nearly two-thirds of export earnings. Vision 2050, presented to the nation in November 2009, outlines PNG’s long-term plan and interim objectives for the years 2020, 2030 and 2040. Figure 1: Vision 2050 For 2030, Vision 2050 aims to see the GDP triple, with 70% of the population to have access to electricity. Introducing and implementing effective Energy Efficiency (EE) policies and programs will generate significant benefits to PNG society. It will help meet the climate and environmental sustainability objective of Vision 2050 and will bring significant benefits in terms of institutional development, human capital development and wealth creation. The wealth creation component will be achieved by reducing the financial resources needed to purchase imported energy. Econoler International 1 Ref.: 5505 Asian Development Bank TA 6485-REG: Promoting Energy Efficiency in the Pacific - Contract No. COSO/90-492 Papua New Guinea Report With regards to the future electricity demand for PNG, a 10% reduction in energy consumption, would result in more than USD 330M in national diesel oil savings. For households, a 10% savings on their electricity bills maintained for the period 2010-2030 would generate total savings of up to USD 975M, almost one billion US dollars. This highlights the importance of both adopting early EE and appropriate policies, and then implementing and sustaining effective EE programs to deliver such benefits to PNG. 1.1 FOSSIL FUELS PNG’s self-sufficiency in fossil fuels puts it in a different position from other PDMCs as the country benefits overall from crude oil price increases and suffers overall from price reductions, although for the great majority of people in PNG international oil price rises lead to unwelcome local fuel price increases1. The rationale for energy savings on fossil fuels is therefore to limit the negative impacts of international crude oil price instability and preserve existing resources to benefit society in the long term or to have the opportunity to export a portion of this national resource. In the public power sector only, energy savings will have to target the diesel oil used by public power company PPL, which was estimated at 75M liters in 2008. PNG’s crude oil production started in 1992 and peaked at over 150,000 barrels a day the following year. However, since then, production has been declining in spite of exploration activities resulting in the development of some additional oil fields. Oil production in 2008 was 38,080 barrels a day from three oil fields. With the commissioning of its first refinery plant in 2004, crude is now refined locally. Sixty-five percent of the refinery’s output is consumed locally. The remaining 35% is exported overseas. A new world-scale export oriented Liquefied Natural Gas (LNG) project is presently under development in PNG and is expected to stat operation in 2014, although there appear to be some significant local landowner opposition that may delay the project2. The project is expected to have a capital cost of US$15 billion, and provides 6.6 million tons of oil products for export per year. Over 9 tcf (trillion cu ft) of gas and 200 million barrels of associated liquids are expected to be produced over the project life of 30 years. The LNG will be exported to key LNG importing Asian countries. This project is expected to add around 25% to PNG’s GDP3. As the PNG economy grows, the consumption of fossil fuels can be expected to increase - as growing GDP in any economy is generally associated with a similar rise in energy use in the absence of major structural shifts in economic structure and/or strong policies and associated programs and enforcement actions to improve EE and shift to Renewable Energy (RE). 1 E.g. http://www.pngcars.com/fast-news/91-auto-industry-news/296-fuel-prices-rise-to-new-heights-in-png.html 2 See for example ABC Australia Radio item of 26 May2011 at http://www.radioaustralia.net.au/pacbeat/stories/201105/s3228006.htm 3 See PNG 2011 Budget Vo1, Chapter 11, http://www.treasury.gov.pg/html/national_budget/files/2011/budget_documents/Volume%201/2011.budget_vol1.chapter1 1.pdf Econoler International 2 Ref.: 5505 Asian Development Bank TA 6485-REG: Promoting Energy Efficiency in the Pacific - Contract No. COSO/90-492 Papua New Guinea Report The use of oil products in transport and power generation can be moderated by strong EE and RE policies and actions to preserve as much as possible of PNG’s oil and gas resources for export - to drive ongoing national economic and social development. 1.2 POWER SUPPLY SECTOR PNG Power Limited (PPL) is a public company responsible for the generation, transmission and distribution of electricity throughout the country. PPL operates two separate mainly based hydro grids of Port Moresby (POM) and Ramu (Lae-Madang-Goroka-Mount Hagen) plus nineteen smaller provincial systems4. There is at present no national grid system due mainly to the challenges posed by PNG's difficult topography as well as the considerable distances between various towns or load centres5. In the 2008-2009 period, the total installed capacity in PNG was estimated to be 547 MW (Table 1) with 40% hydro and 38% thermal (mostly from diesel fired power stations). The remaining power capacity is provided by geothermal and natural gas power plants. Out of this total, 295 MW belongs to PPL, comprising 148 MW of hydro (50%) and 137 MW of thermal (47%) power plants. The remainder installed power production capacity belongs to mining and manufacturing industries for their own usage and therefore is not considered in this research. As PNG is a mainly mountainous high rainfall country, there is a very large remaining hydro power potential but developing such potential is difficult as it is generally located in remote areas. Hence PPL is mainly meeting any increases in electricity demand by thermal (diesel) power plants. It therefore follows that any electricity reductions achieved in any of PPL’s grids will be mainly displacing thermal (diesel) power plant output at the margin as hydro power mainly runs in baseload mode (and is rarely spilled to waste). So the GHG emission factor of any electricity savings will be very close to that of a diesel fueled power plant. Table 1: Electricity Supply Structure PNG TOTAL PNG POWER PRIVATE Generation 2008 / 2009 Installed Production Installed Production Installed Production MW % GWh % MW % GWh % MW % GWh % Hydro 216 40 1,072 39 148 50 544 65 69 27 528 27 Thermal 205 38 812 29 137 47 290 35 68 27 523 27 Geothermal 53 10 405 15 0 0 0 0 53 21 405 21 Gas 72 13 476 17 10 3 0 0 62 25 476 25 Total 547 100 2,767 100 295 834 252 100 1,933 100 Source: PPL, Econoler 4 See ADB Papua New Guinea: Town Electrification Investment Program, October 2010 at http://www.adb.org/Documents/FAMs/PNG/41504-01-png-fam.pdf 5 See PPL website at http://www.pngpower.com.pg/aboutus/aboutnetwork.html Econoler International 3 Ref.: 5505 Asian Development Bank TA 6485-REG: Promoting Energy Efficiency in the Pacific - Contract No. COSO/90-492 Papua New Guinea Report 1.3 PPL SALES The number of PPL customers exceeds 56,000. The overall PNG electrification proportion remains very low with less than 10% of the total population being connected to a power grid. About 49% of electricity sales take place in the capital city area, Port Moresby (Figure 2). This indicates that the EE initiatives should prioritize the two main grids of Port Moresby and the Lae, Madang and the Highlands regions of the Ramu grid. The PPL provided electricity supply is in a number of different locations which means that the transaction cost to implement EE initiatives in those areas will be significant and should be carefully considered when determining program delivery process. Figure 2: Structure of PPL Revenues by Region Source: PPL, Econoler 1.4 ELECTRICITY DEMAND FORECAST In developing countries, growing demand forecasts can be an important decision factor to support the adoption of a strong EE policy and strong EE implementation activities. If the annual demand growth rate is high, this means that large amounts of new electricity production will need to be developed and brought on line. This would support a rationale for using EE strategies as a way to reduce demand growth pressure. The increase in growth also implies that more electric using equipment and appliances will be installed. There is a large potential to increase PNG’s energy efficiency with suitable policies and programs to support the selection and installation of energy- efficient equipment instead of standard appliances. Econoler International 4 Ref.: 5505 Asian Development Bank TA 6485-REG: Promoting Energy Efficiency in the Pacific - Contract No. COSO/90-492 Papua New Guinea Report To encourage the installation of energy efficient equipment in new installations, the price difference between standard equipment and high efficient equipment could be partially subsidized to encourage the use of more energy efficient equipment. As the EE program only needs to consider the incremental cost of introducing new efficient equipment instead of the full cost of equipment that must be considered in a retrofit approach, savings can be optimized while maintaining a minimal investment in the EE program. An electricity demand forecast for the period 2008-2030 has been established under the Asian Development Bank (ADB)’s TA 4932-PNG Power Sector Development Plan From this electricity demand forecast, data has been selected for the medium scenario projection for the period 2008- 2020 as shown in Table 2 and Figure 3 below. The average annual demand growth is estimated at 13.6% p.a., which provides an opportunity to design EE policies and implement EE programs to reduce the impact of this high forecast demand growth. Table 2: Electricity Demand Forecast (GWh/year) 2008-2020 Years 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 %/year Residential 119 134 150 168 188 213 241 273 307 346 393 448 504 13 General 418 458 501 549 602 664 731 809 894 987 1098 1226 1355 10 Industrial 79 86 93 219 859 869 880 892 906 921 938 958 978 23 TOTAL 616 677 744 936 1649 1746 1852 1973 2107 2253 2430 2632 2838 13.60 Source: TA 4932-PNG : Power Sector Development Plan Draft Final Report The high projected demand growth is expected to be driven by the industrial sector as shown in Figure 3: Electricity Demand Growth by Sector. The forecast included that PPL would have to meet power requirements of two important new industrial projects in the Ramu system: the Hidden Valley Mine starting from 2011 and the Ramu Nickel Mine starting from 2012. Econoler International 5 Ref.: 5505 Asian Development Bank TA 6485-REG: Promoting Energy Efficiency in the Pacific - Contract No. COSO/90-492 Papua New Guinea Report Figure 3: Electricity Demand Growth by Sector On the other hand, if the major new industrial projects decide to install their own electricity supply systems instead of connecting to the PPL grid, the resulting PPL demand growth will then be reduced to an annual average rate of only 10.6%. This figure is more in line with the projected 10% average annual demand increase resulting from the Vision 2050 planning exercise. This estimate was based on an ambitious electrification target of 70% to be achieved in 2030. 1.5 PORT MORESBY The Port Moresby (POM) grid is the largest grid in PNG with a rated capacity of 140 MW and an actual capacity of 120 MW. Of this 120 MW, 50 MW (41%) is provided by hydro and 63 MW (59%) is provided by thermal (diesel generator) units. The thermal share of production for POM is higher than the global PPL figures of 47% shown in Table 1. This implies that launching EE activities in the POM area could bring a usefully larger proportion of diesel oil savings. Another advantage to focusing on the POM area first is the local presence of EE/DSM staff in the public administration or at PPL, which allows developing and field testing a series of projects before replicating them in other cities. With more than 300,000 inhabitants, and increasing at an average annual rate of 4%, POM is the most important city of PNG. It presents the most advantageous situation for initial EE initiative development with a widespread grid for electricity distribution, important business activities, a proactive and positively minded chamber of commerce, and a central location that hosts headquarters of the public power utility and the national government. Key players are therefore present in POM and are more likely to become fully engaged in EE policy and program development that similar efforts in other areas of PNG. Econoler International 6 Ref.: 5505 Asian Development Bank TA 6485-REG: Promoting Energy Efficiency in the Pacific - Contract No. COSO/90-492 Papua New Guinea Report 1.5.1 POM Electricity Market Data PPL sales reached 318 GWh in POM in 2005, representing approximately 50% of PPL total sales in PNG6. These sales included 59.6 GWh (19%) for the domestic sector, 39 GWh (12%) for the industrial sector7, 0.8 GWh (0.25%) for street lighting and 219 GWh (69%) for general supply customers (Figure 4). Figure 4: POM Electricity Market Structure POM - Demand Structure 2005 0.25% 12% 19% 69% Domestic General Supply Industrial Street lighting Source: PPL, Econoler 1.5.2 Demand Forecast for POM Based on the ADB Power Sector Development Plan Draft demand forecast study, POM’s electricity demand is expected to increase at an average annual rate of 8.3% for the next 12 years as shown in Table 3 Table 3: POM Electricity Demand Forecast (GWh) Years 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Industrial 37 40 43 46 50 54 59 64 69 75 82 90 97 Resid. 62 67 72 77 84 90 98 106 115 125 137 150 161 General 228 245 264 285 308 333 360 391 425 462 504 553 594 Total 327 352 379 409 442 478 517 561 610 662 723 793 852 Source TA 4932-PNG : Power Sector Development Plan Draft Final Report 6 Power Sector Development Plan Draft Final Report – Appendix A: Market Assessment, Annex A.3, January 2009 7 The industrial sector is defined as customers with a connection of 200 kVA and over. The General Supply Customers are those with a connection under 200 kVA and do not belong to the domestic sector. In fact, this customer categorization does not adequately reflect the nature of customer business activities and needs to be adjusted to EE program requirements. Econoler International 7 Ref.: 5505 Asian Development Bank TA 6485-REG: Promoting Energy Efficiency in the Pacific - Contract No. COSO/90-492 Papua New Guinea Report Figure 5: POM Electricity Demand Forecast (GWH) 900 800 700 600 500 400 300 200 100 0 12345678910111213 Industrial Resid. General In the short term, POM’s electricity demand growth rate could be even higher when the construction of the new liquefied gas plant in POM materializes. The local business community is anticipating a construction boom which is already initiated in the hotel industry sector. 1.5.3 Energy Issues in Port Moresby The reliability of the electricity supply is a serious problem in POM, largely on account of a long history of insufficient maintenance of the power plants. Private sector firms report significant maintenance costs incurred in relation to their plants and equipment owing to the unreliability of the power supply. Furthermore, a significant proportion of the generation plant is now reaching the end of its economic and practical life. The replacement of the existing generation plant is required in addition to new capacity to meet the growing demand. Such conditions and the anticipated fast demand increase rates are already leading PPL to consider EE as a potential strategy to alleviate some of the existing or future demand, thus providing some relief and flexibility for their investment plans. 1.6 TARIFFS The PPL tariff structure is presently evolving to address a number of issues. One issue is the compliance with a required minimum power factor for customer plants or buildings. Industrial customers are currently charged for energy consumption and for their maximum demand. General supply customers are charged only for their energy consumption in a set period of time. The domestic tariff beyond the first 30 kWh/month increases by about 70% per unit used, which provides an incentive for PPL POM customers to reduce their energy consumption through EE actions. The tariff variation, based on the time of use on a daily and seasonal basis, will increase awareness regarding the efficient use of energy and push electricity consumers to optimize their operations in order to reducing the cost of energy. Up to now, both rate structures have had no penalty for low power factor. In 2007, PPL initiated a mandatory power factor improvement program in these customers’ premises. Econoler International 8 Ref.: 5505 Asian Development Bank TA 6485-REG: Promoting Energy Efficiency in the Pacific - Contract No. COSO/90-492 Papua New Guinea Report This program is still in implementation with financial incentives offered to customers and shared 50%-50% by ADB and PPL. Table 4: Electricity Tariffs as per January 2009as below shows the electricity tariffs presently in force in PNG. Table 4: Electricity Tariffs as per January 2009 Rates and Charges Tariff Category Unit applying from January 1, 2009 A Industrial customers (credit meters) All energy toea/kWh 49.71 Demand charge Kina/kVA/month 60.57 Minimum demand kVA/month 200 B. General supply customers B.1 Credit meters All energy toea/kWh 77.51 Minimum charge Kina/month 18.00 B.2 Easipay All energy toea/kWh 76.51 Minimum charge 50.00 Easipay emergency receipt-general Kina/receipt 50.00 supply Easipay emergency service fee-general Kina/receipt 11.00 supply C. Domestic customers C.1 Credit meters First 30 kWh/month toea/kWh 39.16 Balance toea/kWh 66.56 Minimum charge Kina/month 12.00 C.2 Easipay All energy toea/kWh 54.73 Minimum charge Kina/receipt 10 Easipay emergency receipt-domestic Kina/receipt 10 Easipay emergency service fee-domestic Kina/receipt 10 Source: PPL Econoler International 9 Ref.: 5505 Asian Development Bank TA 6485-REG: Promoting Energy Efficiency in the Pacific - Contract No. COSO/90-492 Papua New Guinea Report 1.7 ENERGY EFFICIENCY POLICY IMPLEMENTATION 1.7.1 EE and Energy Policy The Energy Division (ED) of the Department of Petroleum and Energy (DPE) is responsible for preparing energy policies, planning initiatives, data collection and analysis as well as advising the government on energy sector issues. In practice, the ED concentrates on electric power, although PPL, the national electricity utility, undertakes most power sector planning. The DPE itself reports that its extremely limited resources have seriously hampered its ability to perform data collection and analysis. Over the past year or so, three policy drafts have been circulated within the ED-DPE and discussed with the Government and concerned stakeholders. They include the Draft Energy Policy, the Draft Electricity Industry Policy (EIP) and the Draft Rural Electrification Policy. The focus of the government, or rather the ED-DPE, has been on developing the EIP to mainly focus on private sector participation in the PNG power sector. Energy efficiency is briefly mentioned in the EIP; however, the statement looks isolated and lacks any reference to its importance in the future action plan related to policy implementation. The statement is as follows: Energy-efficient technologies are promoted by the government for their use in the electricity industry. The government will ensure that electricity users are not allowed to pay the high price of inefficient technology usage. Promoting the adoption of an energy efficiency policy with articulated objectives, targets and initiatives thus seems premature in this context. 1.7.2 EE and Regulatory Framework An independent regulator of the electricity industry, the Independent Consumer and Competition Commission (ICCC) is responsible for regulating the price and other aspects of electricity supply operations at PPL, under a regulatory contract. However, because of a lack of technical capacity to perform its technical regulatory role in the electricity sector, the ICCC has outsourced this role to PNG Power Limited on a contractual basis. This is scheduled to change as the EIP includes a provision transferring this regulation responsibility to the DPE. There are currently no regulations in place pertaining to energy efficiency in PNG. Introducing regulations such as energy labeling, minimum energy performance standards, and energy efficiency provisions in the building code fits in with the policy statement reported in the Energy Policy paragraph above and is discussed below in the EE Management chapter. Econoler International 10 Ref.: 5505 Asian Development Bank TA 6485-REG: Promoting Energy Efficiency in the Pacific - Contract No. COSO/90-492 Papua New Guinea Report 1.7.3 Review of Major Institutional Stakeholders Energy Department The Department of Petroleum and Energy was established to promote and regulate the development of petroleum and other sources of energy for the long-term benefits of the state in a way which is ethical, socially responsible and environmentally sound. Presently, this department has insufficient capacity to be instrumental in this sector given its existing inadequate resourcing. PNG Power PPL upper management has expressed strong interest and support for EE activity development and has created an EE Cell which currently includes one engineer. This is a good start. PPL should now consider enlarging the presently existing EE Cell with more resources to perform the various tasks required to enlarge the portfolio of EE programs to be implemented. PPL should also systematically incorporate EE in its energy supply plans. Ministry of Environment The Ministry of Environment’s Low-Carbon Growth Working Group chaired by the Department of National Planning and Monitoring (DNPM) is responsible for preparing a strategy for the climate- compatible development of Papua New Guinea. Energy efficiency has been presented to this committee as a significant tool to reduce Greenhouse Gas (GHG) emissions. Further EE policy development should definitely closely involve this committee. Business Community In POM, the business community is permanently coping with poor and deteriorated power supply quality. The Chamber of Commerce and Industry in Port Moresby is fully supportive of any program that may lead to improved power quality and savings on electricity bills. Econoler International 11 Ref.: 5505 Asian Development Bank TA 6485-REG: Promoting Energy Efficiency in the Pacific - Contract No. COSO/90-492 Papua New Guinea Report 1.8 POLICY AND INSTITUTIONAL RECOMMENDATIONS Following meetings with the various stakeholders, a number of suggestions and recommendations have been retained as they fit both stakeholder needs and vision while being consistent with a national objective of adopting strong EE policies and actions. These suggestions and recommendations should be considered for the development of future EE initiatives in PNG. International fossil fuel prices instability is not a critical problem for PNG as a whole as PNG is overall self-sufficient in oil supplies; Implementing an appropriate and effective EE policy in the electricity sector would lead to a lesser amount of energy used in the economy producing economic benefits to the community and a lower environmental impact. A preliminary calculation was made to estimate economic benefits for households during the next twenty years. Assuming household electricity consumption decreases by 10% now and is kept unchanged throughout the period 2010-2030, total savings for the whole population would add up to USD 975M, almost one billion US dollars. Similar to what is now the rule in developed countries, EE needs to become a permanent component of the energy supply/demand balance. Policies with no practical implementation actions as experienced in the past are no longer acceptable. EE management mechanisms have to incorporate this new long-term vision and commitment. As electrification rates are still low and large new buildings will need to be constructed in the near future, there is an opportunity for immediate adoption of regulations for energy labelling, minimum energy performance standards and the preparation of energy efficiency components in the building code. This will insure that future construction will use appropriate energy efficient techniques and equipment and this will result in long term benefits at a minimum cost for PNG society. No expensive retrofits will be required as equipment and building will be energy efficient from the start, with just the incremental cost of EE over BAU to be considered. As product-related taxes presently constitute a significant portion of government revenues, the option of adopting a strategy for tax rebates on energy efficient equipment may not be appropriate and therefore will not be considered as a priority option. Generic organizational recommendations for EE/DSM were made in Section 2.1.6 of the body of the report for the PEEP Phase 1 study. In principle, these recommendations also apply in PNG and were presented and discussed during a stakeholders meeting. However the PNG specific context may justify some adjustments to the generic organizational recommendations as mentioned below. 1.8.1 PNG Government EE Management Organization The Energy Division of the Department of Petroleum and Energy is presently preparing a new Electricity Industry Policy. As the policy document is still in the discussion stage, it was suggested by this PEEP project’s counterpart at the Energy Division to take advantage of the situation to incorporate an EE component. Such an EE component would include a provision quantifying human resources and funding requirements to take charge of activities drafted in the generic organizational table. Econoler International 12 Ref.: 5505 Asian Development Bank TA 6485-REG: Promoting Energy Efficiency in the Pacific - Contract No. COSO/90-492 Papua New Guinea Report Even though EE policies and regulations are not related to the electricity industry, this suggestion would provide an immediate opportunity to recruit some suitable human resources and get an initial budget approved to kick off EE activities. From a government perspective, energy efficiency is a way to improve productivity in the economy through better energy use. These kinds of changes require commitment along with a macro and long-term approach. In addition to EE program development, management, financing and regulation activities, one of the key government contributions is to assume leadership for the development and implementation of EE policies and regulations. It is also paramount to oversee market data production and analysis including sector benchmarks. The following table presents the main recommendations for energy department organization, summarizing the basic activities and programs to put in place. Table 5: Energy Department EE Organization ENERGY DEPARTMENT Institution in Activity Profile of Activity International Support Charge Create an EE Energy - Lead and coordinate EE Technical assistance: Division with Department policies and regulations - Deliver training in EE capacities in: - Develop and implement EE management - Leadership Key Partners: policies - Improve data statistics - Economic analysis - Local - Conduct market surveys for EE purposes - Public sector stakeholders - Conduct energy audits - Assist in market survey management - Traditional - Conduct and monitor design and execution - Technical analysis power leaders training programs - Assist in production of - Sub-contractor - Churches - Produce EE resource plan EE national resource management - Etc. - Produce awareness plan - Communication program - Produce education program - Lead EE activities in public sector - Develop EE regulations and standards In this scheme, the Energy Department or Unit is involved in a large spectrum of EE activities, including EE program management. Since the energy division human resources are limited, it is recommended that the EE division hire required expertise to build a suitable dedicated team for EE program management and evaluation. The country’s EE activities could be jointly undertaken with the public utility (PPL). PPL could provide the technical capacity in market research and program design. PPL’s customers’ listing and its regular contact with them through billing would provide the required market data and an access channel to clients for EE marketing purposes. 1.8.2 PPL EE Management Organization PPL upper management has shown strong support for EE development and should consider building up an EE team consistent with the various activities included in the generic organizational table for public power utilities. Econoler International 13 Ref.: 5505 Asian Development Bank TA 6485-REG: Promoting Energy Efficiency in the Pacific - Contract No. COSO/90-492 Papua New Guinea Report One key initiative should consist in immediately setting up an appropriate customer database. Providing assistance to the power utility to build and store a database for DSM purposes would constitute a very pertinent initiative as it would eliminate the information barrier to DSM program identification and design. However, PPL’s role could be strengthened by the Government mandating PPL to be the implementation arm of the EE program. Utilities often view DSM programs as counter-productive activities as they reduce electricity sales while money has to be invested to run the program. To be attractive, DSM has to be considered as a profitable activity. There are two concrete ways to achieve this objective. The first is to select only DSM programs where the benefits per energy unit are higher than the selling price of this energy unit. In this first scheme, the utility has a direct advantage to reduce electricity production. A second approach allows the utility to recoup the cost invested in EE programs through a small increase in tariff allowed by the government. This second approach is more frequently used and is applicable to a larger portfolio of programs than the first option. DSM should be effectively integrated into the supply strategy of a public utility with as much scrutiny as are traditional power supply and renewable energies. This business approach has two requirements: One is methodological. The public utility must precisely determine its production cost for each load curve segment. It must accurately determine the end-use demand structure behind the load curve to identify which group of customers and usage are responsible for this demand and build its DSM strategy from this basic information. The other refers to EE management. As for any investment in power supply and/or distribution systems, DSM program design needs to be supported by high-quality “bankable” feasibility studies. Econoler International 14 Ref.: 5505 Asian Development Bank TA 6485-REG: Promoting Energy Efficiency in the Pacific - Contract No. COSO/90-492 Papua New Guinea Report Table 6: Electric Public Utility DSM Organization Electric Public Utility Activity Institution Profile of Activity International in Charge Support Create an EE/DSM Power - Get financing resources from Technical unit with capacities in: utility business activities or from a assistance: - Economic analysis raise in tariff - Train staff in and planning - Hire technical staff EE - Database & load - Gather and analyze customer management research data on electricity consumption from utility point - Technical analysis - Identify and develop relationship of view - Program design, with large customers - Assist in EE implementation and - Identify key market players and resource plan management develop positive relationships production - Program evaluation - Develop and implement internal communication program - Develop and implement external communication program - Proceed with market research and potential savings analysis - Design, implement and evaluate EE programs 1.8.3 General Information/Awareness Programs Awareness programs have been stressed as a priority by all PNG public and private organizations. They are highly recommendable to assist local consumers in meeting their existing willingness to save on their energy bill. Sharing information in the EE sector is an efficient way to save on program development costs and to take advantage of creative solutions developed elsewhere. As PDMCs evolve in a specific environment, sharing technical information on energy savings in buildings, standards for air conditioning equipment or specifications for CFLs would allow reaping large benefits for all participating countries. An information center is not necessarily physically required in PNG or in other PDMCs. Making use of the internet by creating a website dedicated to PDMCs seems to be preferable. This website would promote shared information on EE technologies and appropriate specifications, program design, management, results and evaluation, and would allow for networking. Potential partners could be the Pacific Power Association, Pacific Islands Private Sector Organizations or SPC. The specific contribution of PNG would be to name a local coordinator responsible for national contribution to the appropriate web resources. The Energy Division has not yet been involved in this sector, but it needs to increase its presence in light of the government decision for the Energy Divison to get involved in this strategic sector of the economy and establish its leadership. This will require developing an awareness strategy, conducting market research to establish baselines and what iformation is required, produce and distribute informational materials, and then evaluate the impact on awareness levels for further consideration. In the short term, this approach may require support from external technical assistance. Econoler International 15 Ref.: 5505 Asian Development Bank TA 6485-REG: Promoting Energy Efficiency in the Pacific - Contract No. COSO/90-492 Papua New Guinea Report Communication is crucial for the development of a successful and sustainable interest in EE by the population, enterprises and institutions. As a result, it needs to be managed accordingly. Technical support to design a more comprehensive and structured information and awareness program is required. Table 7: EE Information and Awareness Programs INFORMATION AND AWARENESS Activity Institution in Charge Profile of Activity International Support Information centers - Energy Department May include: - PDMC regional to disseminate - Books and leaflets information monitoring information on Key partners - Technical staff center efficient - Electric equipment answering technical - Regional organizations technologies and importers/retailers questions - SOPAC/SPC efficient use of - NGOs energy Awareness - Energy Department May include: TA to assist in: programs Key partners - EE advertising - Designing awareness - Electric equipment - Educational strategic plan retailers material for schools - Producing initial - Public utility material - Education sector 1.8.4 Education and Training Education and training are a prerequisite in PNG to support EE/DSM and should not be limited to short training sessions but rather should be integrated into existing education and training curriculums, wherever possible. As far as energy auditing and EE practices are concerned, it is recommended to consider outsourcing training to the private sector with twinning arrangements with foreign experts to reap the long-term benefits of this activity. The PDMC information center would assist in maintaining and upgrading the material used for education and training and ensuring the sustainability of this activity in the region. Econoler International 16 Ref.: 5505 Asian Development Bank TA 6485-REG: Promoting Energy Efficiency in the Pacific - Contract No. COSO/90-492 Papua New Guinea Report Table 8: Education and Training in Energy Efficiency EDUCATION AND TRAINING Activity Institution in Charge Profile of Activity International Support Primary school Energy Department - Coordinate the production Technical Assistance: level and dissemination of - Assist in producing education, Key partners education material education plan and strategy targeting Department of - Outsource to Department of along with initial education Primary Education Education material schools all - Countrywide activity - Partner: SPC/SOPAC pupils levels Energy audit & Energy Department - Mobilize and involve the TA to: Energy private sector in program - Produce initial education management Key partners design and implementation material Chamber of - Conduct training sessions - Prepare work plan and Commerce Industry on energy audits including strategy - Engineering association financial analysis and - Conduct training sessions firms reporting to customers - Train local staff in delivering - O&M staff - Periodically update and training sessions - Association upgrade capacities technical departments Energy- Energy Department - Mobilize and involve the TA to: efficient private sector in program - Produce initial education building Key partners design and implementation material construction Chamber of - Conduct training sessions - Prepare work plan and practices Commerce Industry on energy-efficient building strategy - Engineering association construction practices for - Conduct training sessions firms Architect and large building constructors - Train local staff in delivering - Architects contractor - Periodically upgrade training sessions - General associations capacities contractors Primary School Education PNG should consider taking advantage of the manual for children on energy savings produced and recently released by SOPAC in Vanuatu, Samoa and Tonga. However, distributing manuals only may not have a permanent impact on youngsters and may not make them adopt a permanent positive attitude towards EE. The PNG Government should consider developing its own education program and then seek external assistance for program implementation. Energy Audit Training National energy audit capabilities and experience are critical for EE policies and programs development in PNG. The University of Lae Engineering Department seems to be the most appropriate place to build this capacity. However, to meet market demand some energy experts from the private sector will be needed immediately in large cities of PNG. More specifically, experts are needed who can bridge the gap between the audit stage of a project, and the detailed design and specification of equipment through to project installation and field supervision. Hence a training program should be addressing as well the academic and private sectors including engineering consultants, construction promoters and large electric equipment retailers, to name a few. Econoler International 17 Ref.: 5505 Asian Development Bank TA 6485-REG: Promoting Energy Efficiency in the Pacific - Contract No. COSO/90-492 Papua New Guinea Report Building Construction Sector EE Training In the building sector, considering that the Architecture and Building Branch at the Department of Works is presently unable to effectively control building code application, education and training constitutes the second best option to meet existing demand for more energy efficiency building guidelines that fit PNG’s climate and environment. Demand for such training already exists in the market. Discussions with the Pacific Consortium Architect (PAC), an architect firm, indicate that there is a tendency now to include energy efficiency in the design and construction of many high-rise buildings in Port Moresby. M&E Partnership, an electrical company that is also designing building systems, agrees with PAC observations that the market shows a tendency to shift to more energy efficient designs. These companies confirmed that their clients insist that energy efficiency be included in the design of building envelopes and systems. 1.8.5 Energy labelling and Minimum Energy Performance Standards (MEPS) Energy Labelling and MEPS enforcement procedures and control systems need to be developed according to specificities of the PNG environment. International technical assistance is required to initiate development and set up the required implementation and follow up procedures. Usually, such a program includes tests by accredited laboratories. This process can involve a complex and costly operation which may create a barrier to implementing energy labeling and MEPS in PNG. A least-cost option could be adopted to overcome implementation barriers and could be summarized as follows: Request from importers/retailers proof of compliance with energy labelling and MEPS for material displayed on the shelves. Recommend importation of already labeled appliances and equipment. Develop a protocol for the validation of foreign laboratory test results to ensure program coherence. Apply penalties for non-compliance. Coordinate energy labelling and MEPS development and share program information with other PDMCs through the electronic information center. Accept existing labeling schemes (from Australia-New Zealand, and perhaps from other countries as well) as a starting point for the development and implementation of the labeling program. Another issue which remains to be settled is the in-kind remittances sent from overseas directly to relatives. Used equipment is generally difficult to include in energy labeling and MEPS regulations as nobody can testify of the performance of those units. However, energy labeling and MEPS could be requested for all equipment entering the country, without restriction. The first step would be to regulate new equipment only at program start-up and then address closely in-kind remittances of equipment from relatives out of the country when detailed data is available. Section 3.6 on Energy Labeling and Energy Labeling and MEPS includes further details. Econoler International 18 Ref.: 5505 Asian Development Bank TA 6485-REG: Promoting Energy Efficiency in the Pacific - Contract No. COSO/90-492 Papua New Guinea Report 1.8.6 Energy Efficiency Provisions in Building Code Generally, in PDMCs, building regulations include no provision for energy efficiency. Builders and building system designers are aware of energy efficiency in principle and, when required, attempt to implement EE elements in their building designs and construction. However, their knowledge in EE matters may not be very comprehensive or fully up to date. Moreover, energy efficiency remains the primarily decision of the client or owner, often regardless of what the building designer, builder or tenant wants. To adapt the existing building code to include provisions for energy-efficient practices, a practical strategy would be to use a code from a country with similar environment conditions. The building EE project in the republic of Palau would be worth looking at in this regard. To limit revision and periodic building EE provision update costs, technical information should be shared with other participating PDMCs through the information Web page proposed before A building code, as for MEPS or labeling, will only be as effective as the enforcement procedures introduced and implemented to ensure compliance. Experience around the world with voluntary building codes show that they have generally resulted in minimum actual EE improvements in target markets. Those experiences suggest that, very early in the process, the government should be fully aware that financial and human resources will be needed to ensure compliance and should decide accordingly whether to develop EE provisions for their building code. If there is no commitment to enforce the EE provisions of the building code, other types of programs and EE initiatives will probably be more cost-effective. However, if EE provisions of the building code are not put on the government priority list, this will result in an important lock-in effect as new buildings will continue to be constructed with the “business-as-usual” energy inefficient approach and contribute for a very long period of time to inefficient energy usage in the building sector. Table 9: Building Code and Energy Efficiency BUILDING CODE Activity Institution in Charge Profile of Activity International Support Introduce EE - Energy Department - Prepare EE TA to: considerations in Key partners specifications adapted - Produce initial building code - Department in charge of to local environment to technical material building code be introduced in - Conduct training - Architect and contractor building code sessions associations - Conduct actual - Train local staff in - Municipalities (if implementation of new delivering training involved in building code regulations in code sessions application) - Inform/train architects - Power utility and contractors The sooner the building code is amended to incorporate locally adapted EE provisions, the better. Presently POM is experiencing a building boom related to the LNG project. Every missed opportunity to have an energy-efficient building erected means 50 or more years of wasted energy consumption, as many energy efficiency measures (such as incorrect building orientation, poor heat management of windows, and lack of external shading are nearly impossible to cost-effectively retrofit later on. Econoler International 19 Ref.: 5505 Asian Development Bank TA 6485-REG: Promoting Energy Efficiency in the Pacific - Contract No. COSO/90-492 Papua New Guinea Report Before EE provisions of the building code can effectively impose energy efficiency in the construction sector, the Architecture and Building Branch of the Department of Works needs to improve its capacity to actually implement and enforce the existing building code provisions for other matters. Some additional analysis establishing a sound strategic approach to building code EE provisions upgrading is required before putting efforts in this activity. Collaborative efforts with other PDMCs would be beneficial to reduce the overall cost of producing EE requirements for the building code. In the short term, the introduction of EE training in building design would be the second best option to promote better construction practices. 1.8.7 Creation of an Energy Efficiency Center Given the low level of effort toward EE improvements, a necessary first step for developing any EE program is institutional strengthening. A stronger legal and regulatory framework should be developed to support new EE initiatives and programs. Additionally, the recruitment and training of energy engineers, financial analysts and program developers should be undertaken. Without such institutional underpinnings, most EE programs will fail to achieve or sustain EE savings. The first step undertaken by other countries in a similar situation was the establishment of a donor-funded energy center. These centers are nonprofit organisations supported by the government. However, they have independent authority to conduct EE applied research and analysis, raise EE awareness and recommend EE policies. Furthermore, they are mandated to design and implement EE programs, and play a central role in fostering market transformation where the implementation of energy-efficient products and services becomes standard practice. Finally, they provide a focal point for EE activities and have high credibility due to their nongovernmental, nonprofit status. The government should consider establishing such an energy center. Subsequently, a DSM cell could be established within the utility to ensure analysis, program development as well as the management and implementation of end-use EE programs. Alternatively, the energy center could be established as a unit within the utility. However, without an identity of its own separate from the utility, it runs the risk of being “captured” or controlled by the utility, which may not be supportive of aggressive EE efforts. In addition, an EE unit within the utility may not be regarded by the public as being a credible independent body. Finally, locating the energy center within an electric utility is inappropriate if its mission will also include the EE of petroleum products used for transport or cooking etc, or inter-fuel substitution issues, especially with the utility’s core electricity business being only electricity supply. The establishment of an independent energy center does not preclude the establishment of an EE unit within the utility to oversee and coordinate utility EE/DSM activities. If such a unit is established within the utility, it should start out reporting directly to the chief executive of the utility to ensure that the concept of energy efficiency is given attention at the highest level and is not subjugated and “controlled” by lower level managers who may not fully support the EE mission. An energy center with adequate independence and funding can review and evaluate existing EE efforts and facilitate their implementation. The energy center can play the role of advocating implementation of EE legal requirements, and presenting a blueprint of how to meet such legal requirements. Econoler International 20 Ref.: 5505 Asian Development Bank TA 6485-REG: Promoting Energy Efficiency in the Pacific - Contract No. COSO/90-492 Papua New Guinea Report For example if a ban on incandescent bulbs is found to be problematic in practice, the energy center could champion better implementation and enforcement of the ban and help determine the extent to which cheap, low-quality CFLs are dominating the market. Steps may be necessary to reduce or eliminate low-quality CFLs through a product labeling program or the establishment of EE standards for bulbs. This type of standards and labeling program is the kind of activity an energy center can support and even implement if it has adequate assistance from those with experience in implementing such programs in other countries. By providing assistance in the design and implementation of EE policies and programs, an energy center can help strengthen the institutional capability of government institutions, like the Ministry of Industry and Energy, to carry out EE initiatives. Over time, staff from the energy center could even take management positions at government institutions thereby transferring EE management capacity directly to those institutions. 1.8.8 Legal Framework Development To ensure the success of the proposed programs, an appropriate legal EE framework should be developed. Up to now, there has been no regulation related to energy management in PNG. Any legislation should take into consideration the context of the country and the different barriers to EE program implementation. This legislation should cover the following elements: Establish the appropriate legislation to enforce technical EE specifications for new buildings, and implement EE thermal, shading, lighting installed load, and appliance and equipment standards. Develop an EE fund which will provide subsidies for appropriate EE projects in all sectors. Organize professional energy efficiency accreditation and define terms of reference for energy auditing. Define the conditions for energy labelling and MEPS implementation of energy-efficient appliances and define the energy consumption levels of prohibited appliances. Define the pre-consultancy conditions and processes for large energy consumption projects. Define certification conditions for manufacturers and installers regarding SWH systems. Define the list of energy-efficient appliances exempt from the VAT and customs fees. Install SWHs on a mandatory basis in hospitals and government buildings if their profitability is confirmed. Development of this EE legal framework and related technical specifications would require an overall budget of about USD 400,000 where about USD 100,000 would be used for the organization of seminars and marketing campaigns. 1.8.9 Nomination of Energy Managers in Government Buildings It is recommended to designate energy managers in government buildings to closely track energy consumption levels in government facilities and improve energy efficiency. These energy management officers will be responsible for tracking and analyzing building energy consumption and to prepare monthly reports for energy efficiency units. These reports will provide the data needed to analyze and identify all energy consumption anomalies. Econoler International 21 Ref.: 5505 Asian Development Bank TA 6485-REG: Promoting Energy Efficiency in the Pacific - Contract No. COSO/90-492 Papua New Guinea Report This information will also contribute to creating an energy consumption database for the government sector. The database will help define the energy savings potential, establish a benchmarking tool to compare energy consumption between the country and a specific region and define EE objectives to be targeted for buildings. This action will require an investment in energy training estimated at USD 0.1 million calculated on the basis of training sessions for each semester over a three-year period. The expected savings are estimated at an average of 2% of the energy consumption level of the sector based on similar implemented projects in other countries. The estimated savings are mainly linked to improved equipment operation optimization and better maintenance practices. For current government buildings in PNG, savings could reach 1.5 GWh/year, resulting in emission reductions of 973 TCO2/year. 1.8.10 Development of an Energy Efficiency Fund An energy efficiency fund would be a good support mechanism for EE project implementation. This fund would be dedicated to energy efficiency project financing in all sectors with favorable conditions. The fund would provide project financing up to say 75% of total project costs, up to a maximum of say USD 100,000. No collateral would be requested for the credit allocated to these projects, if the implementation of the projects is carried out under the supervision of the energy unit. A guarantee fund for energy efficiency projects would be an alternative solution to help promote investments in the sector and to encourage commercial financial institutions to participate in EE market development. Collateral for loans requested for energy efficiency projects would be guaranteed by this fund, which would not burden clients’ credit levels and which would help develop ESCOs. Performance contracting could then be offered by service providers, not only for complete energy systems, but for specific efficient technologies (solar water heaters, efficient motors, efficient ACs, etc.). Local development banks could manage the fund and could provide the loan and credit guarantees required for the implementation of EE projects. Under this component, the energy efficiency projects would benefit from an around 10% subsidy component to encourage EE project implementation. The subsidy would help in prioritizing energy efficiency projects and increase the EE projects’ financial profitability. The level of subsidy could be set based on the country’s market barriers and market maturity. If the subsidy was set at the same level of the market credit interest rate, this would effectively make the EE project interest free. These EE funds needed could be generated through taxes applied to high energy-consuming equipment such as electrical water heaters, low-performance air conditioning units, incandescent lamps and large fuel inefficient vehicles used in the transportation sector. 1.8.11 Public Sector Procurement IMF data show that, in 2008, the PNG Government accounted for up to almost USD 1.5B in equipment purchases and building construction activities. More detailed data is needed to determine the nature and importance of the equipment purchased and the facilities built. Econoler International 22 Ref.: 5505 Asian Development Bank TA 6485-REG: Promoting Energy Efficiency in the Pacific - Contract No. COSO/90-492 Papua New Guinea Report When this analysis is completed, a calculation could be performed to determine the potential for the introduction of energy efficiency in Government procurement. This could provide the required rationale to support the preparation of voluntary appliance energy performance levels and building energy-efficient design guidelines that could be implemented relatively immediately in the public sector, even before the requirements could be enacted as official national EE regulations. The adoption of regulations that incorporate EE considerations, for all type of equipment including energy performance criteria, into the public sector procurement process can provide significant energy savings. Furthermore, it would send a clear signal to the community that the EE policy is taken seriously by the government. Additional benefits include promoting government leadership in energy efficiency and influencing local importers and retailers to opt for higher energy-efficient products and practices. Table 10: Public Procurement Adjustment Organization PUBLIC PROCUREMENT Activity Institution in Charge Profile of Activity International Support Public sector Energy Department Introduce EE regulations in TA to: procurement Key partners procurement procedures Assist in program design All public sector Introduce control and monitoring stakeholders mechanisms 1.8.12 PPL Interruptible tariff In POM, PPL periodically requests large customers to disconnect (up to 10 MW) from the grid to shed load during peak demand times. Participating customers then use their own emergency electricity generating equipment. This arrangement is made on a gentleman’s agreement basis with no specific payment for their assistance. As the economy develops and the local context evolves towards more competition, large customers may find it more difficult to maintain this collaborative attitude with PPL to supplement its lack of supply capability. Moreover, in the near future, PPL may need more of this interruptible load to keep meeting demand. Developing a formal agreement with large customers through an interruptible tariff is one of the most appropriate actions to help reduce the peak demand load while also showing PPL’s willingness to establish sound and harmonious relationships with its customers. Furthermore, this will enhance PPL’s image as a corporate citizen ready to invest in EE/DSM initiatives with its customers’ participation. Econoler International 23 Ref.: 5505 Asian Development Bank TA 6485-REG: Promoting Energy Efficiency in the Pacific - Contract No. COSO/90-492 Papua New Guinea Report 1.8.13 Innovative EE Financing in PNG In POM, the number of large customers seems to be sufficient to justify exploring potential markets for innovative EE financing schemes. A first step consists of a market assessment to identify the actual market size for energy services (comprehensive energy efficiency or load reduction services to customers that own or operate facilities such as factories and buildings); performance contracting (providing energy savings to a customer for a fee, the level of which depends on the amount of energy saved); and third party financing (funding of energy saving investments by an outside company, using energy savings to pay for the capital investment). This market assessment should evaluate the feasibility of having these services provided by a local entity or by international financing organizations and should assess the interest local and international financing institutions may show in participating in such schemes. Econoler International 24 Ref.: 5505 Asian Development Bank TA 6485-REG: Promoting Energy Efficiency in the Pacific - Contract No. COSO/90-492 Papua New Guinea Report 2 ENERGY EFFICIENCY PILOT PROJECT IMPLEMENTATION AND IMPACT EVALUATION In PNG two programs were initially identified and considered for the pilot project in Port Moresby, namely street lighting energy efficiency and PFC (Power Factor Correction) programs. The PFC option was selected for implementation over street lighting energy efficiency since PPL (PNG Power Ltd) had already initiated power system power factor parameter measurements for their key customers. Implementation of PFC initiatives in PNG had been overlooked until 2007, when increases in grid electricity demand and poor quality of service raised the need to properly manage reactive power requirements through improved PF (power factor) in customer facilities. PPL’s (PNG Power Limited’s) PFC project was initiated during the 2007 Rouna hydro power station’s rehabilitation. To assist with meeting peak demand, load shedding and PFC programs were both considered. Load shedding was successfully implemented. Surveys conducted on PF showed significant levels of reactive power on the PPL Network and therefore significant potential for deployment of PFC equipment. PPL then began the installation of Power Factor Correction Systems (PFCS) at a small number of customer locations - Brian Bell Plaza in Boroko, the downtown Credit Corporation Building and the PPL HQ in Hohola. However, PPL was still slow in implementing the program as customers were generally not receptive to the PFC program. 