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

Background

Vanuatu is mostly mountainous, of volcanic origin with narrow coastal plains. About 41% of all land is cultivable with 14% utilised. Total land area is 12,200 km 2 with 65 islands populated of 80 total. Between the 1989 and 1999 censuses, population grew at 2.6% per year reaching 212,000 in 2004, of whom about 27% lived in the urban centres of Port Vila and Luganville, and 80% on seven islands.

Vanuatu has a classic dual economy: a small, high-cost modern sector and subsistence/small-scale agriculture and fishing with most ni-Vanuatu largely outside the cash economy. Nearly 80% of the population engage in subsistence agriculture contributing only 10% to GDP.

Baselines

Vanuatu is overwhelmingly dependent on imported petroleum for commercial energy. Biomass probably provides over 50% of gross national energy production, and solar and hydro together less than 1%. Petroleum imports vary considerably year-by-year but were about 47 million litres in 2003, growing at 4% annually over the previous decade. Between 1999 and 2002, petroleum imports were equivalent to between 56-86% of domestic exports, considerably more than the early 1980s (30-60%) when oil prices were of serious concern to the government. Recent Port Vila wholesale prices of gasoline and distillate (excluding taxes and duties) are slightly higher than average for the PIC region.

Overall, 61% of urban households are electrified, 36% use kerosene for lighting and 53% cook mainly with LPG. O nly about 7% of rural households are electrified, 86% light with kerosene, and over 95% cook with wood. About 106 kilotonnes of fuelwood are consumed per annum for cooking.

For estimating growth in energy use and GHG emissions, it is assumed that population will grow 2.6% annually, real GDP about 2.8% and petroleum fuel use 3.5%. GHG emissions from petroleum fuels would increase from about 110 gigagrammes in 2003 to 156 Gg in 2013, a 41% increase. In principle, by 2013 Vanuatu could reduce annual emissions by about 94 Gg per year, about 85% of current emissions from energy use, ignoring some practical economic, financial, political, social, technical, and environmental constraints. Achievable reductions if barriers to RE were removed would be considerably less. The bulk of potential reductions are from biofuels, with very little from PV or wind energy, even if these were pursued on a large scale.

The PIGGAREP Support

The PIGGAREP activities identified for Vanuatu will build on 4 key initiatives: (1) The Sarakata Hydro Project , (2) The joint Energy Unit and UNELCO EU ACP Energy Facility-funded projects on bio-fuel, (3) The VANREPA's EU ACP Energy Facility-funded project on wind and (4) Pacific Islands Cooperation Programme with the Government of Italy

The Sarakata Hydro Project

Sarakata has two 300 kW turbine generators, installed in 1994 and 1995, that supplied 70% of the electricity to Luganville, Santo in 1995. Growth in demand has made it impossible for the hydro generators to meet the peak demand, hence this 3rd phase to install a new 600 kW hydraulic turbine generator. This project will benefit the approx 20,000 residents of Santo.

The Sarakata project is owned by the GoV. The project is managed by the Power Utility (UNELCO). UNELCO pays GoV the equivalent of the price of oil saved from generating from hydro at Sarakata. This money goes to the Sarakata Fund which is specifically used to support other rural electrification projects, solar PV and grid-extension, in Vanuatu.

In preparation for the growing demand for electricity in Luganville, PIGGAREP will support the further assessment of the potential downstream and the conduct of a feasibility study which will include risks assessment. The support will also include building the general awareness of the surrounding communities about hydro, it benefits, how to avoid potential disasters and how they can help to look after the hydropower project system.

The joint Energy Unit and UNELCO EU ACP Energy Facility-funded projects on bio-fuel

On 17 July 2007, the European Commission approved the final selection of proposals that will benefit from grant co-funding from the ACP-EU Energy Facility. From the entire PICs, Vanuatu was the only country with proposals to be funded from this facility. Three out of the four approved projects were joint Energy Unti-UNELCO projects. These include the provision of renewable energy using locally produced copra oil as biofuel to: (1) 4 villages of North East Malekula island, Malampa Province, (2) 3 villages in Ambae Island, Penama Province, and (3) 2 villages of Vanua Lava island, Torba Province.

