Tonga OFF-Grid Electrification Initiative

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					Tonga OFF-Grid Electrification
Initiative
Improving the access of Tonga’s remote outer island communities to
quality electricity options




Heinz Boehnke and Lano Fonua
2009
ACKNOWLEDGEMENTS
This Note was prepared by Lano Fonua of the Tonga Energy Planning Unit and
Heinz-W. Boehnke on behalf of the International Renewable Energy Agency
IRENA. The work has benefited from the support and review of the World Bank
office in Sydney as well as from the support of the German Agency for Technical
Cooperation gtz. Documents, background information and invaluable review
were made available by Dr. Herbert F. Wade.

CONTACT INFORMATION
Questions and comments should be addressed to Heinz-W. Boehnke
(HWB@technosol.de)




ABBREVIATIONS
ADB – Asian Development Bank
AusAID- Australia Aid for International Development
ESCO- Electricity Service Company
EU – European Union
Lomé II- (now called) European Union Development Fund II
PREFACE- Pacific Renewable Energy France, Australia Common Endeavour
HSEC- Ha’apai Solar Electricity Committee
IRENA- International Renewable Energy Agency
GoT- Government of Tonga
GTZ – German Technical Cooperation
JICA- Japan International Co-operation Agency
IUCN- International Union for the Conservation of Nature
OI- Outer Island
PV – Photovoltaic
PIREP – Pacific Island Renewable Energy Programme
RE – Renewable Energy
SHS- Solar Home System
TOISEP- Tonga Outer Island Solar Electrification Program
TOGI- Tonga Off-Grid Initiative
WB- World Bank
Executive Summary

Context and Background: Basic electricity provision projects for communities on the outer
islands of Tonga have been operating since 1988 with varying levels of success. Clear and
repeatedly reported issues exist with institutional, financially sustainable and technical
capability.

Proposed Tonga Off-Grid Initiative: The initiative aims at a 100% RE based highly reliable
electricity service. Its contribution to the Tonga Road Map is in pushing back the tendency of
informal fast-track fuel based generation. Providing quality electricity options to outer island
communities that are sustainable financially, environmentally and socially is the primary
objective. By addressing the weaknesses of previous programs a truly effective step forward
becomes possible. Taking into account that a wide variation of energy demand and
development opportunities as well as the economic abilities exists between the islands and
certainly exists even across single communities, it is apparent that a one-for-all solution is not
practical. This initiative aims to match the supply concepts along the varying profiles. Supply
levels would be variable and transparent, so as to allow for growth between “tiers” of
generation if and when the demand arises. This tiered approach is a novelty in RE
electrification and may well become a practice for electrification settings with similar growth
demands.

The steps of development: Basic institutional frameworks must be developed to allow the
basic developmental steps to proceed effectively. Again evidence from the last 20 years
speaks clearly on this issue. A detailed planning phase is also required to further focus the
financial projection s on implementation cost and service capacities required.

Financial cost of tiered implementation: In order to appraise the cost for the envisaged
project a detailed survey of the island communities to see what systems they are able to
afford and wish to purchase will be required. An estimate has been created on how much of
the islands potential (number of households) can materialize as demand (number of different
systems likely to be used by each community) by assessing a ‘prosperity rating’. This
projection approximates a cost US$5.5 million in total, which encompasses project
development, capacity building, installation and equipment costs.
Contents
Executive Summary.............................................................................................. 3
Contents .................................................................................................................. 4

1. Context and Background ................................................................................. 5
  1.1. Remote island initiatives to present ............................................................. 6
  1.2. Lessons learned............................................................................................. 12

2. Proposed Tonga Off-Grid initiative (TOGI)..................................................... 16
  2.1. Overall Objective ......................................................................................... 16
  2.2. Objectives ...................................................................................................... 16

3. The steps of Development .............................................................................. 17
  3.1. Organise the energy sector´s institutional framework .... Error! Bookmark
  not defined.
     3.1.1. The Government Energy Agency ......................................................... 18
  3.2. Develop non-government Off-grid ESCO capacity ............................... 18
  3.3. Design System Configuration...................................................................... 19
     3.3.1. Tiered implementation approach ........................................................ 20
     3.3.2. Technical requirements and considerations ....................................... 23
     3.3.3. Incorporating current Off-grid systems................................................. 23
  3.4. Project Development, Implementation and review ............................... 23

4. Financial cost of tiered installation ................................................................ 24
  4.1. Primary cost of the Off-Grid Initiative.......... Error! Bookmark not defined.
     4.1.1. Flexible Donor funding arrangement ................................................... 27
     4.1.2. Tariffs and cross subdisation ................................................................... 25

5. Conclusion........................................................................................................ 27

   Appendix 1 Energy Sector organisation ............................................................. 29
   Appendix 2 Outer Islands information breakdown ............................................. 1
   Appendix 3 Prosperity Ratings .............................................................................. 32
   Appendix 4 Prosperity rating using information on economic activity............ 1
   Appendix 5 Projected breakdown of SHS distribution among Island
   communities and cost distribution of hardware and mobilization...................34
1. Context and Background
The TONGA ROAD MAP initiative that commenced in 2009 has as its goal charting a
renewable energy based strategy to attain a sustainable energy future for all of Tonga. In
view and awareness of the decreasing reliability of fossil fuel based generation, renewable
energy solutions attain increasing focus. The strategy for the outer islands will be focused on
off-grid solutions using renewable energy while that for the urban islands will provide for
conversion of generation from diesel power to renewable energy.

The Government of Tonga (GoT) has had electrification as a key factor in outer island
development for more than 20 years. Providing reliable and adequate electricity supply to
the remote, declining and dispersed population of the outer islands (Table 1) is a major
challenge and requires an entirely different strategy than for the urban island of Tongatapu.


                            Table 1 Population of Tonga, 1996-2006

 Island or Group       Population          % of total         % increase       Annual growth
                         (2006)                               (1996-2006)
   Tongatapu             72,045               71%                  7.6%               0.7
       Eua                5,206               5%                   5.5%               0.5
    Ha’apai               7,570               7%                  -7.0%              -0.7
     Vava’u              15,506              15%                  -1.3%              -0.1
      Niuas               1,665               2%                 -17.5%              -1.9
      Total             101,991              100%                  4.3%               0.4


It is also an opportunity for a combined approach where the 85% of centralized generation
can support the 15% dispersed supply. Beginning in 1987, the GoT has, with the assistance of
various international agencies and donors, implemented a number of outer island electricity
supply models using both solar energy and diesel generation with various levels of success. In
developing an improved outer island electrification strategy for the future, the strengths of
those supply models need to be emphasised and their weaknesses avoided.

In an ad-hoc consultation from Aug.10-12 the World Bank office in Sydney was host to a high
level expert exchange between the GoT and the newly founded International Renewable
Energy Agency IRENA. The Agency with its headquarters in Abu Dhabi is representing
currently 137 signatory countries. By the Kingdom of Tonga, the Agency was asked to assist
the GoT in designing an off-grid supply model which offers present-day reliability, viability and
scaleabitiy of decentralized renewable energy electrification service.

The present notes describe a first assessment of the situation, the lessons learned and the
proposed initiatives.
    1.1. Remote island initiatives to present

The ‘Outer Islands’ (OI’s) of Tonga are a group of 26 islands scattered throughout the three
primary island groups of Tonga. The total population of the OI’s is approximately 6,001 people
which make up roughly 6% of Tonga’s total population. Although there are no definitive
statistics on the income across all the OI’s, data, based on the 2006 census and findings from
various studies2 point to an average annual cash income of around TOP$8000 per
household3.