2.1 KEY PROGRAM PARAMETERS Program rationale The level of reactive power on the PPL network was estimated to be 16% of total real power, representing approximately around 11 to 12 MVA of capacity reduction in the grid. However, it should be stressed that power generation facilities are generally designed for a 0.8 PF, so with an overall grid power factor of 0.84, then PF correction would not be expected to raise PPL’s power generation capacity. Low power factor in a particular customer’s site or grid feeder line requires an increase in the electric utility’s transmission and distribution grid and transformer capacity to that customer or grid feeder line, in order to handle the reactive power component caused by inductive loads. Improving power factor will also reduce voltage drop at the point of electricity use for the grid feeder line involved. Voltages below the equipment’s rating will cause reduced efficiency, increased current, and reduced starting torque in electric motors. Under-voltage also reduces the load electric motors can carry without overheating or stalling. Under-voltage also reduces output from lighting and resistance heating equipment. Worldwide, many power utilities charge large commercial and industrial customers an additional fee when power factor is typically less than 0.9 to 0.95. For example, if the power factor were improved from 80% to 95%, the line loss percent savings would be around 29%. If electrical circuits are fully loaded, power factor correction will help free up transmission and/or distribution capacity. Econoler International 25 Ref.: 5505 Asian Development Bank TA 6485-REG: Promoting Energy Efficiency in the Pacific - Contract No. COSO/90-492 Papua New Guinea Report Although PFC can provide useful power savings, overall system-wide energy savings from PFC are typically small since line losses are generally low in percentage terms. For example, if overall line only technical losses are 2% of the total power draw, the total power savings from correcting the overall power factor from 80% to 95% would be around 0.58%. However, this would still represent a useful opportunity for overall energy savings as the savings are applicable to the entire grid energy demand, rather than large savings from conventional energy efficiency measures for a few customers which would make a lower overall energy savings impact. In Port Moresby, the 250 industries and general service category customers with loads from 250kW to 2MW make up to 68% of the total power consumption. Their PF is generally well below the new minimum requirement, leaving a large potential for PFC savings. In 2009, PPL launched its PFC program promoting a PF of 95% to most of its large industry and General Supply Customers (GSC). This program had some successful realizations; however only a small portion of the total potential was realized due to limited customer participation in PFCS installations at their businesses. PPL has adopted new power supply conditions for existing and new customers to meet the minimum PF requirement of 95%. As PPL is determined to have large customers meet this new minimum PF requirement, pilot projects represented a good opportunities to benefit from ADB assistance for program initiation. However, an important constraint to PFC in PNG is that customers are not charged for low power factor, so it is not an important issue for customers, although it is important to PPL as the electricity utility. Customer Selection PPL had originally started their PFC program with customers connected to the Kone feeder in Port Moresby (downtown) because that feeder was overloaded. Other customers were subsequently selected based on their high load demand. The program carried out design and installation of suitable PFC units for major customers. Fifty of the large commercial and industrial customers in Port Moresby were ranked according to both the size of their loads and the level of their power factor. Those customers having the greatest potential energy and power factor savings through PFC installation were selected. Initially, this included 18 customers, totaling 34 separate facilities. Despite the fact that customer consultation and agreement to proceed with the project were time consuming, the Port Moresby Chamber of Commerce and Industry (POMCCI) was helpful in organizing meetings with customers. Upon completion of a thorough consultation process 10 consumers, totaling 11 different installations, expressed an interest in taking part in the project and PFCS equipment installation proceeded at their sites. Econoler International 26 Ref.: 5505 Asian Development Bank TA 6485-REG: Promoting Energy Efficiency in the Pacific - Contract No. COSO/90-492 Papua New Guinea Report Table 11: List of Customers Who Agreed to PFCS Pilot Project Enrollment Average Average Location Category Elect. Use PFCS Load PF kVA % GWh/Year KVAR TELIKOM GENERAL 1,019 67 2.1 625 RUMANA SUPPLY PACIFIC PLACE INDUSTRIAL 921 72 1.71 500 GARDEN CITY INDUSTRIAL 755 71 2.05 450 DELOITTE INDUSTRIAL 1,166 83 4.27 440 TOWER PARADISE INDUSTRIAL 546 73 1.90 300 FOOD LTD PACIFIC MMI INDUSTRIAL 490 75 1.38 240 SNS WAIGANI INDUSTRIAL 422 75 2.59 240 STEAMSHIP INDUSTRIAL 432 79 2.18 240 PLAZA GATEWAY INDUSTRIAL 462 81 3.04 360 HOTEL KENMORE GENERAL 176 75 1.33 150 INVESTMENT SUPPLY BOROKO INDUSTRIAL 108 69 2.19 60 FOODWORLD Technical specifications PPL undertook the necessary customers’ PF measurement using a power analyser. For each of the applicable customers over a one week period, the power analyser was connected on the different bus bars to measure voltage, current, apparent power, real power, and reactive power. Sampling was done by the power analyser every 15 minutes over a one-week period, and both high and low values were recorded. The profile of the electricity consumption, maximum electricity demand and power factor was assessed to determine and calculate the required system and KVAR needed to reach a PF of 95%. For each customer, a pre-installation report was produced for discussion and approval prior to proceeding with the installation of the PFCS units. When the pre-installation reports were accepted by the customer, work began for the procurement of PFCS equipment and for their subsequent installation. The PFCS technical specifications were general for phases, voltage and frequency and then emphasised the specific requirements of KVAR rating, and isolation circuit breaker rating and communications according to PPL procedures and requirements. Manuals for installation, operation and maintenance, electrical schematics and other relevant product documents were requested as a part of equipment delivery. Econoler International 27 Ref.: 5505 Asian Development Bank TA 6485-REG: Promoting Energy Efficiency in the Pacific - Contract No. COSO/90-492 Papua New Guinea Report Budget and procurement Proposals were requested from four different PFCS manufacturers and suppliers. Three technically compliant and complete bids were received and evaluated and two suppliers were selected on a price basis in accordance with ADB selection procedures. Equipment was purchased based on the lowest cost and the closest kVAR rating available for each installation, as indicated in the table below. Table 12: Selected Providers Proposed Cost of PFCS PPL Firm 1 Firm 2 QTY SPECs Proposal Proposal (kVAR) kVAR) (kVAR) Total Total Offer Cost Offer Cost Selection Justification (PGK) (PGK) 2 60 62.5 15,526 75 16,392 Cost and closest rating 1 70 75 16,579 75 16,392 Cost 1 80 87.5 17,632 100 17,345 Closest rating 1 90 100 18,158 100 17,345 Cost 2 200 200 25,763 200 23,029 Cost 1 240 250 31,395 250 26,132 Cost 1 300 300 36,447 300 31,842 Cost 1 440 450 58,132 450 53,850 Cost 1 500 500 61,026 500 56,950 Cost 1 610 625 64,763 600 67,895 Cost Supplying PFCS equipment in PNG required a long lead time. The delay between placing an order in the PPL system and having the equipment delivered on site took up to six months. About three months was necessary to go through PPL approval procedures and obtain the necessary paperwork and payments for equipment and service suppliers. Unfortunately, PPL staff responsible for procurement and finance appeared to have no great sense of urgency to meet deadlines. The ADB agreement with PPL was to support implementation and installation based on cost sharing with a maximum ceiling of USD 62,000. The total project cost, as listed in Table 12, was about USD 288,600 with USD 113,000 for installation cost. Installation Under the above circumstances, it was necessary to get more than one contractor working on the different installations. As all installations were different, a scope of work was drafted for each installation and five contractors were approached to provide a quotation. Contractor selection was based on their performance from previous PFCS projects Meetings were regularly called between PPL/ADB and the various contractors to follow up on implementation issues and emphasize deadlines. Econoler International 28 Ref.: 5505 Asian Development Bank TA 6485-REG: Promoting Energy Efficiency in the Pacific - Contract No. COSO/90-492 Papua New Guinea Report All PFCS equipment was installed at the clients’ premises. However, only ten installations were able to be fully commissioned and put in operation in the PFC project funded by the ADB PEEP project. For the remaining installation, PPL is still waiting for the client’s approval to shut down the facilities, install the PFCS, and then reconnect the system. 2.2 IMPACT EVALUATION So far, only 10 of the 250 customers in Port Moresby (POM) have completed the PFCS installation process. As such, it would be difficult to witness any tangible improvements in the POM power grid. However, if the new PF is maintained at 95%, and based on the measurement performed after PFCS equipment implementation, the expected savings for each installation are presented in Table 13 below. Table 13: Expected Savings for Pilot Projects Customer Average Elect. Use PFCS Line Savings PBP Load Losses kW GWh/Year KVAR kWh kVA kWh USD Years TELIKOM RUMANA 683 2.10 625 42,000 285 21,109 6,054 7.9 PACIFIC PLACE 663 1.71 500 34,180 212 14,547 4,172 9.1 GARDEN CITY 536 2.05 450 40,920 181 18,064 5,180 6.5 DELOITTE TOWER 968 4.27 440 85,400 140 20,212 5,797 5.8 PARADISE FOOD LTD 399 1.90 300 38,000 120 15,562 4,463 5.1 PACIFIC MMI 368 1.38 240 27,600 98 10,398 2,982 4.6 SNS WAIGANI 317 2.59 240 51,800 84 19,515 5,597 2.4 STEAMSHIP PLAZA 341 2.18 240 43,680 69 13,474 3,864 4.7 GATEWAY HOTEL 374 3.04 360 60,800 65 16,600 4,761 5.8 KENMORE 132 1.33 150 26,660 35 10,044 2,880 1.6 INVESTMENT BOROKO 75 2.19 60 43,880 28 20,732 5,945 1.2 FOODWORLD For the 11 installations the annual savings were estimated at 180,000 kWh, or USD 51,500 with about 1.318 MVA in increased electricity distribution system capacity. 2.3 LESSONS LEARNED The following points should be considered as a way forward and to ensure that energy efficiency (including but not limited to PFC) is effectively implemented in PNG. Econoler International 29 Ref.: 5505 Asian Development Bank TA 6485-REG: Promoting Energy Efficiency in the Pacific - Contract No. COSO/90-492 Papua New Guinea Report Improved Human Resourcing PPL’s EE/ DSM capacity was observed in the course of the PFC project and related activities to be inadequate to mount and sustain any serious and effective EE/DSM program. One option is to establish a formal and properly resourced EE/DSM cell solely dedicated to EE program design, implementation and monitoring. The personnel employed in such an EE/DSM cell would need to be adequately trained in project and contractor management, among other skills required. This training should first and foremost include appropriate technical and social interaction skills in dealing with EE/DSM issues with customers. PPL could also consider the possibility of hiring private consultants as program managers to act on behalf of PPL for EE/DSM project development, design and implementation, operating with clear objectives and defined timeframes. This option appears to be the most promising EE/DSM alternative for PPL to make progress in achieving EE/DSM gains in the short term. Expanding the PFC Project to PPL’s Wider Large Customer Base Communication channels between PPL and customers have traditionally been poor. This project has helped to improve the dialogue between customers and PPL, with support from the POMCCI. PPL should capitalize on the success of this initiative to expand PFCS implementation not only in POM (Port Moresby) but also in other big cities with important client and commercial activities such as in Lae and Madang. There is a potential to increase distribution system capacity by around 10 MVA, which PPL could achieve by expanding the PF correction program throughout PNG. PPL need to consider the implementation of a control and follow up procedure to ensure minimum PF levels are both achieved and maintained over time. Under PPL regulations, revised in October 2009, the required power factor at a consumer premises should be at least 90%. However, PPL needs to enforce this regulation by establishing a cost or other penalty system for low PF. This could be achieved by the installation of PF monitoring devices or changing the current electrical meters to new ones permitting PF reading and logging as done by many utilities, or for changing tariffs to be partly based on KVA, which would require existing revenue meters to be changed to ones that measure both the maximum KVA and the kWh used. It is clear that customers and the wider business community support the principle of projects which create energy savings and improve financial returns, and the business community is particularly keen to assist PPL in all actions to ensure reliable power supply. However, raising awareness on energy efficiency in general and the benefit of PFCS implementation in particular is an important action that needs to be introduced and continuously maintained by PPL. PFCS has very little direct impact on the client side, since no substantial benefit for customers is gained with current tariffs, comparing to the distribution system capacity benefits to PPL. Therefore, other arguments need to be used to support higher PF such as network stability, voltage drop reduction, and improved power delivery quality. If minimum PF requirements are not enforced, as seem highly likely to continue to be the default case in PNG, then ultimately the way to ensure higher PF on the PPL network is to set low PF penalties. The easiest and most direct way to raise power factors is to charge for both maximum KVA demand and kWh used - for all larger customers who have the ability to keep their PF above a certain level, in PPL’s case a PF of 0.9 or 0.95 Econoler International 30 Ref.: 5505 Asian Development Bank TA 6485-REG: Promoting Energy Efficiency in the Pacific - Contract No. COSO/90-492 Papua New Guinea Report 3 FUTURE EE PROGRAM DESIGN AND IMPLEMENTATION This section provides a summary of the estimated savings potential for possible Energy Conservation Measures (ECMs) that were identified in PNG. As a first stage, a baseline was established from the available energy consumption for each sector. The evaluation was built using the results obtained from the pilot projects implemented in other PEEP Pacific countries and adapted to the local context for each proposed ECM. A compilation was then made respective of country data, and information was gathered during the missions to PNG undertaken by the PEEP Phase 1 implementation team. Adjustments were based on the following: Data availability and level of existing details pertaining to energy balance and consumption per sector Information availability in the country from previous EE experience Site visits and preliminary energy audits to evaluate the potential for savings in government buildings and the hotel sector Surveys performed in the residential sector Data gathered from suppliers on technologies used and availability in the market Meeting with equipment and service providers Discussions with stakeholders. The data gathered from the different sectors have established a basic foundation to determine the potential for savings, as limited relevant data on energy consumption was available in the country. As a consequence, the proposals have been limited by the level of information available and the identified ECMs within the PNG country context. The seven (7) major ECMs proposed and presented in Table 14 below show potential savings corresponding to 4.1 % of total energy consumption (for a 2009 reference year). Annual energy savings are estimated at 29,500 MWh, representing savings of USD 9.9 million and emission reductions of 53,600 TCO2 per year. Econoler International 31 Ref.: 5505 Asian Development Bank TA 6485-REG: Promoting Energy Efficiency in the Pacific - Contract No. COSO/90-492 Papua New Guinea Report Table 14: ECM Proposal for PNG – Savings and Investment Baseline Savings Savings Peak Savings Estimated Simple Annual 2011-2025 Inv. per Energy Potential Potential Load Potential Investment Paybac Emission CO2 Saved Use (Sector) (Country) Reduction k Reduction reduction kWh 8 MWh % % kW MWh USD M USD M Years TCO2 TCO2 USD/kWh Energy Efficiency in Selected Government 47,781 8.4 0.6 691 4,035 0.99 3.28 3.3 2,623 20,980 0.102 Buildings for POM Only Implementation of LED for 2,573 71.7 0.3 375 1,844 0.46 2.74 6.0 1,199 9,590 0.185 Street Lighting CFL Program for 131,828 4.1 0.8 2,570 5,401 0.96 0.40 0.4 3,511 31,590 0.008 Residential Sector Implementation of EE 17,905 21.1 0.5 527 3,771 1.08 4.33 4.0 2,451 19,608 0.143 projects in Hotel Sector Energy Labelling and 713,016 1.5 1.5 951 10,419 2.57 1.90 0.7 6,772 55,800 0.022 MEPS Power Factor Correction Program in PNG - Initial 39,113 0.5 0.0 - 208 0.06 0.40 6.8 135 1,220 0.216 List for POM Energy Efficiency in the 156,093 2.4 0.5 435 3,814 3.77 8.94 2.4 36,874 258,121 0.043 Industrial Sector Total 4.1 5,550 29,500 9.9 22.0 2.2 53,600 396,900 The investment per saved kWh is obtained by dividing the total investment by the saved kWh during the 2011-2020 period – which was considered as the average life cycle for the proposed installed ECM equipment. The investment per kWh helps prioritize the ECMs with the best return on investment. As shown in the above Table, the CFL program for the residential sector and EE in the industrial sector are ranked best with only USD 0.008 followed by Energy Labeling and MEPS, EE in the industrial sector, EE in government buildings, EE in the hotel sector and then the PFCS program. Note that the 8 Including Network Losses. Econoler International 32 Ref.: 5505 Asian Development Bank TA 6485-REG: Promoting Energy Efficiency in the Pacific - Contract No. COSO/90-492 Papua New Guinea Report investment cost for MEPS includes only the cost to government, and the cost to the public associated with the purchase of more efficient appliances has not been defined (see Section 3.6). Econoler International 33 Ref.: 5505 Asian Development Bank TA 6485-REG: Promoting Energy Efficiency in the Pacific - Contract No. COSO/90-492 Final Report The potential peak load reduction is estimated at 5,550 KW, which represents about 4% of the average (2009) registered maximum peak load of 136.4 MW. It should be noted that the implementation of the PFCS will increase PPL distribution system capacity by 2,415 kVA. 3.1 GENERAL ASSUMPTIONS AND PARAMETERS Table 15 andTable 16 below show the general parameters used for calculations and electricity energy efficiency potentials estimates. The estimated electricity balance has been developed based on the PPL energy billing database of December 2009, which acts as a reference month to estimate annual electricity consumption by sector. Figure 6: Electricity Consumption per Sector Table 15: Estimated POM Electricity Balance for 2008 PNG Electricity Balance Energy Number of Category Consumption % Customers (kWh) Hotels 17,905,059 3% 261 Commercial 330,847,143 46% 10,709 Government 74,866,692 11% n/a Industry 156,093,648 22% 80 Street Lighting 1,475,480 0.2% Residential 131,828,094 18% 74,574 Total 713,016,100 100% 85,624 Econoler International 34 Ref.: 5505 Asian Development Bank TA 6485-REG: Promoting Energy Efficiency in the Pacific - Contract No. COSO/90-492 Final Report Table 16: General Parameters Used for PNG Country Name PNG Conversion PGK-->USD 0.37 Diesel Consumption per kWh l/kWh 0.25 Incandescent Lamp Operating Hours Hours/day 3.0 PPL Diesel Cost WST/l 1.92 PPL Emissions kCO2/l 2.6 Emissions KgCO2/kWh 0.65 Street Lighting Hours/Year Hours/year 4,200 Average Electricity Tariff for PGK/kWh 0.6656 Domestic Average Electricity Tariff for STL PGK/kWh 0.7751 Average Electricity Tariff for Hotels PGK/kWh 0.7751 Average Electricity Tariff for PGK/kWh 0.6675 Buildings Average Electricity Tariff for PGK/kWh 0.7751 Commercial Network Losses Losses % 17% Cost/CFL PGK/Unit 8 3.2 ELECTRICTY EFFICIENCY IN GOVERNMENT BUILDINGS PPL provided a list of all government buildings to the PEEP project team, but for POM only. Obtaining a listing of all government buildings across PNG was not possible since it would have required a complete assessment per center. This could not be achieved during the PEEP Phase 1 project implementation period despite multiple requests. The list which was provided concerning POM government buildings shows 419 customers for 2010. The list has been divided into the following five groups based on monthly electricity consumption, with hospitals as a separate group: Hospitals Group 1: Buildings with a monthly energy consumption above 3,000 kWh Group 2: Buildings with a monthly energy consumption between 1,000 and 3,000 kWh Group 3: Buildings with a monthly energy consumption between 300 and 1,000 kWh Group 4: Buildings with a monthly energy consumption between 100 and 300 kWh. The groups were selected based on electricity consumption, which reflects the activities and notably the type of equipment used and penetration levels in these buildings. For each group, preliminary walk-through audits were performed to assess the type of equipment used, determine operation parameters and estimate the energy balance (energy consumption per end-user). After the preparation of the energy balance, energy savings were estimated based on potential energy conservation measures to be implemented, considering a maximum payback period of five years. From the sample taken for each group, extrapolations were made to evaluate the energy saving potential across the group. Econoler International 35 Ref.: 5505 Asian Development Bank TA 6485-REG: Promoting Energy Efficiency in the Pacific - Contract No. COSO/90-492 Final Report As hospitals are quite different from other buildings due to distinct activities, specific equipment and special operating conditions, estimates were made in a conservative way since no detailed investigation was undertaken. Energy saving potentials were calculated based on the average of each group and considering the most common end-user, namely lighting and cooling, targeting simple ECMs, namely: - HVAC optimization for centralized systems: optimization of operating hours and parameters Efficient lighting fixtures and lamps: CFLs, electronic ballasts and T5 fluorescent tubes Air compressor O&M: operation optimization and air leak reduction Variable-speed drives: motors and HVACs Fan system improvements: efficient fans and motors LCD monitors AC replacement: replacement with efficient AC based on operating hours and existing equipment condition O&M and energy management: optimization of operating parameters (temperature, operating hours, automatic switches and clocks, preventive maintenance, etc.). Nevertheless, other ECMs may be identified when in-depth energy audits are able to be undertaken. The featured EE potentials should be considered only as preliminary estimates used to assess whether the sector represents a significant EE potential. Only the 367 largest energy using buildings have been considered, as the remaining buildings have a monthly consumption less than 100 kWh, which is considered too low to be included in an initial EE project. However, all buildings will be included in an EE awareness campaign to be launched within the program. Selected buildings from each group have been visited in order to establish the preliminary energy balance and the savings potential used as a reference for extrapolation to the entire group. The results show a promising annual savings potential of 3.45 GWh with an estimated investment of USD 1 million giving an average simple payback period of 3.3 years. The implementation of EE programs in government buildings would generate GHG emission reductions of about 2,623 TCO2 annually. Details for each group are presented in Appendix B.1 showing estimation parameters and expected savings per end-user. Econoler International 36 Ref.: 5505 Asian Development Bank TA 6485-REG: Promoting Energy Efficiency in the Pacific - Contract No. COSO/90-492 Final Report Table 17: Electricity Savings Potentials for Government Buildings Consumption Current Savings Category Situation kWh/Month Number kWh PGK kWh % PGK Hospitals Hospital 2 2,790,500 2,162,900 234,500 8.4% 181,800 Group 1 more 3,000 138 42,606,000 33,023,900 2,939,800 6.9% 2,278,600 Group 2 1,000 Table 18: Investment and Annual Emission Reductions for EE in Government Buildings % 7.2 Average Savings Potential kWh 3,448,500 % 8.4 9 Annual Savings Potential kWh 4,034,745 USD 989,000 Total Estimated Investment USD 3,276,660 Simple Payback Period Years 3.3 Annual Emission Reduction TCO2 2623 Diesel Savings Liters 1,008,700 The proposed ECMs focus on all major electricity using systems found in each group. Table 19 below presents the main actions to be implemented to reduce energy consumption. Table 19: Major Actions to Improve Energy Consumption Average Savings Energy Conservation Measures for Selected Buildings Potential HVAC optimization 5%-15% Air compressor O&M 10%-20% Variable-speed drives 5%-15% Efficient lighting fixtures and lamps 10%-20% Fan system improvements 5%-10% LCD monitors 10%-20% AC replacement 15%-20% O&M and energy management 5% Estimates are based on energy consumption and preliminary estimates for the savings potential in each group. However, an in-depth analysis needs to be conducted with selected samples from each group taking into account the load per end-user with the monthly bill distribution to establish more accurate EE potential and to better extrapolate these results to the entire sector. 9 Including PPL losses Econoler International 37 Ref.: 5505 Asian Development Bank TA 6485-REG: Promoting Energy Efficiency in the Pacific - Contract No. COSO/90-492 Final Report The cumulative electricity savings relative to the government building program for the 2011-2020 period are estimated at 32 GWh, resulting in estimated CO2 emission reductions of 20,980 TCO2. Program implementation is expected to be completed within a maximum of 5 years with an annual progress completion of 20% during the implementation period. Table 20: Cumulative Savings for the 2011-2020 Period kWh 32,277,960 Savings Potential USD 7,912,000 Total Estimated Investment USD 3,276,660 Emission Reduction Period TCO2 20,980 Investment/Saved kWh USD/kWh 0.102 3.3 STREET LIGHTING The street lighting network in PNG is composed of 6,092 lamps as per the data provided from PPL and presented in Table 21 below. The network is constituted of different types of lamps (mercury, HPS and fluorescent tubes) with a power ranging from 50 W to 250 W. The installed power is estimated at 613 kW with an annual energy consumption of about 2.6 GWh. Most network lamps are inefficient, old, decaying and many need to be replaced as they are no longer functioning. Table 21: Street Lighting Network in PNG PNG Number of Unit Total Power Lamps Power in kW 400 250 W 112 41 150 W 7 23 125 W 3 5,111 80 W 450 115 50 W 6 144 50 W 7 218 90 W 22 40 135 W 6 The replacement of energy inefficient mercury lamps with more energy efficient HPS is the obvious first choice to increase lighting efficiency. Combined with dimming/regulation systems, HPS will help acheive the most savings. However, many parameters need to be taken into consideration in technology selection, mainly regarding the type of lighting required, the condition of the existing fixtures and the distribution circuit of the street lighting network. Unfortunately, most existing fixtures present one or more of the following anomalies: Econoler International 38 Ref.: 5505 Asian Development Bank TA 6485-REG: Promoting Energy Efficiency in the Pacific - Contract No. COSO/90-492 Final Report Old fixtures in bad condition Lack of internal reflector Opaque lenses Lack of overlapping lighting patterns Very low lighting level. Light-Emitting Diode (LED) technology seems to be the best overall solution to address most of these problems since it can increase the lighting level and reduce energy costs even for existing fixtures with a low lighting level. The rationale behind LED usage is as follows: Low LED lamp consumption yields an energy saving potential of 20% to 50% over HPS and mercury vapor lamps. LED construction makes solid-state street lamps safe for landfills. They are mercury-free, without harm to the environment. The longevity of LED lamps is 60,000 hours and represents about twice the lifetime of HPS lamps. The longevity of LED pushes back replacement cycles and, consequently also reduces the burden on the waste stream. LED street lights reduce the carbon footprint via energy savings that lower carbon emissions not only from reduced power plant fuel consumption but also from reduced fuel usage by maintenance for bulb replacement. The annual maintenance cost for LED represents almost a fifth of the maintenance costs for regular mercury or HPS lamps. Even though the acquisition cost of the LED fixture is high comparing to the regular HPS (about 5 times more expensive) LED lamps are still attractive. With the generated operation and maintenance cost savings the investment is paid back within less than 4 years, with an estimated life time of 15 years. The new LED lamps light distribution is improved with warm color close to the HPS The proposed lamp replacement strategy is presented in the following Table: Table 22: Equivalent LED for HPS Lamps EQUIVALENT HP6S LED WATTAGE 80 W 30 W 100 W 50 W 150 W 60 W 200 W 80 W 250 W 100 W Introducing LED lamps into the PNG street lighting network will help reduce street lighting energy consumption by 61% and maintenance costs by 61%. Table 23: Energy and Maintenance Costs for the Existing Street Lighting Network Old System Number Old Fixture Total Total Total of Energy Maintenance Energy Total O&M Power Lamps Consumption Cost Cost kWh/Year kW PGK PGK PGK/Year 6,092 2,572,800 613 16,071 1,994,200 2,010,300 Econoler International 39 Ref.: 5505 Asian Development Bank TA 6485-REG: Promoting Energy Efficiency in the Pacific - Contract No. COSO/90-492 Final Report The total required investment is estimated at USD 2.74 million for annual savings of USD 0.46 million representing a simple payback period of 6 years. The implementation of a comprehensive LED street lighting program will generate annual emission reductions of 1,200 TCO2. Table 24: Investment and Emission Reductions for LED Implementation in PNG TOTAL INVESTMENT USD M 2.74 TOTAL SAVINGS USD M 0.46 TOTAL SAVINGS (kWh) kWh 1,576,300 TOTAL Energy Savings (%) % 61.3% TOTAL Cost Savings (%) % 61.2% % 71.7 PPL Savings (kWh)10 kWh 1,844,300 PPL Savings (l) Liters 461,100 PPL Savings (Fuel Cost) USD M 0.33 Simple PBP (Years) Years 6.0 Annual Emission Reduction TCO2 1,199 Street Lighting Load (kW) kW 613 Load Reduction (kW) kW 375 The cumulative savings for the LED street lighting program for the 2011-2020 period are estimated at 14.8 GWh, resulting in CO2 emission reductions of about 9,590 TCO2. Program implementation is expected to be completed within a maximum of 5 years with an annual progress completion of 20% during the implementation period. Table 25: Cumulative Savings for the 2011-2020 Period kWh 14,754,400 Savings Potential USD 3,641,100 Total Estimated Investment USD 2,735,900 Emission Reduction Period TCO2 9,590 Investment/kWh USD/kWh 0.185 3.4 ENERGY EFFICIENCY IN THE HOTEL SECTOR No specific data was available in PNG regarding the hotel sector. Sector estimates were calculated based on the number of hotels featured in “Pacific Islands Investment Summit Tourism -The Next Big Thing” by John Perrottet in August 2010. The energy consumption evaluation was based on average consumption per hotel drawn from the other 4 studied countries. Considering the number of inhabitants in the country and the territory in itself, the hotel sector in PNG is very small with only 10 Including PPL losses. Econoler International 40 Ref.: 5505 Asian Development Bank TA 6485-REG: Promoting Energy Efficiency in the Pacific - Contract No. COSO/90-492 Final Report 261 hotels and a total sector consumption of 17.90 GWh representing only 3% of PNG electricity consumption. Based on results from the pilot project carried out in Vanuatu and the walk-through audit performed in some hotels of POM, the hotel sector saving potential (estimated at 18% including all energy types) was used as a reference potential for PNG as well. As shown in Table 26 below, the total saving potential for the Vanuatu pilot project stands at 18%, where electrical savings represent about 16% (CFLs, room switches, timers) and water savings around 26% (low shower head flow, reduced hot water, optimized garden watering systems, reduced water pumping costs). The Vanuatu pilot project also results in reduced LPG usage by 21% with the installation of solar water heaters. Table 26: Savings Potential in the Hotel Sector for the Vanuatu Pilot Project Total Savings Energy (%) Electrical Energy Savings 16 Water Energy Savings 26 LPG Energy Savings 21 The main energy conservation measures targeted in the hotel sector are as follows: Efficient lighting, mainly CFLs, for interior and exterior lighting Solar Water Heaters (SWHs) Reduced flow for shower heads, sinks and toilet flush Key tag switches for room electrical system Efficient air conditioning units Cooling setting point adjustments Pool pump operation optimization High-efficiency pumps and motors Installation of timers for equipment operation optimization Air curtain installation Table 27: Savings Potential per ECM Energy Saving Potential ECM (%) Solar Water Heating 10% General Key Switch 1% Hotel Lighting 7% Shower Head Replacement 11% Rain Water Catchment Cost Savings Only Optimization of Pool Motors 1% Reducing Setting Temperature of AC 6% Optimization of Garden Watering Cost Savings Only Review of Meter Contracts with Utility Cost Savings Only Air Curtain Installation 1% Econoler International 41 Ref.: 5505 Asian Development Bank TA 6485-REG: Promoting Energy Efficiency in the Pacific - Contract No. COSO/90-492 Final Report The main energy conservation measures targeted in the hotel sector are as follows: Efficient lighting, mainly CFLs, for interior and exterior lighting Solar Water Heaters (SWHs) Reduced flow for shower heads, sinks and toilet flush Key tag switches for room electrical system Efficient air conditioning units Cooling set point adjustments Pool pump operation optimization High-efficiency pumps and motors Installation of timers for equipment operation optimization Air curtain installation. With a maximum simple payback period of 4 years, and potential savings of 18%, the total investment required for the 261 hotels in PNG is estimated at USD 4.3 million. Program implementation will generate annual electricity savings of 3.77 GWh and emission reductions of 2,451 TCO2. Table 28: Investment and Emission Reductions for the Hotel Sector in PNG Hotel Consumption kWh 17,905,059 Sector Estimated Savings % 18 Energy Savings kWh 3,222,900 Hotel Cost Savings USD 1,081,418 % 21.1 kWh 3,770,805 11 PPL Savings Liters 942,701 USD 669,318 Annual Emission Reduction TCO2 2,451 Investment USD M 4.3 Targeted Payback Period Years 4 The cumulative savings relative to the EE program in the hotel sector for the 2011-2020 period are estimated at 30.17 GWh, resulting in CO2 emission reductions of about 19,608 TCO2. Program implementation is expected to be completed within a maximum of 5 years with an annual progress completion of 20% during the implementation period. Table 29: Cumulative Savings for the 2011-2020 Period kWh 30,166,400 Savings Potential USD 8,651,200 Total Estimated Investment USD 4,325,700 Emission Reduction Period TCO2 19,608 Investment/kWh USD/kWh 0.143 11 Including Network Losses. Econoler International 42 Ref.: 5505 Asian Development Bank TA 6485-REG: Promoting Energy Efficiency in the Pacific - Contract No. COSO/90-492 Final Report 3.5 ENERGY EFFICIENCY IN THE RESIDENTIAL SECTOR – CFLS Compilation of survey results in the residential sector shows a different level of incandescent usage in PNG households. Since no data was available we have proceeded with a random survey and selected 30 households to complete a questionnaire assessing lighting usage. There were some difficulties gathering the data as people were reluctant to answer questions. The results were extrapolated to get a preliminary estimation. Table 30: Lighting Distribution per Type of Lighting Type of Lamp Incandescent CFL Fluorescent Other Total/Day/House kWh 0.22 0.04 0.7 0.2 Installed/House W 88 7 247 35 Lamps/House Unit 1.5 0.3 12 0.7 Lighting Weight % 18% 3% 60% 19% The average usage for incandescent lamps is 18% in PNG where fluorescent lamps are widely used with about 60% of total lighting load. The total installed power of incandescent lamps in PNG is estimated at 6,563 kW. According to the survey, the average 1.5 incandescent lamps installed per household are used approximately 2.5 hours per day, representing a total of 110,000 incandescent lamps used across PNG. Considering a complete change of CFL lamps with a savings potential of 75% (the average load per existing lamp of 60 W would be replaced by a 13 W CFL), annual savings would reach 5.4 GWh with a peak reduction of 2,570 kW. Average annual savings per household are estimated at 62 kWh equal to PGK 41. Considering an average cost of PGK 10 per CFL, the payback period is less than 5 months. Assuming a subsidy program of 50% for the residential sector to encourage CFL use, an investment of USD 400,000 is needed to generate the targeted annual emission reduction of 3,511 TCO2. Econoler International 43 Ref.: 5505 Asian Development Bank TA 6485-REG: Promoting Energy Efficiency in the Pacific - Contract No. COSO/90-492 Final Report Table 31: Investment and Emission Reductions for CFLs in the Residential Sector Incandescent Total/Day/House kWh 0.22 Installed/House W 88 Lamps/House Unit 1.5 Lighting Weight % 18% Total/Year/House kWh 80 Coincidence Factor % 100% Number of Houses Unit 74,574 Peak Load Reduction kW 2,570 kWh 4,616,200 Savings % 3.5 kWh 5,401,000 Savings12 % 4.1 Country Fuel Reduction Liters 1,350,300 Fuel Saving Cost USD 958,700 Annual Emission Reduction TCO2 3,511 Savings/House W 69 kWh/Year 62 Payback Period Year 0.4 Investment (50% Subsidy) USD 404,700 The cumulative savings relative to the implementation of the CFL program in the residential sector for the 2011-2020 period are estimated at 46.61 GWh, resulting in CO2 emission reductions of about 31,590 TCO2. Program implementation is expected to be completed within a maximum of 3 years with an annual progress completion of 33% during the implementation period. Table 32: Cumulative Savings for the 2011-2020 Period kWh 48,609,000 Savings Potential USD 8,628,300 Total Estimated Investment USD 404,700 Emission Reduction Period TCO2 31,590 Investment/kWh USD/kWh 0.008 3.6 ENERGY LABELING AND MEPS ECMs relative to air conditioning, lighting and appliances in the residential and commercial sectors could not be assessed due to lack of information and data unavailability in PNG. Unfortunately, no detailed information on residential and commercial appliances is available from the statistics department, which constitutes a major barrier to potential assessment and accurate program 12 Including Network Losses. Econoler International 44 Ref.: 5505 Asian Development Bank TA 6485-REG: Promoting Energy Efficiency in the Pacific - Contract No. COSO/90-492 Final Report proposal. No government entity holds data on the country’s energy balance and energy consumption per end user or sector, which doesn’t provide for good planning. The PEEP Phase 1 project implementation team undertook a quick survey in the residential sector with the random selection of 30 households. The goal was to establish preliminary estimates on appliance use in PNG and to calculate the savings potential for Energy Labeling and MEPS application. Although only statistics on refrigerators, freezers and ACs were collected, this penetration rate was extrapolated from survey results to the 74,574 occupied dwellings in PNG. Since the 30-household sample is not representative of the total population, only 50% of compiled results were considered to be conservative and align with the other 4 PEEP PDMC penetration rates used. Table 33: PNG Adjusted Survey Results Residential Appliances – Penetration Rate Refrigerators 43% Freezers 12% Air Conditioners 15% Occupied Dwellings 74,574 Annual savings per refrigerator were estimated based on the Australian figures for refrigerators and freezers13 taking into account the 2005 annual consumption for refrigerators as the basis for the current situation in PNG, where the annual energy consumption per refrigerator was about 640 kWh. The assumption was based on the fact that most of the appliances are imported from Australia and New Zealand and importers usually bring in the cheapest appliances, which usually have low efficiency rankings. The refrigerators currently available on the Australian market in the 200-300 liters capacity range have an energy consumption ranging between 213 kWh and 537 kWh per year. Given that refrigerators with an average annual consumption of 450 kWh/year, after energy labeling and MEPS introduction, will be targeted, the savings generated per refrigerator will be around 190 kWh. The freezers (upright and chest types) currently available on the Australian market have an energy consumption ranging between 177 kWh and 825 kWh per year. Given that freezers with an average annual consumption of 377 kWh/year after energy labeling and MEPS introduction will be targeted, the savings generated per freezer will be around 198 kWh. The anticipated number of installed ACs in the residential sector is 11,186 units. The estimated current Coefficient of Performance (COP) of 2.76 is equally based on the 2005 situation in Australia. Assuming an average target COP of 3.33 (2011 new MEPS level in Australia for units < 4 kW), the annual savings per unit would be 93 kWh/year, with a yearly average penetration rate of 2%. 13 Costs and benefits of proposed revisions to the method of test and energy labeling algorithms for household refrigerators and freezers, prepared by the Energy-Efficient Strategies Pty Ltd. for the Australian Greenhouse Office, November 2007. Econoler International 45 Ref.: 5505 Asian Development Bank TA 6485-REG: Promoting Energy Efficiency in the Pacific - Contract No. COSO/90-492 Final Report Based on the above, annual emission reductions from energy labeling and MEPS application for refrigerators, freezers and ACs are estimated at 6.77 KTCO2 or 10.42 GWh, taking into consideration the current PPL network losses and emission factor. Table 34: Investment and Savings for MEPS Application – Refrigerators Country Consumption kWh 713,016,100 % 1.2% Annual Estimated Savings kWh 8,904,880 % 1.5 Energy Savings14 kWh 10,418,700 Cost Savings USD M 2.6 Annual Emission Reduction TCO2 6,772 Investment USD M 1.9 The estimated investment includes only the cost to government of establishing a laboratory for equipment testing and validation, along with international support for MEPS development and implementation. The main costs to the public associated with the purchase of more efficient equipment and appliances than would be the case without energy labelling and MEPS has not been defined owing to insufficient data being available during Phase 1. It is recommended that detailed studies of the equipment and appliance markets in each PDMC be undertaken during Phase 2 to estimate the likely costs of MEPS and labelling requirements on imported appliances. The only study to date, conducted in Fiji, estimates these costs to be between 10% and 25% of the value of the benefits.15 Total savings over a 10-year period are presented in Table 35 below. Program implementation is anticipated to take 5 years after which annual savings will be about 85.83 GWh. The savings are considered constant throughout the period since there is no available data on the annual penetration and growth rate of refrigerators in the residential sector. Table 35: Projected Savings for the 2011-2020 Period kWh 85,834,600 Potential Savings USD M 21.1 Total Estimated Investment USD M 1.9 Emission Reduction Period TCO2 55,800 Investment/kWh USD/kWh 0.022 14 Including Network Losses. 15 The Costs and Benefits of Energy Labelling and Minimum Energy Performance Standards for Refrigerators and Freezers in Fiji, George Wilkenfeld and Associates for the Australian Greenhouse Office, February 2006. Econoler International 46 Ref.: 5505 Asian Development Bank TA 6485-REG: Promoting Energy Efficiency in the Pacific - Contract No. COSO/90-492 Final Report 3.7 POWER FACTOR CORRECTION SYSTEMS The PPL PFC project was first initiated as part of the 2007 Rouna hydro power station rehabilitation. Surveys conducted on PF showed significant levels of reactive power (VAR) on the PPL network and therefore a significant potential for the PFC program. Power factor improvement on the demand side would increase PPL transmission and distribution capacity, reduce technical losses, and provide customers with a more stable voltage supply. In terms of energy savings, reducing reactive power will diminish the excess current in the electrical distribution system and bring about a drop in resistive losses. Improving the PF from 80% to 95% will cut back line losses by 29%. Line losses generally account for around 2%, so improving the PF by 15% will thus generate savings of about 0.58%. Although this may not seem significant, considerable savings could be achieved depending on total energy consumption. See Appendix B.3 for calculation details and the list of selected customers for the PFCS program. The 250 industries and general service category customers with loads from 250 kVA to 2 MVA account for 68% of total power consumption in Port Moresby. Their PF is generally well below the new minimum requirement, leaving a large potential for power and current savings. In 2009, PPL launched the PFC program promoting a 95% PF with its most important industrial and General Supply Customers (GSC). Although this program achieved successful results, only a small portion of the total potential has been realized yet. PPL has just adopted new power supply conditions for existing and new customers which include a revised minimum PF of 95%. As PPL is determined to push its customers to meet the 95% minimum PF requirement, existing customers may have no choice but to proceed with PF improvements if they want to remain connected to the PPL grid. A list obtained from PPL regarding 50 customers residing in POM was used to establish the energy saving potential for PFCS implementation. The calculated PFCS needed for these customers ranges between 10 KVAR and 310 KVAR (see Appendix B.3 for customer list). If the PFCS targets the selected customers, PPL will have an additional transmission and distribution capacity of 2,416 kVA with no system investment required. Considering the average cost of USD 76 per installed KVAR as per the implemented pilot project, the needed investment for the selected clients is about USD 406,000. The savings yielded by the reduction in line losses is estimated at around 208,000 kWh generating annual emission reductions of 135 TCO2 with an average payback period of 6.8 years. Econoler International 47 Ref.: 5505 Asian Development Bank TA 6485-REG: Promoting Energy Efficiency in the Pacific - Contract No. COSO/90-492 Final Report Table 36: Savings and Investment by Range of KVAR Installed Invest Emission Savings Number PBP ment % of Reduction of USD Savings MWh kW clients TCO M 2 Customers with Systems 208 2,416 0.40 49 100 135 6.8 more than 20 KVAR Customers with Systems 197 2,422 0.39 40 95 128 6.8 more than 50 KVAR Customers with Systems 152 1,806 0.30 23 73 99 6.9 more than 100 KVAR The estimated investment includes equipment and installation. Total savings over a 10-year period are presented in the Table below. Program implementation is expected to take 3 years after which annual savings will be about 208 MWh. Table 37: Projected Savings for the 2011-2020 Period MWh 1,872 Potential Savings USD 536,000 Total Estimated Investment USD M 0.40 Emission Reduction Period TCO2 1,220 Investment/kWh USD/kWh 0.216 3.8 ENERGY EFFICIENCY IN THE INDUSTRIAL SECTOR Industrial energy consumption accounts for approximately 22% of total energy consumption in PNG with about 80 clients. No data is available to assess the potential of the industrial sector and since its consumption level is important, it represents an interesting candidate for an EE program. The industrial sector, with 22% of total electricity consumed in the country and about 36% of total oil consumed, shows a promising potential for energy savings. The industrial sector should thus be listed as a top priority for EE program development. Based on international experience, expected savings16 from the adoption of best EE practices in manufacturing industries are estimated to be between 18% and 26%. Unfortunately, no extensive data is available to assess the detailed potential for energy savings based on the sector and technologies used. No energy balance by end-user is available or has been able to be assessed in the industrial sector. The lack of detailed information on energy consumption per sector and energy type did not allow the establishment of a sector energy balance. The minimal number of energy audits undertaken, and the unavailability of details at the 16 International Energy Agency (IEA): Tracking Industrial Energy Efficiency and CO2 Emissions, October 2007. Econoler International 48 Ref.: 5505 Asian Development Bank TA 6485-REG: Promoting Energy Efficiency in the Pacific - Contract No. COSO/90-492 Final Report technological level constitute major barriers to providing an action plan and accurate targets for EE actions. Nevertheless, this section presents the potential for energy savings taking into consideration sector energy consumption and results from EE actions undertaken in the industrial sector over the last two decades. In the industrial sector, energy consumption and energy balance are quite different from one sphere to another and vary depending on activities and production. However, based on the reference study conducted by the IEA, primary energy uses of the overall industrial sector are estimated as follows: Figure 7: Primary Energy Uses in Industries17 Based on international experience, the potential for energy savings by sector is expected to range from 9% to 33% as shown in the following Table. 17 International Energy Agency (IEA), Tracking Industrial Energy Efficiency and CO2 Emissions, October 2007. Econoler International 49 Ref.: 5505 Asian Development Bank TA 6485-REG: Promoting Energy Efficiency in the Pacific - Contract No. COSO/90-492 Final Report Table 38: Energy Savings Potential by Industrial Sector Energy Savings Potential by Industrial Sector % Chemicals /Petrochemicals 13-16% Iron and Steel 9-18% Cement 28-33% Pulp and Paper 15-18% Aluminum 6-8% Other Non-Metallic Minerals and Non-Ferrous 13-25% Metals On the other hand, a system/life-cycle analysis is expected to show energy savings potentials ranging between 2% and 40% as shown below: Table 39: System/Life-Cycle Improvement Potential in the Industrial Sector Industrial Sector Energy Savings Potential per System/Life- Cycle Improvement (%) Motor Systems 20-25% Combined Heat and Power 3-4% Steam Systems 10-15% Process Integration 10-40% Increased Recycling 2-4% Energy Recovery 2-3% Total Potential 18-26% The PNG energy savings potential could be larger than world average values. The preliminary estimation as follows is based on the average consumption and savings potential of the industrial sector in PNG and solely taking into consideration sector energy consumption. Since there was no specific data available, conservative estimates are used, relative to the above savings potential in the industrial sector. The general assumption and parameters for EE estimation are presented in the Table below. Econoler International 50 Ref.: 5505 Asian Development Bank TA 6485-REG: Promoting Energy Efficiency in the Pacific - Contract No. COSO/90-492 Final Report Table 40: Assumptions and Parameters Units Values GWh 713.02 National Electricity Consumption Ktoe 61.32 Electricity Consumption of Industrial Sector 21.9% Electricity Consumption of Industrial sector GWh 156 Overall Oil Consumption Ktoe 1,036 % 36 Oil Consumption of Industrial Sector Ktoe 370 Electricity Price (Average Value) USD/kWh 0.29 Thermal Efficiency of PPL Power Plant % 35 Energy Consumption of Boiler % 30 Energy Consumption of Heating Water System % 15 Energy Consumption of Motors % 15 Electricity Consumption of Lighting % 3 Electricity Consumption of Industrial Cooling % 4 EEM 1: Boiler Efficiency Improvements (Combustion % 1.9 and Insulation): Saving potential EEM 1: Boiler Efficiency Improvements (Combustion Years 2.1 and Insulation): Payback period EEM 2: Heat Recovery Systems: Saving Potential % 1.2 EEM 2: Heat Recovery Systems: Payback Period Year 0.9 EEM 3: High Efficiency Motors: Saving Potential % 2.0 EEM 4: Cogeneration - Exhaust Gas: Saving % 0.4 Potential EEM 4: Cogeneration - Exhaust Gas: Payback Years 1.7 Period EEM 5: Preheating Systems: Saving Potential % 0.3 EEM 5: Preheating Systems: Payback Period Years 6 EEM 6: Improvement of Lighting Systems: Saving % 1.0 Potential EEM 6: Improvement of Lighting Systems: Payback Years 2 Period EEM 7: Solar Water Heaters: Saving Potential % 0.2 EEM 7: Solar Water Heaters: Payback Period Years 2 EEM 8: Improvement of Cooling Systems: Saving % 20 Potential Based on the above, the Table below presents the estimated savings per proposed ECM that might be implemented in the PNG industry sector. Savings details for each ECM are presented in Appendix B.4. Econoler International 51 Ref.: 5505 Asian Development Bank TA 6485-REG: Promoting Energy Efficiency in the Pacific - Contract No. COSO/90-492 Final Report Table 41: Savings Potential per ECM Annual 2011-2020 Energy Efficiency Annual 18 Fuel Electricity Investment Emission Emission Projects Savings Reduction Reduction (USD M) (toe) MWh MW (USD M) TCO2 TCO2 EEM 1: Boiler Efficiency Improvements 1.5 2,109 3.1 7,803 54,623 (combustion and insulation) EEM 2: Heat Recovery 0.9 1,299 0.8 4,805 33,636 Systems EEM 3: High Efficiency 2.1 184 2,140 0.24 0.3 2,343 16,401 Motors EEM 4: Cogeneration - 3.5 1,480 3.5 18,850 131,952 Exhaust Gas EEM 5: Preheating 0.2 280 0.3 1,035 7,245 Systems EEM 6: Improvement of 0.01 0.16 14 163 0.37 178 1,246 Lighting Systems 9 EEM 7: Solar Water 0.2 16 0.2 204 1,427 Heaters EEM 8: Improvement of 1.5 130 1,512 0.17 0.52 1,656 11,590 Cooling Systems Total 10 5,511 3,814 0.44 9 36,874 258,121 As shown above, thermal savings are more important than electricity savings. The reduction in PPL sales will diminish revenues by about 0.4 million considering a production cost of USD 0.21 per kWh. Table 42: Total Savings for PPL and Clients PPL Clients Savings Savings Electricity Fuel GWh 5.7 3.81 5,183 USD Million -0.4 3.8 6.3 It should be noted that the featured potentials are indicative only. In order to assess the resulting energy savings potential and prioritize specific EE actions, it is essential to gather comprehensive data on sector energy consumption. 3.9 WATER DISTRIBUTION NETWORK No detailed data is available to assess ECM opportunities. 