At Malampa, the project will bring energy to 660 households, 6 primary schools and one College, 2 dispensaries, in the villages of Lavalsal, Vao, Orap and Wala in the North East of Malekula Island. This will increase the rate of access to electricity from 6.8% to 7.8%.

At Ambae, the project will bring energy to 185 households, 1 primary schools, a branch of the University of the South Pacific (USP), 1 hospital and 1 dispensary, in the villages of Saratamata, Lolowai and Longana in East Ambae. This will increase the rate of access to electricity from 6.8% to 7.1%.

At Torba, the project will bring electricity to 103 households, 2 primary schools, 1 college, 1 dispensary, in the villages of Sola and Mosine on Vanua Lava Island in the TORBA Province.

PIGGAREP will support these projects with studies to look at the sustainability of UNELCO's copra oil supply line including potential value-added products and the environment impacts of its bio-fuel production and use. This study will also look at potential financial risks to UNELCO's copra oil effort and identify mechanisms which could be used to stabilize copra oil prices. Given UNELCO's 25% RE goal and its current and future RE programmes (as well as others' in Vanuatu), PIGGAREP will support a study of the potential benefits of registering these as CDM projects and building the local capacity to effectively manage CDM projects.

The VANREPA's EU ACP Energy Facility-funded project on wind

The Answer is Blowing in the Wind – Improving access to energy services for the communities of Futuna & Aneityum Islands (Vanuatu) using wind technology is the fourth Vanuatu project to be approved for funding under the EU-ACP Energy Facility. The main activities of the project will focus on: i) the installation of wind turbines at key public institutions at communities in Futuna and Aneityum, installation of battery banks with sufficient capacity to enable households to recharge batteries, ii) the establishment of an island focused Renewable Energy Service Cooperative (RESCoop) for the management and maintenance of the systems on both Futuna & Aneityum Islands, iii) the setting up of a billing system for the delivery of energy and the rental of efficient lighting kits and recharge battery ‘tokens’ to households, aimed at sustaining the RESCoop, iv) the training of selected members on the operation, maintenance, financial management of the installed systems as well as potential energy uses and sustainable energy consumption, and v) the identification and promotion of new opportunities and income-generating activities, training of would-be local entrepreneurs. The final direct beneficiaries are over 1,100 people. Approx. 237 households, 4 schools, several kindergartens, 5 health centres (dispensaries), community governing offices, tourism, fishing and handicraft cooperatives, business centres with access to energy from this project.

PIGGAREP will support VANREPA's wind project in the areas of awareness and the support and identification of income generating opportunities.

PIGGAREP will also provide support to establishing an environment which is conducive to investments on RE in Vanuatu. As such, the Electricity Act will be reviewed to allow private generators to come in and generate RE and sell to the grid. An annual RE and EE programme will be conducted to give due recognition to achievements and innovative ideas in these two areas.

Pacific Islands Cooperation Programme with the Government of Italy

The total project cost budgeted under the agreement between the Government of Italy and the Government of Vanuatu is One Million US Dollars (USD 1 million). The Vanuatu project comprises of three components namely:

•  Rehabilitation of solar systems in schools and health clinics in Malekula and Santo;

•  The development of the Talise hydro project; and

•  The installation of wind monitoring equipment in each of the six provinces in Vanuatu.

The Government of Vanuatu has acknowledged that the 1 million is insufficient to complete all the three components above, especially with the hydro needing a bigger portion. The Government of Vanuatu had highlighted that the funding provided by the Italy will be used to leverage additional funds to complete the hydro project.

PIGGAREP will support Vanuatu by preparing the call for tender for the conduct of the feasibility study on the Talise Hydro Project. It will also assist with the scoping and consultations missions relating to this project.

PIGGAREP and IUCN will jointly fund a national coordinator at Vanuatu to look after both projects. This is seen as assisting with strengthening national capacity, supporting the complementary of effort at both the national and regional levels, ensuring the country drivenness and ownership of both effort and maximizing the benefits from donor resources.