1.1.1 Solar Home Systems
Since 1987, several PV based initiatives following the Solar Home Systems (SHS) concept have
been implemented under the Tonga Outer Islands Solar Electrification Programme (TOISEP).
SHS are decentralized, single home generators of 10 to 500 W with controller and battery
storage. Typically, they serve the electricity demand for good quality home lighting and radio
and provide 24 hour access to electricity. The following table lists these projects (also see
Maps 1 and 2):
                               Table 2 The Existing TOISEP Project sites
  Island Group          Island          Installed Source System Qty Panel Panel Total
 Tongatapu       Atataa Phase 1           1997     UNESCO      SHS       25   35   2      1750
                 Atataa Phase 2           1998      Japan      SHS       21   50   2      2100
                 Eueiki                   1999       AUST.     SHS       26   50   2      2600
 Ha’apai         Mango                    1988         EU      SHS       20   33   1       660
                 Mango Upgrade            1991         EU      SHS      24  4 48   2      1620
                 Mango Upgrade            2009       IUCN      SHS       15   80   2      2400
                 Mo’unga’one              1994         EU      SHS       49   55   2      5390
                 Mo’unga’one UpG          2009       IUCN      SHS       36   80   2      5760
                 Fonoifua                 2002    PREFACE      SHS       24   75   2      3600
                 O'ua                     2002    PREFACE      SHS       38   75   2      5700
                 Kotu                     2002    PREFACE      SHS       35   75   2      5250
                 Tungua                   2002    PREFACE      SHS       32   75   2      4800
                 Matuku                   2002    PREFACE      SHS       22   75   2      3300
                 Fotuha'a                 2002    PREFACE      SHS       18   75   2      2700
 Vava’u          Falevai                  1995         EU      SHS       42   50   2      4200
                 Hunga                    1995         EU      SHS       47   50   2      4700
                 Kapa                     1995         EU      SHS       30   50   2      3000
                 Lape                     1995         EU      SHS        7   50   2       700
                 Matamaka                 1995         EU      SHS       42   50   2      4200
                 Noapapu                  1995         EU      SHS       43   50   2      4300
                 Otea                     1995         EU      SHS       35   50   2      3500
                 Ofu                      1995         EU      SHS       43   50   2      4300
                 Olo’ua                   1995         EU      SHS       21   50   2      2100
                 Ovaka                    1995         EU      SHS       26   50   2      2600
                 Taunga                   1987         EU      SHS       25   33   2      1650
                 Taunga UpG               1991         EU      SHS        7   48   2       672
 Niuas           Tafahi                   1999         NZ      SHS       36   48   2      3456
                 Niuafo’ou                1993      France     SHS       35   55   2      3850
                 Niuafo’ou                2004         NZ      SHS      150   75   2     22500
            TOTAL INSTALLED (Not necessarily functioning)               950             113358
    Source : Energy Planning Unit, September 2009


1
  This figure is based on data from the 1996 census, 2006 census, JICA survey 2009 and also information from a
1996 S.P.I.R.E feasibility study.
2
  1996 Census, 2006 census, JICA survey 2009, 1996 S.P.I.R.E feasibility study, 2004 PIREP report
3
  Anecdotal evidence exists of quite large variances of cash income from island to island.
4
    The existing 20 installations were upgraded to 2 panels and 5 more systems installed with 2 panels - 1991 USP report
It should be noted that the data cannot simply be added to assess the number of current
systems, as rehabilitation and upgrading may have been on the same systems (e.g. Mango
would add up to 44 units while census accounts for 12 households) In fact, little monitoring
data exist particularly on the older systems which suggests a thorough assessment before
further alottments. Data show however, that almost all inhabited islands have been exposed
to PV generation systems, although some were abandoned, some rehabilitated, some even
twice and as the understanding of user profiles and service requirements grew, the service
quality also reached a satisfactory level.
The northernmost island group, the Niuas, has been the target of the most recent installations.
The project was funded by New Zealand and since about 2004 some 170 SHS have been
installed on the large volcanic island of Niuafo'ou (also known as “Tin Can Island”) and
another 20 SHS has been installed on the small island of Tafahi in the small Niuatoputapu
group of three islands.

Currently, a Japan-funded electrification drive is reaching the implementation phase. It is
targeting the rehabilitation of 444 Solar Home Systems across the island communities of
Vava’u as well as including ‘Atata and Eueiki islands which are close to Tongatapu. The
systems that will be installed are identical in design to the 12V DC SHS currently used in
Ha’apai (ie 5 DC lights and a plug for a radio). JICA hopes to have this project underway by
March 2010. This comes on the back of a IUCN funded rehabilitation project on Mango and
Mo’unga’one islands in Ha’apai.

Although the capacity of installed SHS has progressively increased over the years, all SHS
projects have followed the “one-size-fits-all” approach and have limited flexibility to meet the
more diverse electricity priorities and financial capacities of different user groups. Some
recipients have found the installations to be larger and more costly than desired while others
find the installed capacity too limited and are willing to pay more for additional capacity to
operate videos, fans and other larger appliances as would be desirable for income
generating applications.

1.1.2 Diesel Electrification
The main islands of the Vava’u and Ha’apai groups and the island of ‘Eua have had diesel
powered grids for many years that are presently professionally operated as utilities by the
TPC. They provide good quality power with acceptable reliability though not as good as that
seen on Tongatapu.

The larger islands of ‘Uiha, Ha’afeva, Nomuka and Ha’ano all had grid-connected diesel
generation installed under an AusAID scheme in 2002. These generators are run by a
community based management scheme under the Cooperative Act but key financial
monitoring and management activities required under the act have not been complied with
and as a result reliability of supply, financial sustainability and system performance are
reported to be not up to the expectations. Unfortunately as the system designs are typically
oversized and quite inefficient, the cost of operation – mainly the fuel component – is very
high on a per kWh service delivery basis. Also, the overall management of the systems has not
been well structured to overcome the technical and operational problems that have
occurred. Only Nomuka’s installation is reported to be providing reasonably acceptable
power quality though its cost of operation is high.
1.1.3 Grid extension
The extension of the existing Tonga Power grid in the three island groups is a geographic
possibility on three of the outer islands (Kapa Island, Ha’ano and ‘Uiha). Grid extension on
these islands is considered an option due to the geographic distance between these islands
and the grid. However there has been no study on the cost both financially and
environmentally of implementing an undersea cable to connect these islands.


                                                                                                  Grid
                                  Grid




        Kapa Island




                                                 Figure 1Potential grid extension options From
                                                 top-left then clockwise: 1; Kapa Island in Vava’u is
                                                 closest to the grid. 2; Uiha is the furthest from the
                                                 grid of the three potential islands. 3; Ha’ano is also
                                                 reasonably close. One thing all locations also have in
                                                 common is the location of a resort between them
                  Grid                           and the grid. Photos from Google Earth
Map 1: Vava'u Electrification Map
Map 2: Ha'apai Electrification Map
Figure 2 Ha'apai Outer Island Installed capacity (AusAid and EPU)




Figure 3 Vava'u Outer Island Installed capacity in KW (source EPU)
1.2.   Lessons learned

The operation and maintenance (O&M) of SHS for electricity supply is very different from the
operation and maintenance of the usual central generation systems using grid delivery. With
central systems, the O&M effort is concentrated at the central generating plant with little field
maintenance required to keep the distribution grid in operation. End users have no
interaction with the electricity supply other than paying the bills and operating and
maintaining their electrical appliances. With SHS, there are as many generators as users and
O&M is distributed among user installations with frequent visits necessary to end user sites.
The introduction of new technologies like SHS assigned to electricity consumers the entirely
new role of power-producers: They had to exercise load management, maintenance service
and even troubleshooting, while the mechanics of those early roll-out left them little grace for
a learning curve. Such, the buy-in even for those willing to assume that new role was hard.
Adequate user information and training, that is basedon lessons learned in most international
SHS projects, needs to be an integral part of the roll-out procedure.

In the course of the various rural electrification projects from 1987 to 2002, a clear
improvement in the electricity service reliability and user acceptance was reported. In
addition to increasing familiarity with the technology both, a better design with larger solar
array and more efficient maintenance can be credited with that improvement.

While initially well-intended socio-economic considerations introduced small SHS with slim
service budget, offering low cost but insufficient operation, later initiatives tried just in
opposite a generous diesel based supply with high initial, operation and replacement cost
leading to non-sustainable operation.

These principal lessons learned from the Tonga experiences will need to be addressed in
future initiatives:

         Service quality is priority: A quality electricity service requires reliable hardware, a
         responsible organization, a sound finance for operation, maintenance and spares,
         and appropriate knowledge. Just as users need to be prepared for their role as
         system operators, adequate and continuous training of planning, operating and
         maintenance staff will have to provide the required capacity enhancement (HRD)
         and recognition of staff within the power companies and energy service providers.

         Design fit the needs: Depending on location, accessibility and social background,
         the spread of energy demand and financial ability varies so greatly among Tonga´s
         outer islands that no single unit type will prove a universal solution. Under-sizing is as
         detrimental as over-sizing. A modular system expansion can grow with the demand.