18 Including network losses. Econoler International 52 Ref.: 5505 Asian Development Bank TA 6485-REG: Promoting Energy Efficiency in the Pacific - Contract No. COSO/90-492 Final Report 4 OTHER RECOMMENDATIONS: Development of an Energy Balance and Energy Matrix: One of the barriers to EE program development in PNG is the unavailability of information on energy consumption by sector, sub-sector and energy type. Without an appropriate set of data on energy consumption and demand profiles it was not possible to develop an detailed energy efficiency programs or define specific targets and objectives. An energy balance is an accounting system that describes the flow of energy through an economy (regional, state or national) during a given period, usually a calendar year. This combination of information is constructed from the most complete available sources of official energy statistics on production, conversion, consumption and energy carrier exports. The main objective of an energy balance is to provide information for the planning of investments in different sectors of the energy system. It should also present indications of where to direct investments in research and development for more efficient energy use. The energy balance consists of a matrix, also called an energy matrix, in which all forms of energy, their conversions, losses and uses in a given period are registered in the same unit of measurement. An energy balance can be presented in various forms, each with its own conventions and purposes. The most common form includes columns, with quantities of energy sources or carriers used, and rows with data on conversions and uses. An energy balance can also be expressed in terms of useful energy, aggregating data regarding the efficiency of final energy use. In order to calculate this efficiency, it is necessary to distinguish two steps in the process of final energy use. The first step occurs when energy is transformed into a final energy carrier and the second step refers to the way in which this energy carrier is utilised to produce goods or provide services. For example, diesel fuel can be used to produce steam in a boiler with an efficiency of 60%. The steam produced will then be distributed to other pieces of equipment where its energy will be used. This second step can have a new efficiency related to the way in which the steam system is designed and operated. Often it is possible to increase the efficiency of this phase without major investments. An energy balance in terms of useful energy requires detailed data regarding end-use technologies and how they are utilized. Load Curve: Electricity demand is not uniform throughout the day or an entire year. Many electricity end-uses are related to the time of day, such as lighting and cooking. The hours of the day during which the highest demand occurs is known as the peak period. During the year, there is also a particular day when electricity demand is at its yearly peak. This yearly peak is typically both climate- and time-related. Some regions face their peak demand during the hottest days of summer, when air conditioning is mostly responsible for the increased electricity demand. In other areas, residential lighting and other evening uses of electricity may be the main drivers of peak demand. Econoler International 53 Ref.: 5505 Asian Development Bank TA 6485-REG: Promoting Energy Efficiency in the Pacific - Contract No. COSO/90-492 Final Report Projections for electrical energy (kWh) are typically made on an annual basis but it is also important to project the future load profile (daily or annually) to reflect the daily and seasonal fluctuations in demand. Peak demand is of particular interest to utilities because their capital requirements for building new generation capacity are normally driven by peak demand considerations. One aspect of DSM involves ways to change the shape of the load curve. Typically, utilities will strive to avoid the concentration of demand during peak hours of the day and will try to spread this demand throughout the day (or night). Data Requirements of End-Use Models: Energy consumption analysis requires a breakdown by sector, activity and end-use. The estimation of end-use breakdowns is important to determine which end-users are most relevant. Once these are known, their magnitude is quantified more accurately to evaluate the opportunities for energy efficiency improvement. The table below illustrates one such possible breakdown. Econoler International 54 Ref.: 5505 Asian Development Bank TA 6485-REG: Promoting Energy Efficiency in the Pacific - Contract No. COSO/90-492 Final Report Table 43: Energy End-Use Possible Breakdown Consumer Class End-use Technologies/Measures Incandescent Compact fluorescent Fluorescent (electronic, electromagnetic) Lighting Fixtures Improved lighting design Day lighting Residential Sector Ventilation, fans Cooling Air conditioners Natural ventilation Space heating Gas, electric, central heating Refrigeration Efficient refrigeration Solar Water heating Gas Incandescent Fluorescent + electromagnetic ballasts Fluorescent + electronic ballasts Mercury vapor Lighting Reflective fixtures Improved lighting design Day lighting Commercial Occupancy sensors Services Sector Ventilation, fans Air conditioners Cooling Natural ventilation Passive cooling Refrigeration Efficient refrigeration Heat pump water heaters Water heating Gas Space heating Gas, electric, central heating Conventional motors Efficient motors Power VSDs + motors Better sizing of motors and tasks Incandescent Industrial Sector Fluorescent + electromagnetic ballasts Fluorescent + electronic ballasts Lighting Mercury vapor Reflexive fixtures Improved lighting design and Day lighting Estimates of end-use equipment saturation and energy use can be made on the basis of aggregate indicators of major end-use categories, for example, information on appliance sales. Where comprehensive information of this type is not available, one might try to use existing information from other countries with similar socio-economic development characteristics to make estimates of end-use saturation and energy consumption. Econoler International 55 Ref.: 5505 Asian Development Bank TA 6485-REG: Promoting Energy Efficiency in the Pacific - Contract No. COSO/90-492 Final Report Alternatively, a more reliable analysis can be performed through a bottom-up approach, which includes extensive questionnaire-based surveys, billing data analysis, energy audits and measurements. End-use projection models are very data intensive. Usually, the approach uses a base year for which detailed breakdowns of the consumer classes and main end-uses is available. Econoler International 56 Ref.: 5505 Asian Development Bank TA 6485-REG: Promoting Energy Efficiency in the Pacific - Contract No. COSO/90-492 Final Report APPENDIX B.1: PNG - ESTIMATED SAVINGS PER SECTOR IN GOVERNMENT BUILDINGS, REFERENCE TABLES Hospitals % Unit Energy Consumption 2,790,500 6% kWh Number of Buildings 2 Buildings Ventilation/Fan/Cooling 976,700 35% kWh Consumption Lighting Consumption 920,900 33% kWh Other Load Consumption 893,000 32% kWh Estimated Investment Average Savings 234,500 8% kWh PGK USD PBP Lighting 92,100 10% kWh 124,500 46,050 3.2 Cooling 97,700 10% kWh 343,300 127,010 Estimated Savings Other 44,700 5% kWh 110,300 40,800 Total 181,761 PGK 578,000 213,860 o Group 1 3,000 kW/Month and More % Unit Energy Consumption 42,605,967 89% kWh Number of Buildings 138 Building s Ventilation/Fan/Cooling 12,781,800 30% kWh Consumption Lighting Consumption 8,521,200 20% kWh Computer Consumption 12,781,800 30% kWh Other Load Consumption 8,521,200 20% kWh Estimated Investment Average Savings 2,939,800 7% kWh PGK USD PBP Lighting 852,100 10% kWh 1,151,600 426,100 3.4 Cooling 1,022,500 8% kWh 3,868,900 1,431,500 Estimated Savings Other 1,065,200 5% kWh 2,630,000 973,100 Total 2,278,600 PGK 7,650,500 2,830,700 Econoler International 57 Ref.: 5505 Asian Development Bank TA 6485-REG: Promoting Energy Efficiency in the Pacific - Contract No. COSO/90-492 Final Report Group 2 Between 1,000 and 3,000 kW/Month % Unit Energy Consumption 1,507,700 3% kWh Number of Buildings 71 Buildings Ventilation/Fan/Cooling 339,300 23% kWh Consumption Lighting Consumption 510,500 34% kWh Computer Consumption 600,800 40% kWh Other Load Consumption 57,100 4% kWh Estimated Investment Average Savings 143,400 10% kWh PGK USD PBP Lighting 76,600 15% kWh 103,500 38,300 2.8 Cooling 33,900 10% kWh 128,400 47,500 Estimated Savings Other 32,900 5% kWh 81,400 30,100 Total 111,100 PGK 313,200 115,900 Group 3 Between 300 and 1,000 kW/Month % Unit Energy Consumption 752,406 2% kWh Number of Buildings 102 Buildings Ventilation/Fan/Cooling 186,800 25% kWh Consumption Lighting Consumption 153,200 20% kWh Computer Consumption 383,100 51% kWh Other Load Consumption 29,300 4% kWh Estimated Investment Average Savings 120,500 16% kWh PGK USD PBP Lighting 30,600 20% kWh 41,400 15,300 3.2 Cooling 28,000 15% kWh 105,900 39,200 Estimated Savings Other 61,900 15% kWh 152,700 56,500 Total 93,400 PGK 300,000 111,000 Econoler International 58 Ref.: 5505 Asian Development Bank TA 6485-REG: Promoting Energy Efficiency in the Pacific - Contract No. COSO/90-492 Final Report Group 4 Between 100 and 300 kW/Month % Unit Energy Consumption 124,428 0% kWh Number of Buildings 54 Building s Ventilation/Fan/Cooling 18,700 15% kWh Consumption Lighting Consumption 62,200 50% kWh Computer Consumption 18,700 15% kWh Other Load Consumption 24,900 20% kWh Estimated Investment Average Savings 10,300 8% kWh PGK USD PBP Lighting 6,200 10% kWh 8,400 3,100 1.8 Cooling 1,900 10% kWh 300 100 Estimated Savings Other 2,200 5% kWh 5,400 2,000 Total 8,000 PGK 14,100 5,200 Econoler International 59 Ref.: 5505 Asian Development Bank TA 6485-REG: Promoting Energy Efficiency in the Pacific - Contract No. COSO/90-492 Final Report APPENDIX B.2: PNG - ESTIMATED SAVINGS FOR STREET LIGHTING, REFERENCE TABLES Old System New Proposed System Savings Number of Power Old Fixture Proposed New Fixture Energy Energy Savings Payback Load Lamps Baseline System Consumption Period Reduction W kWh/Year W kWh/Year PGK % kWh Years kW 400 250 W 470,400 100 LED 183,120 61% 61% 287,280 3.8 68 41 150 W 28,930 60 LED 11,365 61% 61% 17,564 5.2 4 23 125 W 13,283 60 LED 6,376 52% 52% 6,907 7.5 2 5111 80 W 1,889,026 30 LED 708,385 63% 63% 1,180,641 6.3 281 115 50 W 26,565 30 LED 15,939 40% 40% 10,626 15.7 3 144 40 W 29,030 30 LED 19,958 31% 31% 9,072 23.2 2 218 90 W 90,644 40 LED 40,286 56% 56% 50,358 7.1 12 40 135 W 24,948 60 LED 11,088 56% 56% 13,860 6.5 3 6092 2,572,826 996,517 61% 1,576,308 6.0 375 Econoler International 60 Ref.: 5505 Asian Development Bank TA 6485-REG: Promoting Energy Efficiency in the Pacific - Contract No. COSO/90-492 Final Report APPENDIX B.3: PNG – PFCS CALCULATIONS Power Losses and Excess Heat Generation In addition to possible power factor charges, low power factor also results in excess current in the electrical distribution system upstream from the device. The excess line current results in increased resistive losses, and hence heat gain, in the wiring and electrical distribution equipment. The quantity of line losses associated with low power factor correction can be calculated as follows: LL1 = Line loss before power factor correction LL2 = Line loss after power factor correction % Line Loss Savings = (LL1 – LL2) / LL1 LL1 = I2 1R1 = (kVA1/V1) 2 R1 = [(kW1/PF1) / V1] 2 R1 = [kW2 R / V2]1 / PF12 Thus: LL2 = [kW2 R / V2]2 / PF2 Assuming everything remains constant except for the power factor: [kW2R / V2]1 = [kW2 R / V2]2 = [kW2 R / V2] And, % Line Loss Savings = (LL1 – LL2) / LL1 % Line Loss Savings = [(kW2 R / V2) / PF12 – (kW2 R / V2) / PF22] / (kW2 R / V2)1 / PF12 % Line Loss Savings = [1 / PF12 – 1 / PF22] / 1 / PF12 % Line Loss Savings = 1 – (PF1/ PF2) 2 For example, if the power factor were improved from 80% to 95%, the percent line loss savings would be: % Line Loss Savings = 1 – (PF1/ PF2)2 = 1 – (80%/ 95%)2 = 29.1% In addition, heat generation in upstream electrical distribution equipment would be reduced by 29%. If the electrical circuits are fully loaded due to excess current, power factor correction could mitigate this problem. Although percent line loss savings are relatively large, total energy savings are typically small since line losses are low in percentage. For example, if line losses are 2% of the total power draw, the total power savings generated from correcting the power factor would be: 2% x 29.1% = 0.58%. Econoler International 61 Ref.: 5505 Asian Development Bank TA 6485-REG: Promoting Energy Efficiency in the Pacific - Contract No. COSO/90-492 Final Report Some manufacturers of power factor correction equipment claim that actual losses are much greater than those calculated here, but there is little documented evidence of this in the open literature. Econoler International 62 Ref.: 5505 Asian Development Bank TA 6485-REG: Promoting Energy Efficiency in the Pacific - Contract No. COSO/90-492 Final Report List of Customers who Need a System with 10 KVAR and Above: Reduction of Line Savings on Line TotalAvg Load Savings Correction system Investment Losses Line LossesLosses PBP Needed Selected cost KVA PF kwhlday kwhlyear kW KVA kW Factor cost US$ % kWh kWh $ Years KVAR KVAR PGK$ RAY WHITE GARDEN CITY tx1 356 0.72 2,563 640,800 256 86 82 0.635 163 160 9,951 26,895 43% 12,816 5,454 1,564 6.4 TELIKOM RUMANA tx1 465 0.68 3,162 790,500 316 132 126 0.750 237 240 14,927 40,343 49% 15,810 7,710 2,211 6.8 NPF (DELOITTE TOWER) 1256 0.85 10,676 2,669,000 1,068 132 126 0.291 311 311 19,343 52,277 20% 53,380 10,646 3,053 6.3 TELIKOM RUMANA tx2 544 0.72 3,917 979,200 392 132 125 0.635 249 250 15,549 42,024 43% 19,584 8,335 2,390 6.5 MELASESIAN TRUSTEE SERVICES (Pacific Place 549 0.75 4,118 1,029,375 412 116 110 0.553 228 228 14,180 38,325 38% 20,588 7,756 2,224 6.4 PPL NATIONAL OFFICE 517 0.76 4,715 1,178,760 393 103 98 0.526 207 207 12,874 34,795 36% 23,575 8,487 2,434 5.3 POSF AOPI CENTRE 773 0.83 7,699 1,924,770 642 98 93 0.343 220 220 13,683 36,981 24% 38,495 9,111 2,613 5.2 MELASESIAN TRUSTEE SERVICES (Pacific MMI) 489 0.77 4,518 1,129,590 377 93 88 0.500 188 188 11,693 31,602 34% 22,592 7,750 2,223 5.3 PARADISE FOOD LIMITED 506 0.78 4,736 1,184,040 395 91 86 0.474 187 187 11,630 31,434 33% 23,681 7,717 2,213 5.3 NOWRA NO. 60 PL 749 0.84 7,550 1,887,480 629 87 82 0.317 200 200 12,439 33,619 22% 37,750 8,236 2,362 5.3 MELANESIAN TRUSTEE SERVICE (Pacific Place tx 501 0.79 4,749 1,187,370 396 84 80 0.447 177 177 11,008 29,753 31% 23,747 7,326 2,101 5.2 SNS WAIGANI - MERCANDISE DIV 426 0.77 3,936 984,060 328 81 77 0.500 164 164 10,200 27,567 34% 19,681 6,752 1,936 5.3 RAY WHITE GARDEN CITY tx2 357 0.74 3,170 792,540 264 79 75 0.580 153 153 9,516 25,718 39% 15,851 6,233 1,788 5.3 BANK OF PNG tx1 554 0.82 5,451 1,362,840 454 76 72 0.369 168 168 10,449 28,240 25% 27,257 6,949 1,993 5.2 PMF c/- STC (BNG TRADING) 372 0.76 3,393 848,160 283 74 71 0.526 149 149 9,267 25,046 36% 16,963 6,107 1,751 5.3 SARCO TIMBER 220 0.67 1,769 442,200 147 65 62 0.779 115 115 7,152 19,331 50% 8,844 4,445 1,275 5.6 POSF - MOGORU MOTO 427 0.81 4,150 1,037,610 346 63 60 0.395 137 137 8,521 23,029 27% 20,752 5,666 1,625 5.2 REVENUE HAUS tx1 369 0.79 3,498 874,530 292 62 59 0.447 130 130 8,085 21,852 31% 17,491 5,395 1,547 5.2 CLOUDY BAY TIMBER PRODUCTS 189 0.67 1,520 379,890 127 56 53 0.779 99 100 6,219 16,809 50% 7,598 3,819 1,095 5.7 AUSSIE HIGH COMMISSION 449 0.84 4,526 1,131,480 377 52 49 0.317 120 120 7,463 20,171 22% 22,630 4,937 1,416 5.3 ELA BEACH TOWER 298 0.79 2,825 706,260 235 50 48 0.447 105 110 6,841 18,490 31% 14,125 4,357 1,250 5.5 POSF -EDA RUMANA 206 0.79 1,953 488,220 163 35 33 0.447 73 70 4,354 11,767 31% 9,764 3,012 864 5.0 DEFENCE RETIREMNET BENEFIT (DEFENS HAUS 430 0.85 4,386 1,096,500 366 45 43 0.291 106 110 6,841 18,490 20% 21,930 4,374 1,254 5.5 KWILA INSURANCE - ORI LAVI 355 0.83 3,536 883,950 295 45 43 0.343 101 100 6,219 16,809 24% 17,679 4,184 1,200 5.2 VULUPIDI HAUS tx1 344 0.84 3,468 866,880 289 40 38 0.317 92 90 5,598 15,128 22% 17,338 3,783 1,085 5.2 BSP - ISLANDER 428 0.87 4,468 1,117,080 372 36 34 0.238 89 90 5,598 15,128 16% 22,342 3,604 1,034 5.4 REVENUE HAUS tx2 256 0.82 2,519 629,760 210 35 33 0.369 78 80 4,976 13,448 25% 12,595 3,211 921 5.4 VULUPIDI HAUS tx2 367 0.86 3,787 946,860 316 35 33 0.265 84 80 4,976 13,448 18% 18,937 3,418 980 5.1 MOORE PRINTING 195 0.79 1,849 462,150 154 33 31 0.447 69 70 4,354 11,767 31% 9,243 2,851 818 5.3 YUMICOM TIMBERS 85 0.58 592 147,900 49 33 31 1.076 53 50 3,110 8,405 63% 2,958 1,855 532 5.8 PULUMBA LIMITED 85 0.6 612 153,000 51 31 30 1.005 51 50 3,110 8,405 60% 3,060 1,839 528 5.9 PRYDE FURNITURE 120 0.71 1,022 255,600 85 30 29 0.663 57 60 3,732 10,086 44% 5,112 2,257 647 5.8 BSP -4 MILE 236 0.83 2,351 587,640 196 30 28 0.343 67 70 4,354 11,767 24% 11,753 2,782 798 5.5 FIRST HERITAGE CENTRE 225 0.83 2,241 560,250 187 28 27 0.343 64 60 3,732 10,086 24% 11,205 2,652 761 4.9 ENB SUPERMARKET - AFL KONE 327 0.87 3,414 853,470 284 28 26 0.238 68 70 4,354 11,767 16% 17,069 2,754 790 5.5 UAA TIMBERS 52 0.46 287 71,760 24 27 25 1.602 38 40 2,488 6,724 77% 1,435 1,099 315 7.9 GATEWAY HOTEL 420 0.89 4,486 1,121,400 374 27 25 0.184 69 70 4,354 11,767 12% 22,428 2,744 787 5.5 BOROKO FOODWORLD 137 0.77 1,266 316,470 105 26 25 0.500 53 50 3,110 8,405 34% 6,329 2,171 623 5.0 DATEC(PNG) LIMITED 403 0.89 4,304 1,076,010 359 25 24 0.184 66 70 4,354 11,767 12% 21,520 2,632 755 5.8 INTERVEST LIMITED 203 0.84 2,046 511,560 171 24 22 0.317 54 50 3,110 8,405 22% 10,231 2,232 640 4.9 BANK OF PNG tx2 194 0.85 1,979 494,700 165 20 19 0.291 48 50 3,110 8,405 20% 9,894 1,973 566 5.5 WOODSTOCK SAWMILL 45 0.6 324 81,000 27 17 16 1.005 27 30 1,866 5,043 60% 1,620 974 279 6.7 LAMANA HOTAL 252 0.89 2,691 672,840 224 16 15 0.184 41 40 2,488 6,724 12% 13,457 1,646 472 5.3 BSP - COMMERCIAL CENTRE GORDONS 125 0.84 1,260 315,000 105 14 14 0.317 33 30 1,866 5,043 22% 6,300 1,374 394 4.7 BSP HQ DOWNTOWN tx2 149 0.86 1,538 384,420 128 14 13 0.265 34 30 1,866 5,043 18% 7,688 1,388 398 4.7 BSP HQ DOWNTOWN tx1 148 0.86 1,527 381,840 127 14 13 0.265 34 30 1,866 5,043 18% 7,637 1,378 395 4.7 POSF - BURNS HOUSE 180 0.88 1,901 475,200 158 13 13 0.211 33 30 1,866 5,043 14% 9,504 1,349 387 4.8 PNG WATER LIMITED TREATMENT PLANT 60 0.85 612 153,000 51 6 6 0.291 15 10 622 1,681 20% 3,060 610 175 3.6 PNG WATER LIMITED PS tx1 182 0.92 2,009 502,320 167 6 5 0.097 16 20 1,244 3,362 6% 10,046 624 179 6.9 o PNG WATER LIMITED PS tx2 181 0.92 1,998 499,560 167 6 5 0.097 16 20 1,244 3,362 6% 9,991 621 178 7.0 Econoler International 63 Ref.: 5505 Asian Development Bank TA 6485-REG: Promoting Energy Efficiency in the Pacific - Contract No. COSO/90-492 Final Report APPENDIX B.4: PNG - INDUSTRIAL ENERGY EFFICIENCY ESTIMATION DETAILS ECM 1: Boiler Efficiency Improvements 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Total (Combustion and Insulation) Penetration Rate 10 % 10% 20% 40% 60% 80% 90% 100% 100% 100% 100% Years Final Energy Savings TOE 211 422 844 1,265 1,687 1,898 2,109 2,109 2,109 2,109 14,763 Investment per Year USD M 0.31 0.31 0.61 0.61 0.61 0.31 0.31 0.00 0.00 0.00 3.1 Cumulative Savings TOE 211 633 1,476 2,742 4,429 6,327 8,436 10,545 12,654 14,763 Primary Energy TOE 211 422 844 1,265 1,687 1,898 2,109 2,109 2,109 2,109 14,763 Savings Savings USD M 0.15 0.29 0.59 0.88 1.17 1.32 1.46 1.46 1.46 1.46 10 TCO2 Savings TCO2 780 1,561 3,121 4,682 6,243 7,023 7,803 7,803 7,803 7,803 54,623 TCO2 Cumulative TCO 780 2,341 5,462 10,144 16,387 23,410 31,213 39,017 46,820 54,623 Savings 2 Savings PPL/Year Client/Year GWh USD Million 1.46 Econoler International 64 Ref.: 5505 Asian Development Bank TA 6485-REG: Promoting Energy Efficiency in the Pacific - Contract No. COSO/90-492 Final Report ECM 2: Heat Recovery 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Total Systems Penetration Rate 10 % 10% 20% 40% 60% 80% 90% 100% 100% 100% 100% Years Final Energy Savings TOE 130 260 519 779 1,039 1,169 1,299 1,299 1,299 1,299 9,091 Investment per Year USD M 0.08 0.08 0.16 0.16 0.16 0.08 0.08 0.00 0.00 0.00 0.8 Cumulative Savings TOE 130 390 909 1,688 2,727 3,896 5,195 6,494 7,792 9,091 Primary Energy TOE 130 260 519 779 1039 1,169 1,299 1,299 1,299 1,299 9,091 Savings Savings USD M 0.09 0.18 0.36 0.54 0.72 0.81 0.90 0.90 0.90 0.90 6 TCO2 Savings TCO2 481 961 1,922 2,883 3,844 4,325 4,805 4,805 4,805 4,805 33,636 TCO Cumulative 2 TCO 481 1,442 3,364 6,247 10,091 14,416 19,221 24,026 28,831 33,636 Savings 2 Savings PPL/Year Client/Year GWh USD Million 0.90 Econoler International 65 Ref.: 5505 Asian Development Bank TA 6485-REG: Promoting Energy Efficiency in the Pacific - Contract No. COSO/90-492 Final Report ECM 3: High Efficiency 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Total Motors Penetration Rate 10 % 10% 20% 40% 60% 80% 90% 100% 100% 100% 100% Years Final Energy Savings TOE 18 37 74 110 147 166 184 184 184 184 1,288 Investment per Year USD M 0.01 0.02 0.04 0.06 0.09 0.10 0.00 0.00 0.00 0.00 0.3 Cumulative Savings TOE 18 55 129 239 386 552 736 920 1,104 1,288 Primary Energy TOE 63 127 253 380 507 570 633 633 633 633 4,433 Savings Electricity Savings USD M 0.21 0.42 0.84 1.27 1.69 1.90 2.11 2.11 2.11 2.11 Power Savings MW 0.02 0.05 0.10 0.15 0.20 0.22 0.24 0.24 0.24 0.24 Power Savings USD M 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 Total Savings USD M 0.21 0.42 0.84 1.27 1.69 1.90 2.11 2.11 2.11 2.11 14.79 TCO2 Savings TCO2 234 469 937 1,406 1,874 2,109 2,343 2,343 2,343 2,343 16,401 TCO Cumulative 2 TCO 234 703 1,640 3,046 4,920 7,029 9,372 11,715 14,058 16,401 Savings 2 Savings 2011- PPL/Year Client/Year 2020 GWh 2.5 2.1 15.0 USD Million -0.2 0.6 Econoler International 66 Ref.: 5505 Asian Development Bank TA 6485-REG: Promoting Energy Efficiency in the Pacific - Contract No. COSO/90-492 Final Report ECM 4: Cogeneration - 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Total Exhaust Gas Penetration Rate 10 % 10% 20% 40% 60% 80% 90% 100% 100% 100% 100% Years Final Energy Savings TOE 148 296 592 888 1,184 1,332 1,480 1,480 1,480 1,480 10,360 Investment per Year USD M 0.60 0.32 0.64 0.64 0.64 0.32 0.32 0.00 0.00 0.00 3.5 Cumulative Savings TOE 148 444 1,036 1,924 3,108 4,440 5,920 7,400 8,880 10,360 Primary Energy Savings TOE 509 1,019 2,038 3,057 4,076 4,585 5,095 5,095 5,095 5,095 35,663 Savings USD M 0.35 0.71 1.41 2.12 2.83 3.18 3.54 3.54 3.54 3.54 25 TCO2 Savings TCO2 1,885 3,770 7,540 11,310 15,080 16,965 18,850 18,850 18,850 18,850 131,952 TCO2 Cumulative Savings TCO2 1,885 5,655 13,195 24,505 39,586 56,551 75,401 94,251 113,102 131,952 Savings PPL/Year Client/Year GWh USD Million 3.5 Econoler International 67 Ref.: 5505 Asian Development Bank TA 6485-REG: Promoting Energy Efficiency in the Pacific - Contract No. COSO/90-492 Final Report ECM 5: Preheating 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Total Systems Penetration Rate 10 % 10% 20% 40% 60% 80% 90% 100% 100% 100% 100% Years Final Energy Savings TOE 28 56 112 168 224 252 280 280 280 280 1,958 Investment per Year USD M 0.11 0.02 0.03 0.03 0.03 0.02 0.02 0.00 0.00 0.00 0.3 Cumulative Savings TOE 28 84 196 364 587 839 1,119 1,399 1,678 1,958 Primary Energy TOE 28 56 112 168 224 252 280 280 280 280 1,958 Savings Savings USD M 0.02 0.04 0.08 0.12 0.16 0.17 0.19 0.19 0.19 0.19 1.4 TCO2 Savings TCO2 103 207 414 621 828 931 1,035 1,035 1,035 1,035 7,245 TCO Cumulative 2 TCO 103 310 724 1,345 2,173 3,105 4,140 5,175 6,210 7,245 Savings 2 Savings PPL/Year Client/Year GWh USD Million 0.19 Econoler International 68 Ref.: 5505 Asian Development Bank TA 6485-REG: Promoting Energy Efficiency in the Pacific - Contract No. COSO/90-492 Final Report ECM 6: Improvement 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Total of Lighting Systems Penetration Rate 10 % 10% 20% 40% 60% 80% 90% 100% 100% 100% 100% Years Final Energy Savings TOE 1 3 6 8 11 13 14 14 14 14 98 Investment per Year USD M 0.04 0.04 0.07 0.07 0.07 0.04 0.04 0.00 0.00 0.00 0.4 Cumulative Savings TOE 1 4 10 18 29 42 56 70 84 98 Primary Energy TOE 5 10 19 29 39 43 48 48 48 48 336.9 Savings Electricity Savings USD M 0.02 0.03 0.06 0.10 0.13 0.14 0.16 0.16 0.16 0.16 1.1 Power Savings MW 0.002 0.004 0.007 0.011 0.015 0.017 0.019 0.019 0.019 0.019 0.1 Power Savings USD M 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.0 Total Savings USD M 0.02 0.03 0.06 0.10 0.13 0.14 0.16 0.16 0.16 0.16 1.1 TCO2 Savings TCO2 18 36 71 107 142 160 178 178 178 178 1,246.5 TCO Cumulative 2 TCO 18 53 125 231 374 534 712 890 1,068 1,246 Savings 2 Savings PPL/Year Client/Year 20101-2020 GWh 0.2 0.16 1.1 USD Million -0.01 0.05 Econoler International 69 Ref.: 5505 Asian Development Bank TA 6485-REG: Promoting Energy Efficiency in the Pacific - Contract No. COSO/90-492 Final Report ECM 7: Solar Water 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Total Heaters Penetration Rate 10 % 10% 20% 40% 60% 80% 90% 100% 100% 100% 100% Years Final Energy Savings TOE 2 3 6 10 13 14 16 16 16 16 112 Investment per Year USD M 0.04 0.02 0.03 0.03 0.03 0.02 0.02 0.00 0.00 0.00 0.2 Cumulative Savings TOE 2 5 11 21 34 48 64 80 96 112 Primary Energy TOE 6 11 22 33 44 50 55 55 55 55 385.6 Savings Savings USD M 0.02 0.04 0.07 0.11 0.15 0.17 0.18 0.18 0.18 0.18 1.3 TCO2 Savings TCO2 20 41 82 122 163 183 204 204 204 204 1,426.9 TCO Cumulative 2 TCO 20 61 143 265 428 612 815 1,019 1,223 1,427 Savings 2 Savings PPL/Year Client/Year GWh 0.2 0.2 USD Million 0.0 0.1 Econoler International 70 Ref.: 5505 Asian Development Bank TA 6485-REG: Promoting Energy Efficiency in the Pacific - Contract No. COSO/90-492 Final Report ECM 8: Improvement 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Total of Cooling Systems Penetration % 10% 20% 40% 60% 80% 90% 100% 100% 100% 100% 10 Years Rate Final Energy TOE 13 26 52 78 104 117 130 130 130 130 910 Savings Installed Thermal Power kWh 151,194 302,389 604,778 907,167 1,209,555 1,360,750 1,511,944 1,511,944 1,511,944 1,511,944 10,583,610 Investment per USD M 0.05 0.05 0.10 0.10 0.10 0.05 0.05 0.00 0.00 0.00 0.5 Year Cumulative TOE 13 39 91 169 273 390 520 650 780 910 Savings Primary Energy TOE 45 89 179 268 358 403 447 447 447 447 3,132 Savings Electricity USD M 0.15 0.30 0.60 0.90 1.19 1.34 1.49 1.49 1.49 1.49 10.4 Savings Power Savings MW 0.02 0.03 0.07 0.10 0.14 0.16 0.17 0.17 0.17 0.17 1.2 Power Savings USD M 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 Total Savings USD M 0.15 0.30 0.60 0.90 1.19 1.34 1.49 1.49 1.49 1.49 10.4 TCO2 Savings TCO2 166 331 662 993 1,325 1,490 1,656 1,656 1,656 1,656 11,590 TCO2 Cumulative TCO2 166 497 1,159 2,152 3,477 4,967 6,623 8,279 9,934 11,590 Savings Savings PPL/Year Client/Year 2011-2020 GWh 1.8 1.5 10.6 USD Million -0.1 0.4 Econoler International 71 Ref.: 5505 160, rue Saint-Paul, bureau 200, Québec (Québec) G1K 3W1 Canada Tel. : +1 (418) 692-2592 Fax : +1 (418) 692-4899 www.econoler.com ASIAN DEVELOPMENT BANK TA 6485-REG: PROMOTING ENERGY EFFICIENCY IN THE PACIFIC CONTRACT NO. COSO/90-492 APPENDIX C - SAMOA - May 2011 - Asian Development Bank TA 6485-REG: Promoting Energy Efficiency in the Pacific - Contract No. COSO/90-492 Samoa Report ABBREVIATIONS AND ACRONYMS AC Air Conditioning CT Current Transformer DSM Demand-Side Management ED Energy Division EE Energy Efficiency EPC Electric Power Corporation GEF Global Environment Facility HPS High-Pressure Sodium LED Light Emitting Diode LPG Liquid Propane Gas MEPS Minimum Energy Performance Standards MNRE Ministry of Natural Resources and Environment MV Mercury Vapor NGHGAS National Greenhouse Gas Abatement Strategy PDMC Pacific Developing Member Country (for ADB) PFC Power Factor Correction RE Renewable Energy REEEP Renewable Energy & Energy Efficiency Partnership SHA Samoa Hotel Association SOPAC Pacific Island Applied Geoscience Commission STA Samoa Tourism Authority SWH Solar Water Heaters TOU Time of Use Econoler International Ref.: 5505 ii Asian Development Bank TA 6485-REG: Promoting Energy Efficiency in the Pacific - Contract No. COSO/90-492 Samoa Report TABLE OF CONTENTS ABBREVIATIONS AND ACRONYMS ...... II TABLE OF CONTENTS ...... III 1 COUNTRY PROFILE ...... 1 1.1 Fossil Fuels...... 1 1.2 Power Supply Sector ...... 2 1.3 Electricity Tariffs ...... 5 1.4 Energy Efficiency Policy Implementation ...... 6 1.5 Policy and Institutional Recommendations ...... 9 2 ENERGY EFFICIENCY PROJECT IMPLEMENTATION AND IMPACT EVALUATION ...... 20 2.1 Key PF Program Parameters ...... 20 2.2 Impact Evaluation ...... 24 2.3 Lessons Learned ...... 24 3 FUTURE EE PROGRAM DESIGN AND IMPLEMENTATION ...... 26 3.1 General Assumption and Parameters ...... 28 3.2 Energy Efficiency in Government Buildings ...... 29 3.3 Street Lighting ...... 32 3.4 Energy Efficiency in the Hotel Sector ...... 34 3.5 Energy Efficiency in the Residential Sector – CFLs ...... 36 3.6 EneRgy Labelling and MEPS ...... 38 3.7 Power Factor Correction Systems ...... 40 3.8 Energy Efficiency in the Industrial Sector ...... 42 3.9 Water Distribution Network ...... 42 4 OTHER RECOMMENDATIONS: ...... 44 APPENDIX C.1: SAMOA - ESTIMATED SAVINGS PER SECTOR IN GOVERNMENT BUILDINGS, REFERENCE TABLES ...... 48 APPENDIX C.2: SAMOA - ESTIMATED SAVINGS FOR STREET LIGHTING, REFERENCE TABLES ...... 51 APPENDIX C.3: SAMOA – PFCS CALCULATION DETAILS ...... 52 APPENDIX C.4: LIST OF CUSTOMERS NEEDING AT LEAST A 10 KVAR PFCS SYSTEM ...... 54 Econoler International Ref.: 5505 iii Asian Development Bank TA 6485-REG: Promoting Energy Efficiency in the Pacific - Contract No. COSO/90-492 Samoa Report 1 COUNTRY PROFILE The Independent State of Samoa (formerly known as Western Samoa) is the country that governs the western part of the Samoan Islands in the South Pacific Ocean. The country's total land area is 2,934 km², consisting in the two large islands of Upolu and Savai’i which account for 99% of the total land area, and eight small islets. The main island of Upolu is home to 76% of Samoa's population1. Samoa's population is 182,265. Samoa’s small open economy is driven by tourism, remittances, fisheries, construction – and to a lesser extent – agriculture and small-scale manufacturing2. Private sector growth is constrained by a narrow resource base, limited infrastructure, isolation, dependence on fuel imports, a lack of skilled labor resources, and a small domestic market. In the area of traded goods and services, key challenges include expanding the particularly narrow export/foreign exchange base. Only a limited percentage (12% in 2007) of the total population in Samoa is engaged in formal paid employment. Two thirds of the potential labor force is absorbed by subsistence village agriculture, even though the resulting economic activity is not among the most important for the Samoan economy. The main food crops are coconuts, breadfruit, bananas, cocoa and taro. Some progress has been made with measures to diversify the agricultural base and the fisheries sector has shown major growth in the last 5 years with a 31% share of export revenues in March 2007. Since 1992, Samoa has pursued an active policy of seeking direct foreign investment. It has had some success, attracting the Japanese firm Yazaki, which produces wire harnesses (for motor vehicles) for export to Australia. Yazaki is the largest single employer in Samoa. Samoa’s macroeconomic performance remains highly vulnerable to economic shocks and natural disasters. Cyclones in 1990, 1991 and 2004 caused severe economic setbacks. Increased dependence on tourism, with its largely coastal infrastructure, could cause even more significant cyclone-related setbacks in the future. Given these challenges, Samoa is heavily dependent on overseas development assistance, which accounts for about 14% of the country's GDP. 1.1 FOSSIL FUELS Samoa has no oil or gas resources on its territory and relies on imported petroleum products to meet demand. Oil product imports are displayed inTable 1. 1 Census 2006 2 Ministry of External Affairs, New Zealand Econoler International 1 Ref.: 5505 Asian Development Bank TA 6485-REG: Promoting Energy Efficiency in the Pacific - Contract No. COSO/90-492 Samoa Report Table 1: Imported Oil Products 2004 - 2009 (Liters) Year Unleaded Automotive Gas Dual Purpose Total Fuels Petroleum (ULP) Oil (AGO) Kerosene (DPK) Cargo 2004 27,248,775 34,750,666 15,825,730 77,825,171 2005 26,759,615 36,451,361 13,648,454 76,859,430 2006 26,022,392 37,076,993 13,202,664 76,302,049 2007 25,812,741 39,211,041 15,044,322 80,068,104 2008 25,986,424 37,815,865 16,200,371 80,002,660 2009 27,251,063 39,934,590 18,712,891 85,898,544 In the Energy Review published in October 2009, the Ministry of Finance presented a picture of the energy sector in Samoa. The transportation sector was the main consumer of oil products (66%) and the power sector was second with 22%. The majority of electricity production (57%) in 2008 was based on AGO (diesel oil). Total petroleum consumption had declined by 7.1% from 2007 (86,429 kl) to 2008 (80,882 kl), with decreases in all major oil products using sectors in Samoa. The electricity sector recorded a drop in oil consumption of only 1.4% from 17,642 kl to 17,431 kl., partly reflecting that hydro generation was low due to reduced rain fall and had to be replaced by thermal generation Compared to the 23.6% drop in oil products use by the commercial sector, the limited reduction in diesel used for power generation. 1.2 POWER SUPPLY SECTOR Electric Power Corporation (EPC) is a government-owned corporation and the sole producer and supplier of electricity in Samoa. Gross electricity generation in 2008 amounted to 109.9 GWh, which is a drop in generation of 8.1% from 2007 (119.6 GWh). Electricity generation was 57% thermal and 43% hydro in 2008. 1.2.1 EPC Sales Electricity sales accounted for 85.5 GWh in 2008, a decrease of 12.9% from 2007 (98.2 GWh). Commercial and manufacturing sector demand accounted for 55% of total consumption in 2008. The other 45% of total consumption in 2008 was from government departments (10%), schools (3%), religious organizations (6%) and residential users (26%). In 2008, to cope with electricity price increases that came from international oil prices that peaked at US$147/bbl in August 2008, schools and governmental organizations adopted a “black out day” strategy: one day in the week, there was neither light nor any service using electricity. Some residential customers could not afford to be connected and just disconnected from the grid, with electric meters showing no consumption. Such a drastic strategy is not to be generally considered as an energy efficiency option since it relies on a reduction of services provided and indeed did not generally persist once oil prices and hence electricity dropped from late 2008. Real Energy Efficiency (EE) measures are of a different nature and lead to permanent energy reductions. Econoler International 2 Ref.: 5505 Asian Development Bank TA 6485-REG: Promoting Energy Efficiency in the Pacific - Contract No. COSO/90-492 Samoa Report 1.2.2 Sales Forecast The EPC 2008 expansion plan is based on sales forecast for the period 2008-2020. Table 2 presents the average annual sales forecast for Upolu and Savai’I to 2020. Compared to the average increase rate of 6% for the last decade, the overall 4.03% forecast increase shows a significant reduction in sales growth. Table 2: Average Annual Electricity Sales Increase Projections to 2020 MWh Yearly Main Increase Islands 2008 2020 (%) Upolu 81,444 132,520 4.14% Savai'i 9,948 14,410 3.13% Total 91,392 146,930 4.03% EPC Power Sector Expansion Project report Assuming that hydro power capacity remains unchanged and no new significant Renewable Energy (RE) capacity is added by 2020, diesel oil imports will need to increase by 6.8% annually to meet the projected electricity demand. If electricity sales were 10% lower than anticipated in 2011, total diesel oil savings for the period 2011-2020 would cumulate up to approximately WST 6,700,000 or USD 2,600,000. This estimate is indicative of the potential impact that some DSM programs could have on EPC (and hence Samoa’s) diesel costs. 1.2.3 Electricity End-Use End-use electricity demand by sector in Upolu (Table 3) is drawn from the Power Sector Expansion Project Report by EPC3. The most important contributors to peak electricity demand in Samoa are air conditioning (39%) followed by refrigeration (20%). 3 EPC and Egis Bceom, Power Sector Expansion Project Report, 2009 Econoler International 3 Ref.: 5505 Asian Development Bank TA 6485-REG: Promoting Energy Efficiency in the Pacific - Contract No. COSO/90-492 Samoa Report Table 3: Day Peak Demand Breakdown by End-Use in Upolu Sector MW % Air conditioning 6.84 39 Refrigeration 3.45 20 Fans and motors 1.74 10 Office equipment 1.52 9 Water pumps & compressors 1.24 8 Lighting 0.98 5 TV, radio, Hi-Fi 0.76 4 Others 0.98 5 Total 17.51 100 In its demand forecast, EPC anticipates a significant impact from increased air conditioning (AC). A suitably targeted Demand-Side Management (DSM) program could reduce the growth of AC and contribute to the overall country EE strategy. 1.2.4 Electricity Load Curves The electricity load curves for Upolu (Figure 1) and Savai’i (Figure 2) are significantly different, which corresponds to different electricity end-use structures. For EE purposes, EE program priorities and design should carefully consider each island's specific conditions. Figure 1: Upolu Load Curve, September 2008 Econoler International 4 Ref.: 5505 Asian Development Bank TA 6485-REG: Promoting Energy Efficiency in the Pacific - Contract No. COSO/90-492 Samoa Report Figure 2: Savai’i Load Curve, November 2008 In Upolu, the load curve is more complex than in Savai’i. The load curve shows two different peaks caused by different end-uses: the daytime peak is primarily from commercial activities and the evening peak is primarily due to household electricity demand. Consequently, to incur savings on the peak demand, an EE/DSM program should separately address both the daytime and evening peaks and their two separate sectors driving the two peaks. In Savai’i, the peak demand is primarily caused by household activities, with lighting representing a significant share. Hence, it is easier to identify and design an appropriately targeted EE program. 1.3 ELECTRICITY TARIFFS As shown in Table 4, in Samoa, the tariff structure is relatively straightforward. Table 4: Electricity Tariffs by May 1, 2010 Fuel Tariff Structure WST Base Rate Surcharge e.g Total at 13.59% 1. Domestic Consumption 1 to 50 units 0.69 0.09 0.78 51 and above units 0.82 0.11 0.93 2. Non-Domestic Consumption 0.82 0.11 0.93 The surcharge is used to adjust tariffs to diesel oil price fluctuations. The surcharge was reviewed historically on a yearly basis, and is then moved to a 6-month review basis. Due to both increased diesel prices and increased diesel price volatility, the fuel surcharge is now updated on a monthly basis. The monthly surcharge is adjusted according to the diesel price from the previous month. This monthly adjustment in electricity tariffs has a dual impact on DSM strategies: it is a good argument in favor of energy efficiency when it increases and a handicap to EE when it decreases. International experience shows that governments and power utilities often rush to kick start DSM programs when oil prices are increasing and how market participation in the program is discouraged as oil prices go down again. Econoler International 5 Ref.: 5505 Asian Development Bank TA 6485-REG: Promoting Energy Efficiency in the Pacific - Contract No. COSO/90-492 Samoa Report Such yo-yo effects may affect any EE/DSM programs in Samoa and Public Authorities in charge of EE/DSM should carefully incorporate this potential yo-yo effect by adopting a global and realistic EE/DSM strategy and keep focussed throughout international oil price fluctuation cycles 1.4 ENERGY EFFICIENCY POLICY IMPLEMENTATION 1.4.1 Current EE Activities Energy Division, MOF In 2008, MOF conducted an “Energy Awareness Day.” This successful experience has prompted MOF to plan to enlarge the information period to a 6-month awareness program targeting groups like schools, women groups, public servants/ministries and the 18 state enterprises. Funding of USD 45,000 for this initiative is expected from the PIGGAREP project. MOF is the national agency for the SOPAC-REEEP energy standards and labelling feasibility study, whose inception mission was undertaken in August 2010. EPC EPC is presently implementing two programs with energy efficiency implications. In the first project EPC is promoting the installation of pre-paid metering with a target of 75% existing customers connected in 2012. In addition, all new customer connections will automatically be fitted with pre-paid meters. According to information from the Marshall Islands where a similar program was implemented, the consumer feedback provided to customers from the introduction of pre-paid meters leads to average households electricity consumption decreases by an average of 10%. More research is required however to qualify such savings and check if similar results can be expected from the introduction of pre-paid metering in Samoa. The second EE relevant project that EPC is undertaking is a power factor correction pilot program for its large customers. A detailed assessment of program outputs and outcomes is presented in this section. Ministry of Natural Resources and Environment As a component of its National Greenhouse Gas Abatement Strategy (NGHGAS), the Ministry of Natural Resources and Environment (MNRE) has been promoting EE in land transport in Samoa through an information campaign. As the Global Environment Facility (GEF) focal point in Samoa, the MNRE has established the following list of EE priorities to be considered by GEF for financing: Awareness program CFLs in rural areas End-use analysis Government buildings: audits, implementation plan and financing Water authority: power factor correction Standards: adopt standards. Econoler International 6 Ref.: 5505 Asian Development Bank TA 6485-REG: Promoting Energy Efficiency in the Pacific - Contract No. COSO/90-492 Samoa Report Hotel Industry In 2006, the hotel industry offered 1,173 hotel rooms in Samoa. In 2007, the Samoa Tourism Authority (STA) and the Samoa Hotel Association (SHA) conducted a market research forecast for the hotel industry. An increase in international oil prices was identified as among the key impediments to continued hotel sector growth in Samoa. As oil prices rose alarmingly 2008, efficient energy management was introduced into SHA priorities. However, few initiatives have been implemented up to now as the necessary expertise is generally lacking in Samoa. SHA and its members are keen to initiate and sustain suitable energy-efficiency activities and they are very likely to respond positively to any serious EE program launched for their sector. 1.4.2 Energy Efficiency Policy EE policy and regulatory frameworks, defined as a set of specific laws, regulations and government directives are presently practically non-existent in any tangible form in Samoa. The concept of EE is mentioned in the existing national energy policies as illustrated below. However, this mention of EE in existing national energy policies has a minimal tangible impact on government operations, the population and energy users. National Energy Policy - 2007 As shown hereafter, the Samoa National Energy Policy Work Plan based on the National Energy Policy document incorporates EE components. However, most of these have remained at the identification stage since the Ministry of Finance (the Samoan government energy coordination body) relies heavily on international support, which has been minimal. Econoler International 7 Ref.: 5505 Asian Development Bank TA 6485-REG: Promoting Energy Efficiency in the Pacific - Contract No. COSO/90-492 Samoa Report Table 5 shows the limited resources available from the Samoa government and donors in 2009 and demonstrates that little field activity could be conducted with such budgets. Table 5: Energy Efficiency in the National Energy Policy – Excerpt 2 Strategy 3.6: Promote implementation of demand-side management strategies for increased efficiency for all consumers Leading Participating Performance Time Activity Budget/Source Agency Agency Indicator Frame 3.6.1 Conduct a MOF – ED, DSM activities ST$10,000 consultancy to MNRE, NUS, and relevant Govt./PIGGAREP, identify DSM Consultants agencies donors activities relevant identified EPC 2009 for Samoa and identify agencies that best address these activities. Develop DSM Consultants, DSM ST$10,000 Govt. strategies for MOF – ED, strategies financing / TA / major (top 10) NEC developed UNDP, SOPAC, EPC 2009 electricity users PIGGAREP, ADB 3.6.3 Develop and MOF – ED DSM activities ST$10,000 Govt. implement DSM Consultants, developed financing / TA / EPC activities based on NEC 2009 UNDP, SOPAC, 3.6.1 above PIGGAREP, ADB Taxation and Excise Duty Levels Currently, Samoan taxation and excise duty levels actually have a bias against the choice of energy efficiency over “business-as-usual” energy consumption in the electrical sector4. Samoa imposes an excise duty of 8% on electrical appliances and equipment, including the price differential on high-efficiency equipment that costs more than low-efficiency equipment. In addition, Samoa imposes a 15% Value-Added Goods and Services Tax (VAGST) on this type of equipment. The effect is that energy efficiency equipment is subjected to a greater combined tax than electricity consumption. A consumer choosing a high-efficiency air conditioner faces a higher combined tax rate (excise duty and VAGST) on that purchase than a consumer choosing additional electricity consumption using a lower-efficiency air conditioner. 1.4.3 Main Stakeholder Profiles In Samoa, there is presently no specific organization in charge of EE policy and program development. Key stakeholder capabilities are presently extremely limited. 4 ADB TA 4994 SAM: Implementing the Samoa National Energy Policy. Component 3 - Regulatory and Policy Reform in the Power Sector – Demand-Side Management Strategy, February 27, 2009, p. 4-1 Econoler International 8 Ref.: 5505 Asian Development Bank TA 6485-REG: Promoting Energy Efficiency in the Pacific - Contract No. COSO/90-492 Samoa Report MNRE The MNRE Renewable Energy Division has some experience in climate change mitigation programs and is keen to be involved in EE programs. Currently, this division comprises two professionals. Energy Unit, Ministry of Finance The MOF Economic and Planning Division Energy Unit is responsible for the national energy policy and in principle is responsible for EE policy and program development and management. Presently, this section comprises only two professionals who are already overburdened with inner mandates and various international program coordination and reporting assignments (Clean Energy Fund, ADB, Pacific Regional Project, PIGGAREP). EPC EPC conducted numerous information and awareness programs on how to save on household electricity bills in 2008 when the surcharge on electricity tariffs reflecting oil product price increases was increasing every month. This EPC information and awareness activity decreased as international oil prices collapsed from September 2008. Even though useful advice was provided to customers, this information and awareness activity primarily targeted alleviating tensions in the community around rising electricity tariffs and therefore was not part of a planned and sustainable EE strategy. The EPC PMU is responsible for the Power Factor Correction Program implemented in Samoa with ADB support. This Unit has no capabilities in EE program design and, presently, its strategic development plan makes no mention of EE. Power sector regulations are under EPC mandate. 1.5 POLICY AND INSTITUTIONAL RECOMMENDATIONS The rationale behind supporting the development of an EE culture and institution or related initiatives in Samoa is directly linked to ongoing international oil price instability and expected higher prices in the future, which represents a significant threat to ongoing and future economic development in Samoa. One aspect should be highlighted: the international support required to bring Samoa’s EE policy and programs into tangible implementation and impact reality. Samoa should take advantage of international experience in the initiatives detailed below to get experts input through technical assistance programs. Specific aspects of such assistance are listed. However, this does not mean that the Government of Samoa should transfer all its responsibilities to external experts. It is essential for Samoan EE staff to develop their own in-house expertise and capacity, through the twinning support of foreign experts, in particular the capacity to perform activities related to the normal life cycle of any EE/DSM program including preliminary market research, program design, program implementation and program evaluation. Once these capacities are mastered by the EE staff, they will be in a position to make EE a permanent tool to balance the country’s energy supply and demand for the Government of Samoa. Furthermore, local staff involvement and actions on EE matters in the community is the only way to develop and show the government’s leadership in action, which is critical for EE long-term viability. Econoler International 9 Ref.: 5505 Asian Development Bank TA 6485-REG: Promoting Energy Efficiency in the Pacific - Contract No. COSO/90-492 Samoa Report 1.5.1 Government of Samoa EE Management Organization From a government perspective, energy efficiency is a way to improve productivity in the economy through improved energy use. These kinds of changes require commitment along with a macro and long-term approach. In addition to EE program development, management, financing and regulation activities, one of the key government contributions is to assume leadership for the development and implementation of EE policies and regulations. It must also oversee market data production and analysis including sector benchmarks. The following table presents the main recommendations for energy department organization summarizing the basic activities and programs that need to be put in place. Table 6: Energy Department EE Organization ENERGY DEPARTMENT Institution in Activity Profile of Activity International Support Charge Create an EE Energy - Lead and coordinate EE Technical assistance: Division with Department policies and regulations - Deliver training in EE capacities in: - Develop and implement EE management - Leadership Key Partners: policies - Improve data statistics - Economic analysis - Local - Conduct market surveys for EE purposes - Public sector stakeholders - Conduct energy audits - Assist in market survey management - Traditional - Conduct and monitor design and execution - Technical analysis power leaders training programs - Assist in production of - Sub-contractor - Churches - Produce EE resource plan EE national resource management - Etc. - Produce awareness plan - Communication program - Produce education program - Lead EE activities in public sector - Develop EE regulations and standards In this scheme, the Energy Department or Unit would be responsible for a large spectrum of EE activities, including EE program management. Program management could be done in-house or contracted out. It is recommended to contract in the required resources for EE program evaluation, as to be useful program evaluation must be fully independent of program management, and specific expertise and experience is required for program evaluation to really be useful to learn lessons, and to improve the relevance, effectiveness and efficiency of future programs activities .. The public utility could provide the technical capacity in market research and program design. Its customers’ listing and periodical contacts with them through billing would provide the required market data and an access channel to clients for marketing purposes. The utility can collaborate closely with the energy department or Unit to implement EE programs. The creation of a dedicated EE Unit is highly recommended. As presently MNRE and MOF seem to be competing to host EE activities, it is up to the Government of Samoa to decide on which Ministry should take the lead, including where the EE Unit should be located. The EE Unit mandate must encompass a wide spectrum of activities. Econoler International 10 Ref.: 5505 Asian Development Bank TA 6485-REG: Promoting Energy Efficiency in the Pacific - Contract No. COSO/90-492 Samoa Report There is an argument for EE program management to be outsourced to private organizations whose management systems are more flexible than the public sector and therefore are better adapted to deliver EE programs in an effective way. As appropriate, the EE Unit would mandate EPC to act as the EE implementing agency for specific activities. Until the prepaid meter program is fully completed, EPC customer listings and periodical contacts with customers through billing will provide both market data and an access channel to customers for marketing purposes. After that, market surveys will be required to provide information for EE program planning and evaluation purposes. 1.5.2 EPC DSM Management Organization EPC’s upper management has shown strong support for EE development within the company. The next rational step will be to create an EE/DSM cell in EPC. One key initiative should be to immediately develop and implement a suitable customer database within EPC to provide the key information required to EE/DSM program developers regarding the consumer base and the pattern of energy usage. Providing assistance to EPC to build up, store and maintain a database for EE purposes would constitute a very pertinent initiative as it would address the information barrier to perform more efficiently the first stages of EE program identification and design. However, the EPC role in EE/DSM could be strengthened and Government could mandate EPC to be the implementation arm of wider EE/DSM programs in Samoa. However, utilities like EPC often view many aspects of DSM programs as being counter-productive activities as they reduce electricity sales while money has to be invested to develop and run the EE/DSM program. To be attractive, EE/DSM has to be considered as a profitable activity for the utility. There are two concrete ways to achieve this objective. The first is to leave it up to the utility, in which case they will only select only EE/DSM programs where the utility benefits per energy unit are higher than their margin in the electricity selling price. In this first scheme, the utility has a direct advantage to reduce electricity production. A second approach allows the utility to recoup the cost invested in EE programs through a small increase in tariff allowed by the government. This second approach is applicable to a larger portfolio of EE/DSM programs than the first option. EE/DSM should therefore be effectively integrated into the supply strategy of a public utility with as much scrutiny as are traditional power supply and renewable energy options. This business approach has two requirements: One is methodological. The public utility must precisely determine its production cost for each load curve segment. It must accurately determine the end-use demand structure behind the load curve to identify which group of customers and usage are responsible for this demand and build its EE/DSM strategy up from this basic information. The other refers to EE management. As for any investment in power supply and/or distribution systems, EE/DSM program design needs to be supported by high-quality “bankable” feasibility studies. Econoler International 11 Ref.: 5505 Asian Development Bank TA 6485-REG: Promoting Energy Efficiency in the Pacific - Contract No. COSO/90-492 Samoa Report Table 7: Electric Public Utility DSM Organization Electric Public Utility Institution International Activity Profile of Activity in Charge Support Create an EE/DSM Power - Get financing resources from Technical unit with capacities in: utility business activities or from a assistance: - Economic analysis small increase in tariff - Train staff in and planning - Hire appropriate technical staff EE - Database & load - Gather and analyze customer management research data on electricity consumption from utility point - Technical analysis - Identify and develop relationship of view - Program design, with large customers - Assist in EE implementation and - Identify key market players and resource plan management develop positive relationships production - Program evaluation - Develop and implement internal communication program - Develop and implement external communications program - Proceed with market research and potential savings analysis - Design, implement and evaluate EE programs 1.5.3 General Information/Awareness Programs In 2008, the Energy Division (ED) was successfully involved in information and awareness activities with the creation of a dedicated “EE Day.” This demonstrates how the ED is already aware of the necessity to be active in this sector. To improve its information and awareness strategy, the ED would need technical support to design a more comprehensive and structured information and awareness program. In the short term, this approach requires some external technical assistance. Table 8: EE Information and Awareness Programs INFORMATION AND AWARENESS Activity Institution in Charge Profile of Activity International Support Information centers - Energy Department May include: - PDMC regional to disseminate - Books and leaflets information monitoring information on Key partners - Technical staff center efficient - Electric equipment answering technical - Regional organizations technologies and importers/retailers questions - SPC efficient use of - NGOs energy Awareness - Energy Department May include: TA to assist in: programs Key partners - EE advertising - Designing awareness - Electric equipment - Educational strategic plan retailers material for schools - Producing initial - Public utility material - Education sector Econoler International 12 Ref.: 5505 Asian Development Bank TA 6485-REG: Promoting Energy Efficiency in the Pacific - Contract No. COSO/90-492 Samoa Report Beyond activities that meet specific program requirements, the content of the information and awareness program should be tailored to mainstream energy efficiency as part of Samoa’s organizational and behavioral culture. As for other PDMCs, sharing information on EE policies and programs would greatly benefit Samoa’s EE activities.. Using the internet as a communication platform through the creation of a website dedicated to PDMCs seems to be a preferable option. This website would promote shared information on EE technologies, EE program design, management, results and evaluation, and allow for networking among the EE specialist community and policy makers. Potential partners could be the Pacific Power Association, Pacific Islands Private Sector Organizations, and SPC. Samoa’s contribution should be to name a local coordinator to be responsible for national contributions to the website. 1.5.4 Education and Training The EE assessment for Samoa clearly demonstrated that education and training activities are a priority to develop local capability to identify and implement EE programs. For the energy audit and building construction sector, it is recommended to consider outsourcing the training to the private sector with twinning arrangements with foreign experts to reap the long-term benefits of this activity. The EE PDMC information center would assist in maintaining and upgrading the material used for education and training would ensure sustainability for this activity in Samoa. Table 9: Education and Training in Energy Efficiency EDUCATION AND TRAINING Institution in Activity Profile of Activity International Support Charge Primary school Energy Department - Coordinate the production Technical Assistance: level education, and dissemination of - Assist in producing education targeting all Key partners education material plan and strategy along with primary schools Department of - Outsource to Department of initial education material and all pupils Education Education - Partner: SPC/SOPAC - Countrywide activity Energy audit and Energy Department - Mobilize and involve the TA to: Energy private sector in program - Produce initial education management Key partners design and implementation material Chamber of - Conduct training sessions on - Prepare work plan and strategy - Engineering Commerce Industry energy audits including - Conduct training sessions firms association financial analysis and - Train local staff in delivering - O&M staff reporting to customers training sessions - Associated - Periodically update and technical upgrade capacities departments Energy-efficient Energy Department - Mobilize and involve the TA to: building private sector in program - Produce initial education construction Key partners design and implementation material practices Chamber of - Conduct training sessions on - Prepare work plan and strategy - Engineering Commerce Industry energy-efficient building - Conduct training sessions firms association construction practices for - Train local staff in delivering - Architects Architect and large building constructors training sessions - General contractor - Periodically upgrade contractors associations capacities Econoler International 13 Ref.: 5505 Asian Development Bank TA 6485-REG: Promoting Energy Efficiency in the Pacific - Contract No. COSO/90-492 Samoa Report 1.5.5 Energy Labeling and Minimum Equipment Energy Performance Standards Any electric equipment energy labeling and minimum energy performance standards need to be developed specifically for the Samoa environment and will require international technical assistance to be developed. The enforcement mechanism will also need to be analyzed and adapted to the local context. A least-cost option focusing only on priority products should also be considered to limit the resources needed for program implementation. The program outline should include the following components: Include into the energy labelling and MEPS regulations a provision making importers/retailers responsible for proving compliance of the material displayed on the shelves and include penalties for non-compliance. Establish rules to accept equipment testing from internationally recognized laboratories and define procedures to ensure specific unit compliance with energy labelling and MEPS requirements. Establish and enforce suitable penalties for non-compliance. Outsource to the private sector energy labelling and MEPS compliance control management. Coordinate energy labeling and MEPS development and information sharing with other PDMCs through the electronic information center. Accept the existing labeling and MEPS schemes from Australia-New Zealand and other major markets as a starting point for the development and implementation of the energy labeling and MEPS program in the Cook Islands. SOPAC, with REEEP support, has undertaken a situation analysis and feasibility study on the impacts of introducing an appliance labeling program in Samoa, Tonga and Vanuatu. This will provide a useful starting point. The implementation of EE energy labeling and MEPS activities in Samoa is expected to be cost- effective under all scenarios for the 2011-2020 period.. At a 10% discount rate, EE energy labeling and MEPS activities programs in Samoa are expected to offer total program benefits of WST 7 to 11 million (or USD 2.8 to 4.4 million) with a benefit-cost ratio over 4.25. The higher benefit-cost ratios of the proposed EE energy labeling and MEPS activities programs in Samoa compared to those in Tonga and Vanuatu are due to the larger market size of air conditioners in Samoa. Importation of used equipment as in-kind remittances sent from overseas directly to relatives in the Cook Islands will need further investigation. Usually, energy labeling and MEPS regulations do not include imports of used appliances and AC equipment as it is difficult to determine the exact efficiency of each product imported. 