The Study on Rural Electrification Implementation Plan by Renewable Energy in the Republic of Bolivia Final Report (Main Report) CHAPTER 1 INTRODUCTION 1.1 Background of the Study The overall electrification rate of Bolivia was 45.8% in 1997. The rate of rural electrification was low at of 13.7%, which is at the lowest level even among developing countries. Facing this problem, the Vice Ministry of Energy and Hydrocarbons (VMEH), a national government organization responsible for establishing energy policy and its strategy of Bolivia, prepared a national program of electrification (PRONER) in 1998 and launched the implementation for facilitating rural electrification. The PRONER in their first phase envisages to electrify an additional 110,000 households by the year 2002 through the investment of $103 million and plans to increase the rate of rural electrification up to 28%. In the plan, use of renewable energy sources is also recommended, which include solar energy, micro-hydro power and wind power. It was under this circumstance that the Government of Bolivia officially requested technical assistance to the Japanese Government for conducting the study on rural electrification implementation plan by renewable energy. In response to the request, the Japanese Government dispatched a study team for project formulation in October 1998, in which the needs for the development study was confirmed. In succession, a preliminary survey team visited Bolivia for discussing details of the study in January 1999 and agreed on the scope of the work for the study with the Government of Bolivia. As the target study area, La Paz and Oruro Departments were selected in the discussing since both departments had a high potentiality for renewable energies including solar energy, micro-hydro power and wind power, being located in the poorest rural areas in Bolivia. 1.2 Objectives of the Study Objectives of the study are to formulate the Rural Electrification Implementation Plan by Renewable Energy in La Paz and Oruro. The plan to be formulated covers the period of 2002-2011 and aims to promote the rural electrification keeping the balance between the power generation by renewable energy and extension of the grid line. In the study, I - 1 The Study on Rural Electrification Implementation Plan by Renewable Energy in the Republic of Bolivia Final Report (Main Report) conditions for realizing this plan are to be clarified as well as the proposed implementing system. Transfer of technology to the counterpart staff of Bolivia is also another important objective of the study, which includes technology of renewable energy, their operation and management and planning technology. The technology transfer is expected to promote exploitation of rural electrification by renewable energy in Bolivia after completion of the JICA study. 1.3 Necessity and Importance of Rural Electrification and Target Study Area Objectives of rural electrification are not only to supply local people with electricity but also to play an important role in implementing an integrated rural development to tackle poverty reduction in rural area. Promotion of rural electrification should contribute to improving basic human needs such as jobs, food, health services, education, housing, clean water and sanitation both in quality and in quantity. For the selection of the target study area, La Paz and Oruro department, the following characteristics were taken into account. • Both departments have a high potentiality for renewable energies including solar energy, micro-hydro power and wind power. • Most of unelectrified area in both departments are located in one of the poorest areas called ‘Alti-plano’, the mountains and the Amazon jungle area. • Accessibility from La Paz city, capital of Bolivia 1.4 Study Organization, Survey and Study Conducted 1.4.1 Study Organization The study was entrusted to KRI International Corp. in association with Nippon Koei Co., Ltd. in July 1999 and the study team (JICA Study Team) consisting of six experts was formulated for the field survey and study. The member list of the study team is presented in Attachment 1. I - 2 The Study on Rural Electrification Implementation Plan by Renewable Energy in the Republic of Bolivia Final Report (Main Report) For the efficient implementation of the study, a Coordinating Group consisting of representatives of VMEH and, La Paz and Oruro prefectures was organized in Bolivia. In addition, a Working Group consisting of counterpart personnel from the related organizations was also formulated for conducting the study jointly and for effective technology transfer. Member lists of the Coordinating Group and the Working Group are shown in Attachment 1. 