         Attractive Solution: Like any other business, this far-reaching endeavour can only be
         sustainable if it offers opportunities and benefits for all participants, from
         implementers to service to users. While basic electrification will mostly be
         consumptive and not likely create commercial activity and productivity although
         positive exceptions exist in a range of cell-phone services and charging and also PC
         services, the supply solution needs to be open for further reaching commercial
         activity.

         Adequate institutional framework: The current institutional framework governing
         energy in Tonga must be upgraded to cope with development in the sector. This
         upgraded framework must ensure a consolidated, efficient and sustainable way
         forward for the remote energy sector in Tonga.
Over the two decades that have passed since the first attempts at outer island electrification
in Tonga, there have been a number of studies that have examined the problems and
experiences and have, in most cases, made recommendations for improvements. Some key
studies carried out over the last 20 years in Tonga by various consulting and donor agencies
that have documented lessons learned. These include:
1988 Renewable Energy Sources and Appropriate technologies:
A case study of a small island nation, Birman, F. De Silva, T. Hoverman, S. Samootsakorn, M.
Commenting on the newly formed EPU
Page 90“A need for co-ordination with the TEPB (and the EPU)”

1992 Pacific Regional Energy Assessment, Volume 10:
Tonga issues and options in the energy sector, The World Bank
Section 1.16“A shortage of managerial and technical skills constrains Tonga’s capacity to
devise sound energy policies monitor their implementation and operate complex energy
schemes”
Page 4 “but affecting energy sector management is the complex issue of institutional
weaknesses in government and the public sector in general, such as availability of qualified
national candidates for public sector positions, salary levels, management skills, motivation,
staff turnover, and institutional memory.”

1996 S.P.I.R.E feasibility study of Photovoltaic Electrification in the South Pacific,
Case Study of Tonga,
Page 52: The existing (institutional) arrangement is not capable of supporting this large
number of systems spread over three island groups and it is urgent that a new institutional
structure for the PV based rural electrification be implemented as soon as possible”

2000 Ministry of Foreign Afffairs and Trade:
Niuatoputapu and Niuafo’ou Electrification Feasibility and design study, Meritec, NZ, October
2000 Section 5.1.4:
“The TSREP (TOISEP) is not sustainable in its current form. The collection of monthly rates will
only work well if the quality of service provided by the energy planning unit meets the
minimum quality standards”
Recommends “Benefits of solar electrification are equitably distributed to all income groups”

2004 PIREP report (page38-39), 2009 ROPE for TOISEP project by JICA (page 6-7)
“The amount of money that people are willing to pay for PV electrification can be
substantially greater than conventional “ability to pay” surveys predict.”
“The rate of collection of user fees is directly related to the quality of service obtained”
“Local, community based institutions are not adequate for sustainability”
 “Projects need to build on prior experience”
“The more remote the site, the higher need for high quality, long life components”
“Preventative Maintenance improves long term reliability”

2001 ESCAP Tonga Report Initial draft, Chris Cheatham, October 2001
Page 14 , Comenting on energy sector management
“It is therefore recommended that
      1. the solar utility role under the PREFACE program should not be assigned to the EPU,
          but rather two alternative options should be explored: (i) the creation of a solar
          electrification cooperative based on the model being developed for the Ha’apai
          diesel electrification program, or (ii) a new non-government organisation established
          or an existing NGO found that can operate as a solar utility, initially on contract to the
          EPU if necessary, then independently; and
      2. for future rural electrification projects, whether diesel or solar, community
          cooperative-based approaches to project management should be developed,
          modified as required by lessons learned from experience with the Ha’apai
          electrification cooperative. As the private sector gains experience in managing rural
          electrification projects, other entities such as non-profit NGOs or for-profit
       management companies may be established to fill the project management niche
       left open by the EPU, and cooperation with such entities should be explored.“

Page 18 “Concluding remarks : It’s all been said before
Needs:
   Drafting of an energy policy for Tonga, wide circulation, and acceptance by cabinet
   and parliament
   Rationalisation of energy sector management responsibilities
   Regulatory functions
   Development of privatisation options for management of rural electrification, especially
   community-based approaches


1.3.   Lessons from Pacific SHS projects providing quality SHS service

The Kiribati Solar Energy Company

In the 1980’s, the Government of Kiribati made it policy that all outer island electrification
would use renewable energy. As a result Kiribati has approximately 2200 SHS of 100-110 Wp
each plus around 200 public facility installations ranging from 150 Wp to about 600 Wp that
are spread over 18 islands of the Gilbert’s group. All are under the management of the
Kiribati Solar Energy Company (KSEC), a government owned but commercially operated
corporation that acts as a rural utility and charges a fee to users for the service and takes
responsibility for all maintenance and repair of the SHS. The KSEC maintains well trained
technician / agents on each of the islands. The KSEC owns the solar equipment, not the
government or the users. The KSEC started this programme with about 60 installations from
JICA in 1992, another 325 were added by the EU in 1994 and the rest by the EU in 2002-2004.
The next round is expected in 2010-2011 with another 1000 installations from the EU. There is a
trend for users to increasingly request larger systems for additional appliances. The history of
the program has been of reliable services with rarely more than 10% of systems not operating
at any given time. User collections have been good with typically over 85% on time and very
few long term defaults. Technicians are provided refresher training on a regular basis and
new technician recruits must undergo formal training in Tarawa before being assigned to an
island. Residential installations are typically 100-110 Wp in size and the monthly fee of AUD$9
has been charged to residential customers for the past 17 years even though operating and
general costs have increased due to inflation. An increase in fee has been requested several
times over the years but government has not allowed it. So in 2009, for the first time since its
formation, the KSEC has had to request a formal subsidy from government to be able to
continue to provide good quality outer island services. The subsidy concept has been
approved but no payment has yet been received.

The Fiji Department of Energy RESCO system

Fiji has close to 1000 SHS installations mostly on the northern island of Vanua Levu and uses the
RESCO concept as developed initially in Tuvalu and most well established in Kiribati. They are
typically around 100Wp in size. The project has grown from a small trial in 2001-2002 to the
current size through the participation of several different donor agencies. The systems are
owned and managed by the Fiji Department of Energy who receives money from the
customers on a monthly basis. The payments are through a pre-payment system whereby the
customer prepays through the Post Office (currently FJ$14.50 per month of which $0.50 is the
fee charged by the Post Office for the collection service) which turns on the power for 30
days through a timing type meter activated by a 16 digit code provided at the time of
payment. The systems are maintained by a private contractor who is hired by the Fiji DOE.
Although all the systems are on the island of Vanua Levu and accessible by road, villages
served are widely separated and access costs are significant. Customer satisfaction appears
high as indicated by the receipt timely payments and the project has been successful at
providing basic electrical services to remote areas of Vanua Levu for over 7 years.
The Tonga PREFACE initiative

Completed in 2002 the PREFACE project installed 169 Solar Home Systems across 6 islands in
the Ha’apai group with joint funding from Australia and France. The Ha’apai Solar Electricity
Committee (HSEC) was formed, formally registered and made responsible for managing the
project. It uses the Incorporated Society Model which includes village electricity committees,
island technicians and town officers organised under a central management committee
chaired by the Governor of the island group. It uses the utility (RESCO) concept pioneered by
Kiribati where consumers are provided reliable, satisfactory services and in return pay a fee
for those services. The systems themselves were designed to maximize battery life in order for
the RESCO to be more financially feasible; the system included a 160Wp panel array, 12V
high quality open cell battery with a capacity of 130Ah, 3 CFL bulbs (13W) and 1 LED night
light (0.35W). Additionally a fluorescent tube light is mounted outside near the road and can
act as a street light in the evening. It is this high quality system design coupled with a
management structure that has taken the lessons learned from earlier projects that has both
improved the services provided and instituted a management system that is the SHS
equivalent to the proven utility model. PREFACE remains the most successful solar
electrification scheme in Tonga to date and continues to generally provide reliable solar
electricity to its recipients after 7 years of operation.

The PREFACE project structure and technical design represents a reasonable starting point for
future design of SHS projects and indeed the later Niuas SHS electrification project funded by
New Zealand is based on the PREFACE model.