5 Situation Analysis and Feasibility Study on the Impacts of Introducing an Appliance Labeling Program in Samoa, Tonga and Vanuatu, International Institute for Energy and Conservation (IIEC), October 2010. Econoler International 14 Ref.: 5505 Asian Development Bank TA 6485-REG: Promoting Energy Efficiency in the Pacific - Contract No. COSO/90-492 Samoa Report 1.5.6 Energy Efficiency in Building Code The existing Samoa building regulations do not yet include provisions for energy efficiency. Before too much effort is spent on developing energy efficiency provisions to be incorporated into the Samoan building code, the department in charge of building code enforcement needs a plan, funding and a real commitment to improve its capacity to actually implement and enforce any such new EE provisions. It will be critical to develop a suitable strategic approach to reduce development costs when preparing EE provisions for the Samoan building code. These strategies could include i) adapting the EE provisions of the building code from another country with similar environmental conditions, ii) limiting the scope of such EE provisions to simple measures like insulation, windows and external shading , which constitute the bulk of the potential for passive EE measures, iii) using a prescriptive approach including performance levels and benefits for adopting the code, and iv) using a collaborative approach with other similar PDMCs to share the level of effort required in Samoa. If existing EE building code provisions from abroad are used as a basis for development, then there is a need to make sure that all economic studies supporting the minimum level of performance of each component are properly updated to the Samoan context. The high cost of electricity and fossil fuel supply in Samoa will necessitate an update of those economic studies and will likely result in a more stringent threshold for the minimum acceptable performance of building components than in large tropical countries with the benefits of economies of scale on their power sector and/or the benefit of using significant RE resources for power generation. To limit revision and periodical update costs, technical information should be shared with other participating PDMCs through the information Web page already proposed. The EE provisions for a building code, just like energy labeling and MEPS, will only be as effective as the enforcement procedures that will be introduced and actually implemented to ensure compliance. Experience around the world with voluntary EE building code provisions has shown generally minimal improvements in overall target market building EE.. Those experiences suggest that, very early in the process, the government should be fully aware that financial and human resources will be needed to ensure mandatory compliance and should decide accordingly whether to develop mandatory EE provisions for its building code. If there is no serious and realistic commitment to enforce the EE provisions of the building code, then other types of programs and EE initiatives will generally be more cost-effective. However, if EE provisions of the building code are not put on the government’s priority list, this will result in an important lock-in energy inefficiency effect as new buildings will continue to be constructed with the “business-as-usual” approach and contribute for a very long period of time to inefficient energy usage in the building sector In the short term, EE training for the building construction sector is the second best option to promote better EE construction practices. Econoler International 15 Ref.: 5505 Asian Development Bank TA 6485-REG: Promoting Energy Efficiency in the Pacific - Contract No. COSO/90-492 Samoa Report Table 10: Building Code and Energy Efficiency BUILDING CODE International Activity Institution in Charge Profile of Activity Support Introduce EE - Energy Department - Prepare EE TA to: considerations in Key partners specifications adapted - Produce initial building code - Department in charge of to local environment to technical material building code be introduced in - Conduct training - Architect and contractor building code sessions associations - Conduct actual - Train local staff in - Municipalities (if involved implementation of new delivering training in building code regulations in code sessions application) - Inform/train architects - Power utility and contractors 1.5.7 Creation of an Energy Efficiency Center Given the low level of effort toward EE improvements in Samoa, a necessary first step for developing any comprehensive and effective EE program is institutional strengthening. A stronger legal and regulatory framework should be developed to support new EE initiatives and programs. Additionally, the recruitment and training of energy engineers, financial analysts and program developers should be undertaken. Without such institutional underpinnings, most EE programs fail to achieve savings. The first step undertaken by other countries in a similar situation is the establishment of a donor-funded energy center. These centers are generally nonprofit organizations, and are also supported by the government. However, they have independent authority to conduct research and analysis, raise awareness and recommend energy policies. Furthermore, they are mandated to design and implement EE programs, and play a central role in fostering market transformation where the implementation of energy-efficient products and services becomes standard practice. Finally, they provide a focal point for EE activities and have a high credibility due to their nongovernmental, nonprofit status. The government should consider establishing such an energy center. Subsequently, an EE/ DSM cell could be established within EPC to ensure proper analysis, program development as well as management and the effective implementation of a suitable suite of end-use EE programs. Alternatively, the energy center could be established as a unit within EPC. However, without, an identity of its own separate from EPC, it runs a high risk of being “captured” or controlled by EPC, which may not be fully supportive of aggressive EE efforts. In addition, an EE unit within the utility may not be regarded by the public as being a credible independent body for EE advice, especially as regards fuel substitution issues (e.g. Liquid Propane Gas (LPG) used as a cooking fuel or LPG used as a SWH backup energy source vis-à-vis electricity). Finally, locating the energy center within an electric utility may be seen as inappropriate if its mission will be to also address other uses of imported petroleum fuel use, in particular for transport, including as electric bikes are becoming a competitor for petrol powered scooters. Econoler International 16 Ref.: 5505 Asian Development Bank TA 6485-REG: Promoting Energy Efficiency in the Pacific - Contract No. COSO/90-492 Samoa Report The establishment of an independent energy center does not preclude the establishment of an EE unit within the utility to oversee and coordinate utility EE activities. If such a unit is established within the utility, it should start out reporting directly to the chief executive of the utility to ensure that the concept of energy efficiency is given attention at the highest level and is not subjugated and “controlled” by lower level managers who may not support the EE mission. An energy center with adequate independence and funding can review and evaluate existing EE efforts and ensure their implementation. The energy center can play the role of advocating proper implementation of energy labeling and MEPS and EE provisions of building code legal requirements, as well as presenting a blueprint of how to meet these legal requirements. Likewise, if the ban on incandescent bulbs is found to be problematic in any practical matters, the center could champion better implementation and enforcement of the ban and help determine the extent to which cheap, low-quality CFLs are dominating the market. Steps may be necessary to reduce or eliminate low-quality CFLs through a product labeling program or the establishment of EE standards for bulbs. This type of standards and labeling program is the kind of activity an energy center can support and even implement if it has adequate assistance from those with experience in implementing such programs in other countries. By providing assistance in the design and implementation of EE policies and programs, an energy center helps strengthen the institutional capability of government institutions to carry out EE initiatives. Over time, staff from the energy center could even take management positions at government institutions thereby transferring EE management capacity directly to those institutions. 1.5.8 Legal Framework Development To ensure the success of the proposed EE programs, an appropriate legal framework should be developed. Up to now, there has been no regulation related to the management of energy efficiency matters in Samoa. Any legislation should take into consideration the context of the country and the different barriers to EE program implementation. This legislation should cover the following elements: Establish the appropriate legislation to enforce technical EE specifications for new buildings and implement thermal insulation, heat gain (shading), maximum lighting power density, inverter and/or high efficiency AC and so forth standards. Develop an EE fund which will provide subsidies for EE projects in all sectors. Organize professional energy efficiency accreditation and define terms of reference for energy auditing. Define the conditions for energy labelling and MEPS implementation of energy-efficient appliances and products, including the energy consumption levels of prohibited appliances. Define the pre-consultancy conditions and processes for large energy consumption projects. Define certification conditions for manufacturers and installers regarding the SWH system. Define the list of energy-efficient appliances exempt from the VAT and customs fees. Install SWHs on a mandatory basis in hospitals and government buildings Econoler International 17 Ref.: 5505 Asian Development Bank TA 6485-REG: Promoting Energy Efficiency in the Pacific - Contract No. COSO/90-492 Samoa Report Development of this legal framework and related technical specifications will require an overall budget of about USD 200,000 where about USD 50,000 will be used for the organization of seminars and marketing campaigns. 1.5.9 Nomination of Energy Managers in Government Buildings It is recommended to designate energy managers in government buildings to closely track energy consumption levels in government facilities and improve their energy efficiency. These officers will be responsible for tracking and analyzing building energy consumption and preparing monthly reports for the energy efficiency management units that they are responsible for. These reports will provide the data needed to analyze and identify all energy consumption anomalies. This information will also contribute to creating an energy consumption database for the government sector. The database will help define the energy savings potential, establish a benchmarking tool to compare energy consumption between the country as a whole and a specific region and define objectives to be targeted for building EE improvement. This action will require an investment in energy training estimated at USD 0.1 million calculated on the basis of training sessions for each semester over a three-year period. The expected savings are estimated at an average of 2% of the energy consumption level of the sector based on similar implemented projects in other countries. The estimated savings are mainly linked to the EE benefits of equipment operation optimization and improved maintenance practices.. For current government buildings in Samoa, savings could reach 244 MWh/year, resulting in emission reductions of 160 TCO2/year. 1.5.10 Development of an Energy Efficiency Fund An energy efficiency fund would be a useful support mechanism for EE project implementation. Such a fund would be dedicated to energy efficiency project financing in all sectors. The fund could provide project financing up to 75% of total project costs, up to a maximum of USD 100,000. No collateral would be requested for the credit allocated to these projects if the latter are carried out under supervision of the energy unit. A financial guarantee fund for energy efficiency projects would be an alternative solution to help promote EE investments in the sector and encourage commercial financial institutions to participate in market development. Collateral for loans requested for energy efficiency projects would be guaranteed by this fund which will not burden clients’ credit levels and will help develop energy performance contracting and ESCOs. Performance contracting could then be offered by service providers, not only for complete energy systems, but for specific efficient technologies (solar water heaters, efficient motors, efficient ACs, etc.). Local banks can manage the fund and provide the loan and credit guarantees required for the implementation of EE projects. Under this component, the energy efficiency projects initiated could benefit from an around 10% subsidy program to encourage EE project implementation. The subsidy will help in prioritizing energy efficiency projects and increase the EE projects’ financial profitability. The level of subsidy could be set based on the country market barriers and market maturity. If the subsidy will be at the same level of the market credit interest rate, this will effectively give a zero interest rate for applicable EE investments. Econoler International 18 Ref.: 5505 Asian Development Bank TA 6485-REG: Promoting Energy Efficiency in the Pacific - Contract No. COSO/90-492 Samoa Report The funds needed for an energy efficiency fund could be generated through taxes applied to high energy-consuming or energy inappropriate equipment like electrical resistance water heaters, low- performance air conditioning units, incandescent lamps and large energy and/or inefficient vehicles used in the transportation sector. 1.5.11 Public Sector Procurement In 2008, IMF data shows that the Government of Samoa purchased close to USD 115M of goods and services. More detailed data in needed to determine the exact nature and importance of the equipment purchased. When this is completed, an energy efficiency analysis may show that there are useful savings to be achieved through the adoption of minimum energy performance levels fro appliances, equipment and buildings in the public sector. The public sector may adopt earlier than the rest of the market the improved level of energy performance that will be later dictated in regulations to show its leadership. The adoption of regulations that incorporate EE considerations, for all types of energy consuming equipment, into the public sector procurement process can provide significant energy savings. Furthermore, it will send a clear signal to the community that the EE policy is taken seriously by the government itself. Additional benefits include promoting government leadership in energy efficiency and influencing local importers and retailers to opt for more energy-efficient products and practices. An in-house feasibility study may detail what equipment is at stake, suggest adjustments for the procurement procedures and propose a strategy to disseminate information and training to public organizations to apply the revised procedure including EE considerations Table 11: Public Procurement EE Adjustment Organization PUBLIC PROCUREMENT Activity Institution in Charge Profile of Activity International Support Public sector Energy Department Introduce EE TA to: procurement Key partners regulations in Assist in program design All public sector procurement and monitoring stakeholders procedures Introduce control mechanisms Econoler International 19 Ref.: 5505 Asian Development Bank TA 6485-REG: Promoting Energy Efficiency in the Pacific - Contract No. COSO/90-492 Samoa Report 2 ENERGY EFFICIENCY PROJECT IMPLEMENTATION AND IMPACT EVALUATION Prior to the start of this ADB PEEP-1 project, EPC had already conducted a power factor analysis of the electric system of Savaii as part of the EPC Power Sector Expansion Project. That power factor analysis study found that there was a 14% system technical loss on the Low-Voltage (LV) distribution system, from transformers to customer facilities. Low power factors in the commercial customer and large government building sectors also contributed to EPC’s higher than desirable technical loss levels. Although EPC has a power factor lower limit requirement of 85% for customer installations; there is currently no way for EPC to enforce penalties for customers with a low power factor. Given the pre-existing focus by EPC on low power factor, power factor correction system (PFCS) implementation was selected as the pilot project in Samoa for ADB support under the PEEP-1 project. 2.1 KEY PF PROGRAM PARAMETERS 2.1.1 Program Rationale Surveys conducted on PF showed significant levels of VAR (reactive power) on the EPC network and therefore significant potential for a PFC program as EPC’s average PF is 80%. EPC’s current tariff structure only charges for kWh (kilowatt-hours). There is currently no provision for EPC to charge for KVAR (reactive power). PF improvement on the demand side could increase EPC transmission and distribution capacity by around 2.5 MVA, reduce system technical losses, and improve customer electricity use efficiency through improved voltage control. A large portion of EPC power is delivered to commercial sector customers, where the majority does not comply with the minimum specified PF limit of 85%. In addition, in 2009 EPC requested and was approved to raise the PF minimum limit to 95%. EPC is also starting to deploy new electronic revenue meters that greatly facilitate the analysis of customer power demand characteristics, including power factor. The implementation of PFC programs by the ADB PEEP-1 project thus helped promote the new requirement for the PF to be a minimum of 0.95 by implementing PFCS in the premises of selected large commercial and industrial customers. EPC is very keen to have its large customers meet its 95% minimum PF requirement, so a high level enrolment is expected in this program. EPC are working to formulate and obtain approval of new supply regulations that would enable EPC to charge penalties to customers with lower power factors than the new specified minimum power factor standard of 95%. Econoler International 20 Ref.: 5505 Asian Development Bank TA 6485-REG: Promoting Energy Efficiency in the Pacific - Contract No. COSO/90-492 Samoa Report 2.1.2 Customer Selection Improving the power factor for EPC’s large commercial customers and large government departments was targeted in order to be replicated to other EPC customer sectors. The top 150 largest customers were selected from EPC’s billing system. EPC then conducted a spot measurement of the power factor for most of these customers. The 10 customers with the lowest power factor were selected and included in the pilot project list for power factor improvement to 95%. The implementation was planned in two phases. Phase one included the replacement of induction meters with electronic meters that read not only the kWh but also the KVAR, the maximum demand in kilowatts, the power factor, and current and voltage. Phase two included the design, supply, installation and commissioning of power factor correction capacitors within the facilities of the 10 selected customers. The 10 customers selected for the pilot project with their respective pre-implementation average power factors are listed below: Table 12: List of Selected Customers Location Average Consumption PFCS PF kVA % GWh/Year KVAR Aggies Greys Resort 1000 80 0.998 150 Yazaki Samoa 1000 70 0.553 225 Aggie Greys Hotel 500 80 0.683 90 Farmer Joe 200 67 0.350 90 DBS 750 71 0.384 225 CBS 500 73 0.389 100 LDS Temple 500 79 0.492 90 Ah Liki Wholesale 350 53 0.212 90 Frankie Wholesale 500 70 0.264 60 Apia Bottling 200 79 0.281 60 2.1.3 Technical Specifications It was agreed with EPC to implement and manage the project through EPC’s Project Management Unit (PMU) for the Samoa Power Sector Expansion project. EPC installed load loggers within the facilities of the 10 selected customers to measure kW, KVAR, kVA, kWh, harmonics, power factor, voltage and current. Data logging was performed over a three week period. The results of data logging were analyzed and used to design the power factor correction equipment to be installed in the facilities of the 10 customers. Econoler International 21 Ref.: 5505 Asian Development Bank TA 6485-REG: Promoting Energy Efficiency in the Pacific - Contract No. COSO/90-492 Samoa Report As part of the PEEP-1 power factor project, new electronic revenue meters were also fitted to the meter boards for the selected customers to facilitate monitoring of the ongoing effectiveness of the power factor correction system (PFCS) installations. The technical specifications of the electronic meters were agreed with the PMU taking into consideration their requirements for reading parameters and precision. The main new electronic meter parameters are as follows: Internal measurement of active and reactive power in each direction. Can store up to sixteen channels of load profile for various base quantities. Multi-rate billing for energy and demand. Ten base quantities for billing. 32 energy-rate registers and 24 demand-rate registers available. Rate switching mainly performed by internal clock. Two communication channels. The technical specification for PFCS was drafted following EPC’s standards. The requested offers from potential providers included the design, fabrication, supply, installation and commissioning of automatic power factor correction panels suitable for a network voltage of 400/415 V with capacitor banks. The panel enclosures were specified for indoor and weather-proofed type, free standing compartmentalized with ventilation and mounting fan with air filter for forced air cooling. 2.1.4 Budget and Procurement Three bid proposals were received for the supply of electronic meters and one supplier from New Zealand was selected based on the lowest price for the supply of programmable electronic meters with capability to monitor PF and record load profiles. EPC covered the installation costs of the new electronic meters. For PFCS, proposals were requested from four different suppliers. The received bids were evaluated and the supplier was selected on a price basis in accordance with ADB selection procedures. The equipment purchased is indicated in the table below: - Econoler International 22 Ref.: 5505 Asian Development Bank TA 6485-REG: Promoting Energy Efficiency in the Pacific - Contract No. COSO/90-492 Samoa Report Table 13: Selected Provider Proposed Cost of PFCS PFCS Total Cost QTY Location (kVAR) (USD) 1 Aggies Greys Resort 150 13,705 1 Yazaki Samoa 225 15,959 1 Aggie Greys Hotel 90 5,635 1 Farmer Joe 90 5,635 1 DBS 225 16,519 1 CBS 100 8,331 1 LDS Temple 90 5,635 1 Ah Liki Wholesale 90 5,635 1 Frankie Wholesale 60 4,960 1 Apia Bottling 60 4,960 The supply of the PFCS and their installation took longer than proposed in the offer; this was due to delays in equipment delivery. It was agreed with EPC that the ADB contribution would not exceed a maximum of USD 67,500 and that EPC would cover the remaining total amount for the 10 pilot projects investment for PFCS and meters that was initially estimated to USD 97,500. The final total project cost was approximately USD 92,900. 2.1.5 Installation Phase one: The electronic meters were installed in the client premises upon reception from the suppliers. EPC was responsible for the installation and verification of accuracy of the meters. Phase Two: Upon securing consent from clients, the EPC PMU issued a tender for the design, supply, installation and commissioning of suitable power factor correction equipment sets (PFCS). The proposals requested bidders to conduct their own analysis using the data provided as the basis for sizing the power factor correction capacitors. The successful bidders were asked to guarantee a power factor of at least 95%. A local contractor did most of the installations while the supplier did the design and final commissioning of all the panels. Econoler International 23 Ref.: 5505 Asian Development Bank TA 6485-REG: Promoting Energy Efficiency in the Pacific - Contract No. COSO/90-492 Samoa Report 2.2 IMPACT EVALUATION The Power Factor Correction (PFC) project will clearly have a positive impact on both EPC and its customers. An improved power factor will greatly reduce transmission and distribution system currents, and make a small but useful reduction in overall transmission and distribution system losses. Hence, EPC will save on required transmission and distribution capacity upgrades. The table below shows the savings generated from the selected customers under the pilot project. Table 14: Expected Savings for Pilot Projects Average Line Customer Consumption PFCS Savings PBP Load Losses KVA kW GWh/Year kWh kVA kWh USD Years R Aggies Greys Resort 231 0.998 150 19958 46 5,805 1,761 7.8 Yazaki Samoa 128 0.553 225 11059 48 5,055 1,533 10.4 Aggie Greys Hotel 158 0.683 90 13651 31 3,971 1,204 4.7 Farmer Joe 81 0.350 90 6998 36 3,517 1,067 5.3 DBS 192 0.384 225 7690 68 3,395 1,030 16.0 CBS 90 0.389 100 7776 29 3,184 966 8.6 LDS Temple 114 0.492 90 9850 24 3,038 922 6.1 Ah Liki Wholesale 42 0.212 90 4234 35 2,916 884 6.4 Frankie Wholesale 61 0.264 60 5270 23 2,409 731 6.8 Apia Bottling 65 0.281 60 5616 14 1,732 525 9.4 For the 10 implemented projects, EPC annual savings are estimated at 35,000 kWh, or USD 10,600 with about 335 kVA in increased transmission and distribution capacity for EPC 2.3 LESSONS LEARNED The PEEP-1 pilot project implementation presented a good opportunity for EPC and the PMU to initiate the PFCS program. EPC should now capitalize on this initiative to expand PFCS project implementation with other key customers. There is a gain of about 2.5 MVA additional transmission and distribution capacity that PPL could reach by expending the PEEP PFCS pilot program throughout Samoa. Alongside the ongoing generalization and installation of new electronic revenue meters, EPC can seek regulatory agreement and then adopt a new and more stringent power factor standard as industry practice (from 85% to 95%) and can develop and introduce a new PF tariff component to encourage customers to install capacitors in their electrical facilities to avoid penalties due to low power factor. Econoler International 24 Ref.: 5505 Asian Development Bank TA 6485-REG: Promoting Energy Efficiency in the Pacific - Contract No. COSO/90-492 Samoa Report EPC has now realized the need to start installing electronic revenue meters for all large customers so that it can get more information on customers’ electricity consumption and demand profiles. During the installation of the new electronic revenue meters, EPC found several cases of incorrect information being used for customer installations, such as incorrect current transformer (CT) multipliers that led to EPC charging their customers less than what was really due. Even more, the introduction of the new meters will provide EPC with extended opportunities to consider introducing another tariff component specific to maximum demand charges (kW or KVA), as well as a Time of Use (TOU) tariff if needed. EPC has gained useful experience in PFC project implementation, mainly in terms of technical issues, monitoring and financial analyses which will help it expand the PFC initiative. EPC has also recognized the need to collaborate with large customers who have a very low power factor to raise awareness on energy efficiency in general and the benefit of PFCS implementation in particular. The impact of PFCS installation on the EE of the client is generally minimal, however, EPC clients are concerned about network stability, voltage drop and electricity, delivery quality, and those will be improved by higher PFs across the whole electricity system. These benefits can be used as arguments to raise client interest and involvement in future EPC related programs alongside the establishment of suitable penalties for low PF and/or high peak demands Econoler International 25 Ref.: 5505 Asian Development Bank TA 6485-REG: Promoting Energy Efficiency in the Pacific - Contract No. COSO/90-492 Samoa Report 3 FUTURE EE PROGRAM DESIGN AND IMPLEMENTATION This section provides a summary of the estimated savings potential for possible Energy Conservation Measures (ECMs) that were identified in Samoa. At the first stage, a baseline was established from the available energy consumption for each sector. The evaluation was built up using the results obtained from the pilot projects implemented in the five PEEP countries and adapted to the local context for each proposed ECM. A compilation was then made using country data and information gathered during the various missions undertaken by the PEEP consultancy team. Adjustments were based on the following factors: - Data availability and level of existing details pertaining to the energy balance and energy consumption per sector Information availability for Samoa from previous EE experience Site visits and preliminary energy audits to evaluate the potential for savings in government buildings and the hotel sector Surveys performed in the residential, commercial and governmental sectors Data gathered from supplier on technologies used and their availability in the Samoa market Meeting with equipment and service providers Discussions with stakeholders. The data gathered from different sectors has enabled preliminary energy saving estimates to be made, noting that no detailed data on energy consumption and end-uses was available for Samoa. The proposals have therefore been limited by the level of information available and the identified ECMs within the country context. The seven (7) major ECMs proposed and presented in the Table 15 show potential energy savings corresponding to 9.8% of total energy consumption (reference 2008). Annual savings are estimated at 8,600 MWh representing savings of USD 3 million and emission reductions of 5,580 tons of CO2 per year. Econoler International 26 Ref.: 5505 Asian Development Bank TA 6485-REG: Promoting Energy Efficiency in the Pacific - Contract No. COSO/90-492 Samoa Report Table 15: ECM Proposal for Samoa, Savings and Investment Baseline Savings Savings Peak Annual 2011- Savings Estimated Simple Inv./Saved Energy Potential Potential Load Emission 2020 CO Potential Investment PBP 2 kWh Use (Sector) (Country) Reduction Reduction reduction MWh % % kW MWh6 USD M USD M Years TCO2 TCO2 USD/kWh Energy Efficiency in Selected Government 11,250 13.4 1.7% 275 1,504 0.47 2.03 4.3 978 7,820 0.168 Buildings Implementation of LED 2,423 64.3 1.8% 226 1,558 0.56 2.93 5.3 1,013 8,104 0.267 Street Lighting CFL Program for 22,003 3.6 0.9% 644 800 0.21 0.14 0.6 520 4,680 0.019 Residential Sector Implementation of EE 6,347 20.4 1.5% 181 1,297 0.41 1.62 4.0 843 6,743 0.156 Projects in Hotel Sector Implementation of EE 3,064 5.0 0.2% 34 153 0.05 0.27 5.0 113 1,020 0.197 Projects in Pumping Sector Energy Labelling and MEPS 87,544 3.5 3.5% 277 3,030 1.08 1.59 1.5 1,969 14,800 0.070 Power Factor Correction 69,918 0.3 0.2% - 215 0 0.39 4.6 140 1,260 0.203 Program in Samoa Total 9.8% 1,640 8,600 2.8 9.0 3.2 5,580 44,430 The investment per saved kWh is obtained by dividing the total investment by the saved kWh during the 2011-2020 period considered as the average life cycle for installed equipment for the proposed ECMs. The investment per kWh helps prioritize the ECMs with the expected best return on investment. As shown in the above Table, the CFL program for the residential sector is ranked best with only USD 0.019/kWh followed by energy labeling and MEPS, EE in government buildings, EE in the hotel sector and then the PFCS program. Note that the investment cost for MEPS includes only the cost to government, and the cost to the public associated with the purchase of more efficient appliances has not been defined (see Section 3.6). 6 Including Network Losses. Econoler International 27 Ref.: 5505 Asian Development Bank TA 6485-REG: Promoting Energy Efficiency in the Pacific - Contract No. COSO/90-492 Samoa Report The potential peak load reduction is estimated at 1,640 KW, which represents about 11% of the average (2008) registered maximum peak load of 15,004 kW. It should be noted that the implementation of the PFCS will increase EPC production capacity by 1,610 kVA. 3.1 GENERAL ASSUMPTION AND PARAMETERS The tables below show the general parameters used for calculations and estimates of ECM potentials. These parameters have been confirmed, verified and are the most accurate currently available. The estimated energy balance has been developed based on the EPC energy billing database for January 2009, which acts as a reference month to determine annual energy consumption for all indicated sectors. Figure 3: Energy Consumption per Sector Table 16: Estimated Energy Balance for 2008 Samoa Energy Balance Consumption % Number Hotels 6,347,028 7% 64 Commercial 27,760,764 32% 2,668 Government 12,216,792 14% 697 Industry 7,157,016 8% 149 Street Lighting 2,345,868 3% 31 Religious 6,649,236 8% 972 Water Pumping 3,063,840 3% 80 Residential 22,003,452 25% 26,969 Total 87,543,996 100% 31,630 Econoler International 28 Ref.: 5505 Asian Development Bank TA 6485-REG: Promoting Energy Efficiency in the Pacific - Contract No. COSO/90-492 Samoa Report Table 17: General Parameters Used for Samoa Parameter Value Unit Conversion WST-->USD 0.39 Diesel Consumption per kWh l/kWh 0.279 Incandescent Lamp Operating Hours hours/day 6 EPC Diesel Cost WST/l 2.2 EPC CO2 Emissions kCO2/l 2.6 CO2 Emissions kg/kWh 0.65 Street Lighting Hours/Year hours/year 4,380 Average Domestic Electricity Tariff WST/kWh 0.91 Average Street Lighting Electricity WST/kWh 0.76 Tariff Average Hotel Electricity Tariff WST/kWh 0.91 Average Building Electricity Tariff WST/kWh 0.91 Average Commercial Electricity Tariff WST/kWh 0.91 Network Losses Losses % 13.5% Cost/CFL WST/Unit 25 3.2 ENERGY EFFICIENCY IN GOVERNMENT BUILDINGS The list of all government buildings shows 494 customers in 2008. The list has been divided into the following five groups based on monthly energy consumption, with hospitals as a separate group: Hospitals Group 1: Buildings with a monthly energy consumption above 3,000 kWh Group 2: Buildings with a monthly energy consumption between 1,000 and 3,000 kWh Group 3: Buildings with a monthly energy consumption between 300 and 1,000 kWh Group 4: Buildings with a monthly energy consumption between 100 and 300 kWh. The groups were selected based on energy consumption, which reflects the activities and notably the type of equipment and their penetration level in these buildings. For each group, walk-through energy audits were undertaken to assess the type of equipment used, determine operation parameters and estimate the energy balance (energy consumption per end-user). After the preparation of the energy balance, energy savings were estimated based on potential energy conservation measures to be implemented, considering a maximum payback period of 5 years. From the sample taken for each group, extrapolations were made within the group to estimate the energy saving potential. As energy demands in hospitals are generally very different from other buildings due to hospitals’ distinct energy demands (esp. 24/7 full fresh air AC required for operating theaters at central trauma/accident and emergency equipped hospitals), specific equipment and special operating conditions, estimates were made in a conservative way since no detailed investigation was able to be undertaken due to limited resources. Econoler International 29 Ref.: 5505 Asian Development Bank TA 6485-REG: Promoting Energy Efficiency in the Pacific - Contract No. COSO/90-492 Samoa Report Energy saving potentials were calculated based on the average of each group and considering the most common end-users, namely lighting and cooling, targeting simple ECMs ECMs as follows: - HVAC optimization: for centralized systems, optimization of operating hours and parameters. Efficient lighting fixtures and lamps: CFLs, electronic ballasts and T5 fluorescent tubes Air compressor O&M: operation optimization and leak reduction Variable speed drives: for motors and central HVAC plant Fan system improvements: efficient fans and motors LCD monitors for computers and entertainment systems AC replacement: replacement with efficient AC (esp. high efficiency inverter units) based on operating hours and existing equipment condition O&M and energy management: optimization of operational parameters (temperature, operating hours, automatic switches and clocks, preventive maintenance, etc.). Nevertheless, other ECMs could be identified when in-depth energy audits are performed. The featured potentials should be considered only as preliminary estimates used to assess whether the sector represents a significant potential for energy efficiency. Only 175 of the largest energy use buildings were considered while the remaining buildings have a monthly consumption less than 100 kWh, which is considered too low to be included in an initial EE project. However, all buildings would be included in any EE awareness campaign launched within a comprehensive EE program. Selected buildings from each group were visited in order to establish the preliminary energy balance and the savings potential was used as a reference for extrapolation to the entire group. The results show a promising annual savings potential of 1.32 GWh with an estimated investment of USD 2.0 million giving an average simple payback period of 4.3 years. The implementation of EE programs in government buildings will generate emission reductions of about 987 TCO2 annually. Details for each group are presented in Appendix C.1 showing estimation parameters and savings per end-user. Table 18: Energy Savings Potential for Government Buildings Consumption Current Situation Savings Category kWh/Month Number kWh WST kWh % WST Hospital 9 2,292,500 2,086,175 229,200 10% 208,600 s Group1 more 3,000 39 7,669,000 6,978,790 996,700 13% 907,000 Group2 1,000 Econoler International 30 Ref.: 5505 Asian Development Bank TA 6485-REG: Promoting Energy Efficiency in the Pacific - Contract No. COSO/90-492 Samoa Report Table 19: Investment and Annual Emission Reductions for EE in Government Buildings % 12% Average Savings Potential kWh 1,325,000 % 13.4% Annual Potential Savings7 kWh 1,503,875 USD 470,300 Total Estimated Investment USD 2,027,000 Simple Payback Period Years 4.3 Annual Emission Reduction (TCO2) TCO2 978 Diesel Savings (liters) Liters 419,600 The proposed ECMs focus on all major energy using systems found in each group. Table 20: Major Actions to Improve Energy Efficiency below presents the main actions that could be implemented to reduce energy consumption Table 20: Major Actions to Improve Energy Efficiency Energy Conservation Measures for Average Savings Selected Buildings Potential HVAC optimization 5%-15% Air compressor O&M 10%-20% Variable-speed drives 5%-15% Efficient lighting fixtures and lamps 10%-20% Fan system improvements 5%-10% LCD monitors 10%-20% AC replacement 15%-20% O&M and energy management 5% The estimates are based on energy consumption data and some selected samples for potential energy savings in each category. However, an in-depth analysis needs to be conducted with larger sample sizes taking into account the actual load per end-use with the monthly energy bill distribution to more accurately establish real EE potentials. The cumulative savings relative to the government building program for the 2011-2020 period is estimated at 12 GWh, resulting in CO2 emission reductions of about 7,820 TCO2. Program implementation is expected to be completed within a maximum of 5 years with an annual progress completion of 20% during the implementation period. Table 21: Cumulative Savings for the 2011-2020 Period 12,031,000 kWh Savings Potential 3,762,400 USD Total Estimated Investment 2,027,000 USD Emission Reduction Period 7,820 TCO2 Investment/Saved kWh 0.168 USD/kWh 7 Including EPC losses. Econoler International 31 Ref.: 5505 Asian Development Bank TA 6485-REG: Promoting Energy Efficiency in the Pacific - Contract No. COSO/90-492 Samoa Report 3.3 STREET LIGHTING The street lighting network in Samoa is composed of 6,943 lamps as per the data provided from EPC and presented in Table 22 below. The street lighting network consists of different types of lamps (Mercury Vapor (MV), High-Pressure Sodium (HPS) and fluorescent tubes) with a power ranging from 20 W to 250 W. The total street lighting installed power is estimated at 553 kW with an annual energy consumption of about 1.4 GWh. Most street lighting network lamps are inefficient, old, decaying, costly to maintain and some need to be replaced as they are no longer functioning. Table 22: Street Lighting Network in Samoa UPOLU Number of Current Total Power Lamps W kW 121 150 W 121 243 100 W 243 3,209 80 W 3,209 1,547 40 W 1,547 16 20 W 16 SAVAII 36 150 W 36 1,438 80 W 1,438 333 40 W 333 6,943 553 The replacement of Mercury Vapor lamps with HPS is the obvious first choice to increase street lighting efficiency. However, many parameters need to be taken into consideration in technology selection, mainly regarding the type of lighting required, the condition of the existing fixtures and the distribution circuit of the street lighting network. Unfortunately, most existing fixtures present one or more of the following problems: Old fixtures in bad condition Rusted due to saline weather Lack of internal reflector Opaque lenses Lack of lighting meeting points Very low lighting level. Light-Emitting Diode (LED) technology seems to be the best solution to address most of these problems since it can increase the lighting level and reduce energy costs even for existing fixtures with a low lighting level. The rationale behind LED usage in street lighting is as follows: LED lamps give average energy savings of 20% to 50% over HPS and mercury vapor lamps respectively. Econoler International 32 Ref.: 5505 Asian Development Bank TA 6485-REG: Promoting Energy Efficiency in the Pacific - Contract No. COSO/90-492 Samoa Report LED construction makes solid-state street lamps safe for landfills. They are mercury-free, without harm to the environment. The longevity of LED lamps is 60,000 or more hours and represents at least twice the life of HPS lamps. The longevity of LED lamps pushes back replacement cycles and, consequently, reduces the burden on the waste stream. LED street lights reduce pollution and carbon footprint via energy savings that lower carbon emissions not only from reduced power plant fuel consumption but also from reduced fuel usage by maintenance dispatched for bulb replacement. The annual maintenance cost for LED represents almost a fifth of the maintenance costs for regular mercury or HPS lamps. Even though the acquisition cost of LED fixtures is high comparing to conventional HPS fixtures (about 5 times more expensive) the project is still attractive. With operation and maintenance cost savings included, the investment of LED fixtures is paid back within less than 4 years, with the LED fixtures having an estimated life time of 15 or more years. The new LED lamps light distribution is improved, with greatly improved color rendering and a warm-white color temperature The proposed lamp replacement strategy is presented in the following: Table 23 Table 23: Equivalent LED for HPS Lamps EQUIVALENT HPS LED WATTAGE 80 W 30 W 100 W 50 W 150 W 60 W 200 W 80 W 250 W 100 W Introducing LED lamps into the Samoa street lighting network will help reduce energy consumption by 57% and maintenance costs by 62%. Table 24: Energy and Maintenance Costs for the Existing Street Lighting Network Old System Number Old Fixture Total Total Total of Energy Maintenance Energy Total O&M Power Lamps Consumption Cost Cost kWh/Year kW WST WST WST/Year 6,943 2,422,700 553 486,000 1,841,200 2,327,200 Appendix C.2 shows details pertaining to the replacement of the 6,943 fixtures. The total required investment is estimated at USD 2.93 million for annual savings of USD 0.56 million representing 5.3 years as a simple payback period. The implementation of the LED street lighting program will generate annual GGH emission reductions of 1,013 TCO2 annually. Econoler International 33 Ref.: 5505 Asian Development Bank TA 6485-REG: Promoting Energy Efficiency in the Pacific - Contract No. COSO/90-492 Samoa Report Table 25: Investment and Emission Reductions for LED Implementation in Samoa TOTAL INVESTMENT USD M 2.93 TOTAL SAVINGS USD M 0.56 TOTAL SAVINGS (kWh) kWh 1,373,000 TOTAL Energy Savings (%) % 57% TOTAL Cost Savings (%) % 62% % 64% EPC Savings (kWh)8 kWh 1,558,400 EPC Savings (liters) Liters 434,800 EPC Savings (Fuel Cost) USD M 0.37 Simple PBP (years) Years 5.3 Annual Emission Reduction TCO2 1,013 Existing Street Lighting Load kW 553 (kW) Load Reduction (kW) kW 226 The cumulative savings relative to the LED street lighting program for the 2011-2020 period is estimated at 11.0 GWh, resulting in CO2 emission reductions of about 8,104 TCO2. Program implementation is expected to be completed within a maximum of 5 years with an annual progress completion of 20% during the implementation period. Table 26: Cumulative Savings for the 2011-2020 Period kWh 10,984,000 Savings Potential USD 4,468,800 Total Estimated Investment USD 2,933,100 Emission Reduction Period TCO2 8,104 Investment/kWh USD/kWh 0.267 3.4 ENERGY EFFICIENCY IN THE HOTEL SECTOR The hotel sector in Samoa is relatively small with only 64 hotels and a total sector consumption of 6.34 GWh representing 7% of Samoa’s electricity consumption. Based on results from the pilot project carried out in Vanuatu and the walk-through energy audits performed in some hotels of Apia, the Vanuatu hotel sector saving potential (estimated at 18% including all energy types) was used as a reference potential for Samoa as well. As shown in the Table below, the total utility cost saving potential for the Vanuatu pilot project stands at 18%, where electrical savings represent about 16% (CFLs, room switches, timers) and water savings around 26% of water utility bills (low shower head flow, reduced hot water, optimized 8 Including Network Losses. Econoler International 34 Ref.: 5505 Asian Development Bank TA 6485-REG: Promoting Energy Efficiency in the Pacific - Contract No. COSO/90-492 Samoa Report garden watering systems, reduced water pumping costs). The Vanuatu pilot project has also achieved LPG reductions of 21% with the installation of Solar Water Heaters (SWHs). Table 27: Savings Potential in the Hotel Sector for the Vanuatu Pilot Project Total Savings Energy (%) Electrical Energy Savings 16 Water Energy Savings 26 LPG Energy Savings 21 The main energy conservation measures targeted in the hotel sector are as follows: Efficient lighting, mainly CFLs, for interior and exterior lighting Solar Water Heaters (SWHs) Reduced flow for shower heads, sinks and toilet flush Key tag switches for room electrical system Efficient air conditioning units Cooling setting point adjustments Pool pump operation optimization High-efficiency pumps and motors Installation of timers for equipment operation optimization Air curtain installation Table 28: Savings Potential per ECM Energy Saving Potential ECM (%) Solar Water Heating 10% General Key Switch 1% Hotel Lighting 7% Shower Head Replacement 11% Rain Water Catchment Cost Savings Only Optimization of Pool Motors 1% Reducing Setting Temperature of AC 6% Optimization of Garden Watering Cost Savings Only Review of Meter Contracts with Utility Cost Savings Only Air Curtain Installation 1% With a maximum simple payback period of 4 years, and potential savings of 18%, the total investment for the hotel sector in Samoa is estimated at USD 1.6 million. EE program implementation will generate annual electricity savings of 1.29 GWh and annual GHG mission reductions of 843 TCO2. Econoler International 35 Ref.: 5505 Asian Development Bank TA 6485-REG: Promoting Energy Efficiency in the Pacific - Contract No. COSO/90-492 Samoa Report Table 29: Investment and Emission Reductions for the Hotel Sector in Samoa Hotel Consumption kWh 6,347,028 Sector Estimated Savings % 18% Energy Savings kWh 1,142,500 Hotel Cost Savings USD 405,500 % 20.4% kWh 1,296,700 9 EPC Savings Liters 361,800 USD 310,400 Annual Emission Reduction TCO2 843 Investment USD M 1.6 Targeted Payback Period Years 4 The cumulative savings relative to the EE program in the hotel sector for the 2011-2020 period is estimated at 9.14 GWh, resulting in CO2 emission reductions of about 6,743 TCO2. Program implementation is expected to be completed within a maximum of 5 years with an annual progress completion of 20% during the implementation period. Table 30: Cumulative Savings for the 2011-2020 Period 9,140,000 kWh Savings Potential 3,244,000 USD Total Estimated Investment 1,621,900 USD Emission Reduction Period 6,743 TCO2 Investment/kWh 0.156 USD/kWh 3.5 ENERGY EFFICIENCY IN THE RESIDENTIAL SECTOR – CFLS As statistical data was lacking on lighting installed loads and usage in Samoan households, a random survey of 100 households in Savaii and about 40 households in Upolu was undertaken to assess lighting usage. The results were extrapolated to each island to give a preliminary estimate for Samoa as a whole. 9 Including Network Losses. Econoler International 36 Ref.: 5505 Asian Development Bank TA 6485-REG: Promoting Energy Efficiency in the Pacific - Contract No. COSO/90-492 Samoa Report Table 31: Lighting Distribution per Type of Lighting in Savaii Type of Lamp Incandescent CFL Fluorescent Other Total/Day/House Kwh 0.23 0.12 1.31 0.00 Installed/House W 70 2 82 0 Lamps/House Unit 1.2 0.1 2.4 0.0 Lighting Weight % 33% 2% 65% 0% Table 32: Lighting Distribution per Type of Lighting in Upolu Type of Lamp Incandescent CFL Fluorescent Other Total/Day/House Kwh 0.10 0.00 0.00 0.00 Installed/House W 19 0 0 0 Lamps/House Unit 0.3 0.1 4.0 0.0 Lighting Weight % 7% 1% 92% 0% The percentage of incandescent lamps in Savaii is 33%, but only 7% in Upolu where fluorescent lamps are widely used. The total installed power of incandescent lamps in Samoa was estimated at 831 kW. According to the survey, the average 0.8 incandescent lamps installed per household (total number of 14,400 units across Samoa) were used approximately 3 hours per day.. For a complete change of incandescent lamps to CFL lamps with their energy savings potential of 75% (the average load per existing lamp of 60 W were on average replaced by 13 W CFL), annual savings will reach 800 MWh with a peak reduction of about 644 kW. Average annual savings per household are estimated at 37 kWh equal to WST 34. Considering an average cost of WST 25 per CFL, the payback period is less than 1 year. Assuming a subsidy program of 50% for the residential sector to encourage CFL use, an investment of USD 140,000 is needed to generate the targeted annual emission reduction of 520 TCO2. Econoler International 37 Ref.: 5505 Asian Development Bank TA 6485-REG: Promoting Energy Efficiency in the Pacific - Contract No. COSO/90-492 Samoa Report Table 33: Investment and Emission Reductions for CFLs in the Residential Sector Incandescent Total/Day/House kWh 0.161 Installed/House W 44 Lamps/House Unit 0.8 Percent of Lamps per house % 20% Total kWh/Year/House kWh 58.9 Coincidence Factor % 100% Number of Houses Unit 27,000 Peak Load Reduction kW 644 kWh 704,886 Savings % 3.2% kWh 800,000 Savings10 % 3.6% Country Diesel Fuel Reduction Liters 223,200 Fuel Saving Value USD 206,200 Annual GHG Emission TCO 520 Reductions 2 W 34 Savings/House kWh/Year 37.3 Payback Period Year 0.6 Investment (50% Subsidy) USD 140,000 The cumulative savings relative to the implementation of CFLs in the residential sector program for the 2011-2020 period is estimated at 7.2 GWh, resulting in CO2 emission reductions of about 5,220 TCO2. Program implementation is expected to be completed within a maximum of 3 years with an annual progress completion of 33% during the implementation period. Table 34: Cumulative Savings for the 2011-2020 Period kWh 7,200,000 Energy and Cost Savings USD 1,855,800 Total Estimated Investment USD 140,200 Emission Reduction Period TCO2 4,680 Investment/kWh USD/kWh 0.019 3.6 ENERGY LABELLING AND MEPS Unfortunately, no detailed information on residential and commercial appliances based on actual energy use characteristics and actual numbers by model or capacity was available from the 10 Including Network Losses Econoler International 38 Ref.: 5505 Asian Development Bank TA 6485-REG: Promoting Energy Efficiency in the Pacific - Contract No. COSO/90-492 Samoa Report Samoan statistics department, which constituted a major barrier to specific energy efficiency potentials assessments and the development of a specific appliance EE program design. No government entity held accurate and up-to-date data on the country’s energy balance and energy consumption per end user or per sector. However, the PEEP consultants were able to ascertain some basic indicative data from the 2006 Samoa residential census, available through the department of statistics, and from this the PEEP consultants were able to develop indicative energy savings potentials estimates for energy labeling and MEPS application in the residential sector for refrigerators.. Available statistics presented in Table 35 shows the penetration rate for refrigerators in the 23,813 occupied dwellings surveyed. Table 35: Samoa 2006 Census Data Residential Appliances – Penetration Rate Refrigerators 59% Freezers 0% Air Conditioners 0% Water Heaters 0% Clothes Washers 0% Occupied Dwellings 23,813 Potential annual energy savings for refrigerating appliances were estimated based on Australian figures for refrigerators and freezers11 considering the 2005 annual consumption for refrigerator and freezers in Australia as a basis for the current situation in Samoa. The assumption is considered to be a reasonable initial assumption as most of the appliances in Samoa are imported from Australia and New Zealand, and importers often bring in the cheapest available appliances in a particular size and features category, and these lowest price models usually also have the low energy efficiency ranking (i.e. a lower number of Australia-New Zealand energy performance stars). The annual average energy consumption of existing old refrigerators was therefore assumed to be about 640 kWh, and 575 kWh/year for freezers. The refrigerators currently available on the Australian and New Zealand markets have an annual energy consumption ranging between 338 kWh and 537 kWh. Assuming that middle efficiency refrigerators with an average annual consumption of 450 kWh/year would replace existing refrigerators, an energy labeling (and back-up potential MEPS program) could generate energy savings of around 190 kWh/year per refrigerator. Based on the above, annual emission reductions from energy labeling and MEPS application for refrigerators are estimated at 1.97 KTCO2 or 3.03 GWh, taking into consideration the current EPC kWh/litre of diesel and GHG emission factor and including network losses. 11 Costs and Benefits of proposed revisions to the method of test and energy labeling algorithms for household refrigerators and freezers, prepared by Energy Efficient Strategies Pty Ltd for the Australian Greenhouse Office, November 2007 Econoler International 39 Ref.: 5505 Asian Development Bank TA 6485-REG: Promoting Energy Efficiency in the Pacific - Contract No. COSO/90-492 Samoa Report Table 36: Investment and Savings for Energy Labelling and MEPS– Refrigerators Country Consumption kWh 87,544,000 % 3.05 Estimated Annual Savings kWh 2,669,437 % 3.5 Potential Energy Savings12 kWh 3,029,800 USD M 1.1 Energy Cost Savings Annual GHG Emission Reductions TCO2 1,969 Investment USD M 1.6 The estimated investment includes only the cost to government of establishing a laboratory for equipment testing and validation, along with international support for energy labeling and MEPS development and implementation. The main costs to the public associated with the purchase of more efficient equipment and appliances than would be the case without energy labelling and MEPS has not been defined owing to insufficient data being available during Phase 1. It is recommended that detailed studies of the equipment and appliance markets in each PDMC be undertaken during Phase 2 to estimate the likely costs of MEPS and labelling requirements on imported appliances. The only study to date, conducted in Fiji, estimates these costs to be between 10% and 25% of the value of the benefits.13 Total savings over a 10-year period are presented in the Table below. Program implementation is anticipated to take 5 years after which annual savings will be about 22.72 GWh. The savings are considered constant throughout the period since there is no available data on the annual penetration and growth rate of refrigerators in the residential sector. Table 37: Projected Savings for the 2011-2020 Period kWh 22,723,600 Potential Savings USD M 8.1 Total Estimated Scheme Establishment and USD M 1.6 Operations Cost Emission Reduction Period TCO2 14,800 Investment/kWh USD/kWh 0.070 3.7 POWER FACTOR CORRECTION SYSTEMS EPC’s PFC project was first initiated in 2009 with the implementation of the Samoa Power Sector project in Samoa. Surveys conducted on PF showed significant levels of VAR on the EPC network and therefore a significant potential for the PFC program where the average PF is 80%. 12 Including Network Losses. 13 The Costs and Benefits of Energy Labelling and Minimum Energy Performance Standards for Refrigerators and Freezers in Fiji, George Wilkenfeld and Associates for the Australian Greenhouse Office, February 2006. Econoler International 40 Ref.: 5505 Asian Development Bank TA 6485-REG: Promoting Energy Efficiency in the Pacific - Contract No. COSO/90-492 Samoa Report Power factor improvement on the demand side alone would increase transmission and distribution system capacity. It would also improve distribution voltage regulation. Additionally, such an improvement would reduce technical losses. Reducing reactive power will diminish the excess current in the electrical distribution system upstream and bring about a drop in resistive losses. Improving the PF from 80% to 95% will cut line losses by 29%. Line losses generally account for around 2%, so improving the PF by 15%, will generate savings of about 0.58%. Although this may not seem significant, considerable savings could be achieved depending on total system-wide power factor correction improvements. See Appendix C.3 for calculation details and a list of selected customers for the PFCS program. A large portion of EPC power is delivered to commercial sectors which, for the most part, do not comply with the minimum required PF limit of 85%. In 2009, EPC approved the increase of the PF minimum limit to 95%. The implementation of this PF program will help promote the new PF requirement and implement power factor correction systems with large commercial and industrial customers. The list of 519 customers obtained from EPC, along with their average PF, demand and annual energy consumption, were used to establish the energy saving potential for PFCS implementation. From this list, about 141 customers needing a PFCS of more than 10 KVAR accounted for approximately 78% of the total potential (see Appendix C.4 for customer list). Customers who need a PFCS of less than 10 KVAR might only need local capacitors located next to motors and not a PFCS in the main electrical entrance. The investment per KVAR will thus be much lower and local capacitors will be a lot easier to install.If the PFCS project targets the selected 141 customers, EPC will obtain additional transmission and distribution capacity of 1,056 kVA without any additional investment being needed. Considering the average cost of USD 71 per installed KVAR as per the pilot project, the needed investment for the selected clients is about USD 394,100. The savings yielded by the reduction in line losses is estimated at around 215,000 kWh generating annual emission reductions of 140 TCO2 with an average payback period of 4.6 years. Table 38: Savings and Investment by Range of KVAR Installed Number % of Emission Savings investment of PBP Savings Reduction Systems kWh kW USD % TCO2 Years Customers with Systems more than 244200 2873 444800 273 100 159 4.6 5 KVAR Customers with Systems more than 215400 2581 394100 163 88 140 4.6 10 KVAR Customers with Systems more than 169300 2111 314700 95 69 110 4.7 20 KVAR Econoler International 41 Ref.: 5505 Asian Development Bank TA 6485-REG: Promoting Energy Efficiency in the Pacific - Contract No. COSO/90-492 Samoa Report The estimated investment includes equipment and installation. Total savings over a 10-year period are presented in the Table below. Program implementation is anticipated to take 3 years after which annual savings will be about 215 MWh. Table 39: Projected Savings for the 2011-2020 Period kWh 1,939,000 Potential Savings USD 690,000 Total Estimated Investment USD M 0.39 Emission Reduction Period TCO2 1,260 Investment/kWh USD/kWh 0.203 3.8 ENERGY EFFICIENCY IN THE INDUSTRIAL SECTOR Industrial energy consumption accounts for approximately 7% of total energy consumption in Samoa with about 149 clients. No data is available to assess the potential of the industrial sector and its consumption level ranks it as a low priority for an EE program. 