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JOINT REQUEST FOR PROPOSALS BY THE FOOD AND AGRICULTURE ORGANISATION (FAO) SUB-REGIONAL SUB-REGIONAL OFFICE FOR THE PACIFIC ISLANDS , THE SOLOMON ISLANDS ’ ENERGY DIVISION AND THE SECRETARIAT OF THE PACIFIC REGIONAL ENEVIRONMENT PROGRAMME (SPREP)

Background:

The Pacific Islands Greenhouse Gas Abatement through Renewable Energy Project (PIGGAREP) is a continuation of the close collaboration between the Secretariat of the Pacific Regional Environment Programme (SPREP), UNDP and the Global Environment Facility (GEF) to build the capacity of the PICs to deal with the challenges of Climate Change

The global environment and development goal of PIGGAREP is the reduction of the growth rate of GHG emission from fossil fuel use in the Pacific Island Countries (PICs) through the removal of the barriers to the widespread and cost effective use of feasible renewable energy (RE) technologies. The specific objective of the project is the promotion of the productive use of RE to reduce GHG emission by removing the major barriers to the widespread and cost-effective use of commercially viable RE technologies (RETs). PIGGAREP consists of various activities whose outputs will contribute to the removal of the major barriers to the widespread utilization of RE technologies (RETs). The project is expected to bring about in the PICs: (1) Increased number of successful commercial RE applications; (2) Expanded market for RET applications; (3) Enhanced institutional capacity to design, implement and monitor RE projects; (4) Availability and accessibility of financing to existing and new RE projects; (5) Strengthened legal and regulatory structures in the energy and environmental sectors; and, (6) Increased awareness and knowledge on RE and RETs among key stakeholders.

In FAO’s effort to assure a positive balance and synchronicity between food security, environment and bioenergy development has collected and discussed experiences from around the world and is emphasizing and developing tools which enable those involved and potentially impacted to plan and make informed decisions and choices about the type of biofuel, its production processes and the best processing and use. These tools and related information access will be made available to facilitate this evaluation and possible follow up action.

The Solomon Islands Government (SIG) is one of the participating PICs in PIGGAREP and has plans to investigate and develop alternative, cheaper and environmentally friendly forms of fuel to be used as a partial substitute for imported fossil fuel. Indeed, one of the activities in its 2009 Work Plan and Budget is a Biofuel Development and Expansion project and through the policy statement of the Energy Division of the Ministry of Mines, Energy and Rural Electrification, the SIG has outlined its desire to venture into the development and expansion of the biofuel sector as an alternative to providing electricity to the population of the Solomon Islands.

Coconut Oil ( CNO ) is the biofuel that would be dealt with in this activity. The goal of the project is to establish whether CNO is technically and economically viable for power generation in the Solomon Islands (both in rural and urban areas), and more specifically at the Solomon Islands Electricity Authority’s (SIEA) power station at Lata and at a community-based power generation project at Nangu. Both are located in the Santa Cruz Islands group in the remote Temotu Province of the Solomon Islands .

The FAO, the Solomon Islands’ Energy Division and SPREP / PIGGAREP are hereby putting out a Request for Proposal (RFP) to qualified and experienced registered consultancy firms and individuals to undertake a Feasibility Study for the future Development and Expansion of Biofuel use at Lata and Nangu in the Solomon Islands.

Instructions to Offerors:

•  The Proposal must cover all the objectives, outputs and activities as specified in the ToR

•  The Proposal must include costs for professional fees and logistics

•  The Proposal must include:

i) An updated CV of the individual/s who will undertake the market and supply feasibility study

ii) A summary of recent work in the areas to be covered by this consultancy (including client and work produced);

iii) Information on availability;

iv) Total person days proposed for the work on the consultancy and daily rate in US$

v) A methodology and work plan (maximum 10 pages)

vi) The total proposal and the Annexes should not be more than 30 pages 

•  As this task will involve specialized skills, experience and qualification, the proposals must specify such experience and qualification of the individual(s) who will undertake the assigned task(s);

•  As part of the capacity building effort of PIGGAREP, a preference is stated for proposals that makes use of partnerships and are jointly implemented with local experts and which allow for the participation of 1-2 staff of the Energy Division in relevant activities of the study.

•  The consultancy will preferably commence as early as possible;

•  The offer must be in the English language only;

•  The above-mentioned documents, information and requirements are mandatory and as such are required to form a complete tender. An offer will be rejected unless it is substantially responsive;

•  If the Proposal is received prior to the formal submission date corrections/modifications can be made up to that date;

•  The Proposal must be submitted in electronic format only (Word and PDF format, 1 MB max) by email to the e-mail address specified below and

The task will be undertaken at Lata and Nangu, both of the Santa Cruz Island group in Temotu Province.

The exact number of working days will be determined subsequently between the successful Contractor, the SIG and PIGGAREP Project Management Office (PMO).