1.4.2 Field Survey and Study Conducted (1) First Field Survey The JICA Study Team commenced the first field survey from August 7, 1999 and continued the survey work up to September 20, 1999. Presentation of Inception Report and its explanation was made to VMEH and other agencies related to the study. Main items of the first field survey related to renewable energy development are: 1) PV System • selection of PV pilot project sites • socio-economic survey in the pilot project sites 2) Micro-hydro Power • discharge observation and installation of staff gauges 3) Wind Power • site selection for wind monitoring system (2) Second Field Survey The second field survey was conducted during the period of January 5 to February 12, 2000. In this survey, the first seminar was held in La Paz inviting representatives from VMEH, La Paz and Oruro prefectures, and other public and private agencies related to the study. Main aspects of the second field survey on renewable energy development were: 1) PV System • installation of PV systems in La Paz and Oruro I - 3 The Study on Rural Electrification Implementation Plan by Renewable Energy in the Republic of Bolivia Final Report (Main Report) • guidance for operation and maintenance • formulation of organization for operation and maintenance 2) Micro-hydro Power • observation of water level and discharge 3) Wind Power • installation of 10 wind monitoring systems • monitoring and data collection After the second field survey, the Progress Report(1) was prepared in Tokyo summarizing the progress of the survey and study so far conducted. (3) Third Field Survey The third field survey started from May 15, 2000 and continued up to July 14, 2000. Presentation of the Progress Report(1) was made to the VMEH and La Paz and Oruro prefectures in this survey period. Beside this, the second seminar was held in Oruro inviting representatives from VMEH, La Paz and Oruro prefectures, and other related public and private organizations. Main items of the third field survey related to renewable energy were: 1) PV System • review of operation and maintenance system • monitoring PV systems and PV users 2) Micro-hydro Power • field investigation on candidate sites • selection of priority sites (2) for pre-feasibility study 3) Wind Power • replacement of SIM cards • monitoring and collection of wind data During the third field survey, early implementation of topographic survey on the proposed micro-hydro power sites was suggested by VMEH. A JICA expert was I - 4 The Study on Rural Electrification Implementation Plan by Renewable Energy in the Republic of Bolivia Final Report (Main Report) dispatched to the proposed sites in September 2000 for supervising the subcontracted topographic survey. After the third field survey, Progress Report (2) was prepared compiling the data and information additionally collected in Tokyo, which was brought to Bolivia in the fourth field survey for presentation. (4) Fourth Field Survey The fourth field survey commenced from January 5, 2001 and continued until February 15, 2001. Main items of the fourth field survey related to renewable energy were: 1) PV System • continuous monitoring of pilot project 2) Micro-hydro Power • review of topographic survey result • engineering survey on the proposed 2 sites 3) Wind Power • continuous monitoring of wind monitoring systems • selection of priority sites (3 each in La Paz and Oruro) All the results of the fourth field survey and the study as well as the results of the previous studies were compiled into the Interim Report in Tokyo. (5) Fifth Field Survey The fifth field survey started from May 10, 2001 and continued up to June 8, 2001. Presentation of the Interim Report was made to VMEH and La Paz and Oruro prefectures at the initial part of the survey period. Main items of the fifth field survey related to renewable energy were: 1) PV Systems • monitoring and evaluation of PV pilot project • preparation for equipment transfer and management of pilot project I - 5 The Study on Rural Electrification Implementation Plan by Renewable Energy in the Republic of Bolivia Final Report (Main Report) 2) Micro-hydro Power • selection of priority projects • additional survey and data collection for the selected 2 projects • IEE on the proposed 2 projects 3) Wind • selection of priority projects • replacement of wind monitoring systems • IEE on the proposed 3 projects Incorporating all the results of the previous field surveys and study, Draft Final Report was prepared in Tokyo to be brought to Bolivia for explanation and discussion. (6) Sixth Field Survey The sixth field survey will be conducted from August 27 until September 7, 2001. Presentation of the Draft Final Report will be made to VMEH and La Paz and Oruro prefectures. In addition, a seminar (third Seminar) will be held inviting all the public and private organizations related to rural electrification including multilateral and bilateral aid organizations. All the comments on the Draft Final Report raised in the presentation as well as in the seminar will be incorporated in the Final Report. I - 6 The Study on Rural Electrification Implementation Plan by Renewable Energy in the Republic of Bolivia Final Report (Main Report) CHAPTER 2 ELECTRIC INDUSTRY IN BOLIVIA 2.1 Legal Framework Important legal framework for rural electrification in Bolivia consists of the Electricity Law, the Rural Electrification Regulation and the Rural Electrification Information System.