3.9 WATER DISTRIBUTION NETWORK Very little information is available about water pumping stations in Samoa. The annual energy consumption for water pumping is about 3.06 GWh, which represents 3% of the total consumption in Samoa. Based on EE projects in the pumping stations of other countries, 5% savings could be achieved by reducing leaks, installing high efficiency motors, verifying pump curves and optimizing operating hours according to the water profile. Table 40: Savings and Investment for Water Pumping Stations Pumping Station Consumption kWh 3,063,800 % 4.3 Sector Estimated Savings kWh 132,509 % 5 Energy Savings14 kWh 153,190 Pumping Cost Savings USD 54,400 Liters 48,500 EPC Savings USD 41,600 Annual Emission Reduction TCO2 113 Investment USD M 0.27 Targeted Payback Period Years 5 14 Including Network Losses. Econoler International 42 Ref.: 5505 Asian Development Bank TA 6485-REG: Promoting Energy Efficiency in the Pacific - Contract No. COSO/90-492 Samoa Report The cumulative savings relative to the improvement of the pumping systems for the 2011-2020 period are estimated at 1.38 GWh, resulting in CO2 emission reductions of about 1, 020 TCO2. Program implementation is expected to be completed within a maximum of 3 years with an annual progress completion of 33% during the implementation period. Table 41: Projected Savings for the 2011-2020 Period kWh 1,379,000 Potential Savings USD 490,000 Total Estimated Investment USD M 0.27 Emission Reduction Period TCO2 1,020 Investment/kWh USD/kWh 0.197 Econoler International 43 Ref.: 5505 Asian Development Bank TA 6485-REG: Promoting Energy Efficiency in the Pacific - Contract No. COSO/90-492 Samoa Report 4 OTHER RECOMMENDATIONS: Development of an Energy Balance and Energy Matrix: One of the barriers to EE program development in Samoa (as it is generally throughout the Pacific) is the unavailability of information on energy consumption by sector, sub-sector and appliance type. Without an appropriate set of data on energy consumption and demand profiles it was not possible to accurately develop an energy efficiency program or define appropriate targets and objectives. An energy balance is an accounting system that describes the flow of energy through an economy (national, by island, by district, etc.) during a given period, usually a calendar year. This combination of information is constructed from the most complete available sources of official energy statistics on imported fossil fuels, electricity production, conversion losses, consumption and energy end-use (e.g. lighting, refrigerating appliances, AC). The main objective of an energy balance is to provide information for the planning of investments in different sectors of the energy system. It should also present indications of where best to direct investments in research and development for more efficient energy use. The energy balance consists of a matrix, also called an energy matrix, in which all forms of energy, their conversions, losses and uses in a given period are registered in the same unit of measurement. An energy balance can be presented in various forms, each with its own conventions and purposes. The most common form includes columns, with quantities of energy sources or carriers used, and rows with data on conversions and uses. An energy balance can also be expressed in terms of useful energy, aggregating data regarding the efficiency of final energy use. In order to calculate this efficiency, it is necessary to distinguish two steps in the process of final energy use. The first step occurs when energy is transformed into a final energy carrier (e.g. electricity) and the second step refers to the way in which this energy carrier is exploited to produce goods or provide services. For example, LPG or diesel can be used to produce steam in a boiler with an efficiency of say 60%. The steam produced will then be distributed to other pieces of equipment where its energy will be used. This second step can have a new efficiency related to the way in which the steam system is designed and operated. Often it is possible to increase the efficiency of this phase without major investments. An energy balance in terms of useful energy requires detailed data regarding end-use technologies and how they are utilized. Load Curve analysis: Electricity demand is not uniform throughout the day or for an entire year. Several electricity end-uses are related to the time of day, such as lighting and cooking. The hours of the day during which the highest demand occurs is known as the peak period. During the year, there is also a particular day when electricity demand is at its yearly peak. This yearly peak is typically both climate- and time-related. Some regions face their peak demand during the hottest days, when air conditioning is mostly responsible for the increased electricity demand. In other areas, residential lighting and other evening uses of electricity may be the main drivers of peak demand. Econoler International 44 Ref.: 5505 Asian Development Bank TA 6485-REG: Promoting Energy Efficiency in the Pacific - Contract No. COSO/90-492 Samoa Report Projections for electrical energy (kWh) are typically made on an annual basis but it is also important to project the future load profile (daily or annually) to reflect the daily and seasonal fluctuations in demand. Peak demand is of particular interest to utilities because their capital requirements for building new generation capacity are normally driven by peak demand considerations. One aspect of DSM involves ways to change the shape of the load curve. Typically, utilities will strive to avoid the concentration of demand during peak hours of the day and will try to spread this demand throughout the day (or night). Data Requirements of Energy End-Use Models: Energy consumption analysis requires a breakdown by sector, activity and end-use. The estimation of end-use breakdowns is important to determine which end-users are most relevant. Once these are known, their magnitude is quantified more accurately to evaluate the opportunities for energy efficiency improvement. The table below illustrates one such possible breakdown. Econoler International 45 Ref.: 5505 Asian Development Bank TA 6485-REG: Promoting Energy Efficiency in the Pacific - Contract No. COSO/90-492 Samoa Report Table 42: Energy End-Use Possible Breakdown Consumer Class End-use Technologies/Measures Incandescent lamps Compact fluorescent lamps Fluorescent tubes (with associated electronic or electromagnetic ballasts) Lighting Fixtures Improved lighting design Day lighting Improved lighting controls (e.g. daylight dimming) Residential Sector Ventilation, fans Cooling Air conditioners Natural ventilation Efficient refrigeration (e.g. cool stores, Refrigeration transport, retail food storage and display cabinets) Solar Water heating LPG Electricity Incandescent lamps Compact fluorescent lamps Low voltage halogen lamps and fixtures Fluorescent + electromagnetic ballasts Lighting Fluorescent + electronic ballasts Reflector fixtures Improved lighting design Day lighting Commercial Occupancy sensors Services Sector Ventilation, fans Air conditioners Cooling Natural ventilation Passive cooling Refrigeration Efficient refrigeration Solar Water heating Heat pump LPG Conventional electric motors Energy efficient electric motors Power Variable Speed Drives + motors Better sizing of motors and tasks Incandescent lamps Industrial Sector Fluorescent + electromagnetic ballasts Fluorescent + electronic ballasts Lighting Mercury vapor, HPS etc lamps Reflective fixtures Improved lighting design and day lighting Estimates of end-use equipment saturation and energy use can be made on the basis of aggregate indicators of major end-use categories, for example, information on appliance sales. Econoler International 46 Ref.: 5505 Asian Development Bank TA 6485-REG: Promoting Energy Efficiency in the Pacific - Contract No. COSO/90-492 Samoa Report Where comprehensive information of this type is not available, one might try to use existing information from other countries with similar socio-economic development characteristics to make estimates of end-use saturation and energy consumption. Alternatively, a more reliable analysis can be performed through a bottom-up approach, which includes extensive questionnaire-based surveys, billing data analysis, energy audits and measurements. End-use projection models are very data intensive. Usually, energy end use models start with a base year for which detailed breakdown of the consumer classes and main end-uses are developed. Econoler International 47 Ref.: 5505 Asian Development Bank TA 6485-REG: Promoting Energy Efficiency in the Pacific - Contract No. COSO/90-492 Samoa Report APPENDIX C.1: SAMOA - ESTIMATED SAVINGS PER SECTOR IN GOVERNMENT BUILDINGS, REFERENCE TABLES Hospitals % Unit Energy Consumption 2,292,480 20% kWh Number of Buildings 9 Buildings Ventilation/Fan/Cooling 802,368 35% kWh Consumption Lighting Consumption 756,518 33% kWh Other Load Consumption 733,594 32% kWh Estimated Investment Average Savings 229,248 10% kWh WST USD PBP Lighting 75,652 10% kWh 145,484 56,739 Estimated Cooling 80,237 10% kWh 401,184 156,462 3.9 Savings Other 73,359 10% kWh 257,755 100,524 Total 208,616 WST 804,423 313,725 o Group 1 3,000 kWh/Month and More % Unit Energy Consumption 7,669,020 68% kWh Number of Buildings 39 Buildings Ventilation/Fan/Cooling 3,183,201 42% kWh Consumption Lighting Consumption 1,413,003 18% kWh Computer Consumption 2,659,844 35% kWh Other Load Consumption 412,971 5% kWh Estimated Investment Average Savings 996,712 13% kWh WST USD PBP Lighting 211,950 15% kWh 407,597 158,963 Estimated Cooling 477,480 15% kWh 2,571,047 1,002,708 4.5 Savings Other 307,282 10% kWh 1,079,661 421,068 Total 907,008 WST 4,058,306 1,582,739 Econoler International 48 Ref.: 5505 Asian Development Bank TA 6485-REG: Promoting Energy Efficiency in the Pacific - Contract No. COSO/90-492 Samoa Report Group 2 Between 1,000 and 3,000 kWh/Month % Unit Energy Consumption 877,596 8% kWh Number of Buildings 41 Buildings Ventilation/Fan/Cooling 197,486 23% kWh Consumption Lighting Consumption 297,169 34% kWh Computer Consumption 349,714 40% kWh Other Load Consumption 33,228 4% kWh Estimated Investment Average Savings 68,613 8% kWh WST USD PBP Lighting 29,717 10% kWh 57,148 22,288 Estimated Cooling 19,749 10% kWh 106,338 41,472 3.7 Savings Other 19,147 5% kWh 67,275 26,237 Total 545,620 WST 230,761 89,997 Group 3 Between 300 and 1,000 kWh/Month % Unit Energy Consumption 349,464 3% kWh Number of Buildings 49 Buildings Ventilation/Fan/Cooling 86,776 25% kWh Consumption Lighting Consumption 71,148 20% kWh Computer Consumption 177,921 51% kWh Other Load Consumption 13,619 4% kWh Estimated Investment Average Savings 25,369 7% kWh WST USD PBP Lighting 7,115 10% kWh 13,682 5,336 Estimated Cooling 8,678 10% kWh 46,726 18,223 4.1 Savings Other 9,577 5% kWh 33,650 13,123 Total 23,086 WST 94,057 36,682 Econoler International 49 Ref.: 5505 Asian Development Bank TA 6485-REG: Promoting Energy Efficiency in the Pacific - Contract No. COSO/90-492 Samoa Report Group 4 Between 100 and 300 kWh/Month % Unit Energy Consumption 61,884 1% kWh Number of Buildings 37 Buildings Ventilation/Fan/Cooling 9,283 15% kWh Consumption Lighting Consumption 30,942 50% kWh Computer Consumption 9,283 15% kWh Other Load Consumption 12,377 20% kWh Estimated Investment Average Savings 5,105 8% kWh WST USD PBP Lighting 3,094 10% kWh 5,950 2,321 Estimated Cooling 928 10% kWh 214 84 2.1 Savings Other 1,083 5% kWh 3,805 1,484 Total 4,646 WST 9,970 3,888 Econoler International 50 Ref.: 5505 Asian Development Bank TA 6485-REG: Promoting Energy Efficiency in the Pacific - Contract No. COSO/90-492 Samoa Report APPENDIX C.2: SAMOA - ESTIMATED SAVINGS FOR STREET LIGHTING, REFERENCE TABLES UPOLU Old System New Proposed System Savings Number Power Old Fixture Proposed New Fixture Total Energy Savings Payback Load of Baseline System Energy Energy Period Reduction Lamps Consumption Cost W kWh/Year W WST WST % kWh Years kW kWh 121 150 W 89,037 60 LED 61% 26,584 61% 54,058 4.1 12 243 100 W 119,206 50 LED 51% 44,489 51% 60,667 5.4 14 3,209 80 W 1,236,877 30 LED 63% 352,510 63% 773,048 4.4 176 1,547 40 W 325,241 30 LED 31% 169,939 31% 101,638 10.0 23 16 20 W 1,542 30 LED -50% 1,758 -50% -771 54.8 0 5136 1,771,903 595,279 56% 988,640 5.4 226 SAVAII Old System New Proposed System Number Power Old Fixture Proposed New Fixture Total Energy Savings Pay Load of Energy System Energy Energy Back Reduction Lamps Consumption Consumption Cost Period W kWh/Year W WST WST % kWh Years kW kWh 36 150 W 26,490 60 LED 61% 7,909 61% 16,083 4.1 4 1,438 80 W 554,263 30 LED 63% 157,965 63% 346,414 4.4 79 333 40 W 70,010 30 LED 31% 36,580 31% 21,878 10.0 5 1,807 650,763 202,454 59% 384,376 4.9 88 Econoler International 51 Ref.: 5505 Asian Development Bank TA 6485-REG: Promoting Energy Efficiency in the Pacific - Contract No. COSO/90-492 Samoa Report APPENDIX C.3: SAMOA – PFCS CALCULATION DETAILS Power Losses and Excess Heat Generation: In addition to possible power factor charges, low power factor also results in excess current in the electrical distribution system upstream from the device. The excess line current results in increased resistive losses, and hence heat gain, in the wiring and electrical distribution equipment. The quantity of line losses associated with low power factor correction can be calculated as follows: LL1 = Line loss before power factor correction LL2 = Line loss after power factor correction % Line Loss Savings = (LL1 – LL2) / LL1 LL1 = I2 1R1 = (kVA1/V1) 2 R1 = [(kW1/PF1) / V1] 2 R1 = [kW2 R / V2]1 / PF12 Thus: LL2 = [kW2 R / V2]2 / PF2 Assuming everything remains constant except for the power factor: [kW2R / V2]1 = [kW2 R / V2]2 = [kW2 R / V2] And, % Line Loss Savings = (LL1 – LL2) / LL1 % Line Loss Savings = [(kW2 R / V2) / PF12 – (kW2 R / V2) / PF22] / (kW2 R / V2)1 / PF12 % Line Loss Savings = [1 / PF12 – 1 / PF22] / 1 / PF12 % Line Loss Savings = 1 – (PF1/ PF2) 2 For example, if the power factor were improved from 80% to 95%, the percent line loss savings would be: % Line Loss Savings = 1 – (PF1/ PF2)2 = 1 – (80%/ 95%)2 = 29.1% In addition, heat generation in upstream electrical distribution equipment would be reduced by 29%. If the electrical circuits are fully loaded due to excess current, power factor correction could mitigate this problem. Although percent line loss savings are relatively high, total energy savings are typically small since line losses are low in percentage. For example, if line losses are 2% of the total power draw, the total power savings from correcting the power factor would be: 2% x 29.1% = 0.58% Econoler International 52 Ref.: 5505 Asian Development Bank TA 6485-REG: Promoting Energy Efficiency in the Pacific - Contract No. COSO/90-492 Samoa Report Some manufacturers of power factor correction equipment claim that actual losses are much greater than those calculated here, but there is little documented evidence of this in the open literature. Econoler International 53 Ref.: 5505 Asian Development Bank TA 6485-REG: Promoting Energy Efficiency in the Pacific - Contract No. COSO/90-492 Samoa Report APPENDIX C.4: LIST OF CUSTOMERS NEEDING AT LEAST A 10 KVAR PFCS SYSTEM Total reduction of Savings on Total Avg Load bills Savings Correction system Investment PBP Line losses Line Losses line losses Needed Selected cost section 2 KVA PF kwhlday kwhlyear kW $ KVA kW $/day $/year Factor cost US$ Months % kWh kWh KVAR KVAR WST$ Williams 50 0.87 743.6 267696 31.0 676.68 3.00 2.8 39 13913 0.238 7.38 10.00 710 2130 1.84 16% 5354 864 Thompson 50 0.86 761 273960 31.7 692.51 3.49 3.3 45 16204 0.265 8.39 10.00 710 2130 1.58 18% 5479 989 S.Meredith 200 0.83 1016.6 365976 42.4 925.11 6.45 6.1 83 29906 0.343 14.54 15.00 1065 3195 1.28 24% 7320 1732 Tupuola 100 0.86 756.1 272196 31.5 688.05 3.47 3.3 45 16100 0.265 8.34 10.00 710 2130 1.59 18% 5444 983 Leilani 200 0.84 494.2 177912 20.6 449.72 2.84 2.7 37 13168 0.317 6.53 10.00 710 2130 1.94 22% 3558 776 U.S.P 500 0.88 1589.8 572328 66.2 1446.72 5.55 5.3 71 25731 0.211 13.98 14.00 994 2982 1.39 14% 11447 1625 MoamoaTai 50 0.86 745 268200 31.0 677.95 3.42 3.2 44 15864 0.265 8.22 10.00 710 2130 1.61 18% 5364 968 Vaiola 100 0.84 902.1 324756 37.6 820.91 5.18 4.9 67 24037 0.317 11.92 12.00 852 2556 1.28 22% 6495 1417 Sports Complex 500 0.63 498.3 179388 20.8 453.45 11.10 10.5 143 51500 0.904 18.77 20.00 1420 4260 0.99 56% 3588 2010 Nauru 200 0.69 1028.2 370152 42.8 935.66 16.99 16.1 219 78833 0.720 30.86 31.00 2201 6603 1.01 47% 7403 3498 E.P.C Vaitte 350 350 0.89 1330 478800 55.4 1210.30 3.93 3.7 51 18244 0.184 10.18 10.00 710 2130 1.40 12% 9576 1171 Poloa 100 100 0.74 258.7 93132 10.8 235.42 3.22 3.1 41 14938 0.580 6.25 10.00 710 2130 1.71 39% 1863 732 Faasoo 200 200 0.92 1904.6 685656 79.4 1733.19 2.72 2.6 35 12637 0.097 7.72 10.00 710 2130 2.02 6% 13713 852 S. Breweries 500 500 0.86 5569.2 2004912 232.1 5067.97 25.56 24.3 329 118588 0.265 61.42 60.00 4260 12780 1.29 18% 40098 7238 #2 500 500 0.86 2814.6 1013256 117.3 2561.29 12.92 12.3 166 59933 0.265 31.04 30.00 2130 6390 1.28 18% 20265 3658 Pepsi 200 200 0.83 644.4 231984 26.9 586.40 4.09 3.9 53 18957 0.343 9.22 10.00 710 2130 1.35 24% 4640 1098 MaotaMaota o Samoa 350 0.81 764 275040 31.8 695.24 5.79 5.5 75 26868 0.395 12.58 13.00 923 2769 1.24 27% 5501 1502 Puipaa 100 0.86 699.2 251712 29.1 636.27 3.21 3.0 41 14888 0.265 7.71 10.00 710 2130 1.72 18% 5034 909 CCCS Faleulu 200 0.9 1069.7 385092 44.6 973.43 2.61 2.5 34 12092 0.156 6.94 10.00 710 2130 2.11 10% 7702 789 Ava Tuanai 50 0.87 634.6 228456 26.4 577.49 2.56 2.4 33 11873 0.238 6.29 10.00 710 2130 2.15 16% 4569 737 Leauvaa #2 50 0.72 365.5 131580 15.2 332.61 5.12 4.9 66 23757 0.635 9.67 10.00 710 2130 1.08 43% 2632 1120 Salepoua'e 100 0.84 736.7 265212 30.7 670.40 4.23 4.0 55 19630 0.317 9.74 10.00 710 2130 1.30 22% 5304 1157 APC Saleimoa 200 0.62 633.3 227988 26.4 576.30 14.78 14.0 191 68586 0.937 24.72 25.00 1775 5325 0.93 57% 4560 2618 Malua #2 200 0.87 584.8 210528 24.4 532.17 2.36 2.2 30 10942 0.238 5.80 10.00 710 2130 2.34 16% 4211 679 Fasitoouta 30 0.78 297 106920 12.4 270.27 2.84 2.7 37 13171 0.474 5.86 10.00 710 2130 1.94 33% 2138 697 Leulumoega 100 0.84 520.7 187452 21.7 473.84 2.99 2.8 39 13874 0.317 6.88 10.00 710 2130 1.84 22% 3749 818 Waterpump 50 0.62 371.2 133632 15.5 337.79 8.67 8.2 112 40201 0.937 14.49 14.00 994 2982 0.89 57% 2673 1534 MikeTobin 100 0.9 1007.7 362772 42.0 917.01 2.46 2.3 32 11391 0.156 6.53 10.00 710 2130 2.24 10% 7255 744 JehovahWitness 100 0.78 437.5 157500 18.2 398.13 4.18 4.0 54 19402 0.474 8.63 10.00 710 2130 1.32 33% 3150 1026 VaiteleUta 50 0.46 374.5 134820 15.6 340.80 17.50 16.6 225 81170 1.602 24.99 25.00 1775 5325 0.79 77% 2696 2064 Agriculture 25 0.087 272.7 98172 11.4 248.16 118.64 112.7 1529 550405 11.122 126.37 126.00 8946 26838 0.59 99% 1963 1947 Bakery 25 0.54 114.5 41220 4.8 104.20 3.81 3.6 49 17689 1.230 5.87 10.00 710 2130 1.44 68% 824 558 AJSS 50 0.62 314.2 113112 13.1 285.92 7.33 7.0 95 34028 0.937 12.26 12.00 852 2556 0.90 57% 2262 1299 FaleoloAirport 500 0.9 1655.6 596016 69.0 1506.60 4.03 3.8 52 18715 0.156 10.74 11.00 781 2343 1.50 10% 11920 1222 Aggies Resort 500 0.84 3200.7 1152252 133.4 2912.64 18.38 17.5 237 85283 0.317 42.31 40.00 2840 8520 1.20 22% 23045 5028 Mulifanua Wharf 50 0.6 320.8 115488 13.4 291.93 8.21 7.8 106 38076 1.005 13.43 13.00 923 2769 0.87 60% 2310 1388 Golf Course 100 0.86 562.2 202392 23.4 511.60 2.58 2.5 33 11971 0.265 6.20 10.00 710 2130 2.14 18% 4048 731 Telephone Exchange 200 0.89 1465 527400 61.0 1333.15 4.33 4.1 56 20096 0.184 11.21 11.00 781 2343 1.40 12% 10548 1290 AQM 200 0.81 2473.1 890316 103.0 2250.52 18.75 17.8 242 86974 0.395 40.73 41.00 2911 8733 1.20 27% 17806 4861 Samoa Lager 250 0.83 2807 1010520 117.0 2554.37 17.80 16.9 229 82575 0.343 40.15 40.00 2840 8520 1.24 24% 20210 4783 S.T.P.Tr. 200 0.73 424 152640 17.7 385.84 5.60 5.3 72 26000 0.608 10.73 11.00 781 2343 1.08 41% 3053 1250 SamorLa~ 250 0.83 2807 1010520 117.0 2554.37 17.80 16.9 229 82575 0.343 40.15 40.00 2840 8520 1.24 24% 20210 4783 S.T.P.Tr. 200 0.73 424.8 152928 17.7 386.57 5.61 5.3 72 26049 0.608 10.75 11.00 781 2343 1.08 41% 3059 1253 Savalalo 100 0.89 765.1 275436 31.9 696.24 2.26 2.1 29 10495 0.184 5.85 10.00 710 2130 2.44 12% 5509 674 FarmerJoe 50 0.83 835.7 300852 34.8 760.49 5.30 5.0 68 24584 0.343 11.95 12.00 852 2556 1.25 24% 6017 1424 Fugalel#1 200 0.91 2152.4 774864 89.7 1958.68 4.15 3.9 53 19251 0.127 11.38 11.00 781 2343 1.46 8% 15497 1278 TOO Hall 500 0.89 1208.2 434952 50.3 1099.46 3.57 3.4 46 16573 0.184 9.24 10.00 710 2130 1.54 12% 8699 1064 CBS 500 0.68 2431 875160 101.3 2212.21 42.34 40.2 546 196402 0.750 75.93 76.00 5396 16188 0.99 49% 17503 8535 PWD Savalalo 500 0.91 1405.1 505836 58.5 1278.64 2.71 2.6 35 12567 0.127 7.43 10.00 710 2130 2.03 8% 10117 834 Govt Building 500 0.84 1852.7 666972 77.2 1685.96 10.64 10.1 137 49366 0.317 24.49 24.00 1704 5112 1.24 22% 13339 2910 Econoler International 54 Ref.: 5505 Asian Development Bank TA 6485-REG: Promoting Energy Efficiency in the Pacific - Contract No. COSO/90-492 Samoa Report Total reduction of Savings on Total Avg Load bills Savings Correction system Investment PBP Line losses Line Losses line losses Needed Selected cost section 2 KVA PF kwhlday kwhlyear kW $ KVA kW $/day $/year Factor cost US$ Months % kWh kWh KVAR KVAR WST$ Dev Bank 750 0.89 5350.8 1926288 223.0 4869.23 15.82 15.0 204 73398 0.184 40.94 41.00 2911 8733 1.43 12% 38526 4713 LDS Temple 500 0.87 4289.2 1544112 178.7 3903.17 17.30 16.4 223 80251 0.238 42.54 43.00 3053 9159 1.37 16% 30882 4982 LDS 2 200 0.87 1892.1 681156 78.8 1721.81 7.63 7.2 98 35401 0.238 18.77 19.00 1349 4047 1.37 16% 13623 2198 J Boon 200 0.87 1492.2 537192 62.2 1357.90 6.02 5.7 78 27919 0.238 14.80 15.00 1065 3195 1.37 16% 10744 1733 LDS 3 200 0.86 662.9 238644 27.6 603.24 3.04 2.9 39 14116 0.265 7.31 10.00 710 2130 1.81 18% 4773 861 Lepea 3 100 0.8 701.5 252540 29.2 638.37 5.77 5.5 74 26763 0.421 12.31 12.00 852 2556 1.15 29% 5051 1469 Vailoa 200 0.86 1043.2 375552 43.5 949.31 4.79 4.5 62 22214 0.265 11.50 12.00 852 2556 1.38 18% 7511 1356 Vaiusu 50 0.866 752.5 270900 31.4 684.78 3.20 3.0 41 14852 0.249 7.80 10.00 710 2130 1.72 17% 5418 916 Vaigaga 100 0.88 809.8 291528 33.7 736.92 2.83 2.7 36 13107 0.211 7.12 10.00 710 2130 1.95 14% 5831 828 Toomatagi 50 0.86 4536 1632960 189.0 4127.76 20.82 19.8 268 96588 0.265 50.02 50.00 3550 10650 1.32 18% 32659 5895 Polytech P/M 500 0.79 1006.3 362268 41.9 915.73 8.94 8.5 115 41469 0.447 18.76 20.00 1420 4260 1.23 31% 7245 2235 Samoa College 50 0.89 5656.6 2036376 235.7 5147.51 16.73 15.9 216 77593 0.184 43.28 43.00 3053 9159 1.42 12% 40728 4982 Maagiagi Tx 200 0.67 1805 649800 75.2 1642.55 33.08 31.4 426 153485 0.779 58.61 60.00 4260 12780 1.00 50% 12996 6532 Vaivase 50 0.88 699 251640 29.1 636.09 2.44 2.3 31 11314 0.211 6.15 10.00 710 2130 2.26 14% 5033 714 Division 200 0.87 1357 488520 56.5 1234.87 5.47 5.2 71 25390 0.238 13.46 13.00 923 2769 1.31 16% 9770 1576 Vaivase 1 100 0.87 667.8 240408 27.8 607.70 2.69 2.6 35 12495 0.238 6.62 10.00 710 2130 2.05 16% 4808 776 Vaivase 2 100 0.88 655.98 236152.8 27.3 596.94 2.29 2.2 29 10617 0.211 5.77 10.00 710 2130 2.41 14% 4723 670 Puni Vai 100 0.89 918 330480 38.3 835.38 2.71 2.6 35 12592 0.184 7.02 10.00 710 2130 2.03 12% 6610 809 Faatoia 200 0.8 804.68 289684.8 33.5 732.26 6.62 6.3 85 30699 0.421 14.13 14.00 994 2982 1.17 29% 5794 1685 Meredith 200 0.88 785 282600 32.7 714.35 2.74 2.6 35 12705 0.211 6.90 10.00 710 2130 2.01 14% 5652 802 Vaiala 50 0.85 628.1 226116 26.2 571.57 3.24 3.1 42 15035 0.291 7.62 10.00 710 2130 1.70 20% 4522 902 Pilot Piont 200 0.91 1878.2 676152 78.3 1709.16 3.62 3.4 47 16798 0.127 9.93 10.00 710 2130 1.52 8% 13523 1115 Wharf 500 0.66 3677.3 1323828 153.2 3346.34 70.87 67.3 913 328767 0.810 124.05 124.00 8804 26412 0.96 52% 26477 13697 LDS 200 0.92 1913.9 689004 79.7 1741.65 2.74 2.6 35 12699 0.097 7.76 10.00 710 2130 2.01 6% 13780 857 Aggies 500 0.72 2749.3 989748 114.6 2501.86 38.52 36.6 496 178699 0.635 72.76 73.00 5183 15549 1.04 43% 19795 8425 CCCS Tamaligi 500 0.9 3081.8 1109448 128.4 2804.44 7.51 7.1 97 34837 0.156 19.99 20.00 1420 4260 1.47 10% 22189 2274 Samoa T 500 0.94 4080.2 1468872 170.0 3712.98 1.90 1.8 25 8832 0.034 5.83 10.00 710 2130 2.89 2% 29377 615 Tauese 200 0.91 1123.2 404352 46.8 1022.11 2.17 2.1 28 10046 0.127 5.94 10.00 710 2130 2.54 8% 8087 667 Tolupeni 200 0.92 1514.8 545328 63.1 1378.47 2.17 2.1 28 10051 0.097 6.14 10.00 710 2130 2.54 6% 10907 678 Lotemau 500 0.91 2096.2 754632 87.3 1907.54 4.04 3.8 52 18748 0.127 11.09 10.00 710 2130 1.36 8% 15093 1244 ACB 500 0.89 3772.9 1358244 157.2 3433.34 11.16 10.6 144 51754 0.184 28.87 30.00 2130 6390 1.48 12% 27165 3323 Maxkar 200 0.89 835.8 300888 34.8 760.58 2.47 2.3 32 11465 0.184 6.39 10.00 710 2130 2.23 12% 6018 736 Magik Cinema 100 0.76 466.4 167904 19.4 424.42 5.11 4.9 66 23725 0.526 10.23 10.00 710 2130 1.08 36% 3358 1209 Molesi 200 0.8 1740.3 626508 72.5 1583.67 14.31 13.6 184 66394 0.421 30.55 30.00 2130 6390 1.15 29% 12530 3645 MacdoIald ...... 500 0.8 2206.4 794304 91.9 2007.82 18.14 17.2 234 84177 0.421 38.73 40.00 2840 8520 1.21 29% 15886 4621 ANZ Bank 500 0.87 2453.8 883368 102.2 2232.96 9.90 9.4 128 45911 0.238 24.34 20.00 1420 4260 1.11 16% 17667 2850 NPF 1 500 0.92 2927.4 1053864 122.0 2663.93 4.19 4.0 54 19423 0.097 11.87 12.00 852 2556 1.58 6% 21077 1310 NPF 2 500 0.73 1419.3 510948 59.1 1291.56 18.76 17.8 242 87032 0.608 35.93 40.00 2840 8520 1.17 41% 10219 4185 Fagalii airport 100 0.83 674.1 242676 28.1 613.43 4.27 4.1 55 19830 0.343 9.64 10.00 710 2130 1.29 24% 4854 1149 Toa Mapu 50 0.85 472.5 170100 19.7 429.98 2.44 2.3 31 11311 0.291 5.73 10.00 710 2130 2.26 20% 3402 679 Apia Park 500 0.64 755.6 272016 31.5 687.60 16.05 15.2 207 74470 0.872 27.45 27.00 1917 5751 0.93 55% 5440 2971 Maalauli 50 0.82 510.5 183780 21.3 464.56 3.55 3.4 46 16468 0.369 7.86 10.00 710 2130 1.55 25% 3676 937 Mapufagalele 200 0.84 1056 380160 44.0 960.96 6.07 5.8 78 28137 0.317 13.96 14.00 994 2982 1.27 22% 7603 1659 S/Factory 50 0.87 756.6 272376 31.5 688.51 3.05 2.9 39 14156 0.238 7.50 10.00 710 2130 1.81 16% 5448 879 V.lei Tama 50 0.83 475.4 171144 19.8 432.61 3.01 2.9 39 13985 0.343 6.80 10.00 710 2130 1.83 24% 3423 810 tiavea P/S 50 0.65 197.75 71190 8.2 179.95 4.00 3.8 52 18571 0.840 6.92 10.00 710 2130 1.38 53% 1424 757 AmaiIe Uta 30 0.73 315 113400 13.1 286.65 4.16 4.0 54 19316 0.608 7.97 10.00 710 2130 1.32 41% 2268 929 Saleaaumua 50 0.76 251.3 90468 10.5 228.68 2.76 2.6 36 12783 0.526 5.51 10.00 710 2130 2.00 36% 1809 651 Satitoa 100 0.78 491.3 176868 20.5 447.08 4.70 4.5 61 21787 0.474 9.69 10.00 710 2130 1.17 33% 3537 1153 Satitoa W/P 50 0.83 395.16 142257.6 16.5 359.60 2.51 2.4 32 11625 0.343 5.65 10.00 710 2130 2.20 24% 2845 673 Lalomanu 3 100 0.88 918.7 330732 38.3 836.02 3.21 3.0 41 14869 0.211 8.08 10.00 710 2130 1.72 14% 6615 939 LDS Sapunaoa 30 0.72 436.7 157212 18.2 397.40 6.12 5.8 79 28385 0.635 11.56 12.00 852 2556 1.08 43% 3144 1338 Sinalei 500 0.91 1082.1 389556 45.1 984.71 2.09 2.0 27 9678 0.127 5.72 10.00 710 2130 2.64 8% 7791 642 Coconut resort 500 0.74 658.4 237024 27.4 599.14 8.19 7.8 106 38017 0.580 15.92 16.00 1136 3408 1.08 39% 4740 1864 Saanapu LMS 50 0.8 429.9 154764 17.9 391.21 3.54 3.4 46 16401 0.421 7.55 10.00 710 2130 1.56 29% 3095 900 Econoler International 55 Ref.: 5505 Asian Development Bank TA 6485-REG: Promoting Energy Efficiency in the Pacific - Contract No. COSO/90-492 Samoa Report Total reduction of Savings on Total Avg Load bills Savings Correction system Investment PBP Line losses Line Losses line losses Needed Selected cost section 2 KVA PF kwhlday kwhlyear kW $ KVA kW $/day $/year Factor cost US$ Months % kWh kWh KVAR KVAR WST$ family P 200 0.78 9667.8 3480408 402.8 8797.70 92.42 87.8 1191 428733 0.474 190.78 190.00 13490 40470 1.13 33% 69608 22683 Hospital 500 0.78 6356.9 2288484 264.9 5784.78 60.77 57.7 783 281907 0.474 125.44 130.00 9230 27690 1.18 33% 45770 14915 Fesili 200 0.78 927.8 334008 38.7 844.30 8.87 8.4 114 41145 0.474 18.31 20.00 1420 4260 1.24 33% 6680 2177 Coxon 200 0.78 1329.2 478512 55.4 1209.57 12.71 12.1 164 58945 0.474 26.23 30.00 2130 6390 1.30 33% 9570 3119 Leififi 100 0.86 1641.4 590904 68.4 1493.67 7.53 7.2 97 34951 0.265 18.10 18.00 1278 3834 1.32 18% 11818 2133 Bakery 200 0.86 1790.9 644724 74.6 1629.72 8.22 7.8 106 38135 0.265 19.75 20.00 1420 4260 1.34 18% 12894 2327 ChanMow 200 0.86 1254 451440 52.3 1141.14 5.76 5.5 74 26702 0.265 13.83 14.00 994 2982 1.34 18% 9029 1630 K garden 200 0.86 3410 1227600 142.1 3103.10 15.65 14.9 202 72611 0.265 37.61 40.00 2840 8520 1.41 18% 24552 4432 Market 200 0.86 1480.6 533016 61.7 1347.35 6.80 6.5 88 31527 0.265 16.33 20.00 1420 4260 1.62 18% 10660 1924 Mackenzie 200 0.86 2578.6 928296 107.4 2346.53 11.84 11.2 153 54908 0.265 28.44 30.00 2130 6390 1.40 18% 18566 3351 New D/B 200 0.86 726.6 261576 30.3 661.21 3.34 3.2 43 15472 0.265 8.01 10.00 710 2130 1.65 18% 5232 944 Percival 200 0.92 1376.6 495576 57.4 1252.71 1.97 1.9 25 9134 0.097 5.58 10.00 710 2130 2.80 6% 9912 616 Kitano Hotel 300 0.92 2401 864360 100.0 2184.91 3.43 3.3 44 15931 0.097 9.74 10.00 710 2130 1.60 6% 17287 1075 Curry 200 0.92 1496.2 538632 62.3 1361.54 2.14 2.0 28 9927 0.097 6.07 10.00 710 2130 2.57 6% 10773 670 CCCS Palisi 50 0.78 477 171720 19.9 434.07 4.56 4.3 59 21153 0.474 9.41 10.00 710 2130 1.21 33% 3434 1119 Nafanua nursery 100 0.78 613 220680 25.5 557.83 5.86 5.6 76 27184 0.474 12.10 12.00 852 2556 1.13 33% 4414 1438 Chinese Embassy 200 0.78 1159 417240 48.3 1054.69 11.08 10.5 143 51398 0.474 22.87 23.00 1633 4899 1.14 33% 8345 2719 Medcen Hospital 200 0.78 491.8 177048 20.5 447.54 4.70 4.5 61 21810 0.474 9.70 10.00 710 2130 1.17 33% 3541 1154 Avele College 50 0.78 303.6 109296 12.7 276.28 2.90 2.8 37 13464 0.474 5.99 10.00 710 2130 1.90 33% 2186 712 Aus Housing 200 0.78 784.8 282528 32.7 714.17 7.50 7.1 97 34803 0.474 15.49 15.00 1065 3195 1.10 33% 5651 1841 SPREP 500 0.78 1255 451800 52.3 1142.05 12.00 11.4 155 55655 0.474 24.77 25.00 1775 5325 1.15 33% 9036 2945 Letava 50 0.78 564.2 203112 23.5 513.42 5.39 5.1 70 25020 0.474 11.13 11.00 781 2343 1.12 33% 4062 1324 Plown Tiapapata 100 0.78 475.7 171252 19.8 432.89 4.55 4.3 59 21096 0.474 9.39 10.00 710 2130 1.21 33% 3425 1116 Nelson 50 0.78 303.3 109188 12.6 276.00 2.90 2.8 37 13450 0.474 5.99 10.00 710 2130 1.90 33% 2184 712 Island style 50 0.78 279.6 100656 11.7 254.44 2.67 2.5 34 12399 0.474 5.52 10.00 710 2130 2.06 33% 2013 656 White Horse 200 0.85 1002.4 360864 41.8 912.18 5.17 4.9 67 23995 0.291 12.16 12.00 852 2556 1.28 20% 7217 1439 Insel Hotel 200 0.9 1231.4 443304 51.3 1120.57 3.00 2.9 39 13920 0.156 7.99 10.00 710 2130 1.84 10% 8866 909 Tanugamanono 50 0.88 865.9 311724 36.1 787.97 3.02 2.9 39 14015 0.211 7.61 10.00 710 2130 1.82 14% 6234 885 Samasoni 50 0.59 204.2 73512 8.5 185.82 5.46 5.2 70 25352 1.040 8.85 10.00 710 2130 1.01 61% 1470 903 Malifa compound 200 0.85 2273 818280 94.7 2068.43 11.73 11.1 151 54411 0.291 27.57 28.00 1988 5964 1.32 20% 16366 3264 SaoIuafata 50 0.84 420.8 151488 17.5 382.93 2.42 2.3 31 11212 0.317 5.56 10.00 710 2130 2.28 22% 3030 661 lufilufi 100 0.87 699.2 251712 29.1 636.27 2.82 2.7 36 13082 0.238 6.93 10.00 710 2130 1.95 16% 5034 812 Falefa A 50 0.79 305.6 110016 12.7 278.10 2.71 2.6 35 12594 0.447 5.70 10.00 710 2130 2.03 31% 2200 679 Ioapo 50 0.84 460.3 165708 19.2 418.87 2.64 2.5 34 12265 0.317 6.08 10.00 710 2130 2.08 22% 3314 723 solosolo 50 0.79 383.7 138132 16.0 349.17 3.41 3.2 44 15812 0.447 7.15 10.00 710 2130 1.62 31% 2763 852 Econoler International 56 Ref.: 5505 Asian Development Bank TA 6485-REG: Promoting Energy Efficiency in the Pacific - Contract No. COSO/90-492 Samoa Report 160, rue Saint-Paul, Bureau 200, Québec (Québec), Canada G1K 3W1 Tel.: + 1 (418) 692-2592 Fax: +1 (418) 692-4899 www.econoler.com Econoler International 57 Ref.: 5505 ASIAN DEVELOPMENT BANK TA 6485-REG: PROMOTING ENERGY EFFICIENCY IN THE PACIFIC Contract No. COSO/90-492 APPENDIX D: TONGA - May 2011 - Asian Development Bank TA 6485-REG: Promoting Energy Efficiency in the Pacific Contract No. COSO/90-492 Tonga Report ABBREVIATIONS AND ACRONYMS AC Air Conditioning ADO Automotive diesel oil Avgas Aviation gasoline DSM Demand-Side Management ECM Energy Conservation Measure ED Energy Division EE Energy Efficiency EEAAL Energy Efficiency Auditing and Appliance Labeling Project EPU Energy Planning Unit EEZ Exclusive Economic Zone GHG Greenhouse Gas HPS High-Pressure Sodium IMF International Monetary Fund JICA Japan International Cooperation Agency LED Light-Emitting Diode MEPS Minimum Energy Performance Standards MLSNR Ministry of Lands, Survey and Natural Resources MV Mercury Vapor PFC Power Factor Correction RE Renewable Energy SOPAC Pacific Island Applied Geoscience Commission SPREP Secretariat of the Pacific Regional Environment Programme SWH Solar Water Heaters TERM Tonga Energy Road Map TPL Tonga Power Limited Econoler International ii Ref.: 5505 Asian Development Bank TA 6485-REG: Promoting Energy Efficiency in the Pacific Contract No. COSO/90-492 Tonga Report TABLE OF CONTENTS ABBREVIATIONS AND ACRONYMS ...... II 1 COUNTRY PROFILE ...... 1 1.1 Fossil Fuels...... 1 1.2 Power Supply Sector ...... 2 1.3 Energy Efficiency Policy Implementation ...... 4 1.4 Policy and Institutional Recommendations ...... 8 2 STREET LIGHTING LED IMPLEMENTATION IN TONGA ...... 19 2.1 Key Program Parameters ...... 20 2.2 Impact evaluation ...... 22 2.3 Lessons Learned ...... 23 3 FUTURE EE PROGRAM DESIGN ...... 24 3.1 General Assumption and Parameters ...... 27 3.2 Energy Efficiency in Government Buildings ...... 28 3.3 Street Lighting ...... 31 3.4 Energy Efficiency in the Hotel Sector ...... 34 3.5 Energy Efficiency in the Residential Sector – CFLs ...... 36 3.6 Energy Labelling and MEPS ...... 37 3.7 Power Factor Correction ...... 39 3.8 Energy Efficiency in the Industrial Sector ...... 40 3.9 Water Distribution Network ...... 40 4 OTHER RECOMMENDATIONS: ...... 40 APPENDIX D.1: TONGA - ESTIMATED SAVINGS PER SECTOR IN GOVERNMENT BUILDINGS, REFERENCE TABLES ...... 44 APPENDIX D.2: TONGA - ESTIMATED SAVINGS FOR STREET LIGHTING, REFERENCE TABLES ...... 47 Econoler International iii Ref.: 5505 Asian Development Bank TA 6485-REG: Promoting Energy Efficiency in the Pacific - Contract No. COSO/90-492 Final Report 1 COUNTRY PROFILE The Kingdom of Tonga consists of 176 islands with a total area of 748 km2 and an Exclusive Economic Zone (EEZ) of about 700,000 km2. There are four groups of islands (Tongatapu, Ha'apai, Vava'u and Niuas) totaling 36 inhabited islands. The main island is Tongatapu where the capital is located. According to preliminary figures of the 2006 census1, the total population of Tonga is 101,191 inhabitants, which represents a 4.3% increase with reference to the 1996 census (97,784). This increase in population represents an average annual growth of 0.4%. The Tongatapu population is the largest with 72,045, accounting for about 71% of the Kingdom’s population. The census has identified 17,462 private households with an average of 5.8 people per household for a total of 102,000 inhabitants. The 2006 census data shows a net flow of people from the “Outer Islands” of Vava’u, Ha’apai, Eua and Niuas to Tongatapu during the 1996-2006 inter-census period. However, the main direction of Outer Island migrants was to overseas destinations. More than half (53%) of all households receives remittances from overseas, around 24% from both overseas and Tonga, and 5% from inside Tonga only. The main foreign exchange earners for the country are private remittances which stood at TOP 189.8 million at the end of 2008 followed by tourism at about TOP 47.3 million. 1.1 FOSSIL FUELS Total 2007 fossil fuel consumption is presented in Table 1. Table 1: Fossil Fuel Consumption in 20072 Fossil Fuel Type Liters (000) Gasoline 12,200 Aviation gasoline (Avgas) 281 Kerosene & jet fuel (ATF) 2,718 Automotive diesel oil (ADO) 36,056 Retained imports3 45,445 1 See http://www.spc.int/prism/Country/TO/stats/Census06/cen-ind.htm 2 2007 Tonga Trade Report, National Statistics Office 3 Estimated as high sulphur fuel oil (IFO) for liter conversion Econoler International 1 Ref.: 5505 Asian Development Bank TA 6485-REG: Promoting Energy Efficiency in the Pacific - Contract No. COSO/90-492 Final Report In 2008, Tonga Power Limited (TPL) used 14.19 million liters of diesel Automotive Diesel Oil (ADO) for power generation. Assuming a level of consumption similar to that of 2007, TPL’s consumption represented 40.8% of the diesel fuel consumption in Tonga. The ADO price paid by TPL in early 2008 was USD 0.97 per liter, almost half the diesel4 market price of USD 1.67 per liter. 1.2 POWER SUPPLY SECTOR 1.2.1 TPL and Market Supply TPL is the public power company that is responsible for electricity production and distribution for four electricity grids on the most populous Tongan Islands. After ten years (1998-2008) as a private company, TPL went back to being a public enterprise in July 2008 and now operates under the direct responsibility of the government. Power is generated entirely from diesel fuel. Table 2 shows the installed capacity of power stations that supplied electricity to the urban areas of Tongatapu, Ha’apai, Vava’u and ‘Eua over the April 2008-March 2009 period. Tongatapu represents 84% of the installed capacity as the largest island of the country. Table 2: Installed Power Capacity in the Four Main Islands Capacity Gross Generation Peak Base Island Group (kW) MWh (kW) (kW) Tongatapu 12,680 48,567 8,150 4,095 Vava’u 1,272 5,094 892 418 Ha’apai 772 1,400 296 130 ‘Eua 372 1,132 270 110 Total 15,096 56,193 n/a n/a Source: TPL Peak load in the three smaller island grids can be met only if all of the existing production capacity is available5. Therefore, reducing the end-user load would immediately improve the fragile supply/demand balance of outer islands and provide useful extra operational flexibility for Tongatapu. In addition, significant monetary savings will be achieved for both TPL and for end- users through the development and implementation of EE/DSM programs. Assuming the implementation of an EE/DSM program with a targeted 10% annual saving in 2010, cumulative savings on diesel oil could reach USD 22.5 million for TPL over the 2010-2020 period. 1.2.2 TPL Market Structure Table 3 shows the total number of TPL customers (20,711) with a breakdown by region, where Tongatapu represents 75% of the TPL total customer base. Results generated from surveyed households have revealed that there is a higher availability of electric appliances and equipment such as hot water systems, refrigerators, TVs, computers and modems in Tongatapu, in 4 Europaid/119860/C/SV/Multi, Identification mission multi-country – Renewable Energy Program, Final Report, August 2008. 5 See http://www.maetecengineering.com/articles/tonga-renew-energy.pdf Econoler International 2 Ref.: 5505 Asian Development Bank TA 6485-REG: Promoting Energy Efficiency in the Pacific - Contract No. COSO/90-492 Final Report comparison with the outer islands. This implies that the EE potential will be largest on the main island and that Tongatapu should be prioritized for DSM program deployment. Table 3: Number of Electricity Customers in the Four Main Islands Type Tongatapu Vava’u Ha’apai ‘Eua Total Domestic 12,517 2,446 1,012 1,099 17,074 Commercial 2,858 779 0 0 3,637 Total 15,375 3,225 1,012 1,099 20,711 Source: TPL Additionally, as shown in Table 4, commercial activities are concentrated on Tongatapu, which supports the recommendation to focus on this island for EE. The electricity consumption of Tonga shown in the Table below has been extrapolated based on August 2009 consumption. Table 4: Electricity Consumption Structure – 2009 Consumption Number of Sector % (kWh) Consumers Hotels 759,900 2 24 Commercial 10,356,900 28 843 Government 4,482,800 12 303 Industry 425,300 1 28 Street Lighting 578,100 2 114 Religious 3,380,300 9 840 Less than 10 kWh 35,100 0 1,527 Residential 15,292,600 41 11,232 Other 2,082,500 6 464 Total 37,393,500 100 15,375 Source: TPL and Econoler The residential/other sector represents about 41% of electricity consumption making it a good candidate for EE program implementation targeted on lighting, air conditioning (AC) and energy efficient appliances. The commercial sector is the second largest energy user with 28% and can also provide significant potential for EE measures mainly related to lighting and AC. Finally, the government and religious sectors exhibit similar consumption levels and could constitute another useful opportunity for savings, primarily for lighting and cooling. August 2009 billing data revealed another characteristic of the electricity market: all customer categories show a number of registered supply contracts recording zero energy use. These statistics covered almost 6% of the total population in the residential sector and 9% in the commercial sector. Further analysis is required to determine whether this is caused by disconnected or dysfunctional meters, outdated databases or other inaccuracies with data collection. Econoler International 3 Ref.: 5505 Asian Development Bank TA 6485-REG: Promoting Energy Efficiency in the Pacific - Contract No. COSO/90-492 Final Report Some zero readings may also outline a real situation where some customers (especially residential clients) switch off all electric equipment when they consider electricity too expensive or when they don’t have the financial resources to keep using electricity. This factor should be considered when planning DSM activities. 1.2.3 Tariff Analysis Electricity tariffs are regulated by the Electricity Act and administered by the Electricity Commission. The tariff adjustment is determined by a process under the Concession Agreement between Tonga Power Limited and the Electricity Commission. The competent authority is the Tongan Government Agency which sets the landed price of diesel used by Tonga Power Limited for power generation. The electricity tariff of 86.89 senitis (USD 0.42) has been effective since March 2010. It reflects recent increases in international costs of crude and shows an increase of 3.75 senitis over the previous tariff of 83.14 senitis per kWh. The same energy rate is currently used for all islands, regardless of real production and distribution costs for these different grids. Table 5: Electricity Tariffs in March 2010 Present Tariff Increase New Tariff Islands Senitis per Senitis per Senitis per USD kWh kWh kWh Tongatapu 83.14 3.75 86.89 0.42 Vava’u 83.14 3.75 86.89 0.42 Ha’apai 83.14 3.75 86.89 0.42 ‘Eau 83.14 3.75 86.89 0.42 Electricity tariffs are frequently adjusted in Tonga and these variations can become a barrier to energy efficiency (EE) as end-users are unsure about the monetary outcome of implemented EE measures. To overcome this barrier, TPL should consider developing a communication strategy aiming to assist customers in evaluating energy saving investments as tariffs evolve in time. 1.3 ENERGY EFFICIENCY POLICY IMPLEMENTATION 1.3.1 EE and Energy Policy Energy efficiency data gathering and analysis are among the responsibilities of the Energy Planning Unit (EPU) in the Ministry of Lands, Survey and Natural Resources (MLSNR). The Government of Tonga has now published its Tonga Energy Road Map (TERM) with the objective “to lay out a least-cost approach and implementation plan to reduce Tonga’s vulnerability to oil price shocks and achieve an increase in quality access to modern energy services in a financially and environmentally sustainable manner.”6 Through the TERM, the government has approved, inter alia, a 50% target of reducing the volume of diesel imports for electricity generation by 2012 through the use of renewable technologies and investments in EE activities identified in this report. 6 Tonga Energy Road Map, 2010-2020, April 2010. Econoler International 4 Ref.: 5505 Asian Development Bank TA 6485-REG: Promoting Energy Efficiency in the Pacific - Contract No. COSO/90-492 Final Report Until now, aid and assistance channeled through the EPU in the EE and Renewable Energy (RE) sectors have largely been limited to the following activities: The Japan International Cooperation Agency (JICA) and the International Union for Conservation of Nature (IUCN) have been providing about USD 206,000 “hardware” for RE projects (e.g., solar equipment). The Secretariat of the Pacific Regional Environment Programme (SPREP) has been focusing mainly on capacity building projects as follows: - REEEP7 involves assistance in drafting an EE policy and implementing the Renewable Energy Act 2008. Since this act is to be revised as part of a broader policy and regulation revision under the TERM, the REEEP project currently entails two key activities: - Drafting an EE policy - Drafting and implementing RE regulations required under the revised RE Act - Also from the REEEP’s 7th Global Funding Round8, and under the RE policy development and implementation, the activities in for Tonga was focused on the implementation of Renewable Energy Act. - Initiated REEEP- Pacific Island Applied Geoscience Commission (SOPAC) PICs Energy Efficiency Auditing and Appliance Labeling Project (EEAAL) in order to progress the implementation of National Energy Strategic Action plans of Samoa, Tonga and Vanuatu in the areas of EE and EC Over the years, the EPU has been leading or has been involved in a number of specific EE projects and work programs. These include, among others: Public campaigns – radio and TV Competitions in various sectors of transportation (aimed to reduce greenhouse gas emissions), power (ideas and activities to promote wise and prudent use of available electricity) and power conservation measures. These activities also took into account EE needs in other facilities of the government, residential, commercial and industrial sectors Short-term training programs on small engine operation and maintenance – including outboard motors and lawn mowers – across the Kingdom (including the outer islands) Preliminary work on building codes – based on Australian standards Energy audits Collaboration with the Ministry of Education to build energy-related topics (both RE and EE) into school curriculums. 1.3.2 EE and Regulatory Framework The first significant involvement of the Government of Tonga in energy and EE projects began in 1991 and has gradually intensified since the financial year 1995-1996. The main partners and donors for these initial efforts included the Forum Secretariat Energy Division (ED) and the Energy 7 http://www.reeep.org/showProject/2518.107080557/clean-energy-policy-and-regulation-in-tonga.htm 8 http://www.reeep.org/index.php?assetType=news&assetId=252 Econoler International 5 Ref.: 5505 Asian Development Bank TA 6485-REG: Promoting Energy Efficiency in the Pacific - Contract No. COSO/90-492 Final Report Division of SOPAC, under the auspices of the Pacific Islands Energy Policy and Strategic Action Plan (PIEPSAP). These initial projects contemplated possible RE/EE initiatives and related issues. In particular, the initial focus was on assisting the EPU with the development and preparation of a set of RE policies and the drafting of a RE bill to be submitted to parliament. The primary purpose of this Bill was to provide a legal framework to promote the utilization of RE in Tonga, through the creation of a conducive enabling market environment. The bill was subsequently tabled and eventually enacted in Parliament in October 2008. However, as at today, the legislation project is still on hold. 1.3.3 Review of Major Institutional Stakeholders Prime Minister’s Office In November 2009, the formation of the Tonga Energy Road Map (TERM) Committee was approved. The TERM unit was created to provide secretariat services and specialist technical support and oversee the day-to-day management and implementation of the TERM. The final report of the TERM was completed and published in June 2010. The TERM is made possible through close cooperation between the Government of Tonga, under the initiative and leadership of the Prime Minister, and bilateral partners including AusAID, NZAID, the Japan International Cooperation Agency (JICA), IRENA, the European Union, the World Bank and the Asian Development Bank. Among the policy innovations that are key to the TERM, was the decision to amalgamate all development partner resources under a cohesive planned approach. An EE and DSM Coordinator was planned to be hired in 2011 to join the team and plan activities related to EE issues and programs. Meanwhile, all EE activities have been put on hold by the MLSNR Energy Unit. Energy policy management is planned to be modified in the near future taking into consideration TERM considerations. Energy Planning Unit, MLSNR The Energy Planning Unit (EPU) in principle deals with national energy planning, energy policy and coordination, as well as project management. This unit is officially responsible for the development and implementation of all EE activities in Tonga, including project activities related to the design, implementation and evaluation of energy projects in cooperation with regional agencies such as REEEP and SOPAC. However, this lacks capacity for EE program development, implementation and evaluation. The Environment Division under the MLSNR hosts the GEF focal point in Tonga and governs the Energy Unit. Its future roles and responsibilities in the energy policy sector will evolve with the progressive implementation of TERM. Econoler International 6 Ref.: 5505 Asian Development Bank TA 6485-REG: Promoting Energy Efficiency in the Pacific - Contract No. COSO/90-492 Final Report Energy Regulator In 2008, the Electricity Commission (EC) was established as the regulatory agency for grid-based electricity supply, replacing the former TEPB as regulator. The EC is specifically involved in regulating the generation and sale of electric power. The establishment of the EC was legally defined by the Electricity Act 2007. The functions of the EC include the regulation of tariffs, consumer service standards and electrical safety. They also comprise the approval and licensing of electricians and the creation of regulations for major electrical work. The regulatory framework is a “concession contract” model. Tariffs, tariff adjustment formulas, operational efficiency benchmarks, consumer service standards and penalties are specified in a contract between the EC and the electricity provider, Tonga Power Limited. Tonga Power Ltd. As the sole utility in Tonga, TPL upper management recognizes the importance of DSM in its future energy planning. However, there are no staff specifically focused on EE/DSM and TPL needs technical support to build local capacities and implement EE/DSM programs. However, TPL has been involved in TERM development and has already taken the lead in the implementation of the EE pilot project, especially energy conservations actions related to street lighting. Chamber of Commerce and Industry (CCI) The CCI comprises 120 members constituting 60%-80% of the total business community in Tonga. The CCI is greatly concerned by energy prices and suggests focusing on two key initiatives: Train local personnel to conduct energy audits Develop a program with the banking sector to facilitate EE financing in the private sector. Tonga Development Bank The bank would welcome any bankable EE investment projects as indicated by the Managing Director. Considering the reluctance of the private banking sector to extend loans for EE projects, a useful strategic move would be to involve the Tonga Development Bank in future EE investment programs. Such an endeavor would help ensure the capital needed would become available to implement EE initiatives in end-user facilities. Econoler International 7 Ref.: 5505 Asian Development Bank TA 6485-REG: Promoting Energy Efficiency in the Pacific - Contract No. COSO/90-492 Final Report 1.4 POLICY AND INSTITUTIONAL RECOMMENDATIONS 1.4.1 Government EE Management Organization From a government perspective, energy efficiency is a way to improve productivity in the economy through improved energy use. These kinds of changes require commitment along with a macro and long-term approach. In addition to EE program development, management, financing and regulation activities, one of the key government contributions is to assume leadership for the development and implementation of EE policies and regulations. It is also critical that there is a government agency that oversees market data production and analysis including sector benchmarks. The following table presents the main recommendations for energy department organization summarizing the basic activities and programs to be put in place. Table 6: Energy Department EE Organization ENERGY DEPARTMENT Institution in Activity Profile of Activity International Support Charge Create an EE Energy - Lead and coordinate EE Technical assistance: Division with Department policies and regulations - Deliver training in EE capacities in: - Develop and implement EE management - Leadership Key Partners: policies - Improve data statistics - Economic analysis - Local - Conduct market surveys for EE purposes - Public sector stakeholders - Conduct energy audits - Assist in market survey management - Traditional - Conduct and monitor design and execution - Technical analysis power leaders training programs - Assist in production of - Sub-contractor - Churches - Produce EE resource plan EE national resource management - Etc. - Produce awareness plan - Communication program - Produce education program - Lead EE activities in public sector - Develop EE regulations and standards In this scheme, the Energy Department or Unit is involved in a large spectrum of EE activities, including EE program management. Since the ED’s human resources are limited, it is recommended that the EE division outsource EE program management and evaluation to private organizations whose management systems are generally more flexible than the public sector. Such a strategy would likely be better adapted to market-oriented program management. Although the country’s EE market is relatively small, activities could be jointly performed with the utility if mandated by the government as the implementing agency of its EE policy and program plan. The public utility could provide the technical capacity in market research and program design. Its customers’ listing and regular contacts with them through billing would provide the required market data and an access channel to clients for EE marketing purposes. When a utility is mandated by the relevant government to implement EE programs, it is usually allowed to recoup the cost of program implementation through a small increase in the electricity tariff. Econoler International 8 Ref.: 5505 Asian Development Bank TA 6485-REG: Promoting Energy Efficiency in the Pacific - Contract No. COSO/90-492 Final Report In Tonga, the energy sector management structure is to be revised as a consequence of the ongoing implementation of the Tonga energy road map. The new EE and DSM coordinator who is planned to be recruited in 2011 will set up the adequate resources responsible for managing all EE-related activities. Actually, it is anticipated that the public administration of the energy sector will be reshaped along the energy road map implementation requirements. To begin with, this Unit should concentrate on implementing prioritized programs identified in this report. In the medium term, making this Unit a permanent actor of the energy policy will require building all necessary skills for EE program management and evaluations. It will also be required to collaborate with local private organizations since their management systems are more flexible than in the public sector, which will enable the Unit to maximize the upcoming delivery of effective EE programs. 1.4.2 TPL EE/DSM Management Organization TPL management is showing strong support for EE/DSM program development by improving the efficiency on the supply side, participating actively in available opportunities to promote EE and testing new technologies as in the case of LED street lighting. Developing specific EE/DSM programs adjusted to TPL customers requires a specialized and permanent in-house team and the first step should be to assign appropriate resources to establish this function. Another key initiative should consist in prioritizing the development and implementation of a customer database within the power utility to provide key information to EE/DSM program developers and analyze sector patterns of energy usage. Seeking appropriate support and assistance to build, store and maintain a database for EE purposes (list of data appended to this chapter) would constitute a major step forward for TPL and would resolve the existing information barrier to the efficient implementation of the first stages of any EE program. However, TPL’s role could be strengthened and the government could mandate TPL to be the implementation arm of a wider EE/DSM program. Utilities often view EE/DSM programs as counter-productive activities as they reduce electricity sales while money has to be invested to run the program. To be attractive, EE/DSM has to be considered as a profitable activity. There are two concrete ways to achieve this objective. The first is to select only EE/DSM programs where the utility benefits per energy unit are higher than the selling price of this energy unit. In this first scheme, the utility has a direct advantage to reduce electricity production. A second approach allows the utility to recoup the cost invested in EE/DSM programs through a small increase in tariff allowed by the government. This second approach is more frequent and applicable to a larger portfolio of EE/DSM programs than the first option. EE/DSM should therefore be effectively integrated into the supply strategy of a public utility with as much scrutiny as are traditional power supply and RE options. Econoler International 9 Ref.: 5505 Asian Development Bank TA 6485-REG: Promoting Energy Efficiency in the Pacific - Contract No. COSO/90-492 Final Report This business approach has two requirements: One is methodological. The public utility must precisely determine its production cost for each load curve segment. It must accurately determine the end-use demand structure behind the load curve to identify which group of customers and usage are responsible for this demand and build its EE/DSM strategy from this basic information. The other refers to EE/DSM management. As for any investment in power supply and/or distribution systems, EE/DSM program design needs to be supported by high-quality “bankable” feasibility studies. Table 7: Electric Public Utility EE/DSM Organization Electricity Utility Activity Institution Profile of Activity International in Charge Support Create an EE/DSM Power - Get financing resources from Technical unit with capacities in: utility business activities or from a assistance: - Economic analysis small increase in tariff - Train staff in and planning - Hire appropriate technical staff EE - Database & load - Gather and analyze customer management research data on electricity consumption from utility point - Technical analysis - Identify and develop relationship of view - Program design, with large customers - Assist in EE implementation and - Identify key market players and resource plan management develop positive relationships production - Program evaluation - Develop and implement internal communication program - Develop and implement external communications program - Proceed with market research and potential savings analysis - Design, implement and evaluate EE programs 1.4.3 General Information/Awareness Programs Sharing information in the EE sector is an efficient way to save on program development costs and take advantage of creative solutions developed elsewhere. As PDMCs evolve in a specific environment, sharing technical information on energy savings in buildings, EE standards for AC equipment or specifications for CFLs would provide large benefits for all participating countries. An information center is not necessarily physically required in Tonga, or in other PDMCs. Making use of the internet by creating a website dedicated to EE in PDMCs seems to be preferable. This website would promote shared information on EE technologies and appropriate specifications, program design, management, results and evaluation, and would allow for networking. Potential partners could be the Pacific Power Association, Pacific Islands Private Sector Organizations or SPC. The specific contribution of Tonga would be to provide a local coordinator responsible for national contribution to the Web page. Communication is crucial for the development of a successful and sustainable interest in EE by the population, enterprises and institutions. As a result, it needs to be managed accordingly. Econoler International 10 Ref.: 5505 Asian Development Bank TA 6485-REG: Promoting Energy Efficiency in the Pacific - Contract No. COSO/90-492 Final Report Technical support to design a more comprehensive and structured information and awareness program is required. Table 8: EE Information and Awareness Programs INFORMATION AND AWARENESS Activity Institution in Charge Profile of Activity International Support Information centers - Energy Department May include: - PDMC regional to disseminate - Books and leaflets information monitoring information on Key partners - Technical staff center efficient - Electric equipment answering technical - Regional organizations technologies and importers/retailers questions - SPC efficient use of - NGOs energy Awareness - Energy Department May include: TA to assist in: programs Key partners - EE advertising - Designing awareness - Electric equipment - Educational strategic plan retailers material for schools - Producing initial - Public utility material - Education sector 1.4.4 Education and Training Education and training are a prerequisite in Tonga to effectively support EE/DSM. This should not be limited to short training sessions but rather be integrated in existing education and training curriculums, wherever possible. As far as energy auditing and EE practices are concerned, it is recommended to consider outsourcing training to the private sector with twinning arrangements with foreign experts to reap the long-term benefits of this activity. The PDMC EE information center would assist in maintaining and upgrading the material used for education and training, ensuring the sustainability of this activity in the region. Econoler International 11 Ref.: 5505 Asian Development Bank TA 6485-REG: Promoting Energy Efficiency in the Pacific - Contract No. COSO/90-492 Final Report Table 9: Education and Training in Energy Efficiency EDUCATION AND TRAINING Activity Institution in Charge Profile of Activity International Support Primary school Energy Department - Coordinate the production Technical Assistance: level and dissemination of - Assist in producing education, Key partners education material education plan and strategy targeting all Department of - Outsource to Department of along with initial education primary Education Education material schools pupils - Countrywide activity - Partner: SPC/SOPAC Energy audit Energy Department - Mobilize and involve the TA to: and energy private sector in program - Produce initial education management Key partners design and implementation material Chamber of - Conduct training sessions - Prepare work plan and Commerce Industry on energy audits including strategy - Engineering association financial analysis and - Conduct training sessions firms reporting to customers - Train local staff in delivering - O&M staff - Periodically update and training sessions - Associated upgrade capacities technical departments Energy- Energy Department - Mobilize and involve the TA to: efficient private sector in program - Produce initial education building Key partners design and implementation material construction Chamber of - Conduct training sessions - Prepare work plan and practices Commerce Industry on energy-efficient building strategy - Engineering association construction practices for - Conduct training sessions firms Architect and large building constructors - Train local staff in delivering - Architects contractor - Periodically upgrade training sessions - General associations capacities contractors 1.4.5 ENERGY LABELING and Minimum Energy Performance Standards MEPS, enforcement procedures and control systems need to be developed according to specificities of the Tonga environment. International technical assistance is required to initiate development and to set up the required implementation and follow up procedures. Usually, such programs include tests by suitably recognised laboratories. This process involves a complex and costly operation which may create a barrier to implementing MEPS in Tonga. Econoler International 12 Ref.: 5505 Asian Development Bank TA 6485-REG: Promoting Energy Efficiency in the Pacific - Contract No. COSO/90-492 Final Report A least-cost option could be adopted to overcome implementation barriers, suggestions for which include: Include into the energy labelling and MEPS regulations a provision making importers/retailers responsible for proving compliance of the material displayed on the shelves and include penalties for non-compliance. Establish rules to accept equipment testing from internationally recognized laboratories and define procedures to ensure specific unit compliance with the current energy labelling and MEPS requirements. Develop a protocol for the validation of foreign laboratory test results to ensure program coherence. Apply penalties for non-compliance. Outsource to the private sector energy labelling and MEPS compliance control management. Coordinate energy labeling and MEPS development and share program information with other PDMCs through the electronic information center. Accept the existing energy labeling and MEPS schemes from Australia-New Zealand and other major markets as a starting point for the development and implementation of the energy labeling and MEPS program in Tonga. SOPAC, with REEEP support, undertook a situation analysis and feasibility study on the impacts of introducing an appliance labeling program in Samoa, Tonga and Vanuatu through the development of a standards and labeling program. The implementation of energy labeling and MEPS in Tonga is expected to be cost-effective under all scenarios for the 2011-2020 period. At a 10% discount rate, energy labeling and MEPS programs in Tonga will offer total program benefits of TOP 2.1 to 3.4 million (or USD 1 to 1.7 million) with a benefit cost ratio over 1.69. Importation of used equipment as in-kind remittances sent from overseas directly to relatives in Tonga will need further investigation. Usually, energy labeling and MEPS regulations do not include imports of used appliances and AC equipment as it is difficult to determine the exact efficiency of each product imported. Section 3.6 on energy labeling and includes more details about proposed program features. 