The final working plan will be determined subsequently between the successful Contractor, the SIG and the PIGGAREP PMO. Acknowledgements of the receipt of quotations will be provided by e-mail. Successful as well as unsuccessful offerors will be informed by e-mail once the evaluation and selection process are completed.

Award of Contract and Evaluation Criteria:

Quotations will be evaluated jointly between SPREP, FAO, UNDP and the Solomon Islands ’ Energy Division according to the following criteria:

1.   Price (20%)

2.   Specific experience in biofuel studies and biofuel installations for power generation in both urban and rural areas and in small island, or developing country, environments (30%)

3.   Experience in the Solomon Islands or SIDS, Qualifications & Experiences of the Team who will be directly involved in conducting the consultancy (20%)

4.   Methodology/Work Plan (30%)

All quotations must be addressed to:

The Director of SPREP and copied to the FAO Sub-regional Representative and the Solomon Islands Energy Office.

Note that the contract will be between SPREP and the winning bidder.

Contact Information:

Solomone Fifita

Manager – PIGGAREP

P.O Box 240 Apia , Samoa

Telephone: +685 21929 Ext 274

Facsimile: +685 20231

E-mail: solomonef@sprep.org / pmpiggarep@gmail.com

Deadline for the submission of quotations is 5 p.m 30 0ctober 2009 ( Samoa time)

Terms of Reference

Biofuel Development and Expansion in the Solomon Islands

1. Background

The Solomon Islands Government (SIG) through the Energy Division of the Ministry of Mines, Energy and Rural Electrification, in its policy statement has outlined that it would venture into developing and expanding the biofuel sector as a fuel alternative in providing electricity to the population of the Solomon Islands . It is the SIG’s plan to look for alternative, cheaper and environmentally friendly form of fuel to be used as partial substitute for imported fossil fuel.

The Energy Division of the SIG will investigate the economic and technical viability of the production and use of coconut oil ( CNO ) for power generation. This will involve data collection (village surveys) and compilation and analysis of the qualitative and quantitative data. Surveys will be done in Lata and Nangu both of the Santa Cruz Island at the Temotu Province .

Solomon Islands imports, on average, approximately 4.15 million liters of fossil fuel in a month. Of this capacity, SIEA consumes about 2.126 million liters per month, which is about 51% of the total oil import. About 6.5% of this is used by SIEA outstations in the provinces. Individual communities with stand-alone generators and other end uses like kerosene for cooking and lighting have an average consumption of about 390,000 liters per month (this includes petrol, diesel and kerosene).

The percentage of people with access to electricity in the Solomon Islands is close to 20%. That is 15% in the urban areas and 5 % from stand-alone power generators. The rest of the population (majority in the rural and remote areas) use kerosene for lighting

The average copra production in the Solomon Islands is 30,000 tons per annum. There is a potential of 45,000 tons, but due to lack of reliable infrastructures like transportation and wharfs, that potential cannot be met. Records for 2008 showed that 39,000 tons of copra were produced. This is due mainly to the increase in the domestic market price to SBD$2.80 per kilogram.

Domestic CNO production stopped due to the breakdown of CNO mills in most Commodity Export Marketing Authority (CEMA) Milling Centres. Only a couple of private entrepreneurs are operating but existing production can only produce a maximum of 1,000 liters per day.

The retail price of CNO in Honiara is SBD$5.00 per 330ml, following a wholesale price of SBD$3.50 per 330ml. Before CNO can compete on price with imported diesel fuel for power generation, production capacity must be increased and the domestic retail price reduced to SBD$2.27 per 330ml or SBD$6.88 per liter. This will then be attractive to the consumers, as the current diesel retail (pump) price is at SBD7.08 per liter.

Some limited experience with CNO already exists at both the Lata and Nangu sites. Trials with CNO blending were performed by SIEA in 2004 at Lata Power station but failed because of poor management of technical problems. Also in Lata, the provincial Temotu Development Authority is currently crushing copra to extract CNO . In Nangu village a European Union funded mini-copra crushing mill for CNO also exists but has since ceased operation. The reasons for the termination of this operation will have to be studied before any further project recommendations.

Problems encountered during the Lata 2004 CNO Trial were as follows:

• Overheating problems resulting in the following:
• Water through the cylinder heads & into the sump
• Deformed oil cooler seals allowing water into the sump
• Crack in the cylinder block enabling fluid into the sump
• Quality of the CNO is another factor - does not guarantee optimum
• combustion of the fuel - dirty contributes to restriction in the fuel system
• Stoppage of the engine just to clean the filters does not meet the criteria of providing reliable supply to SIEA Customers at Lata.

Lata station has three generator sets (Two Perkins - Installed capacity of 88 kW each but now derated to 60 kW & one Cummins of 103 kW ). Currently only one Perkins is running with the Cummins Genset. The other Perkins unit is being serviced and waiting for spare parts ordered from overseas. Each of these engines can consume up to approx. 450 liters per day.