Over and all experience shows that a structure is preferable, where government supervises
the operation, whether as system owner or owner of an electric service company (ESCO),
and uses a private sector company to conduct operation and maintenance. This excludes
right out sale or rent-to-own schemes in favour of fee-for-service arrangements. The fee has to
cover all operation and replacement cost, will sustain the ESCO and needs no further
government subsidy. When government owns the generator, an upgrade to a next level size
system is facilitated, just as a system transfer in case of a grid formation.
2. Proposed Tonga Off-Grid initiative (TOGI)

2.1.   Overall Objective

To provide all the outer island, off-grid communities of Tonga access to 100% renewable
energy based electricity in a financially, environmentally and socially acceptable manner
while providing outer island communities already using diesel generation the capability to
address their varied needs with the goal of at least 50% of generation from renewable
energies.

For the outer islands, a 100% RE supply is attainable and justifyable. This means to push back
the use of diesel generation as the other alternative (which is used informally in many small
clusters), by offering a reliable and competitive solar PV supply, and to avoid the installation
of any size new fossil fuel based generators.


2.2.   Objectives

   •   Develop clear and attainable electrification targets based on realistic appraisal

   •   Commit to a time frame in which political and administrative frame conditions are set
       to attain these targets.

   •   Vest the Tongan energy sector with the mandate and capacity to attain these
       targets. Ensure the government’s energy agency has the authority under law to
       embark on the regulation, legislation and implementation of the TOGI

   •   Ensure that all players in the “value chain”: consumer, government, service provider
       and financer, benefit from the intervention. To achieve this objective careful attention
       must be given to the planning and project development phase.

   •   Develop an off-grid ESCO as an implementer and service provider for off-grid
       electrification

   •   Develop the capacity within the off-grid ESCO and the government energy agency
       to handle the technical, managerial, financial and organisational features of the
       initiative. In-order to provide consumers with a useful and reliable electricity service
       that matches the consumers’ expectations.

   •   Provide consumers in outer island communities with electricity options that provide
       access to varying levels of generation designed to fit their needs; therefore providing
       access to various appliances that can improve a consumer’s quality of life and
       introduce them to a greater range of potential commercial activity.

Varied levels of electricity demand can be drawn from a grid supply, but can also be
provided by SHS arrangements of different size. Such a tiered supply satisfies small demand at
low cost and larger, even commercial demand at higher cost, providing for an upgrade as
the demand grows. Eventually, this approach can bridge the transfer to small grids.

The tiered supply is a novel approach which requires a more careful assessment of the user
demand than was exercised by SHS initiatives so far. It goes well with the user information
campaign that is now recommended to assure a better buy-in of PV users. It also fits the
monitoring and evaluation phase following the installations which is to assure improved
consumer satisfaction.
3. The steps of Development
Building on the prior experiences of
TOISEP and LOME II it is evident that the                          A. Planning
success of a project is dependent on                   1. Organise institutional framework
ensuring all players (consumers, service
providers, financers and government) in                2. Develop non-government Off-grid ESCO
the „value chain“5 benefit. Because of                 3. Design System Configuration
the relative newness of the tiered
                                                       4. Develop Payment scheme
implementation concept to the rural
electrification scene in Tonga it is                   5. Identify Sites
essential that the initial planning phases,            6. Appraise site, check options
which are commonly undervalued, are
given a high priority in-order for „value
chain“ needs to be addressed.                                      B. Implementation
                                                       7. Conduct information drive
                                                       8. Install demo system
The following is an explanation of the
step by step of a development                          9. Get, evaluate applications enroll applicants
procedure6 that is recommended in                      10.    Secure financing
order to ensure a thorough and
progressive development of the project.                11.    Procure Material
Based on this development schedule an                  12.    Test components
initial estimate of costs for each primary
stage can be made (see section 4).                     13.    Train technicians/ESCO
                                                       14.    Collect Installation fee
The three sections of the project
                                                       15.    Install systems
development procedure are.
   A. Planning                                         16.    Train users
   B. Implementation
   C. Operational
                                                                   C. Operation
                                                       17.    Organise collection
                                                       18.    Supervise operation
                                                       19.    Review Implementation


                                                          Key
                                                                Points of decisive importance, a
                                                                decision must be made on
                                                                whether installation or the
                                                                project\ will go ahead

                                                   Figure 4 Project develpoment procedure




5
    (World Bank, 2008)
6
    Based on Project Development guidelines from the PV Electrification Handbook
3.1.    Organise the energy sector´s institutional framework

The dispersed and overlapping government energy responsibilities will need to be addressed
by the Road Map as in the current structure of the government energy sector accountability;
                                                              7
for the task ahead roles and authority are not ideally defined (see Appendix 1). There is also
a need to adapt legislation on the management, regulation, implementation and review of
off-grid electrification. A renewable energy bill has been drafted and will have to provide a
conducive and encouraging framework for RE application.

A progressively structured institutional framework with clear specifications of role and
authority is something that would allow each stage of the project to have effective
government input. This would be helped by a government energy agency backed by
legislation, with the mandate to wield regulation.

3.1.1. The Government Energy Agency

Introducing a private or non-governmental Electricity service provider allows the public
sector’s energy capacity (EPU or a reformed energy agency) to be wholly focused on the
policy, legislation, regulation and public information tasks, leaving the project management
role with the Non-Governmental Off-Grid Electricity Provider (NGOGEP). This allows for
accountability on project performance because performance could be defined by contract
(with penalties and incentives) and project service standards could become enforceable8.

Building the capacity of this reformed energy agency to be able to handle this new tasks
(rural energy management, planning, legislation etc) is a great opportunity and in the course
of the Tonga Road Map initiative becomes a priority


3.1.2. Develop non-government Off-grid ESCO capacity

Based on the lessons learned from current and previous projects in Tonga and abroad
(Kiribati SEC, experience in the Solomons, Philippines) it is apparent that there should be a
well trained, motivated, well supported and non-government service provider for the outer
islands.

Currently the Tonga Power Limited is not involved in any RE electrification. This means whether
the current utility is going to be the service provider or whether it is another agency the
capacity to handle the proposed off-grid plan must be developed and continuously
updated in order to handle the increased number of systems and the expectation of quality
required.

As such a systematic, repeated capacity enhancement on rural energy planning, technical
design, tendering, supply management, cost and tariff administration as well as a networked
on-site operation and maintenance program needs to be a vital element of the Remote
Island Electrification Initiative.




7
 PIREP report 2005
8
 Sustainable Energy Policy: Overview Report on an Advisory Mission to Tonga, October 2001, Cheatham,
Chris. ESCAP
3.2.   Design of System Configuration
The design of supply concepts for the outer islands will first seek to identify least cost solutions,
based on life-cycle costing or present value.
Among the possible supply concepts it was found that fuel based generators expect high life
cycle costs, wind generators meet insufficient wind regimes, so the most viable approach is
PV solar generation.

Considering that SHS have been introduced widely excludes to go back to the smaller sized
battery-charging or solar lantern concepts. In fact, the practical PV size has been found to
be a minimum of 150 Wp, with an upgrade option for higher demands.

Generation level     Power Wp       distribution    utilization       Income        maintenance
                                                                      potential
Solar Lantern        5              mobile          outdoor           moderate      little
Battery Charger      200            mobile          Mostly            moderate      little
                                                    domestic
SHS Basic            150            Stand alone     domestic          low           regular
SHS Comfort          300            Stand alone     domestic          low           regular
SHS Commercial       450            Stand alone     commercial        moderate      regular
Minigrid             2.000          grid            d&c               medium        professional
Hybrid               20.000         grid            d&c               medium        professional

The tiered implementation approach involves 6 levels of generation: SHS Basic, SHS Comfort,
SHS Commercial, Minigrid, Hybrid and existing working installations. Higher than SHS demands
in clustered communities support PV based mini-grid generators in units of 2 kWp and a hybrid
generator supplementing eg 38 kW diesel sets would be 20 kW.
3.2.1. Tiered implementation approach
Based on the lessons learned, it is important to consider the wide variation of energy demand
and development opportunities as well as the economic abilities over the islands and to
match the supply concepts along these profiles. Hence, a one-for-all solution is not practical
and economical, supply levels should be variable and transparent, so as to allow for growth if
and when the demand arises.


    >20,000Wp energy efficient appliances


    >2000Wp energy efficient appliances




                                                      450Wp
                                                      Freezer, fridge, washing machine

                                   300Wp (AC) Lights, Phone charger, radio, TV,
                                   DVD, low wattage appliances

                             150Wp (DC) Lights, Phone charger and radio

       Figure 5 Relationship between the size of system, complexity, power supplied and capacity
       required to service it.

    The proposal as such stays on the ground of SHS, starting with the current design level but
    open for additional panels, and for AC supply.
    At sufficient density of large SHS, the expansion to mini-grids will be the option in selected
    locations. The load developed with the pre-electrification SHS provides the most
    conducive investment decision for this next higher service level.
    Already existing diesel based small grids can be improved to a third level by optimizing
    their service/cost ratio with a hybrid PV expansion9.




9
 This was suggested as well in the final report (page 42) of the AusAid Ha’apai Outer Islands Electrification
Project Data Collection and Analysis Mission, September 2007.
3.2.1.1.       Solar Home Concepts (150Wp, 300Wp and 450Wp)

Currently the existing SHS schemes and planned extensions (JICA) can be built on by allowing
an expansion transparency for SHS levels from basic lighting of e.g. 150Wp to small
commercial (450 Wp):

A tariff based on the number of panels would reflect different service levels, while
maintenance will not differ much. The larger systems have the potential to also fit public uses
such as PC service in schools, basic medical equipment in infirmaries or public viewing
equipment in municipalities. Along with the active generator components, the operating
agency might do well in stocking energy saving appliances, such as lights and refrigerators.


3.2.1.2.       Mini-grid (>2000Wp)
Where the absence of a grid represents the strongest asset for the SHS approach, introducing
the mini-grid as a small centralized approach, is combining advantages and risks of SHS with
that of the public grid. While an individual household on the grid is mostly no longer restricted
in time and level of electricity consumption, the concept also introduces more costs and
losses for the grid operator.

The higher energy output achieved with more sophisticated technology is mostly met with an
increased demand when users will not personally feel the effect of stronger power use.
Added are the technical and more important non-technical grid losses.
This can be controlled only by introducing metering concepts and a rigid pricing structure
and will lead to higher service cost. While the SHS are operated by users, the Mini-grid needs
trained attendants and strict maintenance. Failure here will be costly and lengthy, and will
affect a whole community. The next major challenge is to accumulate the income for bigger
replacements.

Locations with progressive indicators, above average income and commercial activities such
as trading (jetties) and tourism could benefit from this approach. They should be clustered
and enjoy strong leadership. An ideal pilot location appears to be the island of ‘Atata a few
miles north of the capital (see Figure 4).




              Figure 6 'Atata Island a model location, 20 minutes from the capital
3.2.1.3.          Hybrid Concepts (20,000Wp)

Combining several complementing sources of generation can bring about economic
advantage if these offer strong and calculable contributions. However, they also introduce
higher risks of operation/failure, add the cost of yet another technology, plus the technology
to join the both. As example, combining a PV generator with a wind turbine is advantageous
when there is considerable wind at night, complementing the solar radiation profile and
reducing batteries for night-time storage. Wind generators on the other hand require
substantial maintenance and control and must be matched to the PV operation.

While there are hardly benefits in the SHS power level, mini-grid installations using a primary
wind generator will mostly benefit from an added PV component. Wind, on the Tonga outer
islands however is generally a lean resource below 30m altitude and also bears a cyclone risk.

An interesting opportunity for hybrid application could be the islands where diesel gensets
have been installed which can no longer be operated continuously because of excessive
fuel cost. A PV hybrid with a modest battery support will very likely reduce diesel cost,
improve genset load and expand service times.




Generation level                  SHS Basic       SHS              SHS                Minigrid           Hybrid
                                                  Comfort          Commercial
Current flow                      DC              AC               AC                 AC                 AC
Generator                         Solar PV        Solar PV         Solar PV           Solar PV           Solar PV/
                                                                                                         Diesel
Rated Power                       150 Wp          300 Wp           450 Wp             > 2000 Wp          > 20000
                                                                                                         Wp
Distribution                      Stand-          Stand-           Stand-alone        Grid               Grid
                                  alone           alone
Typical Capital Cost              1,222           2,640            4,206              33,980             149,400
US$
Grid cost part (incl.)                                                                4,000              8,000
Typical energy level              221             442              664                3,973              18,312
kWh/a
Energy cost                       0,553           0,597            0,633              0,855              0,816
US$/kWh/10 a
Recommended                       200             500              900                system             system
Installation fee*                                                                     dependant          dependant
Recommended                       20              40               70                 system             system
Service fee*                                                                          dependant          dependant
Table 3 Estimated costs and projected fee's (*based on current fee structure of Ha'apai Solar Society)
3.2.2. Technical requirements and considerations
In view of the harsh environmental conditions on the islands, with highly corrosive air, sandy
wind, insects, and cyclones, a reasonable lifetime of the technical equipment can be
expected only when it is of suitable quality with high protection class and minimum open
interface. The more remote locations are targeted, the higher the durability needs to be.
Mechanical structures (panel arrays, wind masts) require engineering with cyclone exposure
in mind. Only few suppliers can handle such demand so the more sophisticated technologies
like mini-grids should target the most accessible sites initially.

Guidelines/Regulations for the minimum performance levels will be set by the government
energy agency and implemented by the off-grid ESCO.
Often, specialized material and appliances have been specified in tenders, resulting in higher
cost and more difficult replacement orders as compared to quality standard equipment. In
terms of lifetime and durability, preference would be given to highest quality available while
avoiding custom made or specialized solutions.
The availability of energy efficient DC and AC appliances will also need to be investigated
during the planning phase. Another reason for TOISEPs inability to provide consistent
operation has been the lack of suppliers of DC light bulbs and compatible appliances10.

3.2.3. Incorporating current Off-grid systems
Under TOISEP solar electrification systems have been installed in the majority of the outer
island communities. Maintenance is irregular and monitoring almost non-existent, so the exact
number of operational systems is not known (current EPU estimates range from 45% to 55% of
TOISEP installed systems still functioning). While this means that the majority of the population
will have some knowledge of solar electricity it also means that there are some sites where
installing new equipment is not required to the same extent as those islands that do not have
working electricity. A careful project development may find that in some sites just a
proper operation would suffice, while some may prefer a higher level of system.

In order to overcome negative experiences of past installations, it should be
prudent to start new systems in conducive focal areas to establish good examples
and build confidence. On these systems users of old systems can be demonstrated
the new technology.

Incorporating the current off-grid systems will become increasingly important
especially in light of the JICA project that will have over 400 new SHS units on the
ground over the next year.


3.3.       Project Development, Implementation and review

As described in Figure 4 the process for project development involves a large amount of
human input in-order for the technical hardware to reach its potential for the medium to long
term. Site appraisal, information drives, development of payment schemes, installation and
eventual regular review of the systems performance are all aspects that not only require the
improvement in institutional framework, they also cost.

It is especially important for the government to marry its aspirations for this project with the
realisation that a large amount of funding will need to go to these essential aspects. All effort
towards Information, training and m&e serves to secure the investment on long term.




10
     EPU
4. Financial cost of tiered electrification
In order to appraise the cost for the envisaged project a detailed survey of the island
communities to see what systems they are able to afford and wish to operate is the proper
way of demand assessment. If ever, this has been done only on few projects. It should be an
important task for the RoadMap process to capture this baseline. A good practice however
for a first estimate of how much of the islands potential (number of households) can
materialize as demand (number of different systems likely to be used by each community) is
to assess a ‘prosperity rating’.

Such rating has been used to rank islands according to their perceived prosperity (see
Appendix 2). This is done by assessing prosperity indicators such as the number of boats,
shops, hospitals, wharves, mobile phones and schools on each island. Factors are given
different significance according to their ability to generate income (boats and wharves
indicate an ability to get involved in economic activity so are considered significant). Some
islands are given bonuses for being commercial hubs or having a good local reputation for
being industrious.

Using the prosperity rating, a fairly objective and transparent prognosis can be made on the
expected distribution of systems amongst the islands. Often before, distribution has been
based on social commitment or political favour, which almost entirely failed. A transparent
priorization is a pre-condition to viable operation.
Priorization takes into account that not all households can be covered at once and
completely. Rather, the demand is prospected by multiplying the households with the ranking
factor. For good service, no clusters with less than 10 applicants would be considered initially.
In a dynamic approach, more and larger systems will add later on. Eventually, some
communities may even surpass the ranking limit and attain close to 100% coverage.
The following cost estimate is based on the deployment of equipment that is expected to be
used (see Table 4 below). This includes materials, transport and installation, plus the cost of
project development (information and demonstration to have users “buy in” the new
concept), plus monitoring and evaluation for the initial year.

It has to be born in mind that the cost of administrating such a remote electrification network
along with the maintenance structure of the systems plus the training and capacity building
on all levels will form another large additional (and crucial) part of the budget. Evidence from
previous projects show that about 45% of the project was in this maintenance and
administrative support bracket, hence an administrative factor 2 is suggested.

                           Table 4 Estimated cost of Outer Island Electrification Initiative


                                                                                               Estimated cost
                           Estimated potential Number of systems
                                                                                               per group US$
                  SHS        SHS          SHS
Location                                                     Minigrid Hybrid         Dvlp       M&E
                                                                                                M&E         Mat.Cost
                  Basic      Comfort      Commercial
Niuas                70           23              22              11          0         4.500     22.052       643.171
Vava'u                0           98              20              9           0        16.500      21.115     681.093
Ha'apai              47           28              13              3           5        19.500 53.441 1.086.701
Tongatapu            10            3               0              4           0         3.000    5.139   163.859
Tonga Total #       127          152              55              27          5        Total Material  2.574.824
Total kWp           19,1         45,6            24,8            81,0       100,0     270 kWp
Estimated                                                                                        101.746
                  162.900       421.344            242.897      963.333 784.350 43.500                       2.720.070
 cost per level
Total Volume      Incl. administrative factor x2                                                            5.440.140
4.1.       O&M Cost recovery of the Off-Grid Initiative
If the capital cost of equipment, testing, installation and initial capacity building is absorbed
by donors then the primary costs to the private or non-governmental RESCO will be:

       •   the replacement cost of components over the projected life of the system

       •   The labour and site access cost of the preventive and repair maintenance technician

       •   The cost of administration, spare parts stocks, training costs, and other support costs

The experience in Kiribati and Fiji has been that these three components tend to be about
1/3 of the total life cycle cost of the project though of course the ratio varies according to
the remoteness of the sites and the type of installations that have been made. The actual
total cost when figured on a monthly basis for the setting of service fees has typically ranged
from US$10 to US$15 per month.

A common observation in this fee setting is that the fees proposed include a portion of about
US$6 set aside for battery replacements in the future. The immediate cost of operating the
projects is lower than the fees proposed and the battery replacement money put aside is
often seen as cash surpluses over outlays in the acounts. It has to be clear that his batery fund
has to be built up in order to sustain the operation over the years.


4.2.       Tariffs and cross subdisation
The question of the amount of Tariff imposed must be answered very early on in
implementation and will be mostly political. Lessons from previous projects spell out very
clearly that tariffs, installation and rental fee’s must be set at a level that is close or above a
level required in order to cover battery replacement and general operation and
maintenance. The questions of payment schemes, downpayments before installation and re-
possesion in default also require clear ansers. It was learned that people are willing and
capable of paying a relatively high price for electricity as long as the service matches their
expectations11.
As example, energy cost of 10 US$ monthly for a basic system as in Kiribati may appear high
(ca.0,54 US$/kWh) but rarely has led to a user returning his solar system.

Political intervention is common in the setting of service fees on the OI’s equal or close to the
price on the main islands. That however jeopardises the ability of project managers to deliver
adequate services as itleaves a significant gap between the returns from customers and the
cost of servicing their needs.
Three options then are open to the RESCO that manages the outer islands solar projects:
(1) to reduce the level of preventive maintenance being provided;
(2) to request government that is insisting on lower customer fees to subsidise the remaining
real cost of service provision; or
(3) to cross-subsidise the solar electrification through increased tariffs for the sale of grid
power in urban areas.

Certainly this subsidy cannot be devised as an additional burden to the TPL. However, in the
case of Tonga an Outer Island Electrification subsidy need only charge customers on
Tongatapu (66% of the population and approximately 85% of electricity generation, see
Figure 7 below) a small amount to benefit the countrymen less fortunate (in fact, most
Tongatapu inhabitants have strong ties to the islands and exercise significant support
already).



11
  Recent evidence from the Ha’apai Solar Society which has fee’s much higher than the ability to pay sureys
suggested. The data shows a sustained payment of fees with very few late payments until a point where systems
begin to fail or operate below the original capacity.
            Figure 7 Tonga Electricity generation by Island group (data sourced
            from TOISEP installation figures and Swales „Review of the Tonga Electric
            Grid Supply Systems and Load Forecasts“ 2009.


Such national cost-sharing may be novel for rural electrification; it is not for the renewable
energy support, as e.g. Germany looks back on 10 years experience to very successfully
finance 15% of its total energy production for renewables with such a scheme, which burdens
an individual household less than 1%.
Another transparent source of subsidy funds would be a tax on fossil fuel imports that is
specifically intended for renewable energy development. Since the goal is to reduce the
need to import fossil fuels, taxing fuels is a reasonable response. This approach is used in
Thailand and has been the main source of funding for their aggressive renewable energy
investments that have included megawatts of grid connected solar and a project to provide
some 300,000 SHS for off grid rural households. The tax in Thailand is a fixed amount, not a
percentage of fuel cost, of approximately US$0.07 per litre at current exchange rates.


                                                       Cost of maintenance
                                                           and service
                                                                  Subsidy fills deficit




              Tongatapu
   Approx = 14,000 Power Consumers

   A blunt Rural Energy subsidy of
   TOP 50¢ per month/per consumer                                                         Financially
   means TOP$7,000 per month                                                              sustainable
                                                                                           operation
                                                             contribution
                                                                User




            Outer Islands
 Cannot financially sustain operation




                       Figure 8 An example of what the rural energy subsidy would work
4.3.    Flexible Donor funding arrangement
Because of the tiered nature of implementation (SHS, Mini-Grid, and Hybrid) and the fact that
different communities will be commencing at different tiers depending on their needs and
ability to pay, it is apparent that previous/current donor funding commitments to Tonga may
not be flexible enough. A mechanism where the financing demands are addressed in
tranches and can be drawn from a framework budget as required by the project may be
more appropriate. Such funding mechanism when coupled with accomplishment milestones
protects the donor’s interests because funds are not pushed onto a project before the
capacity to handle them is established. Investments are still secure from the service provider’s
point of view as well.



                           Funding provision                System provision


       Donor funding-
                                              Project                            Community
       projected cost
          of total                       implementors for
         program                          each community



                             Funding needs                    Energy
                                                              needs
                        Figure 9 How a potential donor relationship could work


4.4.    Adding RE to the TPL operated grids on Eua, in Ha’apai and in Vava’u
The initial renewable energy inputs to these more urban grids can be through grid connected
solar. Since there is reasonable mid-day loading in Lifuka (Ha’apai) and Nieafu (Vava’u), just
reaching the 20% maximum mid-day power penetration for those grids using wind or solar
without batteries will require substantial investment but will provide the most cost effective
renewable energy benefits. Eua has only modest mid-day loading and though grid-
connected solar remains the most cost effective renewable energy technology, the
percentage of total energy that can be provided without the installation of expensive energy
storage is modest.
5. Conclusion
The challenging nature of providing electricity to remote communities demands that the
implementation of the Off-grid initiative of the Roadmap must learn from the experiences of
past projects. A tiered approach of PV based electrification, where supply follows demand is
a novel concept in which Tonga could take the lead.

Namely:
The government must enable the energy sector towards a more effective and efficient
regulation and implementation of energy projects.
The government clearly defines the roles of the TPL and the EPU in the outer islands for the
acceleration of renewable energy usage for rural electrification. It is proposed that: (a) TPL
concentrate on island wide grid based AC renewable energy electrification both in the three
outer island grids now operated by TPL and in the four community operated diesel grids; and
(b) that EPU concentrate on stand-alone solar for households, public facilities and
commercial electricity provision, using both DC and AC power as required.

This is the highest priority action and must be done before any rational development of outer
island renewable energy can proceed.

Establish clear regulations for the development of fees and tariffs for outer island electricity
supplies. For the long term survival of outer island electrification projects subsidies should be
limited to capital investment and for O&M a continuing form of transparent support that can
be sustained for the long term without annual government allocation. Examples include a
cross-subsidy from urban electricity customers and a tax on imported fuel.

The capacity both in manpower and in skill set of the government energy agency and the
electricity provider as well as the private sector must be developed with an intensive and well
structured program to ensure the new more complex systems can be maintained and the
quality of service that reaches outer island communities is improved to a well appreciated
level.

After these important objectives are acted upon the implementation of a tiered off-grid
energy concept can be implemented. Donor’s willingness to arrange support tranches by
milestones is suggested in the project timeline and will allow effective project
implementation.

As the first activity proper monitoring needs to be established by assessing the condition of
the existing installations (about half have an unclear status).
Only then a decision is possible whether to
a) rehabilitate any existing renewable energy installations that have been allowed to
deteriorate to the point where they are no longer providing their intended services
b) extend to off-grid outer islands that are not currently electrified but electricity is desired
c) expand existing SHS capacity to increase their level of supply. This will include AC systems
and in selected and commercially strong cases the introduction of mini-grid units.

Create hybrid systems by adding RE capacity to diesel operated grids to the point where
diesel becomes essentially a back up to the renewable energy system.

Add grid connected solar to the Vava’u, Ha’apai and Eua grids currently operated by TPL.

Because of the varied nature of electricity needs across the outer Islands the tiered
generation approach is deemed an innovative and practical way of providing electricity to
these remote communities. Although substantial funding and time will be spent on its
development, the potential positive impact on outer island communities cannot be
understated. It is this potential for the enhancement of the quality of life and potential to
increase economic activity of the outer islands communities that the Tonga Off-Grid Initiative
aims to ultimately cultivate.
                                                  Appendix 1 Energy Sector organisation

                         Tonga Government Ministries/Departments with Energy Sector Management Responsibilities
    International
    Community                                                    Privy Council
                                                                                                                    Central Planning                Other CPD
   Multilateral                                                                                                          Dept                       Functions
    Donors:                                                        Cabinet
   ADB, SPC
  SOPAC, EU,
  ComSec, UN                                                                                                Project Coordination Committee
agencies, ForSec
                                                                 Prime Minister’s
                                                                     Office
                                                                                                                      Niuas Dev Com
Bilateral Donors:
Japan, Australia,                                                                                                    Vava’u Dev Com
   NZ, France
                                                                                                                      Ha’apai Dev Com



                    Statutory      Labour &            Lands, Survey, &              Foreign               Finance             Works &                    Other
                     Boards        Commerce            Natural Resources             Affairs                                  Environment                Ministries
      Private
      Sector

•     Oil  Supply                   Competent           National Standing             Donor             Public Sector        Energy Sector
                     TEPB           Authority            Committee on               Agreements          Institutional        Environmental
      Companies
                                    (Petroleum               Energy                 for Energy            Reform                Impact
•     Shoreline                    Price Control)                                    Projects                                  Mitigation
      Power Ltd     Other
                     Stat                               Energy Planning                                                         Petroleum
•     RE            Boards                                   Unit                                                              Storage and
      equipment                    Cooperatives                                                                                  Safety?
      suppliers                     Division            Community Solar
                                                          Committees
                                   Ha’apai, Vava’u
                                       and Eua
                                    Electrification                                            Solid arrows indicate apparent existing linkages between agencies.
                                                                                               Dashed arrows indicate needed linkages which are missing or weak
                                                                                               Source: 2004 PIREP Tonga National Report, Volume 14, Wade, H.
                                                                                               SPREP 2004
                                             Appendix 2 Outer Islands information breakdown

                                                                            NIUA GROUP
                                                                                                                  Avrg. cash
               Type of Electricity   No# of Capacity of            Population                  Geographical                      No# of
Island Name                                                                       Households                      Income per                 Other Info
               Generation            Systems system [Wp]           (2006)                      Distribution                      schools
                                                                                                                  annum
Niuatoputapu   Solar Home System       32            3072                 1019         211          3 Villages         8177          4       Wharf, Airstrip, clinic
Tafahi         Solar Home System       36            3600                  69           19           Cluster           8177      Unknown Airstrip
Niuafo'ou      Solar Home System       36            3500                 646          139          8 Villages         8177          3       Clinic, Dentist

                                                                          HA'APAI GROUP
                                                                                                    Avrg. cash
                                              No# of Capacity of Population            Geographical            No# of
Island Name Type of Electricity Generation                                  Households              Income per                            Other Info
                                              Systems system [Wp] (2006)               Distribution            schools
                                                                                                    annum
Mango          Solar                                 15            2400           68           12          Cluster        8753        1
                                                                                                                                        Only small boat
Mo'unga'one Solar                                    35            5600          136           23          Cluster        8753        1 access to beach
Fonoifua       Solar                                 24            3600           88           14          Cluster        8753        1
O'ua           Solar                                 38            5200          149           26          Cluster        8753        1
Kotu           Solar                                 35            5250          185           33          Cluster        8753        1
Tungua         Solar                                 32            4800          231           42          Cluster        8753        1
Matuku         Solar                                 22            3300          116           19          Cluster        8753        1
Fotuha'a       Solar                                 18            2700          132           27          Cluster        8753        1 Difficult landing
Ha'ano         AusAid Diesel Generator                1           31000          619 120                  Mini grid       8753        1
Uiha           AusAid Diesel Generator                2           31000          800 148                 2 Villages       8753        1
               Tonga Power Limited
Lifuka         Generator                              2          372000          2967 534                 Mini grid       8753 Unknown Main town and port
               Tonga Power Limited            Grid
Foa            Generator                      tied        Grid                   1479 252                 Mini grid       8753 Unknown 3 resorts
Ha'afeva       AusAid Diesel Generator                1           19000          262           49         Mini grid       8753        1 Hospital and Wharf
Lofanga        Unknown                                            23000          162           35          Cluster        8753        1
Nomuka         AusAid Diesel Generator                1           13000 474            101                Mini grid       8753        1 Ice Maker
                                                                       VAVA'U GROUP
                                                                                                                      Avrg.
                                        Capacity
                                                                                                                      cash
Island    Type of Electricity   No# of of        Population                                                                        No# of
                                                            Households Geographical Distribution                      Income                 Other Info
Name      Generation            Systems system   (2009)                                                                            schools
                                                                                                                      per
                                        [Wp]
                                                                                                                      annum
Taunga    Solar Home System       32         3200        46             12                     Cluster                 11267          1
Hunga     Solar Home System       47         4700        242            51                     Cluster                 11267          1      Medical Clinic
Kapa      Solar Home System       31         3100        72             19       Cluster ( 1/3 of villages on Kapa)    11267          1
Lape      Solar Home System        7         700         27             7                      Cluster                 11267       Unknown

Matamaka     Solar Home System         42      4200       188          47       Cluster (1/2 villages on Noapapu)      11267          1
Noapapu      Solar Home System         43      4300       234          59       Cluster (1/2 villages on Noapapu)      11267          1
Otea         Solar Home System         35      3500       125          35       Cluster ( 1/3 of villages on Kapa)     11267          1
Ofu          Solar Home System         43      4300       128          29                Elongated cluster             11267          1
Olo'ua       Solar Home System         21      2100        89          22                     Cluster                  11267          1
Ovaka        Solar Home System         26      2600        72          19                     Cluster                  11267          1
Falevai      Solar Home System         42      4200       204          51       Cluster ( 1/3 of villages on Kapa)     11267          1      Medical Clinic


Vava'u       Tonga Power Limited         5   1272000     13069                           Dispersed clusters            11267       Unknown 2nd largest town
Pangaimotu Tonga Power Limited Grid            Grid       1298                           Dispersed clusters            11267       Unknown




                                                                      TONGATAPU GROUP
                                             Capacity                                                     Avrg. cash
Island    Type of Electricity    No# of                   Population                      Geographical                   No# of
                                             of system                      Households                    Income per                  Other Info
Name      Generation             Systems                  (2006)                          Distribution                   schools
                                             [Wp]                                                         annum
Atata     Solar Home System         41          4100            250             38           Cluster          14421            1      20 minutes from capital
Eueiki    Solar Home System         26          2600             57             12           Cluster          14421      Unknown      No Jetty
            Appendix 3 Prosperity Ratings
                                                Rating    Prosp.
                                     No# of
  Group           Island   Pop                  out of   Demand
                                   households
                                                  10      conn.
Vava'u      Vava'u         11400     2559        8,6      2213
Ha'apai     Pangai         2967       530        7,6      405
Tongatapu   Atata           250       52         7,4       39
Vava'u      Taunga          46        12         6,5        8
Ha'apai     Ha'afeva        225       45         6,0
Vava'u      Pangaimotu     1412       246        6,6
Ha'apai     Foa            1479       251        6,6
Vava'u      Kapa            72        19         6,2       12
Vava'u      Ofu             128       29         6,3       18
Vava'u      Olo'ua          89        22         6,2       14
Vava'u      Hunga           242       51         6,0       30
Vava'u      Falevai         204       51         6,0       30
Vava'u      Otea            125       35         6,0       21
Vava'u      Ovaka           72        19         5,9       11
Vava'u      Lape            27         7         5,9        4
Vava'u      Matamaka        188       47         5,9       28
Vava'u      Noapapu         234       59         5,9       35
Ha'apai     Kotu            252       43         5,7       24
Ha'apai     Nomuka          474       102        5,6
Tongatapu   Eueiki          57        23         5,5       13
Ha'apai     Ha'ano          477       97         5,5
Niuas       Niuafo'ou       646       150        5,3       80
Niuas       Niuatoputapu   1290       238        5,3       126
Ha'apai     Uiha            638       113        5,0
Ha'apai     Lofanga         348       52         4,7
Ha'apai     Tungua          302       54         4,7       25
Ha'apai     Matuku          142       21         4,9       10
Ha'apai     Mo'unga'one     136       35         4,8       17
Ha'apai     Mango           68        15         4,8        7
Ha'apai     Fonoifua        88        19         4,8        9
Ha'apai     O'ua            149       38         4,8       18
Ha'apai     Fotuha'a        132       30         4,7       14
Niuas       Tafahi          69        19         4,3       15
                             Appendix 4 Prosperity rating using information on economic activity and capability.
                                                                                                                                       Rating
                                  No# of                           Primary Secondary                           Mobile Comercial Cash
Group       Island         Pop               Shops Hospital Clinic                   Churchs Wharf Jetty Boats                         out of
                                  households                       Schools Schools                             Phone bonus      Income
                                                                                                                                       10
Ha'apai     Mango            68       12         0        0      0       1         0       1    0      0     3      0             8753     4.8
Ha'apai     Mo'unga'one     136       23         2        0      0       1         0       4    0      0     2     14             8753     4.9
Ha'apai     Fonoifua         88       14         0        0      0       1         0            0      0     6      0             8753     4.8
Ha'apai     O'ua            149       26         2        0      0       1         0            0      0   12       3             8753     4.8
Ha'apai     Kotu            185       33         2        0      0       1         0            0      0     5      2         1 8753       5.7
Ha'apai     Tungua          231       42         2        0      1       1         0            0      0     5      0             8753     5.0
Ha'apai     Matuku          116       19         1        0      0       1         0            0      0     5      2             8753     4.9
Ha'apai     Fotuha'a        132       27         1        0      0       1         0            0      0     5      3             8753     4.7
Ha'apai     Ha'ano          619      120         3        0      0       1         0            0      0     7     18         1 8753       5.5
Ha'apai     Uiha            800      148         8        1      1       3         0       5    1      0   20      51             8753     5.4
Ha'apai     Ha'afeva        262       49         2        1      0       0         0            1      0   11       0         1 8753       6.7
Ha'apai     Lofanga         162       35         2        0      1       0         0            0      1     7      5             8753     5.0
Ha'apai     Nomuka          474      101         3        0      0       0         0            1      0   19       1         1 8753       5.6
Vava'u      Taunga           46       12         0        0      0       1         0            0      0     5      8            11267     6.8
Vava'u      Hunga           242       51         2        0      1       1         0            0      0     7     10            11267     6.3
Vava'u      Kapa             72       19         0        0      0       1         0            0      0     9     12            11267     6.4
Vava'u      Lape             27        7         0        0      0       0         0            0      0     3      1        -1 11267      6.0
Vava'u      Matamaka        188       47         2        0      0       1         0            0      0   10       4            11267     5.9
Vava'u      Noapapu         234       59         2        0      0       1         0            0      0     9      6            11267     5.9
Vava'u      Otea            125       35         1        0      0       1         0            0      0   12      16            11267     6.1
Vava'u      Ofu             128       29         1        0      0       1         0       2    0      0   16      17            11267     6.4
Vava'u      Olo'ua           89       22         1        0      0       1         0            0      0     8     11            11267     6.3
Vava'u      Ovaka            72       19         0        0      0       1         0            0      0     3     10            11267     6.1
Vava'u      Falevai         204       51         2        0      1       1         0            0      0     6      9            11267     6.3
Tongatapu   Atata           250       52         1        0      0       1         0            0      0   16      34            14421     7.5
Tongatapu   Eueiki           57       23         0        0      0       0         0            0      0     8      6        -2 14421      5.6
Niuas       Niuatoputapu   1019      211         4        1      0       3         1            1      0   18       0         1 8177       5.4
Niuas       Tafahi           69       19         1        0      0       0         0            0      0     6      0             8177     4.3
Niuas       Niuafo'ou       646      139         3        1      0       2         1            0      0     6      0         1 8177       5.5


                           Information sourced from Census 2006, Census1996, Mango and Mo’unga’one Rehabilitation project and
                           Statistics from the Household Assets survey 2006
           Appendix 5 Projected breakdown of SHS distribution among Island communities
                         and cost distribution of hardware and mobilization
                             Projected system breakdown across island groups




                                                           Developme




                                                                                                                       Commerci
                                                                         Mobilizatio
                                              Projection




                                                                                             SHS Basic
                                              Demand




                                                                                                             Comfort




                                                                                                                                       Minigrid
                                                                         n M&E1
                                                           Project
              Group




                                                                                                                                                         Hybrid
                                    Island




                                                                                                             SHS



                                                                                                                       SHS
                                                           nt




                                                                                                                       al
   Ha'apai            Mango                        7        1500         726
   Ha'apai            Mo'unga'one                 17        1500        1683           10                   5           2
   Ha'apai            Fonoifua                     9        1500         915                                4
   Ha'apai            O'ua                       18         1500        1826           11                   5           2
   Ha'apai            Kotu                       24         1500       2435                                                       3
   Ha'apai            Tungua                     25         1500       2522            16                   6           3
   Ha'apai            Matuku                     10         1500        1027                                5           5
   Ha'apai            Fotuha'a                   14         1500       1406            10                   3           1
   Ha'apai            Ha'ano                      97         1500       9700                                                                         1
   Ha'apai            Uiha                     113           1500      11300                                                                         1
   Ha'apai            Ha'afeva                    45         1500       4500                                                                         1
   Ha'apai            Lofanga                     52         1500       5200                                                                         1
   Ha'apai            Nomuka                   102           1500      10200                                                                         1
   Vava'u             Taunga                      8         1500           779                                                    1
   Vava'u             Hunga                     30          1500        3041                                                      3
   Vava'u             Kapa                       12         1500          1185                                                    1
   Vava'u             Lape                        4         1500          410
   Vava'u             Matamaka                  28          1500        2790                               14           4         1
   Vava'u             Noapapu                   35          1500        3454                               11           4         2
   Vava'u             Otea                       21         1500        2100                               16           5
   Vava'u             Ofu                        18         1500        1824                               14           4
   Vava'u             Olo'ua                    14          1500         1372                              14
   Vava'u             Ovaka                       11        1500          1122                             11
   Vava'u             Falevai                   30          1500        3037                               18           3         1
   Tongatapu Atata                              39          1500         3871                                                     4
   Tongatapu Eueiki                              13         1500         1268          10                   3
   Niuas              Niuatoputapu             126          1500       12586           60                  20          20         3
   Niuas              Tafahi                     15         1500        1505           10                   3           2
   Niuas              Niuafo'ou                 80          1500         7961                                                     8
   Total Units                               1017                                      127                 152          55        27                 5
   Sub total Cost US$                                      43500 101746 162.900 421.344 242.897 963.333                                            784.350

                      AusAid Diesel Minigrids                                                            Total projected cost                     2.720.070
                                                                                                         Administrative factor                           X2
                                                                                                         Total Cost (US$)                         5.440.140


Key Assumptions
• Wharfs, Shops, Hopsitals and High schools generally reflect prosperous communities and have been weghted to reflect
  their importance
• "Bonus points" are given to areas which are commercial hubs, main ports and reknowned communities
• It is assumed there is one shop for every 17.5 households
• It is assumed that SCO commercial set-ups will be used on islands with communities large enough to support two shops
• Gray shaded areas indicate AusAid gensets that require fuel saving hybrid initiative

				
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