1.4.6 Energy Efficiency in Building Codes The cost of developing detailed stand-alone EE provisions for the building code may be too challenging financially for a small country like Tonga to do on its own. It will be critical to develop strategies to reduce development costs and efforts when preparing the EE provisions of the building code for Tonga. These strategies could include i) adapting the EE provisions of the building code from another country with similar environmental conditions, ii) limiting the scope of such EE provisions to simple measures like insulation, windows and external shading, which constitute the bulk of the potential for passive EE measures, iii) using a prescriptive approach including performance levels and benefits for adopting the code, and iv) using a collaborative approach with other similar PDMCs to share the level of effort required in Tonga. If existing EE building code provisions from abroad are used as a basis 9 Situation Analysis and Feasibility Study on the Impacts of Introducing an Appliance Labeling Program in Samoa, Tonga and Vanuatu, International Institute for Energy and Conservation (IIEC), October 2010. Econoler International 13 Ref.: 5505 Asian Development Bank TA 6485-REG: Promoting Energy Efficiency in the Pacific - Contract No. COSO/90-492 Final Report for development, then there is a need to make sure that all economic studies supporting the minimum level of performance of each component are properly updated to the Tonga context. The high cost of electricity and fossil fuel supply in Tonga will necessitate an update of those economic studies and will likely result in a more stringent threshold for the minimum acceptable performance of building components than in large tropical countries with the benefits of economies of scale in their power sector and/or the benefit of using significant RE resources for power generation. To limit revision and periodical update costs, technical information should be shared with other participating PDMCs through the information Web page already proposed. The EE provisions of a building code, like energy labeling and MEPS, will only be as effective as the enforcement procedures introduced to ensure compliance. Experience around the world with voluntary EE building code provisions have shown generally minimal improvements in overall target market building EE. Those experiences suggest that, very early in the process, the government should be fully aware that financial and human resources will be needed to ensure compliance and should decide accordingly whether to develop mandatory EE provisions for its building code. If there is no serious and realistic commitment to enforce the EE provisions of the building code, then other types of programs and EE initiatives will generally be more cost-effective. However, if EE provisions of the building code are not put on the government’s priority list, this will result in an important lock-in energy inefficiency effect as new buildings will continue to be constructed with the “business-as-usual” approach and contribute for a very long period of time to inefficient energy usage in the building sector. Table 10: Building Code and Energy Efficiency BUILDING CODE Activity Institution in Charge Profile of Activity International Support Introduce EE - Energy Department - Prepare EE TA to: considerations in Key partners specifications adapted - Produce initial building code - Department in charge of to local environment to technical material building code be introduced in - Conduct training - Architect and contractor building code sessions associations - Conduct actual - Train local staff in - Municipalities (if implementation of new delivering training involved in building code regulations in code sessions application) - Inform/train architects - Power utility and contractors 1.4.7 Creation of an Energy Efficiency Center Given the low level of effort toward EE improvements, a necessary first step for developing any EE program is institutional strengthening. The recruitment and training of energy engineers, financial analysts and program developers should be undertaken. Without such institutional underpinnings, most EE programs will likely fail to achieve savings. The first step undertaken by other countries in a similar situation was the establishment of a donor-funded energy center. These centers are typically non profit-making and supported by the government. However, they have independent authority to conduct research and analysis, raise awareness and recommend Econoler International 14 Ref.: 5505 Asian Development Bank TA 6485-REG: Promoting Energy Efficiency in the Pacific - Contract No. COSO/90-492 Final Report energy policies. Furthermore, they are mandated to design and implement EE programs, and play a central role in fostering market transformation where the implementation of energy-efficient products and services becomes standard practice. Finally, they provide a focal point for EE activities and have high credibility due to their nongovernmental, nonprofit status. The government should consider establishing such an energy center. Subsequently, an EE/DSM cell could be established within the utility to ensure analysis, program development as well as management and implement end-use EE programs. Alternatively, the energy center could be established as a unit within the utility. However, without an identity of its own separate from the utility, it runs the risk of being “captured” or controlled by the utility, which may not be supportive of aggressive EE efforts. In addition, an EE unit within the utility may not be regarded by the public as being a credible independent body for EE advice, especially as regards fuel substitution issues (e.g. LPG used as a cooking fuel or LPG used as a SWH backup energy source vis-à-vis electricity). Finally, locating the energy center within an electric utility may be seen as inappropriate if its mission will be to also address other uses of imported petroleum fuel use, in particular for transport. The establishment of an independent energy center does not preclude the establishment of an EE unit within the utility to oversee and coordinate utility EE activities. If such a unit is established within the utility, it should start out reporting directly to the chief executive of the utility to ensure that the concept of EE is given attention at the highest level and is not subjugated and “controlled” by lower level managers who may not support the EE mission. An energy center with adequate independence and funding can review and evaluate existing EE efforts and ensure their implementation. The energy center can play the role of advocating proper implementation of energy labeling and MEPS and EE provisions of building code legal requirements, as well as presenting a blueprint of how to meet these legal requirements. Likewise, if the ban on incandescent bulbs is found to be problematic in any practical matters, the center could champion better implementation and enforcement of the ban and help determine the extent to which cheap, low-quality CFLs are dominating the market. Steps may be necessary to reduce or eliminate low-quality CFLs through a product labeling program or the establishment of EE standards for bulbs. This type of standards and labeling program is the kind of activity an energy center can support and even implement if it has adequate assistance from those with experience in implementing such programs in other countries. By providing assistance in the design and implementation of EE policies and programs, an energy center helps strengthen the institutional capability of government institutions, to carry out EE initiatives. Over time, staff from the energy center could even take management positions at government institutions thereby transferring EE management capacity directly to those institutions. Econoler International 15 Ref.: 5505 Asian Development Bank TA 6485-REG: Promoting Energy Efficiency in the Pacific - Contract No. COSO/90-492 Final Report Legal Framework Development To ensure the success of the proposed EE programs, an appropriate legal framework should be developed. Up to now, there has been no regulation related to the management of EE matters in Tonga. Legislation is required to take into consideration the context of Tonga and the different barriers to EE program implementation. This legislation should cover the following issues: Establish the appropriate legislation to enforce technical specifications for new buildings and implement thermal insulation, heat gain (shading), maximum lighting power density, inverter and/or high efficiency AC and so forth standards. Develop an EE fund which would provide subsidies for EE projects in all sectors. Organize professional EE accreditation and define terms of reference for energy auditing. Define the conditions for energy labelling and MEPS implementation of energy-efficient appliances and products, including the energy consumption levels of prohibited appliances. Define the pre-consultancy conditions and processes for large energy consumption projects. Define certification conditions for manufacturers and installers regarding SWH systems. Define the list of energy-efficient appliances exempt from the VAT and customs fees. Install SWHs on a mandatory basis in hospitals and government buildings Development of this legal framework and technical specifications will require an overall budget of about USD 200,000, where about USD 50,000 will be used for the organization of seminars and marketing campaigns. 1.4.8 Nomination of Energy Managers in Government Buildings It is recommended to designate energy managers in government buildings to closely track energy consumption levels in government facilities and improve their EE. These officers will be responsible for tracking and analyzing building energy consumption and preparing monthly reports for the EE management units that they are responsible for. These reports will provide the data needed to analyze and identify all energy consumption anomalies. This information will also contribute to creating an energy consumption database for the government sector. The database will help define the energy savings potential, establish a benchmarking tool to compare energy consumption between the country as a whole and a specific region and define objectives to be targeted for building EE improvement. This action will require an investment in energy training estimated at USD 0.1 million calculated on the basis of training sessions for each semester over a three-year period. The expected savings are estimated at an average of 2% of the energy consumption level of the sector based on similar implemented projects in other countries. The estimated savings are mainly linked to the EE benefits of equipment operation optimization and improved maintenance practices. For current government buildings in Tonga, additional savings could reach 90 MWh/year, resulting in emission reductions of 61 TCO2/year. Econoler International 16 Ref.: 5505 Asian Development Bank TA 6485-REG: Promoting Energy Efficiency in the Pacific - Contract No. COSO/90-492 Final Report 1.4.9 Development of an Energy Efficiency Fund An EE fund would be a useful support mechanism for EE project implementation. Such a fund would be dedicated to EE project financing in all sectors. The fund could provide project financing up to 75% of total project costs, up to a maximum of USD 100,000. No collateral would be requested for the credit allocated to these projects if the latter are carried out under supervision of the energy unit. A financial guarantee fund for EE projects would be an alternative solution to help promote EE investments in the sector and encourage commercial financial institutions to participate in market development. Collateral for loans requested for EE projects would be guaranteed by this fund which will not burden clients’ credit levels and will help develop energy performance contracting and ESCOs. Performance contracting could then be offered by service providers, not only for complete energy systems, but for specific efficient technologies (Solar Water Heaters (SWH), efficient motors, efficient ACs, etc.). Local banks can manage the fund and provide the loan and credit guarantees required for the implementation of EE projects. Under this component, the EE projects initiated could benefit from an around 10% subsidy program to encourage EE project implementation. The subsidy will help in prioritizing EE projects and increase the EE projects’ financial profitability. The level of subsidy could be set based on the country market barriers and market maturity. If the subsidy will be at the same level of the market credit interest rate, this will effectively give a zero interest rate for applicable EE investments. The funds needed for an EE fund could be generated through taxes applied to high energy- consuming or polluting equipment like electrical water heaters, low-performance AC units, incandescent lamps and fuel inefficient vehicles. Public Sector Procurement In 2008, International Monetary Fund (IMF) data showed that the Government of Tonga’s final consumption expenditures10 were over USD 64 million. More detailed data need to be gathered in order to determine the share and nature of the equipment purchased. When this is completed, an EE analysis should be performed to establish achievable savings through the adoption of MEPS or building code regulations in the public sector. To show its leadership in EE matters, and set an example, the public administration may adopt earlier than the rest of the market the level of performance that will later be included in regulations. The adoption of regulations that incorporate EE considerations for all type of energy consuming equipment into the public sector procurement process can provide significant energy savings. Furthermore, it will send a clear signal to the community that the EE policy is taken seriously by the government. Additional benefits include promoting government leadership in EE and influencing 10 EuroStat definition: General government final consumption expenditure consists of expenditure incurred by resident general government units (i.e., units within the subsectors central government, state government, local government or social security funds) on goods or services that are used for the direct satisfaction of individual needs or wants or the collective needs of members of the community. Final consumption expenditure may take place on the domestic territory or abroad. Econoler International 17 Ref.: 5505 Asian Development Bank TA 6485-REG: Promoting Energy Efficiency in the Pacific - Contract No. COSO/90-492 Final Report local importers and retailers to opt for energy-efficient products and practices. An in-house feasibility study may detail what equipment is at stake, suggest adjustments for the procurement procedure and propose a strategy to disseminate information and training to public organizations to apply the revised procedure including EE considerations. Table 11: Public Procurement Adjustment Organization PUBLIC PROCUREMENT Activity Institution in Charge Profile of Activity International Support Public sector Introduce EE procurement Energy Department regulations in TA to: Key partners: procurement Assist in program design All public sector procedures and monitoring stakeholders Introduce control mechanisms Econoler International 18 Ref.: 5505 Asian Development Bank TA 6485-REG: Promoting Energy Efficiency in the Pacific - Contract No. COSO/90-492 Final Report 2 STREET LIGHTING LED IMPLEMENTATION IN TONGA The Light-Emitting Diode (LED) Street Lighting pilot project in Tonga was developed as a way to reduce street lighting electricity use as well as maintenance costs, through the use of lower power lamps and through increasing the time interval before the lamps need to be replaced. The new LED street lighting units will produce better quality street lighting and hence a better all-round street lighting system. As street lights are generally operated for 3500 – 4500 hours a year, and thousands of units of a common design are used even in PDMCs, the payback for street lighting upgrades will be generally better than for lighting upgrades in most other applications. At the time of the project, there were 3,208 street lights installed and in use throughout Tonga. A number of different lighting technologies were used in Tonga, including primarily High Pressure Sodium (HPS) lamps, some fluorescent tubes and few residual obsolete-technology Mercury Vapor (MV) lamps. Most of the lamps’ fixtures were old, rusted and in bad condition, and used more electricity than good modern street lighting practice, while at the same time generally producing poor street level lighting levels and quality of light and also had high maintenance costs. To withstand the often high salt weather conditions and its associated corrosion in Tonga, street lighting fixtures need to be well protected and adapted to maritime environment salt conditions, as well as to high tropical temperatures and humidity, and regular and frequently devastating cyclones. The new LED street lights installed under the PEEP-1 pilot project in Tonga give off a distinctive clear white light compared with the poor-color rendering nearly monochromatic orange light of the existing older HPS lights - although the overall energy efficiency (or more accurately the overall lighting efficacy in lumens per watt) is broadly similar between the best fluorescent lamps (around 100 lumens/watt), the best HPS (usually around 100 lumens/watt, but can be up to 150 lumens/watt11) and LED street lights (around 80 lumens/watt although this is increasing as the technology matures), and much better than the remaining MV units (which are now a dated technology and banned for use in new fittings in some markets such as the US). However, LED lamps’ light output only falls off slowly over its lifetime (i.e. high lumen maintenance) so in practice this means that for the same minimum amount of useful street lighting illumination, a LED street lighting unit will use less electricity than a comparable high pressure sodium unit. A high efficiency fluorescent fitting gives good color rendering and can be as energy efficient as an LED unit, but the life of a fluorescent lamp is too short and the maintenance cost of replacing tubes too high for fluorescent tubes to be cost-effective for street lighting applications. Fluorescent tubes are inexpensive but only have an around 10,000 – 15,000 hour rated life, and HPS units generally have a life of 24,000 hours12 and up to 32,000 hours, but this still falls short of the rated life of 50,00013 - 100,000 hours for LED lamps (but LED street lights and fixtures are still too new for this 100,000 hour lifetime to be fully proven in practice yet). 11 E.g. GE Lucalox™ XO High Pressure Sodium lamps, see http://www.gelighting.com/eu/lighting_applications/street.html#lucaloxHPS 12 See http://smud.apogee.net/comsuite/content/ces/?utilid=smud&id=1175 13 E.g. see GE Iberia LED Street Lamp systems at http://www.gelighting.com/eu/resources/literature_library/catalogs/lighting_fittings_catalog/downloads/Fitting_LED_Iberia _sellsheet_en_2009oct.pdf Econoler International 19 Ref.: 5505 Asian Development Bank TA 6485-REG: Promoting Energy Efficiency in the Pacific - Contract No. COSO/90-492 Final Report With the lower actual electricity use by LED street lights, there will also be a consequential reduction in Greenhouse Gas (GHG) emissions. The PEEP-1 pilot project was used to quantify the savings and other benefits of LED street lighting technology in the Tongan context, for post pilot project wider deployment in Tonga and elsewhere in the Pacific. The savings in operating and maintenance costs could also potentially allow more street lights to be installed without increasing the annual cost to the respective government. 2.1 KEY PROGRAM PARAMETERS The network selected for the implementation of the LED street lights comprised three routes along Vuna road, which runs East to West along Nuku’alofa’s waterfront. These routes were chosen because of the ease of access and the large amount of vehicle and pedestrian traffic on the corresponding roads. Before the implementation of the project, not all street lights were working on these routes. This was rectified during the preliminary stages of the project to provide an accurate measurement baseline. The street lights used previously on these routes comprised 109 street lighting fixtures with 150 W Sylvania HPS lamps for a total measured electricity consumption of 56,720 kWh/year. The total electricity consumption of the 109 LED street lights installed along the same routes will be reduced to 36,800 kWh/year, with savings of 19,920 kWh per year for a cost savings of around USD 12,720/year. Technical specifications Technical specifications were developed based on the best practices for LED street lighting use and quality, and taking into consideration product reliability and longevity. The specifications included options for further energy savings through time-based and/or dimming controls, as well as the potential for future remote control options. Econoler International 20 Ref.: 5505 Asian Development Bank TA 6485-REG: Promoting Energy Efficiency in the Pacific - Contract No. COSO/90-492 Final Report The LED street lamp specifications were as follows: Light color temperature of around 2,700k (warm white) Improved light deployment on road surface with an effective light angle of 150°. Luminous flux (light output) greater than 7,500 lumens and a luminous efficacy greater than 80 lumen/Watt Power factor greater than 0.95 and a power supply efficiency greater than 90% Minimum life of 50,000 hours - with a well-designed heat sink enhancing output and prolonging the expected life of the unit Weather resistance to IP 65, hence reducing internal fitting corrosion Budget and procurement Quotes were requested from five suppliers who were shortlisted from a wide search of possible suppliers. The five prospective suppliers were asked to provide quotes for 109 LED street light units in accordance with the specifications provided. The results of the analysis of the three offers complying with the technical identified a provider that met the technical requirements and had the lowest price of USD 679 for its 100 W LED fixtures. Furthermore, the supplier included proof of technical testing and the light pattern of the two-way directional LED design of their 100 W street lighting unit. However, the lead time for delivery of the 109 LED street light units was quite long since the LED lamps were supplied from a different country to where the supplier was based, and the equipment was only received in October 2010. It was agreed that a maximum of USD 41,500 would be provided by ADB as its contribution for equipment procurement for the LED street lighting pilot project in Tonga. TPL agreed to cover the rest of the investment needed for the LED street lighting acquisition and also cover all installation costs. The final project cost for the equipment was about USD 75,000 where the TPL contribution was approximately USD 32,500 (excluding installation costs which TPL also separately covered). Installation The installation of the 109 LED fixtures was provided by TPL. The old light fixtures were removed (including the ballast) and were replaced with the new LED lamp fixtures and required accessories. In general only the vertical columns and lighting extended arms were retained. The installation of the 109 street lighting units was completed by the end of December 2010 Econoler International 21 Ref.: 5505 Asian Development Bank TA 6485-REG: Promoting Energy Efficiency in the Pacific - Contract No. COSO/90-492 Final Report Figure 1: Route (RED) where LED Street Lights were installed 2.2 IMPACT EVALUATION Measurement of the relevant daily street lighting electricity use was undertaken prior to the installation of the LED lights to establish the energy consumption of the pre-existing lighting fixtures. After their replacement with new LED fixtures, the same measurement of the electricity use was undertaken for the same time period and under the same operating conditions. A direct comparison was used to calculate the energy savings. The comparison of the existing 150 W HPS street lights and the same number of new 100 W LED street lights shows a consumption reduction of 0.7 kWh per day per lamp, representing a saving of 35.1%. Table 12: Energy Savings for the Selected Network with New LED Lamps Energy Consumption Energy Consumption for for Old Fixture LED fixture Power kW 0.168 0.109 Annual consumption per fixture kWh 613 398 Annual consumption for the selected kWh 66,839 43,362 Network Total Annual Cost USD 36,272 23,534 % 35.1% Savings USD 12,738 Econoler International 22 Ref.: 5505 Asian Development Bank TA 6485-REG: Promoting Energy Efficiency in the Pacific - Contract No. COSO/90-492 Final Report For the 109 new fixtures installed, measurements taken before and after installation show annual savings of USD 12,738 in energy costs alone. Maintenance savings will amount to approximately 60% from an annual cost of USD 960 to about USD 384, due to LED lights not requiring as much maintenance as HPS lights. 2.3 LESSONS LEARNED The major problem met during the project was the long lead time for the delivery of the selected LED lamps which met the technical requirements for light distribution, light color and expected life. The technical requirements were somewhat more demanding than those typically found in the LED street lighting market. The warm color requested was close to that for the existing HPS lamps - which was a little challenging since existing LED lamps are generally closer to the white than to the warm color end of the light spectrum. Effective light angle is an important parameter that needs to be taken into consideration, as it represents the light distribution on road surfaces that avoids concentrated pools of light. The requested effective angel of 150° provides an improved lighting distribution along the road width. Since LED street lights are a relatively new technology and can be considered to not yet be fully mature, a 2 years guarantee was required to be provided by the LED manufacturer. It is recommended to assess the pilot project’s reliability for at least for the guaranteed period before a large scale implementation of LED street lights is undertaken in Tonga. Installation of the new LED fixtures was quite straightforward as it did not require any major changes compared to the HPS fixture fittings. It is recommended that the Tonga LED street lights’ performance and operational experience be reviewed and discussed in appropriate workshops to increase awareness about new energy efficient technologies in general, and more specifically for LED street lighting applications in the Pacific Econoler International 23 Ref.: 5505 Asian Development Bank TA 6485-REG: Promoting Energy Efficiency in the Pacific - Contract No. COSO/90-492 Final Report 3 FUTURE EE PROGRAM DESIGN This section provides a summary of the estimated savings potential for possible Energy Conservation Measures (ECMs) that were identified in Tonga. At the first stage, a baseline was established from the available energy consumption for each sector. The evaluation was built up using the results obtained from the pilot projects implemented in the five PEEP countries and adapted to the local context for each proposed ECM. A compilation was then made using country data and information gathered during the various missions undertaken by the PEEP consultancy team. Adjustments were based on the following factors: Data availability and level of existing detail pertaining to the energy balance and energy consumption per sector Information availability for Tonga from previous EE experience Surveys performed in the residential sector Data gathered from supplier on technologies used, and their availability in Tonga Islands market Meeting with equipment and service providers Discussions with stakeholders. The data gathered from different sectors has enabled preliminary energy saving estimates to be made, noting that no detailed data on energy consumption and end-uses was available for Tonga. The proposals have been therefore been limited by the level of information available and the identified ECMs within the country context. The five (5) major ECMs proposed and presented in the Table below show potential savings equal to 13.4% of total energy consumption (reference 2009). Annual savings are estimated at 5,010 MWh representing savings of USD 1.8 million and emission reductions of 3,406 TCO2 per year. Econoler International 24 Ref.: 5505 Asian Development Bank TA 6485-REG: Promoting Energy Efficiency in the Pacific - Contract No. COSO/90-492 Final Report Table 13: ECM Proposal for Tonga, Savings and Investment Baseline Savings Savings Peak Annual 2011-2020 Savings Estimated Simple Inv./Saved Energy Potential Potential Load Emission CO Potential Investment PBP 2 kWh Use (Sector) (Country) Reduction Reduction Reduction 14 MWh % % kW MWh USD M USD M Years TCO2 TCO2 USD/kWh Energy Efficiency in Selected Government 4,430 13.4 1.6% 105 595 0.21 0.76 3.6 405 3,240 0.160 Buildings Implementation of LED 1,261 63.0 2.1% 194 794 0.35 1.51 4.3 540 4,320 0.273 for Street Lighting CFL Program for 15,293 6.4 2.6% 790 986 0.16 0.08 0.1 671 6,039 0.009 Residential Sector Implementation of EE 760 20.7 0.4% 22 157 0.06 0.26 4.0 107 856 0.206 Projects in Hotel Sector Energy Labelling and 37,393 6.6 6.6% 197 2,475 1.02 1.56 1.5 1,683 12,500 0.084 MEPS Total 13.4% 1,310 5,010 1.8 4.2 2.3 3,406 26,960 The investment per saved kWh is obtained by dividing the total investment by the saved kWh during the 2011-2020 period considered as average life cycle for installed equipment for the proposed ECMs. The investment per kWh helps prioritize the ECM with the expected best return on investment. As shown in the above Table, the CFL program for the residential sector is ranked best at USD 0.009/kWh followed by energy labeling and MEPS program and then the implementation of EE in the public building sector. Note that the investment cost for MEPS includes only the cost to government, and the 14 Including Network Losses. Econoler International 25 Ref.: 5505 Asian Development Bank TA 6485-REG: Promoting Energy Efficiency in the Pacific - Contract No. COSO/90-492 Final Report cost to the public associated with the purchase of more efficient appliances has not been defined (see Section 3.6). The potential peak load reduction is estimated at 1,310 KW, which represents about 20% of the average (October 2008 to November 2009) registered maximum peak load of 6,644 kW. Econoler International 26 Ref.: 5505 Asian Development Bank TA 6485-REG: Promoting Energy Efficiency in the Pacific - Contract No. COSO/90-492 Final Report 3.1 GENERAL ASSUMPTION AND PARAMETERS The tables below show all the general parameters used for calculations and estimates of ECM potentials. The estimated energy balance has been developed based on the TPL energy billing database for January 2009, which acts as a reference month to determine annual energy consumption for all indicated sectors. Figure 2: Energy Consumption per Sector Energy Consumption per sector Hotels 2% Other 6% Commercial 28% Residential 41% Government 12% Religious 9% Industry Less than 10 kWh 1% 0% Street Lighting 1% Table 14: Estimated Energy Balance for 2009 Tonga Energy Balance Consumption Number of % (kWh) Consumers Hotels 759,900 2% 24 Commercial 10,356,900 28% 843 Government 4,482,800 12% 303 Industry 425,300 1% 28 Street Lighting 578,100 2% 114 Religious 3,380,300 9% 840 Less than 10 kWh 35,100 0% 1,527 Residential 15,292,600 41% 11,232 Other 2,082,500 6% 464 Total 37,393,500 100% 15,375 Econoler International 27 Ref.: 5505 Asian Development Bank TA 6485-REG: Promoting Energy Efficiency in the Pacific - Contract No. COSO/90-492 Final Report Table 15: General Parameters Used for Tonga Parameter Unit Value Conversion TOPUSD 0.485 Diesel Consumption per kWh l/kWh 0.25 Incandescent Lamp Operating Hours Hours/day 3.0 TPL Diesel Cost TOP/l 1.30 TPL Emissions kCO2/l 2.7 Emissions kg/kWh 0.68 Street Lighting Hours/Year Hours/year 3,650 Average Electricity Tariff for TOP/kWh 0.85 Domestic Users Average Electricity Tariff for Street TOP/kWh 0.85 Lighting Average Electricity Tariff for Hotels TOP/kWh 0.85 Average Electricity Tariff for TOP/kWh 0.85 Buildings Average Electricity Tariff for TOP/kWh 0.85 Commercial Users Network Losses Losses % 15% Cost/CFL TOP/Unit 5 3.2 ENERGY EFFICIENCY IN GOVERNMENT BUILDINGS The list of all government buildings obtained from the TPL billing database shows 301 customers in January 2009. The list has been divided into the following five groups based on monthly energy consumption, with hospitals being classified as a separate group: Hospitals Group 1: Buildings with a monthly energy consumption above 3,000 kWh Group 2: Buildings with a monthly energy consumption between 1,000 and 3,000 kWh Group 3: Buildings with a monthly energy consumption between 300 and 1,000 kWh Group 4: Buildings with a monthly energy consumption between 100 and 300 kWh. The groups have been selected based on the energy consumption which reflects the activities and notably the type of equipment and penetration level in these buildings. For each group, walk-through energy audits were undertaken to assess the type of equipment used, determine operation parameters and estimate the energy balance (energy consumption per end-user). After the preparation of the energy balance, energy savings were estimated based on potential energy conservation measures to be implemented, considering a maximum payback period of 5 years. From the sample taken for each group, extrapolations have been made within the group to estimate the energy saving potential. As energy demands in hospitals are generally very different from other buildings due to hospitals’ distinct energy demands (esp. 24/7 full fresh air AC required for operating theaters at central trauma/accident and emergency equipped hospitals), specific equipment and special operating conditions, estimates were made in a conservative way since no detailed investigation was able to be undertaken due to limited resources. Econoler International 28 Ref.: 5505 Asian Development Bank TA 6485-REG: Promoting Energy Efficiency in the Pacific - Contract No. COSO/90-492 Final Report Energy saving potentials have been calculated based on the average of each group and considering the most common end-user, namely lighting and cooling, targeting simple ECMs as follows: HVAC optimization: for centralized systems, optimization of operating hours and parameters. Efficient lighting fixtures and lamps: CFLs, electronic ballasts and T5 fluorescent tubes Air compressor O&M: operation optimization and leak reduction Variable speed drives: for motors and central HVAC plant Fan system improvements: efficient fans and motors LCD monitors for computers and entertainment systems AC replacement: replacement with efficient AC (esp. high efficiency inverter units) based on operating hours and existing equipment condition O&M and energy management: optimization of operation parameters (temperature, operating hours, automatic switches and clocks, preventive maintenance, etc.). Nevertheless, other ECMs could be identified when in-depth energy audits are performed. The featured potentials should be considered only as preliminary estimates used to assess whether the sector represents a significant potential for energy efficiency. Only 163 of the largest energy use buildings were considered while the remaining buildings have a monthly consumption less than 100 kWh, which is considered too low to be included in an initial EE project. However, all would be included in any EE awareness campaign launched within a comprehensive EE program. Selected buildings from each group were visited in order to establish the preliminary energy balance and the savings potential used as a reference for extrapolation to the entire group. The results show a promising annual savings potential of 517,500 kWh with an estimated investment of USD 0.764 million giving an average simple payback period of 3.6 years. The implementation of EE programs in government buildings will generate emission reductions of about 405 TCO2 annually. Details for each group are presented in Appendix D.1 showing estimation parameters and savings per end-user. Econoler International 29 Ref.: 5505 Asian Development Bank TA 6485-REG: Promoting Energy Efficiency in the Pacific - Contract No. COSO/90-492 Final Report Table 16: Savings Potential for Government Buildings Consumption Current Savings Category Situation kWh/Month Number kWh TOP kWh % TOP Hospitals 2 212,900 181,000 21,300 10.0% 18,100 Group 1 over 3,000 25 2,898,100 2,463,400 376,700 13.0% 320,200 Group 2 1,000 Table 17: Investment and Annual Emission Reductions for EE in Government Buildings % 11.7 Average Savings Potential kWh 517,500 % 13.4% Annual Potential Savings15 kWh 595,125 USD 213,461 Total Estimated Investment USD 763,700 Simple Payback Period Years 3.6 Annual Emission Reduction (TCO2) TCO2 405 Diesel Savings (liters) Liters 148,800 The proposed ECMs focus on all major energy using systems found in each group. Table 18 below presents the main actions that could be implemented to reduce energy consumption. Table 18: Major Actions to Improve Energy Consumption Average Savings Energy Conservation Measures for Selected Buildings Potential HVAC optimization 5%-15% Air compressor O&M 10%-20% Variable-speed drive 5%-15% Efficient lighting fixtures and lamps 10%-20% Fan system improvements 5%-10% LCD monitors 10%-20% AC replacement 15%-20% O&M and energy management 5% The estimates are based on energy consumption data and some selected samples for potential energy savings in each category. However, an in-depth analysis needs to be conducted with larger 15 Including TPL Network Losses Econoler International 30 Ref.: 5505 Asian Development Bank TA 6485-REG: Promoting Energy Efficiency in the Pacific - Contract No. COSO/90-492 Final Report sample sizes taking into account the actual load per end-use with the monthly energy bill distribution to more accurately establish real EE potentials. The cumulative savings relative to the government building program for the 2011-2020 period is estimated at 4.76 GWh, resulting in CO2 emission reductions of about 3,240 TCO2. Program implementation is expected to be completed within a maximum of 5 years with an annual progress completion of 20% during the implementation period. Table 19: Cumulative Savings for the 2011-2020 Period 4,761,000 kWh Savings Potential 1,707,685 USD Total Estimated Investment 763,700 USD Emission Reductions 3,240 TCO2 Investment/Saved kWh 0.160 USD/kWh 3.3 STREET LIGHTING The street lighting network in Tonga comprises 3,208 lamps as per the data provided from TPL and presented in the Table 20 below. The street lighting network consists of different types of lamps (High-Pressure Sodium (HPS), Mercury Vapor (MV)) and fluorescent tubes) with a power ranging from 20 W to 250 W per fitting. The total street lighting installed power is estimated at 412 kW with an annual energy consumption of about 1.26 GWh. Most network lamps are inefficient, old, decaying, costly to maintain and some need to be replaced as they are no longer functioning. Table 20: Street Lighting Network in Tonga Tongatapu Number of Current Total Power Lamps Power W kW 339 250 W 95 258 150 W 43 438 100 W 49 159 70 W 12 104 40 W 5 202 20 W 4 22 55 W 1 Ha'apai 17 250 W 5 22 100 W 2 25 70 W 2 14 20 W 0.3 Vava'u 853 70 W 67 Eua Econoler International 31 Ref.: 5505 Asian Development Bank TA 6485-REG: Promoting Energy Efficiency in the Pacific - Contract No. COSO/90-492 Final Report 755 70 W 59 Reducing the cost of street lighting is a TPL priority and the company is looking into cost reduction possibilities regarding network operation and maintenance. The replacement of MV lamps with HPS is the obvious first choice to increase street lighting efficiency. Moreover, combined with dimming/regulation systems, HPS will help reach significant initial energy savings. However, many parameters need to be taken into consideration in technology selection, mainly regarding the type of lighting required, the condition of the existing fixtures and the distribution circuit of the street lighting network. Unfortunately, most existing fixtures present one or more of the following problems:- Old fixtures in bad condition Rusted due to saline weather Lack of internal reflector Opaque lenses Lack of metering points Very low lighting level. LED technology seems to be the best solution to address most of these problems. It can increase the lighting level while reducing energy costs since the existing fixtures already have a low lighting level. The rationale behind LED usage in street lighting is as follows: LED lamps give average energy savings of 20% to 50% over HPS and MV lamps respectively. LED construction makes solid-state street lamps safe for landfills. They are mercury-free, without harm to the environment. The longevity of LED lamps is 60,000 or more hours and represents at least twice the life of HPS lamps. The longevity of LED lamps pushes back replacement cycles and, consequently, reduces the burden on the waste stream. LED street lights reduce pollution and carbon footprint via energy savings that lower carbon emissions not only from reduced power plant fuel consumption but also from reduced fuel usage by maintenance dispatched for bulb replacement. The annual maintenance cost for LED represents almost a fifth of the maintenance costs for regular mercury or HPS lamps. Even though the acquisition cost of LED fixtures is high comparing to conventional HPS fixtures (about 5 times more expensive) the project is still attractive. With operation and maintenance cost savings included, the investment of LED fixtures is paid back within less than 4 years, with the LED fixtures having an estimated life time of 15 or more years. The new LED lamps light distribution is improved, with greatly improved color rendering and a warm-white color temperature. Econoler International 32 Ref.: 5505 Asian Development Bank TA 6485-REG: Promoting Energy Efficiency in the Pacific - Contract No. COSO/90-492 Final Report The proposed lamp replacement strategy is presented in the following Table 21. Table 21: Equivalent LED for HPS Lamps EQUIVALENT SHP LED WATTAGE 80 W 30 W 100 W 50 W 150 W 60 W 200 W 80 W 250 W 100 W Introducing LED lamps into the Tonga street lighting network will help reduce energy consumption by 55% and maintenance costs by 58%. Table 22: Energy and Maintenance Costs for the Existing Street Lighting Network Old System Number Old Fixture Total Total Total of Energy Maintenance Energy Total O&M Power Lamps Consumption Cost Cost kWh/Year kW TOP TOP TOP/Year 3,208 1,260,700 412 160,400 1,071,600 1,232,000 Appendix D.2 shows details pertaining to the replacement of the 3,208 fixtures. The total required investment is estimated at USD 1.51 million for annual savings of USD 0.35 million representing 4.3 years as a simple payback period. The implementation of the LED street lighting program will generate annual GHG emission reductions of 540 TCO2. Table 23: Investment and Emission Reductions for LED Implementation in Tonga TOTAL INVESTMENT USD M 1.51 TOTAL SAVINGS USD M 0.35 TOTAL SAVINGS (kWh) kWh 690,000 TOTAL Energy Savings (%) % 55% TOTAL Cost Savings (%) % 58% % 63% TPL Savings16 kWh 793,500 TPL Savings (l) Liters 198,400 TPL Savings (Fuel Cost) USD M 0.13 Simple PBP (years) Years 4.3 Annual Emission Reductions TCO2 540 Existing Street Lighting Load kW 412 (kW) LED fixtures (kW) kW 194 16 Including Network Losses. Econoler International 33 Ref.: 5505 Asian Development Bank TA 6485-REG: Promoting Energy Efficiency in the Pacific - Contract No. COSO/90-492 Final Report The cumulative savings relative to the LED street lighting program for the 2011-2020 period is estimated at 5.52 GWh, resulting in CO2 emission reductions of about 4,320 TCO2. Program implementation is expected to be completed within a maximum of 5 years with an annual progress completion of 20% during the implementation period. Table 24: Cumulative Savings for the 2011-2020 Period 5,520,000 kWh Savings Potential 2,774,800 USD Total Estimated Investment 1,507,300 USD Emission Reductions 4,320 TCO2 Investment/kWh 0.273 USD/kWh 3.4 ENERGY EFFICIENCY IN THE HOTEL SECTOR The hotel sector in Tonga is very small with only 24 hotels and a total sector consumption of 760 MWh representing 2% of Tonga’s electricity consumption. Based on results from the pilot project carried out in Vanuatu and the walk-through energy audits performed in some hotels of Rarotonga, the Vanuatu hotel sector saving potential (estimated at 18% including all energy types) was used as a reference potential for Tonga as well. As shown in the Table below, the total utility cost saving potential for the Vanuatu pilot project stands at 18%, where electrical savings represent about 16% (CFLs, room switches, timers) and water savings around 26% of water utility bills (low shower head flow, reduced hot water, optimized garden watering systems, reduced water pumping costs). The Vanuatu pilot project also achieved LPG reductions of 21% with the installation of Solar Water Heaters (SWHs). Table 25: Savings Potential in the Hotel Sector for the Vanuatu Pilot Project Total Savings Energy (%) Electrical Energy Savings 16 Water Energy Savings 26 LPG Energy Savings 21 Econoler International 34 Ref.: 5505 Asian Development Bank TA 6485-REG: Promoting Energy Efficiency in the Pacific - Contract No. COSO/90-492 Final Report The main energy conservation measures targeted in the hotel sector are as follows: Efficient lighting, mainly CFLs, for interior and exterior lighting SWHs Reduced flow for shower heads, sinks and toilet flush Key tag switches for room electrical system Energy efficient air conditioning units Cooling setting point adjustments Pool pump operation optimization High-efficiency pumps and motors Installation of timers for equipment operation optimization Air curtain installation. With a maximum simple payback period of 4 years, and potential savings of 18%, the total investment for the hotel sector in Tonga is estimated at USD 260,000. EE program implementation will generate annual electricity savings of 157 MWh and annual GHG emission reductions of 107 TCO2. Table 26: Investment and Emission Reductions for the Hotel Sector in Tonga Hotel Consumption kWh 759,900 Sector Estimated Savings % 18% Energy Savings kWh 136,780 Hotel Cost Savings USD 64,900 % 20.7% kWh 157,300 TPL Savings17 Liters 39,330 USD 24,800 Annual Emission Reductions TCO2 107 Investment USD M 0.260 Targeted Payback Period Years 4 The cumulative savings relative to the EE program in the hotel sector for the 2011-2020 period are estimated at 1.26 GWh, resulting in CO2 emission reductions of about 856 TCO2. Program implementation is expected to be completed within a maximum of 5 years with an annual progress completion of 20% during the implementation period. 17 Including Network Losses. Econoler International 35 Ref.: 5505 Asian Development Bank TA 6485-REG: Promoting Energy Efficiency in the Pacific - Contract No. COSO/90-492 Final Report Table 27: Cumulative Savings for the 2011-2020 Period kWh 1,258,400 Savings Potential USD 519,200 Total Estimated Investment USD 259,500 Emission Reductions TCO2 856 Investment/kWh USD/kWh 0.206 3.5 ENERGY EFFICIENCY IN THE RESIDENTIAL SECTOR – CFLS As statistical data was lacking on lighting installed loads and usage in Tongan households, a random survey was undertaken to assess lighting usage. The sector was been divided into 4 groups based on the average monthly energy consumption as shown in the table below. From each group, a sample of households was surveyed and used as a basis for extrapolation to establish the incandescent lamp usage and the savings potential per group. Table 28: Lighting Distribution per Type of Lighting and Consumption Group Residential kWh (Monthly) >1,000 1,000-300 300-100 <100 Fluorescent 37% 48% 44% 69% Incandescent 44% 23% 20% 25% CFL 19% 9% 8% 6% Halogen 0% 19% 28% 0% Other 0% 0% 0% 0% Light from Total Consumption 2.7% 14% 26% 38% Residential Light Consumption (kWh) 2,700 26,600 161,400 138,800 Incandescent Consumption (kWh) 1,200 6,200 32,500 34,400 Total Incandescent Consumption (kWh) 74,300 Energy consumption for incandescent lamps in the residential sector ranges from 20% to 44% of the total lighting consumption with a total installed power estimated at 826 kW. The total installed power of incandescent lamps in Tonga was estimated at 794 kW. According to the survey, the average 1.4 incandescent lamps installed per household (total number of 18,300 units across Tonga) were used approximately 4 hours per day. For a complete change of incandescent lamps to CFL lamps with their energy savings potential of 75% (the existing lamps were on average replaced by 13 W CFLs), annual savings will reach 668 MWh with a peak load reduction of about 790 kW. Average annual savings per household are estimated at 79 kWh equal to TOP 67. Considering an average cost of TOP 5 per CFL, the payback period is just over 1 month. Assuming a subsidy program of 50% for the residential sector to encourage CFL use, an investment of USD 81,500 is needed to generate 671 TCO2 in emission reductions annually. Econoler International 36 Ref.: 5505 Asian Development Bank TA 6485-REG: Promoting Energy Efficiency in the Pacific - Contract No. COSO/90-492 Final Report Table 29: Investment and Emission Reductions for CFLs in the Residential Sector Incandescent Total/Day/House kWh 0.56 Installed/House W 156 Lamps/House Unit 1.4 Percent of Lamps per house % 21% Total kWh/Year/House kWh 62.48 Coincidence Factor % 100% Country Number of Houses Unit 11255 Peak Load Reduction kW 790 kWh 857,600 Savings % 5.6% kWh 986,200 Savings18 % 6.4% Country Diesel Fuel Reduction Liters 246,600 Fuel Saving Cost USD 155,600 Annual GHG Emission TCO 671 Reductions 2 W 70 Savings/House kWh/year 101 Payback Period Year 0.08 Investment (50% Subsidy) USD 81,500 The cumulative savings relative to the implementation of the CFL program in the residential sector for the 2011-2020 period is estimated at 8.87 GWh, resulting in CO2 emission reductions of about 6,030 TCO2. Program implementation is expected to be completed within a maximum of 3 years with an annual progress completion of 33% during the implementation period. Table 30: Cumulative Savings for the 2011-2020 Period kWh 8,875,800 Energy and Cost Savings USD 1,400,400 Total Estimated Investment USD 81,500 Emission Reductions TCO2 6,030 Investment/kWh USD/kWh 0.009 3.6 ENERGY LABELLING AND MEPS Unfortunately, no detailed information on residential and commercial appliances based on actual energy use characteristics and actual numbers by model or capacity was available from Tonga 18 Including Network Losses. Econoler International 37 Ref.: 5505 Asian Development Bank TA 6485-REG: Promoting Energy Efficiency in the Pacific - Contract No. COSO/90-492 Final Report statistics department, which constituted a major barrier to specific EE potentials assessments and the development of a specific appliance EE program design. No government entity held accurate and up-to-date data on the country’s energy balance and energy consumption per end user or per sector. However, the PEEP consultants were able to ascertain some basic indicative data from the 2006 Tonga residential census, available through the department of statistics, and from this the PEEP consultants were able to develop indicative energy savings potentials estimates for energy labeling and MEPS application in the residential sector for refrigerators. Available statistics presented in Table 31 shows the penetration rate for selected appliances in the 17,425 occupied dwellings of Tonga in 2006. Table 31: Tonga 2006 Census Data Residential Appliances – Penetration Rate Refrigerators 65% Freezers - Air Conditioners - Water Heaters 9% Clothes Washers 58% Occupied Dwellings 17,425 Potential annual energy savings for refrigerating appliances were estimated based on Australian figures for refrigerators and freezers19 considering the 2005 annual consumption for refrigerator and freezers in Australia as a basis for the current situation in Tonga. The assumption is considered to be a reasonable initial assumption as most of the appliances in Tonga are imported from Australia and New Zealand, and importers often bring in the cheapest available appliances in a particular size and features category, and these lowest price models usually also have the low EE ranking (i.e. a lower number of Australia-New Zealand energy performance stars). The annual average energy consumption of existing old refrigerators was therefore assumed to be about 640 kWh, and 575 kWh/year for freezers. The refrigerators currently available on the Australian and New Zealand markets have an annual energy consumption ranging between 338 kWh and 537 kWh. Assuming that middle efficiency refrigerators with an average annual consumption of 450 kWh/year would replace existing refrigerators, an energy labeling (and back-up potential MEPS program) could generate energy savings of around 190 kWh/year per refrigerator. Based on the above, annual emission reductions from energy labeling and MEPS application for refrigerators are estimated at 1,683 TCO2 or 2.47 GWh, taking into consideration the current TPL kWh/litre of diesel and GHG emission factor and including network losses. 19 Costs and Benefits of proposed revisions to the method of test and energy labeling algorithms for household refrigerators and freezers, prepared by Energy Efficient Strategies Pty Ltd for the Australian Greenhouse Office, November 2007 Econoler International 38 Ref.: 5505 Asian Development Bank TA 6485-REG: Promoting Energy Efficiency in the Pacific - Contract No. COSO/90-492 Final Report Table 32: Investment and Savings for Energy Labelling and MEPS – Refrigerators Country Consumption kWh 37,393,500 % 5.8% Estimated Annual Savings kWh 2,152,100 % 6.6% Potential Energy Savings20 kWh 2,474,900 Energy Cost Savings USD M 1.0 Annual GHG Emission Reductions TCO2 1,683 Investment USD M 1.6 The estimated investment includes only the cost to government of establishing a laboratory for equipment testing and validation, along with international support for energy labeling and MEPS development and implementation. The main costs to the public associated with the purchase of more efficient equipment and appliances than would be the case without energy labelling and MEPS has not been defined owing to insufficient data being available during Phase 1. It is recommended that detailed studies of the equipment and appliance markets in each PDMC be undertaken during Phase 2 to estimate the likely costs of MEPS and labelling requirements on imported appliances. The only study to date, conducted in Fiji, estimates these costs to be between 10% and 25% of the value of the benefits.21 Total savings over a 10-year period are presented in the Table 33 below. Program implementation is anticipated to take 5 years after which annual savings will be about 2.47 GWh. The savings are considered constant throughout the period since there is no available data on the annual penetration and growth rate of refrigerators in the residential sector. Table 33: Projected Savings for the 2011-2020 Period GWh 16.56 Savings Potential USD M 7.7 Total Estimated USD M 1.6 Investment Emission Reductions TCO2 12,500 Investment/kWh USD/kWh 0.084 3.7 POWER FACTOR CORRECTION TPL does not hold any record about power factor and, consequently, no analysis has been done to assess program suitability. 20 Including Network Losses. 21 The Costs and Benefits of Energy Labelling and Minimum Energy Performance Standards for Refrigerators and Freezers in Fiji, George Wilkenfeld and Associates for the Australian Greenhouse Office, February 2006. Econoler International 39 Ref.: 5505 Asian Development Bank TA 6485-REG: Promoting Energy Efficiency in the Pacific - Contract No. COSO/90-492 Final Report 3.8 ENERGY EFFICIENCY IN THE INDUSTRIAL SECTOR Industrial energy consumption accounts for approximately 1% of total energy consumption in Tonga with about 28 clients. No data is available to assess the potential of the industrial sector and its consumption level ranks it as a low priority for an EE program. 3.9 WATER DISTRIBUTION NETWORK No detailed data is available to assess ECM opportunities. 