The main challenge is the logistics and excessive cost of transporting the fuel drums across from Honiara to Lata. Shipping can be difficult with only one ship reaching Lata once a month or no shipping at all in a month.

If the fossil fuel consumption can be reduced by using biofuel then this would result in more reliable electricity service and if not lower cost at least a better market for local CNO. In reality the vast distance is already a real challenge in managing the operations of the station & maintenance of the machines at Lata.

2. Objectives

The objective of the assignment is to determine the technical, economic, institutional and market feasibility and requirements of utilizing coconut oil for power generation at the Lata Power Station and Nangu community-based power generators in the SI. 

3. Detailed Activities

The tasks/activities and outputs required of the contractor must address, but are not restricted, to the following areas: 

A. Technical

•  Assess the current and future demand for electricity in the two target communities

•  Assess the current and future supply of copra oil (including palm oil) at the target communities

•  Assess the capacity of mills to cater to the demand from the two power stations and determine whether new mill capacity or refurbishment is required

•  Assess the quality of the SI copra oil (or a blend of) and its suitability for power generation

•  Assess the existing diesel generation units and determine the necessary retrofits and technology upgrades required to allow for fuel switching to CNO .

•  Assess the feasibility of other renewable energy and energy saving options as compared to and for integration with the CNO for biofuel suggestions

•  Undertake analysis of previous attempts to use CNO at both sites and use this accumulated knowledge to make recommendations for future CNO and biofuel and renewable energy initiatives.

B. Economics

•  Assess the production costs of copra oil or a blended product for power generation

•  Assess the potential for cost savings from increasing the scale or changing the method of CNO production

•  Conduct a comparative economic and financial analysis of the cost of electricity generated from diesel, other renewable energy options and from a coconut oil-based fuel

•  Identify fiscal and financial policy measures that would support a sustainable supply of coconut oil to substitute fossil fuel in power generation at the remote target communities

C. Institutional

•  Assess and identify suitable institutional set ups that would enhance a sustainable supply of coconut oil and a cost effective and sustainable supply of coconut oil based electricity

•  Assess a sustainable institutional and management set up for the management of any proposed coconut crushing mills or a community-based CNO power generation plant

D. Market

•  Assess and identify market barriers to the use of coconut oil for power generation

•  Assess and identify a market set up that would promote the marketing of copra and the production of coconut oil for power generation within the studied communities

E. Environment

•  Assess the potential impacts of the biofuel and other electrification options on the environment, with particular reference to land use and ecosystem impacts

•  Assess the compliance of the biofuel and other electrification options with environmental and other safeguards, government clearances and approvals, and identify any inconsistencies with current government policies

•  Assess the potential greenhouse gas savings over the lifecycle of the electricity generation options

•  Assess potential CDM benefits to the target communities from the electrification options

F: Social

•  Assess possible barriers to the acquisition of land and the access to resource / generation sites, highlighting especially any potential land use change caused by the projects

•  Assess the social benefits of electrification to the target communities, including gender, women, youth and the handicapped and underprivileged

•  Assess and quantify the potential productive uses of electricity

•  Asses the potential impacts of the electrification options on the livelihoods of the target communities, highlighting particularly how the project is going to improve the social and cultural obligations of the disadvantaged groups, especially women

•  Assess the capacity of the target communities to sustainably manage their electrification programme and identify required capacity building and awareness initiatives

4. Output/Deliverables

The contractor will produce the following deliverables during the assignment:

•  An Inception Report to include: a) understanding of the consultancy and associated tasks; b) the actual detailed technical approach to the study; c) the actual detailed workplan/timeline; d) identification of issues crucial to the viability of the consultancy; and e) a draft report structure and its major sub-headings.

•  A draft report to be commented on by CEMA, SIEA, FAO UNDP, Energy Division, the Provincial Authority and rural communities) and the PIGGAREP PMO.

•  A final Detailed Feasibility Study Report.

5. Collaboration with other Development Partners

The Asian Development Bank (ADB) has secured grant financing from the Multi-Donor Clean Energy Fund under the Clean Energy Financing Partnership Facility to administer a renewable energy Technical Assistance project in the Solomon Islands . Subject to a positive outcome of the PIGGAREP project, this funding will be used to implement the CNO projects at Lata and/or Nangu. The project consultant should therefore liaise closely and share information and findings with consultants appointed for the ADB project.

6. Duration and Phasing

The study s hould begin no later than November 2009. Delivery of final reports shall be not later than 26 th February 2010.

7. Reporting Requirements 

Concerning reporting requirements it should be noted:

•  Structure/format of the Feasibility Study Report and Program Document must be in line with internationally recognized standards. Suggested draft structure/format to be approved by FAO Energy Division and PIGGAREP,

•  All draft documents should be in Microsoft Word and

•  All documents must have no restriction in access.

8. Inputs

The following are the required inputs from the Energy Division, SIEA, CEMA, Provincial Government Authority and rural communities to enable this study: