Laamu Gan-Fonadhoo Feasibility Study & Technical Requirements Final 090315

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    Feasibility Study and Technical Requirements to Build Central Power Station, Distribution Network and Intake of Renewable Energy

    Copyright 2014

    Developed by Plankton Investment Private Limited for the Low Emission Climate ResilientDevelopment Programme (LECRED) and commissioned by United Nations Development

    Programme in the Maldives

    All rights reserved. The document or extracts from this publication may, however, be freely

    reviewed, quoted, reproduced or translated, in part or in full, provided the source is given

    due acknowledgement. The views expressed in this publication are those of the author(s) and

    do not necessarily represent those of the United Nations, including UNDP, or their Member

    States.

    Published by: United Nations Development Programme in the Maldives

    Cover and Layout design by: Plankton Investment Private Limited

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    Feasibility Study and Technical Requirements to Build Central Power Station, Distribution Network and Intake of Renewable Energy 1

    Table of contents

    EXECUTIVE SUMMARY 4

    ABBREVIATION 6

    1 BACKGROUND 8

    2 MALDIVES POWER SECTOR 10

    2.1 ENERGY SECTOR INSTITUTIONAL FRAMEWORK 10

    2.2 POLICY, LEGAL AND REGULATORY CONTEXT 11

    2.2.1 MALDIVES NATIONAL ENERGY POLICY AND STRATEGY 2010 11

    2.2.2 LEGAL AND REGULATORY BACKGROUND 11

    2.2.3 ELECTRICITY TARIFF STRUCTURE 122.3 ENERGY SUPPLY 13

    3 THE PROJECT 14

    3.1 PROJECT LOCATION 14

    3.2 METHODOLOGY 15

    4 SOCIO-ECONOMIC CONTEXT OF THE PROJECT LOCATION 16

    4.1 GANISLAND 194.2 FONADHOO ISLAND 20

    5 EXISTING POWER SYSTEMS 21

    5.1 POWER SYSTEM OF GAN 21

    5.2 POWER SYSTEM OF THUNDI 21

    5.3 POWER SYSTEM OF MAAHINNA 22

    5.4 POWER SYSTEM OF MATHIMARADHOO 23

    5.5 POWER SYSTEM OF MUKURIMAGU 24

    5.6 POWER SYSTEM OF FONADHOO 255.7 OTHER POWER PRODUCERS 26

    6 LOAD FORECAST AND AVAILABLE CAPACITY 28

    7 DEMAND FOR ELECTRICAL ENERGY 33

    7.1 ELECTRICITY DEMAND PATTERN 33

    8 RENEWABLE ENERGY OPTIONS 35

    8.1 WIND ENERGY 35

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    Feasibility Study and Technical Requirements to Build Central Power Station, Distribution Network and Intake of Renewable Energy 2

    8.2 OCEAN ENERGY 37

    8.3 WASTE HEAT RECOVERY 39

    8.4 BIOMASS 40

    8.5 WASTE TO ENERGY 41

    8.6 SOLAR ENERGY 42

    9 PROPOSED POWER SYSTEM FOR GAN FONADHOO 45

    10 ENVIRONMENTAL CONSIDERATIONS 48

    10.1 POWER PLANT LOCATION AND CLIMATE 48

    10.2 ENVIRONMENTAL ASPECTS OF DIESEL POWER PLANT 48

    10.3 EXHAUST EMISSION TO THE AIR 49

    10.4 IDENTIFYING AND ASSESSING THE IMPACTS 51

    10.5 ENVIRONMENTAL ASPECTS TO CONSIDER FOR THE PROJECT 51

    10.6 POSSIBLE ENVIRONMENTAL IMPACTS BY THE PROJECT 5210.6.1 MOBILIZATION 52

    10.6.2 FUEL MANAGEMENT 52

    10.6.3 COOLING WATER DISCHARGE 53

    10.6.4 ATMOSPHERIC EMISSIONS 53

    10.6.5 NOISE POLLUTION 54

    10.7 IMPACT ON MARINE ENVIRONMENT 54

    10.8 WAYS TO MINIMIZE IMPACTS 54

    10.8.1 MITIGATION ACTIONS DURING CONSTRUCTION 55

    10.8.2 MITIGATION ACTIONS DURING THE OPERATION 55

    10.9 MONITORING AND MAINTENANCE OF THE SYSTEM 55

    11 FINANCIAL AND ECONOMIC ANALYSIS 57

    11.1 INITIAL INVESTMENT BUDGET 57

    11.2 OPERATION COSTS 57

    11.3 SENSITIVITY TO THE CHANGES IN TARIFF 60

    11.4 USE OF SOLAR PHOTOVOLTAIC (PV) WITH THE NEW SYSTEM 61

    11.5 AVOIDANCE OF CO2 62

    12 RISK ANALYSIS 63

    13 PROJECT MANAGEMENT AND PROCUREMENT 64

    13.1 SCOPE OF BID 64

    13.2 SOURCE OF FUND 64

    13.3 ELIGIBLE BIDDERS 65

    13.4 INSTRUCTION TO BIDDERS 65

    13.5 GENERAL CONDITION OF THE CONTRACT 66

    13.6 GENERAL TECHNICAL REQUIREMENT 66

    13.7 CIVIL WORKS 67

    13.8 MECHANICAL WORKS 67

    13.9 ELECTRICAL WORKS 6813.10 INSTRUMENT AND CONTROL (I&C) 68

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    Feasibility Study and Technical Requirements to Build Central Power Station, Distribution Network and Intake of Renewable Energy 3

