Energy for Rural Development Program Report PR-80-8 CASE HISTORIES OF ENERGY PROJECTS FOR RURAL DEVELOPMENT Louis J. Goodman Ralph N. Love John N. Hawkins Tet'uo Miyabara energy September 1980 systems CASE HISTORIES OF ENERGY PROJECTS FOR RURAL DEVELOPMENT by Louis J. Goodman Ralph N. Love John N. Hawkins Tetsuo Miyabara prepared for SUMMARY OF 18-MONTH ACCOMPLISHMENTS ENERGY FOR RURAL DEVELOPMENT GRANT COPYRIGHT PENDING TABLE OF CONTENTS PREFACE I INTRODUCTI ON 3 CASE 1 - Bio~as Project in the Philippines 32 CASE 2 - I tc-rat d _-i s Project: in Fiji 69 CASE 3 - Etiu i. :: ';ood: Establishment of a Pilot Plant 99 CASE 4 - ML:ii--,v',u-2ctric Project: Peole's Republic of China 2 CASE 5 - Mfini-HvdrolectriP:'ojects:The Philippines ""2 CONCLUSIONS: Policy and Research ISSueS 280 NOTE: Cases 1 through 5 are completed, edited, and manuscript typed for Pergnmon Press, Inc. (See Preface). These 5 cases can only be used for internal purposes at both the East-Vest Center and the U.S. Agency for International Development until published by Pergamon Press, Inc. COPYRIGI-T ENDING PREFACE Development to increase economic growth and improve the quality of life has been a major objective of all countries over the last three decades. The pace of development, however, has not always been matched by the ability to manage the process itself. Both developing and developed countries have experienced a lack of project-oriented managers who can provide unified control of development projects for all sectors of the economy and society. This proolem has been especial, critical in rural areas where shortages of skilled manpower are compounded by inadequate infrastructure, including reliable energy sources. In response to the need for more effective planning and management of development projects, the East-West Center has worked to create a new concep­ tual framework for planning development projects and a curriculum for training project managers that uses this analytical tool. The Integrated Project Planning and Management Cycle (IPPMC) is a dynamic approach to management which examines the entire range of a project's activities, from policy formu­ lation through completion, as an integrated process. The IPPMC is the basis for a prototype curriculum package for project managers that was developed by the East-West Center, in cooperation with over fifty organizations in fifteen countries, during the years 1972 to 1977. The basic instructional tool of the prototype curriculum is a series of case histories analyzing real-life development projects within the mold of the IPPMC. Each case describes the entire history of a project, from identifi­ cation through completion, with final evaluation of the project's success or failure providing the feedback necessary to sharpen and refine policy guide­ lines. A total of 32 case histories of development projects from all sectors of the economy and society have been researched and written over the past two 2 years with a major grant from the Exxon Education Foundation. Partial support for this particular manuscript was provided by the grant from the U.S. Agency for International Development to the East-West Resource Systems Institute to undertake a major study concerned with "Energy for Rural Development." Since all Aeveloping societies require energy to make their economic and social plans a reality, it was decided to include in the total number of case histories 13 cases of energy projects coveri.ng geothermal, biomass, and small hydroelectric projects for rural development. This decision was based on the fact that new alternat.ive energy sources are needed for agriculture, communi­ cation, transportation, food processing, manufacturing, rural households, and other vital development activities. Presently, the energy needs of most nations throughout the world, developed and developing, are to a large degree being met with imported oil from outside sources. The impact of current world prices for oil is resulting in extlemely severe economic and social disruptions. It is therefore vital to the future of mankind that available indigenous resources be utilized to meet energy needs in order to reduce dependence on imported oil. For the purposes of the AID Grant on "Energy for Rural Development," it is felt that 5 of these cases are directly related to the objectives of the grant. These cases cover biomass and small hydroelectric projects in the Philippines, Fiji, China, and New Zealand. These 5 cases have been packaged in manuscript form as Sections 2 through 6 of this manuscript. The Introduc­ tion provides brief background materials on the concept and applications of biomass energy projects and small hydroelectric projects for rural development. It concludes with a discussion of the Integrated Project Planning and Manage­ ment Cycle (IPPMC). The concluding section analyzes and evaluates each of the 5 case histories with respect to policy issues and research issues. The five case histories contained in this manuscript have been accepted for publication by Pergamon Press, Inc. of Elmsford, New York. 3 INTRODUCTION Energy is one of the most basic i:.puts to the development process. Recent global events have focused attention dramatically on appropriate ways of assessing and meeting the energy needs of all oil-importing nations, with increasing concern for island nations and rural areas in developing nations. Many ot the Pacific nations and rural areas in Asia possess the means to rdu-e their dependence on imported oil, and over time they could become largely self-sufficient in energy requirements. There are available indi­ genous resources which could be utilized to meet energy needs. These include: geothermal, biomass, water power, solar, and wind. It is possible that these sources can be developed to meet much of the energy requirements, especially with a proper mix of indigenous renewable energy resources. Thi.s section will examine and discuss the potential of biomass fuels and small hdro power plants. It concludes with a discussion of the Integrated Project Planning and Management Cycle (IPPMC), the conceptual framework for researching and writing each of the case histories of energy projects. Biomass Energy From biomass--planL matter available for processing into food, fiber, and chemical products--comes mankind's oldest and most fundamental source of renew­ able energy. Until the use of fossil fuels became widespread, biomass in the form of wood was the main energy source for most countries of the world; for some it remains the only source. In the broadest terms, however, biomass resources for energy include not only wood but microbes, plants, animals, animal and vegetable oils, and organic wastes. Figure I.1 shows how the natural forces of photosynthesis work in plant systems to produce biomass energy. Photosynthesis is the biological process by which plants and algae convert sunlight, water, and carbon dioxide into 4 carbohydrates and oxygen. These carbohydrates are then used as energy sources and raw materials for all other synthetic reactions in the plant. When the plants are harvested (or the organic wastes are processed), the solar energy which has been stored can be converted to a variety of biomass fuels: solids such as wood and charcoal, liquids such as oils and alcohols, gases such as methane and hydrogen, or electricity. The exploitation of these photosynthetic by-products represents a long-established technology for energy conversion and storage. The production of a biomass fuel once photosynthesis has taken place can be summarized generally as follows (see Figure I.1): a plant system, whether crops, forests, exotic species, or an energy farm, is harvested, producing a wide range of biomass resources, including crop and forest residues, energy crops, animal and urban wastes. These resources may then be pretreated in several ways, including drying, separation, hydrolysis, densification, and pelletization; ideally, in an integrated management system some type of biomass energy can itself be used as the processing energy. At a center producing ethanol from sugarcane, for example, part of the refuse can be converted into bagasse to fuel the ethanol production process. The conversion process that turns a biomass resource into a fuel can be either biological or thermochemical. Besides fuels, biomass resources produce electricity in the form of steam and chemicals such as feedstocks and ferti­ lizers. All these products have diverse domestic, commercial, industrial, and transport uses. With proper management, a number of by-products of the conversion process, such as fertilizers made of compost from bagi se or sludge from hiogas dig2sters, can be recycled into the plant system, recharging the land and creating a closed energy cycle. Although it is difficult to quantify the amount of biomass presently used in, for example, developing countries, estimates indicate that the amount of 5 plant systems - jrect -~~~ CO2 SUNLIGHT H20 PHOTOSYNTHESIS -0 sio- prcs .0\ Figue I1. Bomas eergyo Proesseo proess 6 biomass energy consumed annually is probably equal to the amount of energy moving annually in the international oil market. Clearly, on a global scale, many rural areas have continued an unbroken tradition of using wood, vegetable matter, or dung as a primary energy source for domestic and village use. Ironically, rising petroleum costs and the supply restrictions of the late twentieth century are forcing the more technologically advanced nations to return to biomass and other renewable energy sources as alternatives to once abundant and inexpensive fossil fuels. Until recently, however, science has paid little attention to biomass conversion technologies. The reasons for this are manifold: first and fore­ most, with cheap supplies of fossil fuels there was little ircentive to explore renewable resources of any sort. Second, biomass fuels (often referred to as biofuels) are in many ways more difficult to study than their fossil fuel counterparts. While it is easy to determine the energy content of oil, or even obtain reliable values for the various grades of coal, it can be diffi­ cult to obtain similar values for raw biomass resources.