4 OTHER RECOMMENDATIONS: Development of an Energy Balance and Energy Matrix: One of the barriers to EE program development in Tonga (as it is generally throughout the Pacific) is the unavailability of information on energy consumption by sector, sub-sector and appliance type. Without an appropriate set of data on energy consumption and demand profiles it was not possible to accurately develop an EE program or define appropriate targets and objectives. An energy balance is an accounting system that describes the flow of energy through an economy (national, by island, by district, etc.) during a given period, usually a calendar year. This combination of information is constructed from the most complete available sources of official energy statistics on imported fossil fuels, electricity production, conversion losses, consumption and energy end-use (e.g. lighting, refrigerating appliances, AC). The main objective of an energy balance is to provide information for the planning of investments in different sectors of the energy system. It should also present indications of where to direct investments in research and development for more efficient energy use. The energy balance consists of a matrix, also called an energy matrix, in which all forms of energy, their conversions, losses and uses in a given period are registered in the same unit of measurement. An energy balance can be presented in various forms, each with its own conventions and purposes. The most common form includes columns, with quantities of energy sources or carriers used, and rows with data on conversions and uses. An energy balance can also be expressed in terms of useful energy, aggregating data regarding the efficiency of final energy use. In order to calculate this efficiency, it is necessary to distinguish two steps in the process of final energy use. The first step occurs when energy is transformed into a final energy carrier (e.g. electricity) and the second step refers to the way in which this energy carrier is exploited to produce goods or provide services. For example, LPG or diesel can be used to produce steam in a boiler with an efficiency of say 60%. The steam produced will then be distributed to other pieces of equipment where its energy will be used. This second step can have a new efficiency related to the way in which the steam system is designed and operated. Often it is possible to increase the efficiency of this phase without major investments. An energy balance in terms of useful energy requires detailed data regarding end-use technologies and how they are utilized. Econoler International 40 Ref.: 5505 Asian Development Bank TA 6485-REG: Promoting Energy Efficiency in the Pacific - Contract No. COSO/90-492 Final Report Load Curve analysis: Electricity demand is not uniform throughout the day or for an entire year. Several electricity end-uses are related to the time of day, such as lighting and cooking. The hours of the day during which the highest demand occurs is known as the peak period. During the year, there is also a particular day when electricity demand is at its yearly peak. This yearly peak is typically both climate- and time-related. Some regions face their peak demand during the hottest days, when AC is mostly responsible for the increased electricity demand. In other areas, residential lighting and other evening uses of electricity may be the main drivers of peak demand. Projections for electrical energy (kWh) are typically made on an annual basis but it is also important to project the future load profile (daily or annually) to reflect the daily and seasonal fluctuations in demand. Peak demand is of particular interest to utilities because their capital requirements for building new generation capacity are normally driven by peak demand considerations. One aspect of Demand- Side Management (DSM) involves ways to change the shape of the load curve. Typically, utilities will strive to avoid the concentration of demand during peak hours of the day and will try to spread this demand throughout the day (or night). Data Requirements of Energy End-Use Models: Energy consumption analysis requires a breakdown by sector, activity and end-use. The estimation of end-use breakdowns is important to determine which end-users are most relevant. Once these are known, their magnitude is quantified more accurately to evaluate the opportunities for EE improvements. The table below illustrates one such possible breakdown. Econoler International 41 Ref.: 5505 Asian Development Bank TA 6485-REG: Promoting Energy Efficiency in the Pacific - Contract No. COSO/90-492 Final Report Table 34: Energy End-Use Possible Breakdown Consumer Class End-use Technologies/Measures Incandescent lamps Compact fluorescent lamps Fluorescent tubes (with associated electronic or electromagnetic ballasts) Lighting Fixtures Improved lighting design Day lighting Improved lighting controls (e.g. daylight dimming) Residential Sector Ventilation, fans Cooling Air conditioners Natural ventilation Efficient refrigeration (e.g. cool stores, Refrigeration transport, retail food storage and display cabinets) Solar Water heating LPG Electricity Incandescent lamps Compact fluorescent lamps Low voltage halogen lamps and fixtures Fluorescent + electromagnetic ballasts Lighting Fluorescent + electronic ballasts Reflector fixtures Improved lighting design Day lighting Commercial Occupancy sensors Services Sector Ventilation, fans Air conditioners Cooling Natural ventilation Passive cooling Refrigeration Efficient refrigeration Solar Water heating Heat pump LPG Conventional electric motors Energy efficient electric motors Power Variable Speed Drives + motors Better sizing of motors and tasks Incandescent lamps Industrial Sector Fluorescent + electromagnetic ballasts Fluorescent + electronic ballasts Lighting Mercury vapor, HPS etc lamps Reflective fixtures Improved lighting design and day lighting Estimates of end-use equipment saturation and energy use can be made on the basis of aggregate indicators of major end-use categories, for example, information on appliance sales. Where comprehensive information of this type is not available, one might try to use existing information from other countries with similar socio-economic development characteristics to make estimates of end-use saturation and energy consumption. Econoler International 42 Ref.: 5505 Asian Development Bank TA 6485-REG: Promoting Energy Efficiency in the Pacific - Contract No. COSO/90-492 Final Report Alternatively, a more reliable analysis can be performed through a bottom-up approach, which includes extensive questionnaire-based surveys, billing data analysis, energy audits and measurements. End-use projection models are very data intensive. Usually, energy end use models start with a base year for which detailed breakdown of the consumer classes and main end-uses are developed. Econoler International 43 Ref.: 5505 Asian Development Bank TA 6485-REG: Promoting Energy Efficiency in the Pacific - Contract No. COSO/90-492 Final Report APPENDIX D.1: TONGA - ESTIMATED SAVINGS PER SECTOR IN GOVERNMENT BUILDINGS, REFERENCE TABLES Hospitals % Unit Energy Consumption 212,892 5% kWh Number of Buildings 2 Buildings Ventilation/Fan/Cooling Consumption 42,578 20% kWh Lighting Consumption 74,512 35% kWh Other Load Consumption 95,801 45% kWh Estimated Investment Average Savings 21,289 10% kWh TOP USD PBP Lighting 7,451 10% kWh 11,500 5,600 Estimated Cooling 4,258 10% kWh 17,100 8,300 3.1 Savings Other 9,580 10% kWh 27,000 13,100 Total 18,096 TOP 55,600 27,000 Group 1 3,000 kW/Month and More % Unit Energy Consumption 2,898,072 65% kWh Number of Buildings 25 Buildings Ventilation/Fan/Cooling Consumption 1,159,229 40% kWh Lighting Consumption 579,614 20% kWh Computer Consumption 869,422 30% kWh Other Load Consumption 289,807 10% kWh Estimated Investment Average Savings 376,749 13% kWh TOP USD PBP Lighting 86,942 15% kWh 134,400 65,200 Estimated Cooling 173,884 15% kWh 752,600 365,200 3.8 Savings Other 115,923 10% kWh 327,300 158,800 Total 320,237 TOP 1,214,200 589,200 Econoler International 44 Ref.: 5505 Asian Development Bank TA 6485-REG: Promoting Energy Efficiency in the Pacific - Contract No. COSO/90-492 Final Report Between 1,000 and 3,000 Group 2 kW/Month % Unit Energy Consumption 897,984 20% kWh Number of Buildings 42 Buildings Ventilation/Fan/Cooling Consumption 202,073 23% kWh Lighting Consumption 304,072 34% kWh Computer Consumption 357,838 40% kWh Other Load Consumption 34,000 4% kWh Estimated Investment Average Savings 60,103 7% kWh TOP USD PBP Lighting 30,407 10% kWh 47,000 22,800 Estimated Cooling 10,104 5% kWh 43,700 21,200 2.9 Savings Other 19,592 5% kWh 55,200 26,800 Total 51,087 TOP 145,900 70,800 Group 3 Between 300 and 1,000 kW/Month % Unit Energy Consumption 316,860 7% kWh Number of Buildings 46 Buildings Ventilation/Fan/Cooling Consumption 78,680 25% kWh Lighting Consumption 64,510 20% kWh Computer Consumption 161,321 51% kWh Other Load Estimated Investment Consumption 12,348 4% kWh Average Savings 50,755 16% kWh TOP USD PBP Lighting 12,902 20% kWh 20,000 9,700 Estimated Cooling 11,802 15% kWh 51,100 24,800 3.4 Savings Other 26,050 15% kWh 73,600 35,700 Total 43,141 TOP 144,700 70,200 Econoler International 45 Ref.: 5505 Asian Development Bank TA 6485-REG: Promoting Energy Efficiency in the Pacific - Contract No. COSO/90-492 Final Report Group 4 Between 100 and 300 kW/Month % Unit Energy Consumption 103,896 2% kWh Number of Buildings 48 Buildings Ventilation/Fan/Cooling Consumption 15,584 15% kWh Lighting Consumption 51,948 50% kWh Computer Consumption 15,584 15% kWh Other Load Estimated Investment Consumption 20,779 20% kWh Average Savings 8,571 8% kWh TOP USD PBP Lighting 5,195 10% kWh 8,000 3,900 Estimated Cooling 1,558 10% kWh 200 100 1.8 Savings Other 1,818 5% kWh 5,200 2,500 Total 7,286 TOP 13,400 6,500 Econoler International 46 Ref.: 5505 Asian Development Bank TA 6485-REG: Promoting Energy Efficiency in the Pacific - Contract No. COSO/90-492 Final Report APPENDIX D.2: TONGA - ESTIMATED SAVINGS FOR STREET LIGHTING, REFERENCE TABLES Tongatapu Old System Number Old Fixture Average Total Total Total of Current Energy Maintenance Maintenance Energy Total O&M Power Lamps Consumption Cost Cost Cost W kW kWh/Year TOP/Year/Unit TOP TOP TOP/Year 339 250 W 95 346,458 50 16,950 294,489 311,439 258 150 W 43 158,206 50 12,900 134,475 147,375 438 100 W 49 179,054 50 21,900 152,196 174,096 159 70 W 12 45,267 50 7,950 38,477 46,427 104 40 W 5 18,221 50 5,200 15,488 20,688 202 20 W 4 16,221 50 10,100 13,788 23,888 22 55 W 1 4,898 50 1,100 4,164 5,264 1,522 210.5 768,325 76,100 653,076 729,176 Ha'apai Old System Number Old Fixture Average Total Total Total of Current Energy Maintenance Maintenance Energy Total O&M Power Lamps Consumption Cost Cost Cost W kW kWh/Year TOP/Year/Unit TOP TOP TOP/Year 17 250 W 5 17,374 50 850 14,768 15,618 22 100 W 2 8,994 50 1,100 7,645 8,745 25 70 W 2 7,118 50 1,250 6,050 7,300 14 20 W 0.3 1,124 50 700 956 1,656 78 9.5 34,609.3 3,900 29,418 33,318 Vava'u Old System Number Old Fixture Average Total Total Total of Current Energy Maintenance Maintenance Energy Total O&M Power Lamps Consumption Cost Cost Cost W kW kWh/Year TOP/Year/Unit TOP TOP TOP/Year 853 70 W 67 242,849 50 42,650 206,422 249,072 853 66.5 242,849 42,650 206,422 249,072 Econoler International 47 Ref.: 5505 Asian Development Bank TA 6485-REG: Promoting Energy Efficiency in the Pacific - Contract No. COSO/90-492 Final Report Eua Old System Number Old Fixture Average Total Total Total of Current Energy Maintenance Maintenance Energy Total O&M Power Lamps Consumption Cost Cost Cost W kW kWh/Year TOP/Year/Unit TOP TOP TOP/Year 755 70 W 59 214,949 50 37,750 182,706 220,456 755 125.4 214,949 37,750 182,706 220,456 Econoler International 48 Ref.: 5505 Asian Development Bank TA 6485-REG: Promoting Energy Efficiency in the Pacific - Contract No. COSO/90-492 Final Report Tongatapu New Proposed System Total Total Average Total Number of Total Fixture Installation Total New New Fixture Energy Power Proposed System Cost Installation Energy Maintenance Maintenanc Total O&M Lamps Cost Cost Fixture Cost Consumption Cost Cost Cost e Cost W W Per Unit TOP Per Unit TOP TOP kWh/Year TOP TOP TOP/Year/Unit TOP TOP/Year 339 250 W 100 LED 1,419 481,105 100 33,900 515,005 134,871 61% 114,640 10 3,390 118030 258 150 W 60 LED 1,126 290,482 100 25,800 316,282 62,152 61% 52,829 10 2,580 55,409 438 100 W 60 LED 1,126 493,144 100 43,800 536,944 105,514 41% 89,687 10 4,380 94,067 159 70 W 30 LED 692 110,063 100 15,900 125,963 19,152 58% 16,279 10 1,590 17,869 104 40 W 30 LED 692 71,991 100 10,400 82,391 12,527 31% 10,648 10 1,040 11,688 202 20 W 30 LED 692 139,828 100 20,200 160,028 24,331 -50% 20,681 10 2,020 22,701 22 55 W 30 LED 692 15,229 100 2,200 17,429 2,650 46% 2,252 10 220 2,472 1522 1,601,843 152,200 1,754,043 361,197 307,017 15,220 322,237 Ha'apai New proposed system Total Total Average Total Number of Total Fixture Installation Total New New Fixture Energy Power Proposed System Cost Installation Energy Maintenance Maintenanc Total O&M Lamps Cost Cost Fixture Cost Consumption Cost Cost Cost e Cost W W Per Unit TOP Per Unit TOP TOP kWh/Year TOP TOP TOP/Year/Unit TOP TOP/Year 17 250 W 100 LED 1419 24,126 100 1,700 25,826 6,763 61% 5,749 10 170 5919 22 100 W 50 LED 883 19,418 100 2,200 21,618 4,417 51% 3,754 10 220 3,974 25 70 W 30 LED 692 17,306 100 2,500 19,806 3,011 58% 2,560 10 250 2,810 14 20 W 30 LED 692 9,691 100 1,400 11,091 1,686 -50% 1,433 10 140 1,573 78 70,541 7,800 78,341 15,878 13,496 780 14,276 Vava'u New proposed system Total Total Average Total Number of Total Fixture Installation Total New New Fixture Energy Power Proposed System Cost Installation Energy Maintenance Maintenanc Total O&M Lamps Cost Cost Fixture Cost Consumption Cost Cost Cost e Cost W W Per Unit TOP Per Unit TOP TOP kWh/Year TOP TOP TOP/Year/Unit TOP TOP/Year 853 70 W 30 LED 692 590,464 100 85,300 675,764 102,744 58% 87,332 10 8,530 95,862 853 590,464 85,300 675,764 102,744 87,332 8,530 95,862 Eua New proposed system Total Total Average Total Number of Total Fixture Installation Total New New Fixture Energy Power Proposed System Cost Installation Energy Maintenance Maintenanc Total O&M Lamps Cost Cost Fixture Cost Consumption Cost Cost Cost e Cost W W Per Unit TOP Per Unit TOP TOP kWh/Year TOP TOP TOP/Year/Unit TOP TOP/Year 755 70 W 30 LED 692 522,626 100 75,500 598,126 90,940 58% 77,299 10 7,550 84,849 755 522,626 75,500 598,126 90,940 77,299 7,550 84,849 Econoler International 49 Ref.: 5505 Asian Development Bank TA 6485-REG: Promoting Energy Efficiency in the Pacific - Contract No. COSO/90-492 Final Report Tongatapu Savings Number of Payback Load Power Proposed System Energy Savings Maintenance Cost Total Savings Lamps Period Reduction W W % kWh kWh TOP % TOP % TOP Years kW 339 250 W 100 LED 61% 211,587 179,849 80% 13,560 62% 193,409 2.7 58 258 150 W 60 LED 61% 96,053 81,645 80% 10,320 62% 91,965 3.4 26 438 100 W 60 LED 41% 73,540 62,509 80% 17,520 46% 80,029 6.7 20 159 70 W 30 LED 58% 26,116 22,198 80% 6,360 62% 28,558 4.4 7 104 40 W 30 LED 31% 5,694 4,840 80% 4,160 44% 9,000 9.2 2 202 20 W 30 LED -50% -8,110 -6,894 80% 8,080 5% 1,186 134.9 -2 22 55 W 30 LED 46% 2,248 1,911 80% 880 53% 2,791 6.2 1 1522 53% 407,128 346,059 80% 60,880 56% 406,939 4.3 112 Ha'apai Savings Number of Payback Load Power Proposed System Energy Savings Maintenance Cost Total Savings Lamps Period Reduction W W % kWh kWh TOP % TOP % TOP Years kW 17 250 W 100 LED 61% 10610.6 9019 80% 680 62% 9699 2.7 3 22 100 W 50 LED 51% 4,577 3,891 80% 880 55% 4,771 4.5 1 25 70 W 30 LED 58% 4,106 3,490 80% 1,000 62% 4,490 4.4 1 14 20 W 30 LED -50% -562 -478 80% 560 5% 82 134.9 0 78 54% 18,732 15,922 80% 3,120 57% 19,042 4.1 5 Vava'u Savings Number of Payback Load Power Proposed System Energy Savings Maintenance Cost Total Savings Lamps Period Reduction W W % kWh kWh TOP % TOP % TOP Years kW 853 70 W 30 LED 58% 140,105 119,089 80% 34,120 62% 153,209 4.4 38 853 58% 140,105 119,089 80% 34,120 62% 153,209 4.4 38 Eua Savings Number of Payback Load Power Proposed System Energy Savings Maintenance Cost Total Savings Lamps Period Reduction W W % kWh kWh TOP % TOP % TOP Years kW 755 70 W 30 LED 58% 124,009 105,407 80% 30,200 62% 135,607 4.4 34 755 58% 124,009 105,407 80% 30,200 62% 135,607 4.4 34 Econoler International 50 Ref.: 5505 160, rue Saint-Paul, Bureau 200, Québec (Québec), Canada G1K 3W1 Tel.: + 1 (418) 692-2592 Fax: +1 (418) 692-4899 www.econoler.com ASIAN DEVELOPMENT BANK TA 6485-REG: PROMOTING ENERGY EFFICIENCY IN THE PACIFIC CONTRACT No. COSO/90-492 APPENDIX E - VANUATU - May 2011 - Asian Development Bank TA 6485-REG: Promoting Energy Efficiency in the Pacific - Contract No. COSO/90-492 Vanuatu Report ABBREVIATIONS AND ACRONYMS AC Air Conditioning CFL Compact Fluorescent Lamp DSM Demand-Side Management ECM Energy Conservation Measures EE Energy Efficiency HG High Voltage HPS High-Pressure Sodium IGA Investment Grade Audit LED Light Emitting Diode LPG Liquid Propane Gas LV Low Voltage MEPS Minimum Energy Performance Standards MV Mercury Vapor PDMC Pacific Developing Member Country (for ADB) REEEP Renewable Energy & Energy Efficiency Partnership SOPAC Pacific Island Applied Geoscience Commission SWH Solar Water Heaters UNELCO Union Electrique du Vanuatu Limited VCC Vanuatu Chamber of Commerce VHRA Vanuatu Hotel and Resort Association VIT Vanuatu Institute of Technology VUI Vanuatu Utilities and Infrastructure Econoler International ii Ref.: 5505 Asian Development Bank TA 6485-REG: Promoting Energy Efficiency in the Pacific - Contract No. COSO/90-492 Vanuatu Report TABLE OF CONTENTS ABBREVIATIONS AND ACRONYMS ...... II TABLE OF CONTENTS ...... III 1 COUNTRY PROFILE ...... 1 1.1 Fossil Fuels...... 1 1.2 Power Supply Sector ...... 1 1.3 Tariffs ...... 3 1.4 Energy Efficiency Implementation ...... 6 1.5 Policy and Institutional Recommendations ...... 10 2 ENERGY EFFICIENCY PROJECT IMPLEMENTATION AND IMPACT EVALUATION ...... 20 2.1 Key Program Parameters ...... 20 2.2 Impact Evaluation ...... 23 2.3 Lessons Learned ...... 25 3 FUTURE EE PROGRAM DESIGN AND IMPLEMENTATION ...... 27 3.1 General Assumption and Parameters ...... 30 3.2 Energy Efficiency in Government Buildings ...... 31 3.3 Street Lighting ...... 34 3.4 Energy Efficiency in the Hotel Sector ...... 36 3.5 Energy Efficiency in the Residential Sector – CFLs ...... 38 3.6 Energy Labeling and MEPS ...... 39 3.7 Power Factor Correction ...... 42 3.8 Energy Efficiency in the Industrial Sector ...... 42 3.9 Water Distribution Network ...... 42 4 OTHER RECOMMENDATIONS: ...... 44 APPENDIX E.1: VANUATU - ESTIMATED SAVINGS PER SECTOR IN GOVERNMENT BUILDINGS, REFERENCE TABLES ...... 48 Econoler International iii Ref.: 5505 Asian Development Bank TA 6485-REG: Promoting Energy Efficiency in the Pacific - Contract No. COSO/90-492 Vanuatu Report 1 COUNTRY PROFILE Vanuatu is an archipelago of over 80 islands. Its population of 243,000 inhabitants (census 2009) is 75.7% rural and 24.3% urban. The main urban areas are Port Vila (on the island of Efate, with 45,700 people in 8,600 households) and Luganville (on the island of Espirtu Santo or just Santo, with13,500 people in 2,500 households). The total population constitutes approximately 46,000 households, over 50% of which are located on the three most populous islands of Efate, Santo and Tanna. Vanuatu's economic growth continues to be driven largely by tourism and construction. After negative growth in the early 2000s, Vanuatu's economy (real GDP) grew by 6.3 per cent in 2008, slowing to 3.6 per cent in 2009 and 3.0 per cent in 2010 due to the impact of the global recession. GDP per capita for 2010 was US$2,917, up from US$2,643 in 2009. Future growth is projected to be 3.75 per cent in 2011, strengthening further in 2012 (IMF/EIU forecast)1. Vanuatu receives considerable development aid, historically primarily from Australia, New Zealand, France, and Japan2, and more recently from the USA through the Millennium Challenge Account (MCA)3. 1.1 FOSSIL FUELS Vanuatu is highly reliant on petroleum imports to cater for its national energy demand due to its lack of indigenous mineral petroleum resources. Less than two-thirds of mineral petroleum imports are consumed by the transport sector, with approximately 38% for electricity generation. In early 2005, UNELCO’s (the then sole electricity utility) average diesel demand was 11 million liters at a cost of VUV 600 million (approximately USD 5.4 million). Fossil fuel import prices have increased significantly in Vanuatu in the last 10 years as global conventional low light sweet crude oil supplies have peaked. The increase in global oil prices has greatly affected the Vanuatu economy, as it has also been a challenge for all other Pacific Island countries. 1.2 POWER SUPPLY SECTOR Vanuatu features a low electrification rate of around 27%, primarily focused in major urban centers (around 75% electrification rate in the main urban centers of Port Vila (Efate) and Luganville (Santo)4), while the more than 70% of the population residing in rural remote areas generally relies on biomass as its major energy source. 1 See http://www.dfat.gov.au/geo/vanuatu/vanuatu_brief.html 2 http://www.un.org/esa/policy/devplan/profile/ia_vanuatu.pdf 3 http://www.mcavanuatu.gov.vu/ 4 http://www.adb.org/Documents/CPSs/VAN/2010-2014/VAN-Power-Sector-Assessment.pdf Econoler International 1 Ref.: 5505 Asian Development Bank TA 6485-REG: Promoting Energy Efficiency in the Pacific - Contract No. COSO/90-492 Vanuatu Report Urban electricity supply in Port Vila (supplied 9.5% by windpower and 0.8% from coconut oil) Malekula (diesel and 13% coconut oil), and Tanna (100% diesel) is provided by a privately owned utility Union Electrique du Vanuatu Limited (UNELCO) which is a private company and a subsidiary of GDF Suez. UNELCO has been producing and supplying electricity and water in Vanuatu since 19395. UNELCO operates under a concession arrangement between the Government of Vanuatu and UNELCO. As of 1 January 2011, Vanuatu Utilities and Infrastructure Limited (VUI), a subsidiary of Pernix Group, Inc., started operating a concession on Santo island (formerly run by UNELCO), which is supplied 41% from hydro power. Outside the concession areas, there are a variety of small scale and independent arrangements for electricity provision. The installed power generation capacity in Vanuatu was 24 MW in 2008 (Table 1) with 85% installed in Port Vila. Gross electricity production was almost 63 GWh, using 15.9 million liters of diesel oil and a small quantity (then less than 1%) of coconut oil. Table 1: Electricity Generation in Vanuatu, 2008 Energy Type Unit Port-Vila Santo Malekula Tanna Total Installed capacity KW 20,420 2,850 400 440 24,110 Peak demand MW 10,610 1,373 120 107 12,210 Gross energy MWh 54,700 7,072 636 390 62,798 Generation efficiency % 96.7 96.5 97 Gas oil consumption L 13,988,413 1,562,120 223,668 128,201 15,902,402 Coco-fuel L 149,708 0 0 0 149,708 consumption Energy sold MWh 47,782 6,482 552 314 55,130 UNELCO electricity sales for 2008 are displayed in Table 2. A total of 87% of sales were in Port Vila and 12% in Santo (Luganville), leaving only 2% in Malekula and Tanna. In Port Vila and Santo, sales are distributed as follows, 60% by low voltage (LV) (including residential and small shops) distribution system and 40% to high voltage (HV) (industry, large retail shops, hotel sector) distribution system. The number of customers by category provides a different picture. In Port Vila and Santo, LV customers represent 99.4% of connections with an average yearly consumption in Port Vila of 3,268 kWh and 1,915 kWh in Santo. LV customers in Port Vila therefore use significantly more electricity and a larger number of appliances than in Santo. Less than 1% of total customers account for 40% of electricity sales (HV). In terms of Energy Efficiency (EE)/Demand-Side Management (DSM) program design and management, the LV customers are probably best accessed by generic EE/DSM programs, and only the HV category of 5 http://www.ura.gov.vu/index.php?option=com_content&view=article&id=38&Itemid=73&lang=en Econoler International 2 Ref.: 5505 Asian Development Bank TA 6485-REG: Promoting Energy Efficiency in the Pacific - Contract No. COSO/90-492 Vanuatu Report customers should be considered for individualised energy audit and support activities. Nevertheless, there is still a need for a systematic evaluation of savings potentials and program cost-effectiveness before a specific EE/DSM strategy is adopted. Table 2: Electricity Sales in Vanuatu, 2008 Electricity Voltage Port-Vila Santo Malekula Tanna Total Sales Sales in kWh LV 28,769,022 4,115,798 398,597 160,999 33,444,416 by category HV 19,013,216 2,366,201 0 0 21,379,417 of connection TOTAL 47,782,238 6,481,999 398,597 160,999 54,823,833 LV 8,803 2,149 67 63 11,082 Number of customers HV 56 14 0 0 70 (units) TOTAL 8,859 2,163 526 601 12,149 1.3 TARIFFS Electricity tariffs are based on a complex formula which deserves some explanation as the specifics of applicable tariffs will impact the monetary energy saving evaluation of customer electricity billing. The tariff structure displayed below concerns the Port Vila concession in 2008. Customer tariffs include “energy charges” (Vatu per kWh, to reflect the electrical energy used) and “fixed charges” (Vatu per subscribed kVA or kilovolt-ampere, a measure of the capacity to use energy). Both Vt/kWh and Vt/kVA are revised monthly on the basis of a “base tariff” computed according to a formula agreed upon in December 2007 and in effect as of January 2008. Base tariff (P): This is a single number from which specific customer tariff rates are derived by using a multiplier, or “P-coefficient,” specified in the agreement with UNELCO for the Port Vila concession. The formula for base tariff P is P = Po * [0.09+0.44*G/Go +0.17*M/Mo +0.3*IM/IMo *(0.6+0.4*C/Co)] where labels with subscript zero define values in the reference period and without subscript in the current period.6 6A. In detailed terms, tariffs for a given month are determined on the basis of data from the preceding month (with the exception of IM) where: G is the weighted average price of a liter of diesel fuel and coconut oil purchased in Port Vila, Luganville, Malekula o and Tanna, expressed in Vatu/liter and calculated as follows: G = {GVLV + GLLL+ GMLM + GTLT+ GCLC}/{LV + LL+ LM + LT+ LC*KPCI} where: GV is the average price of a liter of diesel fuel delivered to Port Vila (total invoice divided by fuel quantity) in the month; LV is the number of liters of diesel fuel actually consumed that month; And similarly for Luganville, Malekula and Tanna signified by the subscripts and for coconut oil in Port Vila, EXCEPT that (i) diesel for Luganville is computed as if all the hydro generation were produced using diesel and the equivalent fuel cost for the imputed diesel, after deductions for depreciation, maintenance expenses and management fees, is deposited in a “Sarakata Special Reserve Fund”; and, (ii) KPCI is an adjustment factor for the difference in calorific value between diesel and coconut oil. M is the average monthly wage of a single male not receiving board or lodging in Port Vila at IFIRA WHARF AND STEVEDORING, classified as an “inexperienced worker” and with a “PO2” classification with the Public Service of the Vanuatu government; Econoler International 3 Ref.: 5505 Asian Development Bank TA 6485-REG: Promoting Energy Efficiency in the Pacific - Contract No. COSO/90-492 Vanuatu Report Table 3: Tariff Analysis September January- Reference January September March 2008- Variable September Period 2008 2008 2009 March 2008 2009 P = Vatu/kWh base Po 30.34 51.06 65.17 46.2 28% (29%) tariff G = fuel price Go 38.8 88.19 122.8 68.05 39% (45%) (weighted, adjusted for coconut oil) in Vatu/liter M = Index of labor costs Mo 1,118 1,118 1,118 1,216 0% 9% IM = Index of material IMo 92.38 128.29 132.02 141.26 3% 7% costs C = Index of exchange Co 1.203 1.2427 1.2818 1.3182 3% 3% rate V/FPF The base tariff P is translated into a tariff structure with the main categories and formulas presented in the following Table. [NOTE: The basis of M was changed in February 2009.] IM is the average of the index “Material” (equipment) published by the official newspaper (New Caledonia Gazette) for the next preceding month; C is the average of the daily selling rate in Vatu for the Pacific Franc (XPF or CFP) as published by the Banque d’Hawaii. Econoler International 4 Ref.: 5505 Asian Development Bank TA 6485-REG: Promoting Energy Efficiency in the Pacific - Contract No. COSO/90-492 Vanuatu Report Table 4: Base Tariff P Monthly Fixed Charge Vatu/kVA Energy Charge Vatu/kWh Connected Load Customer Category Multipli September March Multiplier September March er of P 2008 2009 of P 2008 2009 Low voltage “domestic” < 60 kWh/month 0.62 40.4 28.7 NONE 60-120 kWh /month 0.93 60.6 43.0 > 120 kWh/month 1.7 110.8 78.6 Low voltage “licensed” 0.87 56.7 40.2 20 1,303 924 Other low voltage 0.96 62.6 44.4 19 1,238 878 Medium voltage 0.7 45.6 32.4 25 1,629 1,156 Therefore, the actual cost for a customer will depend on the classification assigned, energy used and, for most customers, the subscribed capacity. For instance, a “domestic” consumption of 90 kWh in September 2008 would amount to an average tariff of 47.14 Vatu/kWh (before VAT). On the other hand, “other low-voltage” customers with a 10 kVA connection and twice as much consumption (180 kWh) in the same month would have paid an average tariff of 131.35 Vatu/kWh (before VAT), about a 180% higher unit rate. These complex calculations result in the following tariff grid where energy and fixed charges (where applicable) are periodically changing: Econoler International 5 Ref.: 5505 Asian Development Bank TA 6485-REG: Promoting Energy Efficiency in the Pacific - Contract No. COSO/90-492 Vanuatu Report Table 5: Electricity tariffs P-Coefficient January September March Tariff Parameters Multiplier 2008 2008 2009 Base tariff 51.06 65.17 46.22 Energy charge per kWh A. LV "domestic" customers less than 60 kWh 0.62 31.66 40.41 28.66 60-120 kWh 0.93 47.49 60.61 42.98 more than 120 kWh 1.70 86.8 110.79 78.57 B. LV "licensed" customers 0.87 44.42 56.7 40.21 (commercial/institutional) C. Sports arena 1.00 51.06 65.17 46.22 D. Public lighting 0.54 27.57 35.19 24.96 E. Other LV customers 0.96 49.02 62.56 44.37 F. MV customers 0.70 35.74 45.62 32.35 "Fixed" (capacity) charge and deposits A. LV "domestic" customers Fixed charge NONE Security deposit 70 3,574 4,562 3,235 B. LV "licensed" customers (commercial/institutional) Fixed charge per subscribed kVA 20 1,021 1,303 924 Security deposit 150 7,659 9,776 6,933 E. Other LV customers Fixed charge per subscribed kVA 19 970 1,238 878 Security deposit 150 7,659 9,776 6,933 F. MV customers Fixed charge per subscribed kVA 25 1,277 1,629 1,156 Security deposit 150 7,659 9,776 6,933 Such tariff conditions make energy saving economic evaluation extremely complex for consumers and, as a result, clearly constitute a major obstacle to energy efficiency in Vanuatu. 1.4 ENERGY EFFICIENCY IMPLEMENTATION 1.4.1 Current EE activities The concept of energy efficiency measures is not well known or understood by the general public in the residential sector in Vanuatu. The commercial and industrial sectors are generally well informed on the concepts and rationale for the adoption of EE measures due to increasing annual electricity costs. Most industrial and commercial sector entities realize that there is a potential for the implementation of energy efficiency programs and some have even embarked on initiating energy efficiency concepts, although with limited results. Although the market is offering opportunities to supply the appropriate technologies to meet demand, a major contributing factor remains lack of expertise and know-how. The actual analysis component in determining actual savings is still an area which requires technical assistance for future projects to be successfully implemented. Another barrier is the price of energy-efficient products and appliances on the market, which can be more twice the price of basic technology products. Econoler International 6 Ref.: 5505 Asian Development Bank TA 6485-REG: Promoting Energy Efficiency in the Pacific - Contract No. COSO/90-492 Vanuatu Report The incremental cost is mainly due to the very low demand in the country for energy efficient equipment in addition to the growing availability of low-cost products, in particular (but not limited to) those imported from China. 1.4.2 EE and Energy Policy Vanuatu, along with other Pacific Island countries in the region, is very aware of the high cost of electricity production required to meet current demand. High tariff rates are a common issue facing Pacific countries. In Vanuatu, the high tariffs are primarily due to high diesel costs, the limited economies of scale of the small grids. Thus, the Government of Vanuatu, through the Energy Unit, has established a National Energy Policy which advocates and encourages the promotion and implementation of energy efficiency and conservation programs. The policy aims to achieve the efficient supply and use of energy throughout Vanuatu. The strategy under this framework is to promote awareness on the importance of energy efficiency and conservation measures. The National Energy Policy also in principle includes the government fostering imports of energy- efficient appliances. A key challenge in successfully implementing energy efficiency programs among interested customers in Vanuatu is the lack of capacity (know-how) to design and implement the best programs to achieve intended goals. Lack of data is a major barrier to the analysis and design of potential energy efficiency activities and dedicated programs. 1.4.3 National Energy Policy Framework As shown below, the National Energy Policy Framework includes in its work plan considerations on energy conservation. These apply exclusively to fuel oil consumption, with a clear emphasis on the transport sector. There is no specific reference to fuel oil savings through electricity savings. Econoler International 7 Ref.: 5505 Asian Development Bank TA 6485-REG: Promoting Energy Efficiency in the Pacific - Contract No. COSO/90-492 Vanuatu Report Figure 1: Vanuatu National Energy Policy Framework The programs highlighted above have not been implemented under the timeframe originally set out and there is no indication that they will be in the near future either. 1.4.4 EE and Regulatory Framework EE policy and regulatory frameworks, defined as a set of specific laws and regulations, economic and information tools and EE programs, are presently non-existent in Vanuatu. However, the EE concept is not totally absent since it is mentioned in existing energy policies as illustrated below, but with almost no consistent impact on actual government activities. Econoler International 8 Ref.: 5505 Asian Development Bank TA 6485-REG: Promoting Energy Efficiency in the Pacific - Contract No. COSO/90-492 Vanuatu Report 1.4.5 Main Stakeholder Review Energy Department The Energy Unit is established under the Ministry of Lands, Energy, Environment, Geology Mines and Water Resources and is responsible for formulating and implementing policies relative to the development of the energy sector. These policies deal with energy planning and management, energy program promotion, alternative energy assessment and electricity contract review. The Energy Unit is performing its duties with a very limited number of resources. Capacity building is ranked as a top priority to help the unit perform in-depth EE program analyses and be able to develop and monitor programs in accordance with country conditions. UNELCO UNELCO has been supportive of the ADB PEEP Phase 1 project and has submitted a list of 50 major consumers in Port Vila including hotels and resorts that would be potential participants in the energy saving project. UNELCO does not perform any consumption analysis per sector and does not have an estimated peak load breakdown. It does not currently carry out activities related to Demand-Side Management (DSM). However, UNELCO is interested in EE and wishes to provide such a service to its major customers. UNELCO could bring considerable support for EE programs by providing data on electricity consumption and demand pattern analysis. However, UNELCO is a private company, accessing such data has been complex and the little information gathered did not allow the PEEP project team to conduct the in-depth analysis needed. Business Community The Vanuatu Chamber of Commerce (VCC) has a total of 4,000 active members. In recent past, VCC conducted a number of business forums and an ongoing concern expressed by participants is the high cost of electricity. VCC is keen to join efforts to build up and manage initiatives bringing energy saving solutions to its members. In the short term, as the building sector is presently the most active in Vanuatu, VCC suggests to focus on this sector first. Municipality of Port Vila Overall, the municipality is fully committed to improving energy efficiency and is eager to participate in electricity bill reduction, for which it has been seeking EE expertise and assistance. Although limited, municipality resources prioritize actions aiming to reduce financial burdens and electricity bills. Street lighting is a sector where the municipality and UNELCO are seeking solutions for the current high cost, reflected in street lighting power bills that are still suffering from non-payment. UNELCO has reduced street lighting operation hours and turned off lights around midnight, which has a negative impact on security in Port Vila. Econoler International 9 Ref.: 5505 Asian Development Bank TA 6485-REG: Promoting Energy Efficiency in the Pacific - Contract No. COSO/90-492 Vanuatu Report 1.5 POLICY AND INSTITUTIONAL RECOMMENDATIONS The rationale to support EE development and initiatives in Vanuatu is primarily due to ongoing higher international oil prices and price instability represents a significant threat to the ongoing and future economic development of the country. International support to bring Vanuatu’s EE policy and programs into reality is paramount. Vanuatu should take advantage of international experience to get experts onboard through technical assistance programs so that the Government of Vanuatu can then take over responsibility in program development and implementation. Under the supervision and help of external experts, EE staff would acquire the necessary skills and capacity to perform activities related to the normal life cycle of any EE/DSM program including preliminary market research as well as program design, implementation and evaluation. Once these capacities are mastered by national staff, EE can become a permanent tool to help balance the country’s energy supply and demand for the Government of Vanuatu. Furthermore, local staff involvement and actions on EE matters in the community is the only way to develop and reinforce government leadership in action, which is critical for EE long-term viability. 1.5.1 Government of Vanuatu EE Management Organization From a government perspective, energy efficiency is a way to improve productivity in the economy through improved energy use. These kinds of changes require commitment along with a macro and long-term approach. In addition to EE program development, management, financing and regulation activities, one of the key government contributions is to assume leadership for the development and implementation of EE policies and regulations. It is also paramount to oversee market data production and analysis including sector benchmarks. The following table presents the main recommendations for energy department organization summarizing the basic activities and programs that need to be put in place. Econoler International 10 Ref.: 5505 Asian Development Bank TA 6485-REG: Promoting Energy Efficiency in the Pacific - Contract No. COSO/90-492 Vanuatu Report Table 6: Energy Department EE Organization ENERGY DEPARTMENT Institution in Activity Profile of Activity International Support Charge Create an EE Energy - Lead and coordinate EE Technical assistance: Division with Department policies and regulations - Deliver training in EE capacities in: - Develop and implement EE management - Leadership Key Partners: policies - Improve data statistics - Economic analysis - Local - Conduct market surveys for EE purposes - Public sector stakeholders - Conduct energy audits - Assist in market survey management - Traditional - Conduct and monitor design and execution - Technical analysis power leaders training programs - Assist in production of - Sub-contractor - Churches - Produce EE resource plan EE national resource management - Etc. - Produce awareness plan - Communication program - Produce education program - Lead EE activities in public sector - Develop EE regulations and standards In this scheme, the Energy Department or Unit is involved in a large spectrum of EE activities, including EE program management. Since the energy division human resources are limited, it is recommended that the EE division hire the required expertise to build a suitable dedicated team for EE program management and evaluation. The country’s EE activities could be jointly undertaken with the main public utility (UNELCO). UNELCO could provide the technical capacity in market research and program design. UNELCO’s customers’ listing and its regular contact with them through billing would provide the required market data and an access channel to clients for EE marketing purposes. 1.5.2 UNELCO EE/DSM Management Organization As a private enterprise, UNELCO is independent from the Government of Vanuatu and its involvement in EE/DSM either needs to be a business decision, or it needs to be mandated by the government through the URA (the Utilities Regulatory Authority) . However, UNELCO is already interested in providing complementary services such as energy auditing to their clients to reduce the energy losses and consumption. However, UNELCO’s role could be strengthened and the government and/or URA could mandate UNELCO to be the primary implementation arm of an EE program. Utilities often view DSM programs as counter-productive activities as they reduce electricity sales while money has to be invested to run the program. To be attractive, DSM has to be considered as a profitable activity. There are two concrete ways to achieve this objective. The first is to select only DSM programs where the utility benefits per energy unit are higher than the margin on the selling price of this energy unit. In this first scheme, the utility has a direct advantage to reduce electricity production. Econoler International 11 Ref.: 5505 Asian Development Bank TA 6485-REG: Promoting Energy Efficiency in the Pacific - Contract No. COSO/90-492 Vanuatu Report A second approach allows the utility to recoup the cost invested in EE programs through a small increase in tariff allowed by the government or regulator (URA). This second approach is more common and is applicable to a larger portfolio of EE/DSM programs than the first option. EE/DSM should therefore be effectively integrated into the supply strategy of a utility with as much scrutiny as are traditional power supply and renewable energy options. This business approach has two requirements: One is methodological. The utility must precisely determine its production cost for each load curve segment. It must accurately determine the end-use demand structure behind the load curve to identify which group of customers and usage are responsible for this demand and build its EE/DSM strategy from this basic information. The other refers to EE management. As for any investment in power supply and/or distribution systems, EE/DSM program design needs to be supported by high-quality “bankable” feasibility studies. Table 7: Electric Utility DSM Organization Electric Public Utility Activity Institution Profile of Activity International in Charge Support Create an EE/DSM Power - Get financing resources from Technical unit with capacities in: utility business activities or from a assistance: - Economic analysis small increase in tariff - Train staff in and planning - Hire appropriate technical staff EE - Database & load - Gather and analyze customer management research data on electricity consumption from utility point - Technical analysis - Identify and develop relationship of view - Program design, with large customers - Assist in EE implementation and - Identify key market players and resource plan management develop positive relationships production - Program evaluation - Develop and implement internal communication program - Develop and implement external communications program - Proceed with market research and potential savings analysis - Design, implement and evaluate EE programs 1.5.3 General Information/Awareness Programs Communication is crucial for the development of a successful and sustainable interest in EE by the population, enterprises and institutions. As a result, it needs to be managed accordingly. Technical support to design a more comprehensive and structured information and awareness program is required. Econoler International 12 Ref.: 5505 Asian Development Bank TA 6485-REG: Promoting Energy Efficiency in the Pacific - Contract No. COSO/90-492 Vanuatu Report Table 8: EE Information and Awareness Programs INFORMATION AND AWARENESS Activity Institution in Charge Profile of Activity International Support Information centers - Energy Department May include: - PDMC regional to disseminate - Books and leaflets information monitoring information on Key partners - Technical staff center efficient - Electric equipment answering technical - Regional organizations technologies and importers/retailers questions - SOPAC/SPC efficient use of - NGOs energy Awareness - Energy Department May include: TA to assist in: programs Key partners - EE advertising - Designing awareness - Electric equipment - Educational strategic plan retailers material for schools - Producing initial - Utility material - Education sector Sharing information in the EE sector is an efficient way to save on program development costs and take advantage of creative solutions developed elsewhere. As PDMCs evolve in a common specific environment, sharing technical information on energy savings in buildings, standards for air conditioning equipment or specifications for CFLs would provide large benefits for all participating countries. An information center is not necessarily physically required in Vanuatu or in other Pacific Developing Member Country (PDMCs). Making use of the internet by creating a website dedicated to EE in PDMCs seems to be preferable. This website would promote shared information on EE technologies and appropriate specifications, program design, management, results and evaluation, and would allow for networking. Potential partners could be the Pacific Power Association, Pacific Islands Private Sector Organizations or SOPAC/SPC. The specific contribution of Vanuatu would be to provide a local coordinator responsible for national contribution to the common web resource. 1.5.4 Education and Training The EE assessment for Vanuatu has clearly demonstrated that education and training activities are a priority to develop local capacity to identify and implement EE/DSM programs. Education and training are a prerequisite to support EE/DSM and should not be limited to short training sessions but rather be integrated in existing education and training curriculums, wherever possible. As far as energy auditing and EE practices are concerned, it would be recommendable to consider outsourcing training to the private sector with twinning arrangements with foreign experts to reap the long-term benefits of this activity. The PDMC EE information center would assist in maintaining and upgrading the material used for education and training, thus ensuring the ongoing sustainability of this activity in the region. Econoler International 13 Ref.: 5505 Asian Development Bank TA 6485-REG: Promoting Energy Efficiency in the Pacific - Contract No. COSO/90-492 Vanuatu Report Table 9: Education and Training in Energy Efficiency EDUCATION AND TRAINING Activity Institution in Charge Profile of Activity International Support Primary school Energy Department - Coordinate the production Technical Assistance: level and dissemination of - Assist in producing education, Key partners education material education plan and strategy targeting all Department of - Outsource to Department of along with initial education primary Education Education material schools pupils - Countrywide activity - Partner: SPC/SOPAC Energy audit Energy Department - Mobilize and involve the TA to: and energy private sector in program - Produce initial education management Key partners design and implementation material Chamber of - Conduct training sessions - Prepare work plan and Commerce Industry on energy audits including strategy - Engineering association financial analysis and - Conduct training sessions firms reporting to customers - Train local staff in delivering - O&M staff - Periodically update and training sessions - Associated upgrade capacities technical departments Energy- Energy Department - Mobilize and involve the TA to: efficient private sector in program - Produce initial education building Key partners design and implementation material construction Chamber of - Conduct training sessions - Prepare work plan and practices Commerce Industry on energy-efficient building strategy - Engineering association construction practices for - Conduct training sessions firms Architect and large building constructors - Train local staff in delivering - Architects contractor - Periodically upgrade training sessions - General associations capacities contractors 1.5.5 Energy Labeling and Minimum Equipment Energy Performance Standards Energy labeling and Minimum Energy Performance Standards (MEPS) enforcement procedures and control systems need to be developed according to the specificities of the Vanuatu environment. International technical assistance is required to initiate development and set up the required implementation and follow up procedures. Usually, such a program includes tests by recognised testing laboratories. This process involves a complex and costly operation which may create a barrier to implementing MEPS in Vanuatu. A least-cost option could be adopted to overcome implementation barriers and could be summarized as follows: Include into the energy labeling and MEPS regulations a provision making importers/retailers responsible for proving compliance of the material displayed on the shelves and include penalties for non-compliance. Establish rules to accept equipment testing from internationally recognized laboratories and define procedures to ensure specific unit compliance with the current energy labeling and MEPS requirements. Outsource to the private sector energy labeling and MEPS compliance control management. Coordinate energy labeling and MEPS development and share information on energy labeling and MEPS programs with other PDMCs through the electronic information center. Econoler International 14 Ref.: 5505 Asian Development Bank TA 6485-REG: Promoting Energy Efficiency in the Pacific - Contract No. COSO/90-492 Vanuatu Report Accept the existing labeling and MEPS schemes from Australia-New Zealand and other major markets as a starting point for the development and implementation of the energy labeling and MEPS program in Vanuatu. SOPAC with REEEP support, has undertaken an initial situation analysis and feasibility study on the impacts of introducing an appliance labeling program in Samoa, Tonga and Vanuatu. Energy labeling and MEPS program implementation in Vanuatu are projected to be cost-effective under all implementation scenarios over the 2011-2020 period. At a 10% discount rate, Energy labeling and MEPS programs in Vanuatu are estimated by the SOPAC study to offer total program benefits of VUV 91 to 160 million (or USD 0.9 to 1.6 million) with a benefit-cost ratio ranging from 1.35 to 2.077. Another issue which remains to be settled is the in-kind remittances sent from overseas directly to relatives in Vanuatu. Used equipment is generally difficult to include in Energy labeling and MEPS regulations as nobody can testify of the performance of those units. However, MEPS compliance could be requested for all equipment entering the country, without restriction. The first step would be to regulate new equipment only at program start-up and then address closely in-kind remittances of equipment from relatives out of the country when detailed data becomes available. Section 3.6 on energy labeling and MEPS includes more details about proposed program features. 1.5.6 Energy Efficiency in Building Code and Enforcement The cost of developing detailed stand-alone energy efficiency provisions for the building code may be too challenging financially for a small country like Vanuatu to do on its own. It will be critical to develop strategies to reduce development costs and efforts when preparing the EE provisions of the building code for Vanuatu. These strategies could include i) adapting the EE provisions of the building code from another country with similar environmental conditions, ii) limiting the scope of such EE provisions to simple measures like insulation, windows and external shading , which constitute the bulk of the potential for passive EE measures, iii) using a prescriptive approach including performance levels and benefits for adopting the code, and iv) using a collaborative approach with other similar PDMCs to share the level of effort required in Vanuatu. If existing EE building code provisions from abroad are used as a basis for development, then there is a need to make sure that all economic studies supporting the minimum level of performance of each component are properly updated to Vanuatu context. The high cost of electricity and fossil fuel supply in Vanuatu will necessitate an update of those economic studies and will likely result in a more stringent threshold for the minimum acceptable performance of building components than in large tropical countries with the benefits of economies of scale on their power sector and/or the benefit of using significant RE resources for power generation. To limit revision and periodical update costs, technical information should be shared with other participating PDMCs through the information Web page already proposed. 7 Situation Analysis and Feasibility Study on the Impacts of Introducing an Appliance Labeling Program in Samoa, Tonga and Vanuatu, International Institute for Energy and Conservation (IIEC), October 2010. Econoler International 15 Ref.: 5505 Asian Development Bank TA 6485-REG: Promoting Energy Efficiency in the Pacific - Contract No. COSO/90-492 Vanuatu Report The EE provisions of a building code, like energy labeling and MEPS, will only be as effective as the enforcement procedures introduced to ensure compliance. Experience around the world with voluntary EE building code provisions have shown generally minimal improvements in overall target market building EE. Those experiences suggest that, very early in the process, the government should be fully aware that financial and human resources will be needed to ensure compliance and should decide accordingly whether to develop mandatory EE provisions for its building code. If there is no serious and realistic commitment to enforce the EE provisions of the building code, then other types of programs and EE initiatives will generally be more cost-effective. However, if EE provisions of the building code are not put on the government’s priority list, this will result in an important lock-in energy inefficiency effect as new buildings will continue to be constructed with the “business-as-usual” approach and contribute for a very long period of time to inefficient energy usage in the building sector. Table 10: Building Code and Energy Efficiency BUILDING CODE Activity Institution in Charge Profile of Activity International Support Introduce EE - Energy Department - Prepare EE TA to: considerations in Key partners specifications adapted - Produce initial building code - Department in charge of to local environment to technical material building code be introduced in - Conduct training - Architect and contractor building code sessions associations - Conduct actual - Train local staff in - Municipalities (if implementation of new delivering training involved in building code regulations in code sessions application) - Inform/train architects - Power utility and contractors 1.5.7 Creation of an Energy Efficiency Center The first step often undertaken by countries with a low level of EE programs and activities is the establishment of a donor-funded energy center. These centers are typically non profit-making and supported by the government. They have independent authority to conduct research and analysis, raise awareness and recommend energy policies. Furthermore, they are mandated to design and implement EE programs, and play a central role in fostering market transformation where the implementation of energy-efficient products and services becomes standard practice. They provide a focal point for EE activities and have high credibility due to their nongovernmental, nonprofit status. The government should consider establishing such an energy center. Subsequently, an EE/DSM cell could be established within UNELCO to ensure analysis, program development as well as management and implement end-use EE programs. Alternatively, the energy center could be established as a unit within UNELCO. However, without an identity of its own separate from the utility, it runs the risk of being “captured” or controlled by the utility, which may not be supportive of aggressive EE efforts. In addition, an EE unit within the utility may not be regarded by the public as being a credible independent body for EE advice, especially as regards fuel substitution issues (e.g. Liquid Propane Gas (LPG) used as a cooking Econoler International 16 Ref.: 5505 Asian Development Bank TA 6485-REG: Promoting Energy Efficiency in the Pacific - Contract No. COSO/90-492 Vanuatu Report fuel or LPG used as a Solar Water Heater (SWH) backup energy source vis-à-vis electricity). Finally, locating the energy center within an electric utility may be seen as inappropriate if its mission will be to also address other uses of imported petroleum fuel use, in particular for transport. The establishment of an independent energy center does not preclude the establishment of an EE unit within the utility to oversee and coordinate utility EE activities. If such a unit is established within the utility, it should start out reporting directly to the chief executive of the utility to ensure that the concept of energy efficiency is given attention at the highest level and is not subjugated and “controlled” by lower level managers who may not support the EE mission. An energy center with adequate independence and funding can review and evaluate existing EE efforts and ensure their implementation. The energy center can play the role of advocating proper implementation of energy labeling and MEPS, EE provisions of building code legal requirements, as well as presenting a blueprint of how to meet these legal requirements. Likewise, if a ban on incandescent bulbs is found to be problematic in any practical matters, the center could champion better implementation and enforcement of the ban and help determine the extent to which cheap, low-quality CFLs are dominating the market. Steps may be necessary to reduce or eliminate low- quality CFLs through a product labeling program or the establishment of EE standards for bulbs. This type of standards and labeling program is the kind of activity an energy center can support and even implement if it has adequate assistance from those with experience in implementing such programs in other countries. By providing assistance in the design and implementation of EE policies and programs, an energy center helps strengthen the institutional capability of government institutions to carry out EE initiatives. Over time, staff from the energy center could even take management positions at government institutions thereby transferring EE management capacity directly to those institutions. 1.5.8 Legal Framework Development To ensure the success of the proposed EE programs, an appropriate legal framework should be developed. Up to now, there has been no regulation related to the management of energy efficiency matters in Vanuatu. Any legislation should take into consideration the context of the country and the different barriers to EE program implementation. This legislation should cover the following elements: Establish the appropriate legislation to enforce technical specifications for new buildings and for example implement thermal insulation, heat gain (shading), maximum lighting power density, inverter and/or high efficiency Air Conditioning (AC) and so forth standards. Develop an EE fund which will provide subsidies for EE projects in all sectors. Organize professional energy efficiency accreditation and define terms of reference for energy auditing. Define the conditions for energy labeling and MEPS implementation of energy-efficient appliances and products, including the energy consumption levels of prohibited appliances. Define the pre-consultancy conditions and processes for large energy consumption projects. Define certification conditions for manufacturers and installers regarding SWH systems. Define the list of energy-efficient appliances exempt from the VAT and customs fees. Econoler International 17 Ref.: 5505 Asian Development Bank TA 6485-REG: Promoting Energy Efficiency in the Pacific - Contract No. COSO/90-492 Vanuatu Report Install SWHs on a mandatory basis in hospitals and government buildings Development of this legal framework and related technical specifications will require an overall budget of about USD 200,000 where about USD 50,000 will be used for the organization of seminars and marketing campaigns. 1.5.9 Nomination of Energy Managers in Government Buildings It is recommended to designate energy managers in government buildings to closely track energy consumption levels in government facilities and improve their energy efficiency. These officers will be responsible for tracking and analyzing building energy consumption and preparing monthly reports for the energy efficiency management units that they are responsible for. These reports will provide the data needed to analyze and identify all energy consumption anomalies. This information will also contribute to creating an energy consumption database for the government sector. The database will help define the energy savings potential, establish a benchmarking tool to compare energy consumption between the country as a whole and a specific region and define objectives to be targeted for building EE improvement. This action will require an investment in energy training estimated at USD 0.1 million calculated on the basis of training sessions for each semester over a three-year period. The expected savings are estimated at an average of 2% of the energy consumption level of the sector based on similar implemented projects in other countries. The estimated savings are mainly linked to the EE benefits of equipment operation optimization and improved maintenance practices. For current government buildings in Vanuatu, additional savings could reach 980 MWh/year, resulting in emission reductions of 55 TCO2/year. 1.5.10 Development of an Energy Efficiency Fund An energy efficiency fund would be a useful support mechanism for EE project implementation. Such a fund would be dedicated to energy efficiency project financing in all sectors. The fund could provide project financing of up to 75% of total project costs, up to a maximum of USD 100,000. No collateral would be requested for the credit allocated to these projects if the latter are carried out under supervision of the energy unit. A financial guarantee fund for energy efficiency projects would be an alternative solution to help promote EE investments in the sector and encourage commercial financial institutions to participate in market development. Collateral for loans requested for energy efficiency projects would be guaranteed by this fund which will not burden clients’ credit levels and will help develop energy performance contracting and ESCOs. Performance contracting could then be offered by service providers, not only for complete energy systems, but for specific efficient technologies (solar water heaters, efficient motors, efficient ACs, etc.). Local banks can manage the fund and provide the loan and credit guarantees required for the implementation of EE projects. Under this component, the energy efficiency projects initiated could benefit from an around 10% subsidy program to encourage EE project implementation. The subsidy will help in prioritizing Econoler International 18 Ref.: 5505 Asian Development Bank TA 6485-REG: Promoting Energy Efficiency in the Pacific - Contract No. COSO/90-492 Vanuatu Report energy efficiency projects and increase the EE projects’ financial profitability. The level of subsidy could be set based on the country market barriers and market maturity. If the subsidy will be at the same level of the market credit interest rate, this will effectively give a zero interest rate for applicable EE investments. The funds needed for an energy efficiency fund could be generated through taxes applied to high energy-consuming or polluting equipment like electrical water heaters, low-performance air conditioning units, incandescent lamps and vehicles used in the transportation sector. 1.5.11 Public Sector Procurement The adoption of regulations that incorporate EE considerations for all type of energy consuming equipment into the public sector procurement process can provide significant energy savings. Furthermore, it would send a clear signal to the community that the EE policy is taken seriously by the government. Additional benefits include promoting government leadership in energy efficiency and influencing local importers and retailers to opt for energy-efficient products and practices. An in-house feasibility study may detail what equipment is at stake, suggest adjustments for the procurement procedure and propose a strategy to disseminate information and training to public organizations to apply the revised procedure including EE considerations. Table 11: Public Procurement Adjustment Organization PUBLIC PROCUREMENT Activity Institution in Charge Profile of Activity International Support Public sector Introduce EE procurement Energy Department regulations in TA to: Key partners: procurement Assist in program design All public sector procedures and monitoring stakeholders Introduce control mechanisms Econoler International 19 Ref.: 5505 Asian Development Bank TA 6485-REG: Promoting Energy Efficiency in the Pacific - Contract No. COSO/90-492 Vanuatu Report 2 ENERGY EFFICIENCY PROJECT IMPLEMENTATION AND IMPACT EVALUATION 2.1 KEY PROGRAM PARAMETERS 2.1.1 Program Rationale The hotel sector in Vanuatu accounts for 20% of overall electricity consumption. The Vanuatu government, through its executing agency, the Energy Unit, with support from the main power utility company (UNELCO) and the private sector recognizes the economic significance of this sector and requested support for an energy efficiency project in the hotel sector. Hence, an EE project was implemented at a hotel complex in the capital, Port Villa, to illustrate the impact of energy conservation and energy cost reduction through the adoption of a suite of energy conservation measures (ECMs). Selection of hotel Consultation with Vanuatu Hotel and Resort Association (VHRA) members during the initial planning phase of the project was initiated and there followed discussions with a number of hotels to explain the benefits they could reap from implementing EE projects at their hotels. An invitation for participation in the project was launched to present the project to potential participant hotels. The three first hotels who expressed their willingness to participate in the pilot project and who committed to invest if the Investment Grade Audit (IGA) results would show a promising and cost effective EE potential, were then followed up as candidates for the pilot hotel EE project. Capacity building and training Since appropriately trained human resources are needed to conduct and implement IGAs, the training of Vanuatu Institute of Technology (VIT) students and teachers was singled out as the best option to support the IGAs realization and at the same time address the issue of lack of knowledge of EE programs and energy auditing in Vanuatu. A total of 50 students and two teachers were offered three days training on the basic techniques and general knowledge in conducting IGA through the application of the appropriate methodology. The participation of VIT students in this capacity building component was considered as an essential element for future initiatives, and their involvement was seen as a positive step in addressing the wider issue of lack of knowledge of EE in Vanuatu. The team also launched awareness programs within the VHRA members who showed keen interest in the project and its benefits. Maintenance personnel were also invited to a one day capacity building workshop. The local electricity utility (UNELCO) was also involved in the training exercise, their participation also made a positive contribution to the project’s implementation by acquiring the necessary electrical use data. Econoler International 20 Ref.: 5505 Asian Development Bank TA 6485-REG: Promoting Energy Efficiency in the Pacific - Contract No. COSO/90-492 Vanuatu Report Investment grade audit methodology and findings Investment Grade Audits were conducted with the assistance of the Vanuatu Institute of Technology (VIT) to gather the required information based on the template provided by the PEEP- 1 consulting team during the training session. The maintenance and management staff of the three selected hotels were fully involved during the IGA process. The IGA development was initiated by a complete survey of all hotel equipment and operational schedules. Energy balances were established and invoices analyzed. For the identified ECMs, investment and savings potentials were estimated. However, only one IGA was completed in the planned timeframe, and the results presented to the hotel owner for implementation approval. The IGA recommended eight ECMs to be implemented, as follows: - Solar water heating for 27 rooms General key switch for 27 rooms Hotel lighting optimization for the entire hotel (installation of CFLs) Reducing air-conditioning (AC) temperature setting points for the entire hotel Review of UNELCO contracts for the electric meters installed in the 12 apartment’s bloc Low flow shower head replacements for the entire hotel Optimization of garden watering Optimization of pool motors The first five ECMs were approved by the hotel owner for immediate implementation, with the remaining three ECMs to be considered later for implementation by the hotel’s O&M staff. Procurement & budget An advertisement was placed in the major newspaper to provide equipment and services for the approved ECMs, and a request to provide proposals was also sent directly to selected suppliers. Four suppliers responded to the requests and submitted proposals. Suppliers were selected according to ADB procurement procedures and each supplier was approved to provide one item. Table 12: Hotel ECMs Total ADB Invoiced Items Amount Contribution Amount (USD) % (USD) Compact Fluorescent Lamps (CFL's) 1,535 50% 767 Room Key Tag Switches 7,587 50% 3,793 Supply and Install underground electric cable from main switch to 12 apartments 5,644 50% 2,822 block opposite the laundry Supply and installation of (6) units of Roof 32,252 50% 16,126 mounted Solar Water Heaters (SWH) Total 47,017 50% 23,508 Econoler International 21 Ref.: 5505 Asian Development Bank TA 6485-REG: Promoting Energy Efficiency in the Pacific - Contract No. COSO/90-492 Vanuatu Report It was agreed with the hotel owner that the ADB contribution for equipment procurement and installation would be 50% of the total amount invested with a maximum ceiling of USD 35,000. The final project cost for the equipment and installation was USD 47,017 with a client contribution of USD 23,508. Installation Implementation of the ECM projects in the hotel were carried out in close collaboration with the hotel staff, and with the equipment and service providers for the SWH and underground electric cabling. The CFLs, room key tag switches and adjustment of AC remote controls were installed by the hotel’s O&M staff. No significant difficulties arose during the implementation of the ECMs, however there were some delays from a lack of availability of the required number of CFLs and the rooms key tags. The maintenance staff of the hotel played an important role on a daily basis to ensure that the recommended work planned as part of the ECMs was implemented successfully and performed as intended. Description of ECMs The ECMs implemented were as follows: - Table 13: Implemented Hotel ECMs Implemented ECM’s Recommended Energy Description Conservation Measures (ECMs Installation of solar water heaters for the 27 apartments Tendering for three quotes for six SWH units of 300 liters storage each (turn- 1. Solar Water key project) Heating (SWH) Installation - including piping and interface with LPG heating system Supplier to design the SWH reticulation network to be connected to the existing LPG hot water system in the hotel 2. Lighting Replacement of all incandescent light bulbs with CFLs (warm color) within Optimization for the hotel the Entire Hotel External & internal lighting replaced with CFLs 3. General Key Switch for the 27 Placement of orders for key switches for the rooms. apartments 4. Reduce AC Minor modifications to remote control units for apartment AC units. Temperature Set Remote temperature controls disabled to prevent guests from changing the Point for the temperature preset to 24 C Entire Hotel Removing the two existing electric meters and using only one meter for the whole hotel to considerably reduce energy bills compared to the current 5. Review status quo. The additional monthly fixed cost is a contributing factor to the UNELCO high cost of monthly bills. Contacts Re-connecting the 12-room apartment block to the main existing switch box by supplying and installing an underground cable. Econoler International 22 Ref.: 5505 Asian Development Bank TA 6485-REG: Promoting Energy Efficiency in the Pacific - Contract No. COSO/90-492 Vanuatu Report 2.2 IMPACT EVALUATION The eight proposed ECMs for the hotel were recommended to address the increasing rate of electricity and LPG consumption by the hotel sector. Based on the baseline scenario of 2009, and the preliminary energy consumption data gathered after the project’s implementation, the savings expected from the eight proposed ECMs for the hotel would generate a financial savings of VUV 5,138,410 per annum (USD 51,440). Considering the value of investment in implementing the ECMs, the payback period would not exceed 1.1 years. The total investment of VUV 5.5 million would be recovered within a year and would generate savings of VUV 5 million per year, representing 10% savings from electricity, 12% savings from water and 13% savings from LPG, which in total represents a 13% savings in the hotel’s energy bills. Econoler International 23 Ref.: 5505 Asian Development Bank TA 6485-REG: Promoting Energy Efficiency in the Pacific - Contract No. COSO/90-492 Vanuatu Report Table 14: Real Savings from Implemented ECMs Estimated Simple Estimated Savings Investment PBP Description Electricity LPG Electricity LPG (VUV) (VUV) (Years) (kWh) (kWh) (VUV) (VUV) Solar Water Heating 4,151,250 0 17,530 0 506,710 506,710 8.2 General Key Switch 270,000 2,520 0 86,280 0 86,280 3.1 Hotel Lighting 476,240 36,820 0 1,259,070 0 1,259,070 0.4 Head Shower Replacement 272,020 0 37,900 0 1,095,420 1,327,760 0.2 Optimization of Pool Motors 53,800 7,320 0 250,340 0 250,340 0.2 Reducing Temperature Setting of AC 100,000 30,140 0 1,030,890 0 1,030,890 0.1 Optimization of Garden Watering 37,950 0 0 0 0 32,240 1.2 Reviewing Electricity Meter Contracts 157,500 0 0 645,120 0 645,120 0.2 with UNELCO Total 5,518,760 76,800 55,430 3,271,700 1,602,130 5,138,410 1.1 USD 55,240 USD 32,750 USD 16,040 USD 51,440 Econoler International 24 Ref.: 5505 Asian Development Bank TA 6485-REG: Promoting Energy Efficiency in the Pacific - Contract No. COSO/90-492 Vanuatu Report 2.3 LESSONS LEARNED The following issues are relevant for future EE/DSM projects in Vanuatu: - During the initial phase of the project, identifying a national consultant to comply with the project TORs was not as easy as envisaged. The necessary national capacity is nearly non-existent and represents a common issue in the region. Difficulties in identifying and recruiting suitable people with the required technical background and experience are clearly reflected in the implementation progress of the project, which was rather slow. Part of the problem regarding this barrier relates to a lack of understanding of the nature of the project. This time requirement for recruitment of suitable national consultants needs to be seriously considered in the planning of future EE projects. A low capacity on EE/DSM within government further delayed progress and the meeting of project deadlines. While the Energy Unit should be the driving agency for such projects, the lack of resources and technical capacity poses a serious problem to identifying an effective government institution that could become a national focal point to execute future EE projects. Capacity building of energy specialists to be employed by the Energy Unit is a critical national issue. Other prospective energy projects in the pipeline from various funding agencies will have very limited chances of achieving success should the current deficiencies within the administrative and government system not be resolved. Accessing technical data is time consuming. There is no energy data base within the government executing agency while technical data from utility suppliers is also not easily available. There is a lack of energy use and cost data within all government agencies and sectors. Therefore, energy planning and budgeting is usually done on an ad hoc basis, and depends on inconsistent assumptions and estimates. The low technical level and the lack of know-how for IGA development was a major barrier to the completion of ECM reports. The few participants from the private sector with higher technical knowledge could not participate continuously to assist the students involved due to their other work commitments. This was a major constraint to producing the reports required for assessing the EE potential of assigned hotels. Although each group was assigned a group leader, the IGA exercises were never completed. The procurement of materials to implement the project was slow, due mainly to the limited number of local suppliers. The bidding on tenders for the supply of electrical items clearly reflected the situation where a number of these items were highly priced due to lack of competition in the local market. Econoler International 25 Ref.: 5505 Asian Development Bank TA 6485-REG: Promoting Energy Efficiency in the Pacific - Contract No. COSO/90-492 Vanuatu Report Future energy projects require full-time management support with clear objectives and responsibilities. The pilot project’s experience shows that recruiting a suitable full-time local consultant would have resolved nearly half of the issues raised above. This implies an effective project set-up with enough resources to address the key issues that might come up during EE project management. The hotel sector will clearly need ongoing support and incentives to create a sustainable EE market. The legal framework could be strengthened by the requirement for mandatory energy audits to investigate relevant ECM options. The building code does not include EE requirements or performance norms for new hotels and/or for the refurbishment of exiting hotels. Energy services companies could be a useful market catalyst since minimal expertise is currently available for the identification, implementation and verification of ECMs. Capacity building for existing services and equipment providers could lead to the use of Energy Performance Contracts. Econoler International 26 Ref.: 5505 Asian Development Bank TA 6485-REG: Promoting Energy Efficiency in the Pacific - Contract No. COSO/90-492 Vanuatu Report 3 FUTURE EE PROGRAM DESIGN AND IMPLEMENTATION This section provides a summary of the estimated savings potential for possible ECMs that were identified in Vanuatu. At the first stage, a baseline was established from the available energy consumption data for each sector. The evaluation was built up using the results obtained from the pilot projects implemented in the five PEEP countries and adapted to the local context for each proposed ECM. A compilation was then made using country data and information gathered during the various missions undertaken by the PEEP consultancy team. Adjustments were based on the following factors: - Data availability and level of existing detail pertaining to the energy balance and energy consumption per sector Information availability for Vanuatu from previous EE experience Surveys performed in the residential sector Data gathered from supplier on technologies used, and their availability in the local Vanuatu market Meeting with equipment and service providers Discussions with stakeholders. The data gathered from different sectors enabled preliminary energy saving estimates to be made, noting that no detailed data on energy consumption and end-uses was available for Vanuatu. The proposals have been therefore been limited by the level of information available and the identified ECMs within the country context. The six (6) major ECMs proposed and presented in the Table 14 below show potential savings equal to 9.9% of total energy consumption (reference 2008). Annual savings are estimated at 5,400 MWh, representing savings of USD 2.1 million and emission reductions of 3,100 tons of CO2 per year. Econoler International 27 Ref.: 5505 Asian Development Bank TA 6485-REG: Promoting Energy Efficiency in the Pacific - Contract No. COSO/90-492 Vanuatu Report Table 15: ECM Proposal for Vanuatu, Savings and Investment Baseline Savings Savings Peak Annual 2011-2020 Savings Estimated Simple Inv./Saved Energy Potential Potential Load Emission CO Potential Investment Payback 2 kWh Use (Sector) (Country) Reduction Reductions reductions 8 MWh % % kW MWh USD M USD M Years TCO2 TCO2 USD/kWh Energy Efficiency in Selected Government 4,892 14.4 1.3% 139 705 0.28 0.93 3.3 395 3,180 0.164 Buildings Implementation of LED for Street 184 33.7 0.1% 31 62 0.04 0.65 15.0 35 279 1.448 Lighting CFL Program for 12,565 9.6 2.2% 684 1,209 0.22 0.08 0.2 677 6,093 0.008 Residential Sector Implementation of 10,762 19.8 3.9% 298 2,131 0.94 3.77 4.0 1,193 9,544 0.221 Hotel EE Projects Energy Labeling and 55,130 2.2 2.2% 112 1,226 0.58 0.54 0.9 687 5,200 0.059 MEPS Implementation of 2,275 5.0 0.2% 25 114 0.05 0.20 4.0 70 630 0.196 Pumping EE Projects Total 9.9% 1,290 5,400 2.1 6.2 2.9 3,100 24,900 The investment per saved kWh is obtained by dividing the total investment by the saved kWh during the 2011-2020 period considered as average life cycle for installed equipment for the proposed ECMs. The investment per kWh helps prioritize the ECM with the expected best return on investment. As shown in the above Table, the Compact Fluorescent Lamp (CFL) program for the residential sector is ranked best at only USD 0.008/kWh, followed by energy labeling and MEPS and then the implementation of EE in government buildings. Note that the investment cost for MEPS includes only the cost to government, and the cost to the public associated with the purchase of more efficient appliances has not been defined (see Section 8 Including Network Losses. Econoler International 28 Ref.: 5505 Asian Development Bank TA 6485-REG: Promoting Energy Efficiency in the Pacific - Contract No. COSO/90-492 Vanuatu Report 3.6). The potential peak load reduction is estimated at 1,290 kW, which represents about 12% of the average (2008) registered maximum peak load of 10,600 kW. Econoler International 29 Ref.: 5505 Asian Development Bank TA 6485-REG: Promoting Energy Efficiency in the Pacific - Contract No. COSO/90-492 Vanuatu Report 3.1 GENERAL ASSUMPTION AND PARAMETERS The tables below show all the general parameters used for calculations and estimates of ECM potentials. These parameters have been confirmed, verified and are the most accurate estimates available to date. The estimated energy balance has been extracted based on the UNELCO 2008 technical annual report. Figure 2: Energy Consumption per Sector Energy Consumption per sector Water Hotels pumping Residential 20% 3% 23% Street Lighting 0.5% Government Commercial Industry 9% 39% 5% Table 16: Energy Balance for 2008 Vanuatu Energy Balance Consumption % Number Hotels 10,761,700 19.5% 47 Commercial 21,684,300 39.3% 1,174 Government 4,899,800 8.9% 134 Industry 2,670,700 4.8% 57 Street Lighting 273,400 0.5% 107 Water pumping 2,274,900 4.1% 2 Residential 12,565,200 22.8% 10,628 Total 55,130,000 100% 12,149 Econoler International 30 Ref.: 5505 Asian Development Bank TA 6485-REG: Promoting Energy Efficiency in the Pacific - Contract No. COSO/90-492 Vanuatu Report Table 15: General Parameters Used for Vanuatu Parameter Unit Value Conversion VUV-->USD 0.01001 Diesel Consumption per kWh Liter/kWh 0.26 Incandescent Lamp Operating Hours Hours/day 5.5 UNELCO Diesel Cost VUV/liter 71.5 UNELCO CO2 Emissions kCO2/liter 2.2 CO2 Emissions kg/kWh 0.56 Street Lighting Hours/Year Hours/year 1,825 Average Domestic Electricity Tariff VUV/kWh 47.2 Average Street Lighting Electricity VUV/kWh 27.41 Tariff Average Hotel Electricity Tariff VUV/kWh 44.15 Average Building Electricity Tariff VUV/kWh 47.2 Average Commercial Electricity Tariff VUV/kWh 44.15 Network Losses Losses % 10% Cost/CFL VUV/Unit 350 3.2 ENERGY EFFICIENCY IN GOVERNMENT BUILDINGS The list of all government buildings obtained from the Ministry of Finance based on the billing database shows 149 customers for 2009. The list has been divided into the following 5 groups based on monthly energy consumption, with hospitals as a separate group: Hospitals Group 1: Buildings with a monthly energy consumption above 3,000 kWh Group 2: Buildings with a monthly energy consumption between 1,000 and 3,000 kWh Group 3: Buildings with a monthly energy consumption between 300 and 1,000 kWh Group 4: Buildings with a monthly energy consumption between 100 and 300 kWh. For each group, walk-through energy audits were undertaken to assess the type of equipment used, determine operational parameters and estimate the energy balance (energy consumption per end-use). After the preparation of the energy balance, energy savings were estimated based on potential energy conservation measures to be implemented, considering a maximum payback period of 5 years. From the sample taken for each group, extrapolations have been made within the group to estimate the energy saving potential. As energy demands in hospitals are generally very different from other buildings due to hospitals’ distinct energy demands (esp. 24/7 full fresh air AC required for operating theaters at central trauma/accident and emergency equipped hospitals), specific equipment and special operating conditions, estimates were made in a conservative way since no detailed investigation was able to be undertaken due to limited resources. Econoler International 31 Ref.: 5505 Asian Development Bank TA 6485-REG: Promoting Energy Efficiency in the Pacific - Contract No. COSO/90-492 Vanuatu Report Energy saving potentials have been calculated based on the average of each group and considering the most common end-user, namely lighting and cooling, targeting simple ECMs as follows: - HVAC optimization: for centralized systems, optimization of operating hours and parameters. Efficient lighting fixtures and lamps: CFLs, electronic ballasts and T5 fluorescent tubes Air compressor O&M: operation optimization and leak reduction Variable speed drives: for motors and central HVAC plant Fan system improvements: efficient fans and motors LCD monitors for computers and entertainment systems AC replacement: replacement with efficient AC (esp. high efficiency inverter units) based on operating hours and existing equipment condition O&M and energy management: optimization of operation parameters (temperature, operating hours, automatic switches and clocks, preventive maintenance, etc.). Nevertheless, other ECMs could be identified when in-depth energy audits are performed. The featured potentials should be considered only as preliminary estimates used to assess whether the sector represents a significant potential for energy efficiency. Only 108 of the largest energy use buildings were considered while remaining buildings have a monthly consumption less than 100 kWh, which is considered too low to be included in an initial EE project. However, all buildings should be included in an EE awareness campaign to be launched within the programs. Selected buildings from each group were visited in order to establish the preliminary energy balance and the savings potential was used as a reference for extrapolation to the entire group. The results show a promising annual savings potential of 705 MWh with an estimated investment of USD 0.925 million giving an average simple payback period of 3.3 years. The implementation of EE programs in government buildings will generate emission reductions of about 395 TCO2 annually. Details for each group are presented in Appendix E 1 showing estimation parameters and savings per end-user. Table 16: Savings Potential for Government Buildings Consumption Current Situation Savings Category kWh/Month Number kWh VUV kWh % VUV Hospitals Hospital 1 557,600 24,618,000 55,800 10.0% 2,463,600 Group 1 over 3,000 19 3,292,600 145,368,300 461,000 14.0% 20,353,200 Group 2 1,000 Econoler International 32 Ref.: 5505 Asian Development Bank TA 6485-REG: Promoting Energy Efficiency in the Pacific - Contract No. COSO/90-492 Vanuatu Report Table 17: Investment and Emission Reductions for EE in Government Buildings % 13.1 Average Savings Potential kWh 640,900 % 14.4% Potential Savings9 kWh 704,990 USD 283,200 Total Estimated Investment USD 925,300 Simple Payback Period Years 3.3 Annual Emission Reductions (TCO2) TCO2 395 Diesel Savings (l) Liters 182,900 The proposed ECMs focus on all major energy using systems found in each group. Table 18 below presents the main actions that could be implemented to reduce energy consumption. Table 18: Major Actions to Improve Energy Efficiency in Government Buildings Average Savings Energy Conservation Measures for Selected Buildings Potential HVAC optimization 5%-15% Air compressor O&M 10%-20% Variable-speed drive 5%-15% Efficient lighting fixtures and lamps 10%-20% Fan system improvements 5%-10% LCD monitors 10%-20% AC replacement 15%-20% O&M and energy management 5% The estimates are based on energy consumption data and some selected samples for potential energy savings in each category. However, an in-depth analysis needs to be conducted with larger sample sizes taking into account the actual load per end-use with the monthly energy bill distribution to more accurately establish real EE potentials. The cumulative savings relative to the government building program for the 2011-2020 period is estimated at 5.64 GWh, resulting in CO2 emission reductions of about 3,180 TCO2. Program implementation is expected to be completed within a maximum of 5 years with an annual progress completion of 20% during the implementation period. Table 19: Cumulative Government Buildings Energy Savings for the 2011-2020 Period Savings Potential 5,639,920 kWh 2,265,600 USD Total Estimated Investment 925,300 USD Emission Reductions 3,180 TCO2 Investment/Saved kWh 0.164 USD/kWh 9 Including UNELCO Losses Econoler International 33 Ref.: 5505 Asian Development Bank TA 6485-REG: Promoting Energy Efficiency in the Pacific - Contract No. COSO/90-492 Vanuatu Report 3.3 STREET LIGHTING The street lighting network in Vanuatu is composed of 984 lamps as per the data provided from UNELCO and presented in Table 21 below. The street lighting network consists of different types of lamps, primarily High-Pressure Sodium (HPS) and Mercury Vapor (MV), with an average power ranging from 80 W to 400 W per fitting. The total street lighting installed power is estimated at 101 kW with an annual energy consumption of about 183.8 MWh. Most street lighting network lamps are inefficient, old, decaying, costly to maintain and some need to be replaced as they are no longer functioning. Since municipalities are not paying their electricity bills regularly, street lighting operating hours are reduced and maintained to about 5 hours a day. At around midnight, UNELCO turns off the street lighting network and keeps only a few lamps on in the downtown area. Table 20: Street Lighting Network in Vanuatu Vanuatu Number of Current Total Power Lamps Power W kW 23 400 W 10 75 250 W 21 862 125 W 67 24 80 W 2 The replacement of Mercury Vapor lamps with HPS is the obvious first choice to increase street lighting efficiency. However, many parameters need to be taken into consideration in technology selection, mainly regarding the type of lighting required, the condition of the existing fixtures and the distribution circuit of the street lighting network. Unfortunately, most existing fixtures present one or more of the following problems: Old fixtures in bad condition Rusted due to saline weather Lack of internal reflector Opaque lenses Lack of metering points Very low lighting level. Light Emitting Diode (LED) technology seems to be the best solution to address most of these problems. It can increase the lighting level while reducing energy costs since the existing fixtures already have a low lighting level. The rationale behind LED usage in street lighting is as follows: - LED lamps give average energy savings of 20% to 50% over HPS and mercury vapor lamps respectively. LED construction makes solid-state street lamps safe for landfills. They are mercury-free, without harm to the environment. The longevity of LED lamps is 60,000 or more hours and represents at least twice the life of HPS lamps. The longevity of LED lamps pushes back replacement cycles and, consequently, reduces the burden on the waste stream. Econoler International 34 Ref.: 5505 Asian Development Bank TA 6485-REG: Promoting Energy Efficiency in the Pacific - Contract No. COSO/90-492 Vanuatu Report LED street lights reduce pollution and carbon footprint via energy savings that lower carbon emissions not only from reduced power plant fuel consumption but also from reduced fuel usage by maintenance dispatched for bulb replacement. The annual maintenance cost for LED represents almost a fifth of the maintenance costs for regular mercury or HPS lamps. Even though the acquisition cost of LED fixtures is high comparing to conventional HPS fixtures (about 5 times more expensive) their use is generally still attractive. With operation and maintenance cost savings included, the investment of LED fixtures is generally paid back within less than 4 years, with the LED fixtures having an estimated life time of 15 or more years. The new LED lamps light distribution is improved, with greatly improved color rendering and a warm-white color temperature. The proposed lamp replacement strategy is presented in the following Table. Table 21: Equivalent LED for HPS Lamps EQUIVALENT HPS LED WATTAGE 80 W 30 W 100 W 50 W 150 W 60 W 200 W 80 W 250 W 100 W 400 W 160 W Introducing LED lamps into the Vanuatu street lighting network would help reduce energy consumption by 31% and maintenance costs by 51%. However the street lighting operation hours in Vanuatu are maintained at an unusually low level. The average hours of use of street lights for other countries is around 4,200 hours a year, but in the case of Vanuatu it is only 1,825 hours per year due to the limited ability or willingness of the relevant municipality to pay. Table 22: Energy and Maintenance Costs for the Existing Street Lighting Network Old System Number Old Fixture Total Total Total Total O&M of Energy Power Maintenance Energy Lamps Consumption Cost Cost kWh/Year kW VUV VUV VUV/Year 984 183,800 101 3,493,200 5,037,200 8,530,400 The total required investment is estimated at USD 0.65 million for annual savings of USD 0.04 million and represents 15 years as a simple payback period with the current operation schedule. However, if operating hours are maintained at more normal level the payback period would be around 10 years. The low return on investment even with more common operating hours per year is mainly due to the low electricity tariff for street lighting in Vanuatu, which is around 50% of the average kWh cost. Econoler International 35 Ref.: 5505 Asian Development Bank TA 6485-REG: Promoting Energy Efficiency in the Pacific - Contract No. COSO/90-492 Vanuatu Report The implementation of the LED street lighting program would generate emission reductions of 35 TCO2 annually. Table 23: Investment and Emission Reductions for LED Implementation in Vanuatu TOTAL INVESTMENT USD M 0.65 TOTAL SAVINGS USD M 0.04 TOTAL SAVINGS (kWh) kWh 56,300 TOTAL Energy Savings (%) % 31 TOTAL Cost Savings (%) % 51 % 34 UNELCO Savings (kWh) kWh 61,900 UNELCO Savings (l) Liters 16,100 UNELCO Savings (Fuel Cost) USD 11,500 Simple Payback (Years) Years 15.0 Annual Emission Reduction TCO2 35 Street Lighting Load (kW) kW 101 Load Reduction (kW) kW 31 The cumulative savings relative to the LED street lighting program for the 2011-2020 period is estimated at 450.4 MWh, resulting in CO2 emission reductions of about 279 TCO2. Program implementation is expected to be completed within a maximum of 5 years with an annual progress completion of 20% during the implementation period. Table 24: Cumulative Savings for the 2011-2020 Period Savings Potential kWh 450,400 USD 347,300 Total Estimated Investment USD 652,000 Emission Reductions TCO2 279 Investment/kWh USD/kWh 1.448 3.4 ENERGY EFFICIENCY IN THE HOTEL SECTOR The hotel sector in Vanuatu is quite small with only 47 hotels, but it boasts a relatively high consumption level of 10.76 GWh, representing 20% of Vanuatu’s electricity consumption. As shown in the Table below, the total utility cost saving potential for the Vanuatu pilot hotel EE project was 18%, where electrical savings represent about 16% (CFLs, room switches, timers) and water savings around 26% of water utility bills (low shower head flow, reduced hot water, optimized garden watering systems, reduced water pumping costs). The Vanuatu pilot project also achieved LPG reductions of 21% with the installation of Solar Water Heaters (SWHs). Econoler International 36 Ref.: 5505 Asian Development Bank TA 6485-REG: Promoting Energy Efficiency in the Pacific - Contract No. COSO/90-492 Vanuatu Report Table 25: Savings Potential in the Vanuatu Pilot Hotel EE Project Total Savings Energy (%) Electrical Energy Savings 16 Water Energy Savings 26 LPG Energy Savings 21 The EE savings come from the following measures: - Efficient lighting, mainly CFLs, for interior and exterior lighting SWHs Reduced flow for shower heads, sinks and toilet flush Key tag switches for room electrical system Energy efficient air conditioning units Cooling setting point adjustments Pool pump operation optimization High-efficiency pumps and motors Installation of timers for equipment operation optimization Air curtain installation. With a maximum simple payback period of 4 years, and potential savings of 18%, the total investment for the 47 hotels in Vanuatu is estimated at USD 3.8 million. Program implementation will generate annual electricity savings of 2.13 GWh and emission reductions of 1,193 TCO2. Table 26: Investment and Emission Reductions for the Hotel Sector in Vanuatu Hotel Consumption kWh 10,761,700 Sector Estimated Savings % 18% Energy Savings/year kWh 1,937,100 Hotel Cost Savings/year USD 941,700 % 19.8 kWh 10 2,130,800 UNELCO Savings/year Liters 552,800 USD 395,400 Annual Emission Reductions TCO2 1,193 Investment USD M 3.8 Payback Period Years 4 The cumulative savings relative to the EE program in the hotel sector for the 2011-2020 period is estimated at 17.05 GWh, resulting in CO2 emission reductions of about 9,544 TCO2. Program implementation is expected to be completed within a maximum of 5 years with an annual progress completion of 20% during the implementation period. 10 Including Network Losses. Econoler International 37 Ref.: 5505 Asian Development Bank TA 6485-REG: Promoting Energy Efficiency in the Pacific - Contract No. COSO/90-492 Vanuatu Report Table 27: Cumulative Savings for the 2011-2020 Period Savings Potential 17,046,400 kWh USD 7,533,600 Total Estimated Investment USD 3,766,800 Emission Reduction Period 9,544 TCO2 Investment/kWh 0.221 USD/kWh 3.5 ENERGY EFFICIENCY IN THE RESIDENTIAL SECTOR – CFLS As statistical data was lacking on lighting installed loads and usage in Vanuatu households, a random survey of 50 households in Port Vila was undertaken to assess lighting usage. The results were extrapolated to give a preliminary estimate for Vanuatu as a whole. Table 28: Lighting Distribution per Type of Lighting Type of Lamp Incandescent CFL Fluorescent Other Total/Day/House kWh 1.32 0.15 0.22 0.02 Installed/House W 93 7 38 0 Lamps/House Units 2.2 1.2 3.6 0.0 Lighting Weight % 31% 17% 51% 0% The percentage of incandescent lamps in Port Vila is 31%, compared with 17% for the much more energy efficiency CFLs. This indicates a low awareness level of energy efficiency concerns for lighting. The installed power of incandescent lamps in Vanuatu is estimated at 990 kW. According to the survey, the average 2.2 incandescent lamps installed per household are used approximately 4.4 hours per day, representing a total number of 23,400 units across Vanuatu.. For a complete change of incandescent lamps to CFL lamps with their energy savings potential of 75% (the existing lamps would on average be replaced by 13 W CFLs), annual savings would reach 1.2 GWh with a peak reduction of about 684 kW. Average annual savings per household are estimated at 103 kWh, equal to VUV 4.882. Considering an average cost of VUV 350 per CFL, the payback period is just over 2 months. Assuming a subsidy program of 50% for the residential sector to encourage CFL use, an investment of USD 82,000 would be needed to generate the targeted annual emission reduction of 677 TCO2. Econoler International 38 Ref.: 5505 Asian Development Bank TA 6485-REG: Promoting Energy Efficiency in the Pacific - Contract No. COSO/90-492 Vanuatu Report Table 29: Investment and Emission Reductions for CFLs in the Residential Sector Incandescent Total/Day/House kWh 1.32 Installed/House W 93 Lamps/House Units 2.2 Lighting Weight % 31% Total/Year/House kWh 482 Coincidence Factor % 100% Number of Houses Units 10,628 Peak Load Reduction kW 684 Savings kWh 1,099,200 % 8.7 Savings11 kWh 1,209,100 % 9.6 Country Fuel Reduction/year Liters 313,700 Fuel Saving Cost/year USD 224,400 Annual Emission Reductions TCO2 677 Savings/House W 64 kWh/Year 103 Payback period Years 0.2 Investment (50% Subsidy) USD 81,900 The cumulative savings relative to the implementation of the CFL program in the residential sector for the 2011-2020 period is estimated at 10.9 GWh, resulting in CO2 emission reductions of about 6,093 TCO2. Program implementation is expected to be completed within a maximum of 3 years with an annual progress completion of 33% during the implementation period. Table 30: Cumulative Savings for the 2011-2020 Period Savings Potential 10,881,900 kWh 2,019,600 USD Total Estimated Investment 81,900 USD Emission Reductions 6,093 TCO2 Investment/kWh 0.008 USD/kWh 3.6 ENERGY LABELING AND MEPS Unfortunately, no detailed information on residential and commercial appliances based on actual energy use characteristics and actual numbers by model or capacity was available from the Vanuatu statistics department, which constituted a major barrier to specific energy efficiency 11 Including Network Losses Econoler International 39 Ref.: 5505 Asian Development Bank TA 6485-REG: Promoting Energy Efficiency in the Pacific - Contract No. COSO/90-492 Vanuatu Report potentials assessments and the development of a specific appliance EE program design. No government entity held accurate and up-to-date data on the country’s energy balance and energy consumption per end user or per sector. However, the PEEP consultants were able to ascertain some basic indicative data with local consultants and stakeholders and from this the PEEP consultants were able to develop indicative energy savings potentials estimates for energy labeling and MEPS application in the residential sector for refrigerators and freezers.. Table 33 shows the penetration rate for selected appliances in the 10,628 occupied dwellings of Vanuatu. Table 31: Vanuatu Estimated Appliance Penetration Data12 Residential Appliances – Penetration Rate Refrigerators 50% Freezers 5% Air Conditioners - Water Heaters - Clothes Washers - Occupied Dwellings 10,628 Potential annual energy savings for refrigerating appliances were estimated based on Australian figures for refrigerators and freezers13 considering the 2005 annual consumption for refrigerator and freezers in Australia as a basis for the current situation in Vanuatu. The assumption is considered to be a reasonable initial assumption as most of the appliances in Vanuatu are imported from Australia and New Zealand, and importers often bring in the cheapest available appliances in a particular size and features category, and these lowest price models usually also have the low energy efficiency ranking (i.e. a lower number of Australia-New Zealand energy performance stars). The annual average energy consumption of existing old refrigerators was therefore assumed to be about 640 kWh and 575 kWh/year for freezers. The refrigerators currently available on the Australian and New Zealand markets have an annual energy consumption ranging between 338 kWh and 537 kWh. Assuming that middle efficiency refrigerators with an average annual consumption of 450 kWh/year would replace existing refrigerators, an energy labeling (and back-up potential MEPS program) could generate energy savings of around 190 kWh/year per refrigerator. The freezers (upright and chest types) currently available on the Australian and New Zealand markets have an energy consumption ranging between 177 kWh and 825 kWh per year. Assuming that middle efficiency freezers with an average annual energy consumption of 377 kWh/year would replace average existing freezers, an energy labeling (and back-up potential MEPS program) could generate energy savings generated per freezer of around 198 kWh/year. 12 Estimated with local consultant 13 Costs and Benefits of proposed revisions to the method of test and energy labeling algorithms for household refrigerators and freezers, prepared by Energy Efficient Strategies Pty Ltd for the Australian Greenhouse Office, November 2007 Econoler International 40 Ref.: 5505 Asian Development Bank TA 6485-REG: Promoting Energy Efficiency in the Pacific - Contract No. COSO/90-492 Vanuatu Report Based on the above, annual emission reductions from energy labeling and MEPS application for refrigerators and freezers are estimated at 687 TCO2 or 1.23 GWh, taking into consideration the current UNELCO kWh/litre of diesel and GHG emission factor and including network losses. Table 32: Investment and Savings for Energy Labeling and MEPS Country Consumption kWh 55,130,000 Annual Estimated Savings % 2.0 kWh 1,114,880 Annual Energy Savings14 % 2.2 kWh 1,226,400 Annual Cost Savings USD M 0.6 Annual Emission Reductions TCO2 687 Investment USD M 0.5 The estimated investment includes only the cost to government of establishing a validation and control unit, along with international support for a regional (across the five PEEP PDMCs) energy labeling and MEPS scheme’s development and implementation. The establishment of a new energy performance testing laboratory does not seem necessary, since Vanuatu appliance market is very small and most equipment is imported from New Zealand and Australia and other countries which already have energy performance labeling and MEPS schemes in place. The main costs to the public associated with the purchase of more efficient equipment and appliances than would be the case without energy labelling and MEPS has not been defined owing to insufficient data being available during Phase 1. It is recommended that detailed studies of the equipment and appliance markets in each PDMC be undertaken during Phase 2 to estimate the likely costs of MEPS and labelling requirements on imported appliances. The only study to date, conducted in Fiji, estimates these costs to be between 10% and 25% of the value of the benefits.15 Total savings over a 10-year period are presented in Table 34. Program implementation is expected to take 5 years. The savings are considered constant throughout the period since there is no available data on the annual penetration and growth rate of refrigerators, freezers and ACs in the residential sector. Table 33: Projected Energy Labeling and MEPS Savings for the 2011-2020 Period kWh 9,197,700 Potential Savings USD M 4.3 Total Estimated Investment USD M 0.5 Emission Reductions TCO2 5,200 Investment/kWh USD/kWh 0.059 14 Including Network Losses. 15 The Costs and Benefits of Energy Labelling and Minimum Energy Performance Standards for Refrigerators and Freezers in Fiji, George Wilkenfeld and Associates for the Australian Greenhouse Office, February 2006. Econoler International 41 Ref.: 5505 Asian Development Bank TA 6485-REG: Promoting Energy Efficiency in the Pacific - Contract No. COSO/90-492 Vanuatu Report 3.7 POWER FACTOR CORRECTION UNELCO is already monitoring PF and applying penalties for customers who do not complying with minimum PF requirements. 3.8 ENERGY EFFICIENCY IN THE INDUSTRIAL SECTOR Industrial energy consumption accounts for approximately 4.8% of total energy consumption in Vanuatu with about 57 clients. No data is available to assess the potential of the industrial sector and its low consumption level ranks it as a low priority for EE program interventions. 3.9 WATER DISTRIBUTION NETWORK Very little information is available about water pumping stations in Vanuatu. The annual energy consumption for water pumping is about 2.27 GWh, which represents 4.1% of the total consumption in Vanuatu. Based on EE projects in the water pumping stations, 5% savings could be achieved by reducing leaks, installing high efficiency motors, verifying curve pumps and optimizing operating hours according to the water profile. Table 34: Savings and Investment for Water Pumping Stations Pumping Station Consumption/year kWh 2,274,900 % 4.5 Sector Estimated Savings/year kWh 102,370 % 5 Energy Savings/year16 kWh 113,700 Pumping Cost Savings/year USD 50,200 UNELCO Diesel Saving/years Liters 32,400 USD 23,200 Annual Emission Reductions/year TCO2 70 Investment USD M 0.20 Targeted Payback Period Years 4 The cumulative savings relative to the improvement of the pumping systems for the 2011-2020 period is estimated at 1.02 GWh, resulting in CO2 emission reductions of about 630 TCO2. Program implementation is expected to be completed within a maximum of 3 years with an annual progress completion of 33% during the implementation period. 16 Including Network Losses. Econoler International 42 Ref.: 5505 Asian Development Bank TA 6485-REG: Promoting Energy Efficiency in the Pacific - Contract No. COSO/90-492 Vanuatu Report Table 35: Projected Savings for the 2011-2020 Period Potential Savings kWh 1,023,000 USD 452,000 Total Estimated Investment USD M 0.20 Emission Reductions TCO2 630 Investment/kWh USD/kWh 0.196 Econoler International 43 Ref.: 5505 Asian Development Bank TA 6485-REG: Promoting Energy Efficiency in the Pacific - Contract No. COSO/90-492 Vanuatu Report 4 OTHER RECOMMENDATIONS: Development of an Energy Balance and Energy Matrix One of the barriers to EE program development in Vanuatu (as it is generally throughout the Pacific) is the unavailability of information on energy consumption by sector, sub-sector and appliance type. Without an appropriate set of data on energy consumption and demand profiles it was not possible to accurately develop an energy efficiency program or define appropriate targets and objectives. An energy balance is an accounting system that describes the flow of energy through an economy (national, by island, by district, etc) during a given period, usually a calendar year. This combination of information is constructed from the most complete available sources of official energy statistics on imported fossil fuels, electricity production, conversion losses, consumption and energy end-use (e.g. lighting, refrigerating appliances, AC). The main objective of an energy balance is to provide information for the planning of investments in different sectors of the energy system. It should also present indications of where to direct investments in research and development for more efficient energy use. The energy balance consists of a matrix, also called an energy matrix, in which all forms of energy, their conversions, losses and uses in a given period are registered in the same unit of measurement. An energy balance can be presented in various forms, each with its own conventions and purposes. The most common form includes columns, with quantities of energy sources or carriers used, and rows with data on conversions and uses. An energy balance can also be expressed in terms of useful energy, aggregating data regarding the efficiency of final energy use. In order to calculate this efficiency, it is necessary to distinguish two steps in the process of final energy use. The first step occurs when energy is transformed into a final energy carrier (e.g. electricity) and the second step refers to the way in which this energy carrier is exploited to produce goods or provide services. For example, LPG or diesel can be used to produce steam in a boiler with an efficiency of say 60%. The steam produced will then be distributed to other pieces of equipment where its energy will be used. This second step can have a new efficiency related to the way in which the steam system is designed and operated. Often it is possible to increase the efficiency of this phase without major investments. An energy balance in terms of useful energy requires detailed data regarding end-use technologies and how they are utilized. Load Curve analysis: Electricity demand is not uniform throughout the day or for an entire year. Several electricity end-uses are related to the time of day, such as lighting and cooking. The hours of the day during which the highest demand occurs is known as the peak period. During the year, there is also a particular day when electricity demand is at its yearly peak. This yearly peak is typically both climate- and time-related. Econoler International 44 Ref.: 5505 Asian Development Bank TA 6485-REG: Promoting Energy Efficiency in the Pacific - Contract No. COSO/90-492 Vanuatu Report Some regions face their peak demand during the hottest days, when air conditioning is mostly responsible for the increased electricity demand. In other areas, residential lighting and other evening uses of electricity may be the main drivers of peak demand. Projections for electrical energy (kWh) are typically made on an annual basis but it is also important to project the future load profile (daily or annually) to reflect the daily and seasonal fluctuations in demand. Peak demand is of particular interest to utilities because their capital requirements for building new generation capacity are normally driven by peak demand considerations. One aspect of Demand- Side Management (DSM) involves ways to change the shape of the load curve. Typically, utilities will strive to avoid the concentration of demand during peak hours of the day and will try to spread this demand throughout the day (or night). Data Requirements of Energy End-Use Models: Energy consumption analysis requires a breakdown by sector, activity and end-use. The estimation of end-use breakdowns is important to determine which end-users are most relevant. Once these are known, their magnitude is quantified more accurately to evaluate the opportunities for energy efficiency improvements. The table below illustrates one such possible breakdown. Econoler International 45 Ref.: 5505 Asian Development Bank TA 6485-REG: Promoting Energy Efficiency in the Pacific - Contract No. COSO/90-492 Vanuatu Report Table 36: Energy End-Use Possible Breakdown Consumer Class End-use Technologies/Measures Incandescent lamps Compact fluorescent lamps Fluorescent tubes (with associated electronic or electromagnetic ballasts) Lighting Fixtures Improved lighting design Day lighting Improved lighting controls (e.g. daylight dimming) Ventilation, fans Cooling Air conditioners Natural ventilation Efficient refrigeration (e.g. cool stores, Residential Sector Refrigeration transport, retail food storage and display cabinets) Solar Water heating LPG Electricity Incandescent lamps Compact fluorescent lamps Low voltage halogen lamps and fixtures Fluorescent + electromagnetic ballasts Lighting Fluorescent + electronic ballasts Reflector fixtures Improved lighting design Day lighting Occupancy sensors Ventilation, fans Air conditioners Cooling Natural ventilation Passive cooling Refrigeration Efficient refrigeration Commercial Solar Services Sector Water heating Heat pump LPG Conventional electric motors Energy efficient electric motors Power Variable Speed Drives + motors Better sizing of motors and tasks Incandescent lamps Fluorescent + electromagnetic ballasts Fluorescent + electronic ballasts Lighting Industrial Sector Mercury vapor, HPS etc lamps Reflective fixtures Improved lighting design and day lighting Estimates of end-use equipment saturation and energy use can be made on the basis of aggregate indicators of major end-use categories, for example, information on appliance sales. Econoler International 46 Ref.: 5505 Asian Development Bank TA 6485-REG: Promoting Energy Efficiency in the Pacific - Contract No. COSO/90-492 Vanuatu Report Where comprehensive information of this type is not available, one might try to use existing information from other countries with similar socio-economic development characteristics to make estimates of end-use saturation and energy consumption. Alternatively, a more reliable analysis can be performed through a bottom-up approach, which includes extensive questionnaire-based surveys, billing data analysis, energy audits and measurements. End-use projection models are very data intensive. Usually, energy end use models start with a base year for which detailed breakdown of the consumer classes and main end-uses are developed. Econoler International 47 Ref.: 5505 Asian Development Bank TA 6485-REG: Promoting Energy Efficiency in the Pacific - Contract No. COSO/90-492 Vanuatu Report APPENDIX E.1: VANUATU - ESTIMATED SAVINGS PER SECTOR IN GOVERNMENT BUILDINGS, REFERENCE TABLES Hospitals % Unit Energy Consumption 557,600 11% kWh Number of Buildings 1 Buildings Ventilation/Fan/Cooling Consumption 111,500 20% kWh Lighting Consumption 195,200 35% kWh Other Load Consumption 250,900 45% kWh Estimated Investment Average Savings 55,800 10% kWh VUV USD PBP Lighting 19,500 10% kWh 1,458,500 14,600 Estimated Cooling 11,200 10% kWh 2,177,800 21,800 2.9 Savings Other 25,100 10% kWh 3,436,600 34,400 Total 2,463,570 VUV 7,072,900 70,800 Group 1 3,000 kW/Month and More % Unit Energy Consumption 3,292,600 67% kWh Number of Buildings 19 Buildings Ventilation/Fan/Cooling Consumption 1,317,000 40% kWh Lighting Consumption 658,500 20% kWh Computer Consumption 987,800 30% kWh Other Load Estimated Investment Consumption 329,300 10% kWh Average Savings 461,000 14% kWh VUV USD PBP Lighting 131,700 20% kWh 9,870,100 98,800 Estimated Cooling 197,600 15% kWh 41,458,500 415,000 3.4 Savings Other 131,700 10% kWh 18,032,000 180,500 Total 20,353,150 VUV 69,360,600 694,300 Econoler International 48 Ref.: 5505 Asian Development Bank TA 6485-REG: Promoting Energy Efficiency in the Pacific - Contract No. COSO/90-492 Vanuatu Report Group 2 Between 1,000 and 3,000 kW/Month % Unit Energy Consumption 741,149 15% kWh Number of Buildings 35 Buildings Ventilation/Fan/Cooling Consumption 185,300 25% kWh Lighting Consumption 222,300 30% kWh Computer Consumption 222,300 30% kWh Other Load Estimated Investment Consumption 111,200 15% kWh Average Savings 89,000 12% kWh VUV USD PBP Lighting 44,500 20% kWh 3,336,700 33,400 Estimated Cooling 27,800 15% kWh 5,834,200 58,400 2.9 Savings Other 16,700 5% kWh 2,287,700 22,900 Total 3,929,350 VUV 11,458,500 114,700 Between 300 and 1,000 Group 3 kW/Month % Unit Energy Consumption 264,736 5% kWh Number of Buildings 37 Buildings Ventilation/Fan/Cooling Consumption 79,400 30% kWh Lighting Consumption 53,900 20% kWh Computer Consumption 79,400 30% kWh Other Load Estimated Investment Consumption 52,000 20% kWh Average Savings 31,800 12% kWh VUV USD PBP Lighting 10,800 20% kWh 809,200 8,100 Estimated Cooling 7,900 10% kWh 1,658,300 16,600 3.0 Savings Other 13,100 10% kWh 1,798,200 18,000 Total 1,403,970 VUV 4,265,700 42,700 Econoler International 49 Ref.: 5505 Asian Development Bank TA 6485-REG: Promoting Energy Efficiency in the Pacific - Contract No. COSO/90-492 Vanuatu Report Between 100 and 300 Group 4 kW/Month % Unit Energy Consumption 36,000 1% kWh Number of Buildings 16 Buildings Ventilation/Fan/Cooling Consumption 5,400 15% kWh Lighting Consumption 14,400 40% kWh Computer Consumption 7,200 20% kWh Other Load Estimated Investment Consumption 9,000 25% kWh Average Savings 3,300 9% kWh VUV USD PBP Lighting 2,200 15% kWh 169800 1700 Estimated Cooling 300 5% kWh 2697 27 1.9 Savings Other 800 5% kWh 109900 1100 Total 145,695 VUV 279700 2800 Econoler International 50 Ref.: 5505 Asian Development Bank TA 6485-REG: Promoting Energy Efficiency in the Pacific - Contract No. COSO/90-492 Vanuatu Report Econoler160, rue International Saint-Paul, Bureau 200, Québec (Québec), Canada G1K 3W1 Tel.: + 1 (418) 692-2592 Fax: +1 (418) 692-489951 Ref.: 5505 www.econoler.com