    14 PROPOSED ORGANIZATIONAL STRUCTURE FOR CPS 69

    14.1 ADMINISTRATIVE DEPARTMENT 69

    14.2 FINANCE AND ACCOUNTS DEPARTMENT 70

    14.3 POWER GENERATION AND DISTRIBUTION DEPARTMENT 70

    15 STAFF COMPETENCY AND TRAINING REQUIREMENT 71

    15.1 SITE TRAINING FOR POWER GENERATION AND DISTRIBUTION DEPARTMENT STAFF 71

    15.2 SPECIFIC TRAINING AT SITE FOR ELECTRICAL UNIT STAFF: 72

    15.3 SPECIFIC TRAINING AT FACTORY 72

    15.4 ADDITIONAL TRAINING AT SITE 73

    16 CONCLUSION 74

    ANNEX I

    ANNEX II

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    Feasibility Study and Technical Requirements to Build Central Power Station, Distribution Network and Intake of Renewable Energy 4

    Executive Summary

    The supply of quality electricity to the citizens of the Maldives is one of the top priorities of

    the Government of Maldives (GoM). In this regard, the Government of Maldives (GoM) is

    exploring the feasibility of constructing a Central Power System (CPS) in Laamu Atoll wherethe islands are connected by land. Under the Low Emission and Climate Resilient

    Development (LECReD) program, the project focuses on constructing a single CPS for

    providing power to all citizens ofGan-Fonadhoo in Laamu Atoll.

    The objective of this feasibility study is to assess the technical, institutional, regulatory,

    economic, financial and environmental aspects of the proposed central power station and

    distribution network to feed the local LV networks and intake of energy from appropriate

    renewable energy sources.

    Gan-Fonadhoo stretch consists of four districts of Gan Island, Fonadhoo Island, Maandhoo

    Island where a fish processing factory is operated and managed by Horizon Fisheries Private

    Limited and Kadhdhoo Islandwhere a domestic airport is operated by the Regional Airports.

    The power systems developed in the districts ofGan and Fonadhoo were developed as need

    based and in an ad-hoc manner. As a result, the power systems in these wards were not

    properly equipped, and the installed generator systems are poorly designed and engineered,

    leading to reduced life span of the power systems. The powerhouses and the equipment are

    not to the current standards and regulations of the Maldives. Existing facilities are undersized,

    inefficient and overloaded.

    Despite the poor quality of the power generation and distribution systems that exist in the

    stretch the demand for electricity has grown rapidly in the Gan-Fonadhoo stretch over the

    past years. The data indicates that there is a combined peak demand of 3.28 MW among all

    the islands.

    As the land stretch has potential for industrial activities within the stretch like demand for

    construction of guesthouses and related businesses, it is anticipated that the demand for the

    electricity will be increased considerably in the near future.

    The proposed central power station would provide reliable electricity to current and future

    electricity need within the stretch. The proposed generating capacity of 16MW (4 x 4 MW)

    and the medium voltage distribution network will enable power producer to relieve the

    present shortage and meet the anticipated increase in demand for electricity in Gan-

    Fonadhoo stretch. The new power station will also help to enhance the quality of supply

    through greater rehabilitation of LV network with improved efficiency.

    The new power station would be located on reclaimed land adjacent to the fish factory inLaamu Atoll. When commissioned it will take over as the base load station and will make

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    Feasibility Study and Technical Requirements to Build Central Power Station, Distribution Network and Intake of Renewable Energy 5

    possible to shut down the existing powerhouses located in the middle of the wards amidst

    commercial and residential properties. The new power station is expected to be in operation

    in 2018 and will be capable for extension to accommodate more generating units to meet

    future load increase. Additionally, the new power station will be designed to feed renewable

    energy. Therefore, cleaner energy production will occur within the scope of the project sideby side.

    The project will bring positive socio-economic and environmental benefits to the

    communities of Gan-Fonadhoo stretch. The introduction of solar energy for power

    generation will reduce the amount of emissions from diesel generators, which would

    contribute to a cleaner environment and less pollution. With oil prices continually rising and

    volatile, the reduction in specific consumption of diesel may lead to lower electricity costs in

    the long term.

    The total cost of the project without renewable component is estimated to be USD 29.50

    million. However, when the system is in operational this system will give an annual saving of

    MVR 5.9 million and it is expected to payback the investment in 9 years.

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