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Pacific Islands Greenhouse Gas Abatement through Renewable Energy Project (PIGGAREP) - PNG Interventions

Background

Papua New Guinea (PNG) is by far the largest of the Pacific Island Countries (PICs), with over 600 islands, immense physical variety, and 5.6 million people (2003). Of all PICs, PNG is the most affected by natural disasters and has the lowest life expectancy. About 97% of land is under traditional clan ownership, providing an opportunity for people to manage land for their long-term benefit. PNG has two distinct economies: i) a modern, cash economy dominated by mining, timber, gas and oil, and agricultural exports (coffee, cocoa, tea, oil palm and copra); and ii) the traditional subsistence economy and semi-subsistence farming, with most villages producing little or no surplus for trading.

Baselines

Since 1992, PNG has exported about 340 million barrels of light crude oil, about 100,000 bbl/day on average, from recoverable reserves of roughly 550 million barrels. In 2003 e xports were 15 million barrels earning about US$ 520 million. Production will steadily decline over the next decade as the resource is depleted. The natural gas resource is equivalent to about 2,700 million barrels of oil (perhaps far more), over ten times PNG’s remaining recoverable oil reserves.

In 2001, the end use consumption of commercial energy was 364 ktoe, a decrease of 58% from 2000. Industry accounted for 60%, transport 17% and agriculture/residential /commercial, 24%. Petroleum provided 40% of energy consumption and other energy forms (mainly electricity) 60%.

The WB estimates that in 2001, about 600 MW of installed electricity capacity (PNG Power and private) generated about 2,600 GWh. PNG Power supplies electricity to only 5.5% of households nationally, accounting for 82% of customers but 11% of sales. It is likely that under 10% of the population are electrified by all means: grid, self-generation, nearby industry, small hydro or solar.

The PIGGAREP Support

The PIGGAREP activities identified for PNG will build on 2 key initiatives: (1) the Govt of Italy and PIC cooperation programme, and (2) the PNG Sustainable Energy Ltd’s renewable energy developments.

Government of Italy and PIC Cooperation Programme

The communiqués has been signed and 8 proposals has been drafted and submitted. The PNG University of Technologies is taking the lead in developing proposals to be funded by the Italian government. They include the following:

1. Baiteta solar PV project (Madang Province)

ATCDI has got K6,000.00 (US$1, 968). ATCDI will submit a proposal to the Italian to cover the Solar modules, batteries, regulator, cables, light fittings, cables, battery enclosure, module

2. The Biodiesel project (Unitech, Lae)

ATCDI will submit a proposal to the Italian to cover a Personalized Biodiesel Production System, Diesel Engine for Testing Fuel, Dynameter plus accessories, Exhaust Gas Analyzer, Engine Performance Analyzer, Wear Particle Analyzer (Model 56), Oxygen Bomb Calorimeter and an expendable supplies & services (including coconut oil).

3. The Bogo MHP project rehabilitation (Simbu)

ATCDI spent US$6500 to install in 1993. For this project ATCDI will submit a project proposal to the Italian to cover the following Turbine/generator, uPVC pipes and fitting, cement, timber, angle iron and steel bars.

4. Buakap solar PV project (Huon, Morobe)

This is a new project. A new Aidpost building has been built funded by the Rotary Club. For this project ATCDI will submit a project proposal to the Italian to cover solar modules, batteries, regulator, cables, light fittings, battery enclosure and module security frame.

5. The gasifier project (Asaro, EHP)

The gasifier itself was funded by GEF/SGP with a grant of US$3929. The gasifier will be transported to site and installed. For this project ATCDI will submit project proposals for co-financing from the Italian.

6. Solar PV and micro hydropower training

The training will be conducted in the four regions. For this project ATCDI will submit a proposal to the Italian to cover the local transport, resource materials, copying & printing of lecture materials, refreshments, Certificates and contingencies.

7. ATCDI staff development

This is a project to develop capacity of ATCDI staff by visiting/attachment to two RE organisations abroad for 2 weeks. Organisations selected are CASE in Perth and Rainbow Power Company (RPC) in Nimbin NSW. For the staff development training ATCDI will submit project proposals for support by the Italian.

8. Bago solar PV project (Pomio, ENB).

This is a new project located in the New Guinea Islands region. For this project ATCDI will submit a project proposal to the Italian to cover Solar modules, batteries, regulator, cables, light fittings, Cables, battery enclosure, module security frame.

PNG Sustainable Energy Ltd (PNGSEL)

1. PNGSEL is keen to develop rural power supply using straight coconut oil/biodiesel to provide power supply to remote rural communities, where the cost of petroleum diesel is very high. PNGSEL has an initial budget of K1.7 million to start the production of biodiesel and coconut oil for local generation of power supply to remote villages (Pomio Coconut and Biodiesel Rural Electrification Project). Coconuts in these rural areas have been left unattended because of the high cost of transport and a market available locally will promote coconut tree rehabilitation and grow local economies as well as improve education and health programs through the availability of power supply. Their model will include the availability of Micro Finance Banking and communications, including an internet cafe.

PNGSEL is also implementing a trail bio-diesel project at Aroma. Aroma project will trial the use of small scale biofuel production to provide power to 480 people (80 households). Under this model being tested PNG SEL provides a local coconut plantation owner with oil extraction machinery and arranges a purchase agreement of buy straight coconut oil (SCO) at a set price. SCO will be used to power the adjacent villages. Small scale biodiesel production for local vehicles will also being trailed. Total load is estimated at 144,000kWh, requiring around 50kVA installed capacity. A 13.5kVA genset has also been provided for the plantation.

As this is a trial of a model for small-scale sustainable electrification it would be useful if it could be co-funded as a feasibility study.

A PIGGAREP support in training and exposure of PNGSEL staff in the production of coconut oil and biodiesel for the generation of rural power supply would add value to their rural electrification programs as they will be looking to roll out these programs throughout the country, wherever there is an abundant supply of coconuts.

A sub-section of the above would be the exposure to the technical aspects of processing equipment and the associated advantages and disadvantages of the different types available on the market. Such an exercise would assist greatly in PNGSEL’s sourcing of the right equipment and processors from the very beginning instead of half way through the exercise when funding can be a real issue.

2. The other area of interest is in Photovoltaic. PNGSEL have identified areas where Solar Powered Stations would be the most beneficial option for some rural village settings. The budget for the current project for one of the villages in the Western Province (Mabudawan Solar Power Station Project) is about K7 million Kina for a 300kW solar power station. This exercise is a first for PNGSEL’s engineers and some exposure/training on the design and construction aspects of solar power stations between 10 kW to 300 kW would definitely add value to these projects. Again, PNGSEL will be looking to construct a number of these projects throughout the country and the high initial capital costs involved does not leave any room for mistakes (as mistakes can result in the project being abandoned and a lot of money wasted).

3. An agreement has been signed between PNG Sustainable Energy Limited, Bismarck Energy and New Guinea Gold for feasibility studies to be carried out on the potential of a geothermal power station at the Sinivit gold mine in East New Britain. The plan is for Bismarck Energy to construct the geothermal power plant and sell electricity to New Guinea Gold the developer of the Sisnivit Gold mine.

4. Cooperation Agreement between PNG Sustainable Energy Limited (PNG SEL) and New Guinea Ireland Provincial Government (NIPG) is been prepared for signing by January 2008 to pave way for the parties to investigate the rehabilitation of Sohun Micro Hydropower Station and the development of potential hydro and biodiesel resources in New Ireland Province. The investigations would identify, quantify and consolidate the rehabilitation requirements together with other resources and provide options for harnessing and development. Sohun has 231kW generation capacity but current output is only 60-80 kW due to mechanical and low-flow problems. According to previous studies, it is anticipated that a total generation reserve of over 1MW would be developed to support power supply to Namatanai District Headquarter and communities along the peripherals of power generation and transmission routes.

PIGGAREP assistance is required in the completion of the rehabilitation study.

5. PNGSEL is also interested in investigating the potential for wind power generation in Hula Peninsula. This would aim to cater for the population on the Hula Peninsula, around 11,970 people (1,855 households). Load is estimated at 820kW or 3.5GWh/a. Following a detailed evaluation the aim would be to install around 900kW of wind power and a similar capacity of diesel in a hybrid setup. Hula is expected to be an area of good wind potential based on ground observations and some measurements nearby. Another possibility would be to use larger turbines and interconnect with a nearby 22kV PNG Power line.

Assistance is required from PIGGAREP to carry out feasibility study and train local engineers to plan and design wind farms.

6. Ormand is a storage hydro in the Eastern side of Central Province. Total installed capacity has been estimated at 5MW for an annual output of 33.8 GWh/a. It has been suggested that it is expandable to 8MW with annual output increasing to 63 GWh/a.

The population within range of medium voltage distribution lines is around 39,053 people (6,083 households). This hydro could also be connected to an existing PNG Power 22kV line nearby.

Assistance could be co-funding of a feasibility study.

7. Kimadan is a 3 stage run of river hydro in the middle of New Ireland Province. Total installed capacity has been estimated at 5.1MW for an annual output of 29.6 GWh/a. The population within range of medium voltage distribution lines is around 30,980 people (6,024 households), while there are some commercial loads including a large Palm Oil plant. The connection of Kavieng town would require around 160km of high voltage lines.

Assistance could be co-funding of a feasibility study.