cdm project opportunities solomon islands

CDM Project Opportunities Solomon Islands

October 2012


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Cover photo: The Biofuel Unit at the Auki Power Station in Solomon Islands. Photo supplied by Gerhard Zieroth.

Website of the CDM Component of the ACP MEAs Programme: www.acp-cd4cdm.org

Acknowledgement and Disclaimer This booklet has been produced with support from the ongoing ACP MEAs project funded by the European Union and implemented by the UNEP and UNEP Risoe Centre. The ACP-CD4CDM Project is part of the European Commission Programme for Capacity Building related to Multilateral Environmental Agreements (MEAs) in African, Caribbean and Pacific (ACP) Countries. The Project will enable the participating ACP countries to fully participate in the carbon market. The findings, suggestions and conclusions presented in this publication are entirely those of the authors and should not be attributed in any manner to the European Commission, the UNEP, and the UNEP Risoe Centre.

http://www.acp-cd4cdm.org/


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TABLE OF CONTENTS

ABBREVIATIONS ........................................................................................................................ 4

1. ABOUT SOLOMON ISLANDS ............................................................................................ 5

1.1. Location, Population, and Climate Conditions .................................................... 5 1.2. Economic and energy profile .............................................................................. 6

2. CLIMATE CHANGE AND CDM IN SOLOMON ............................................................... 8

2.1. Main sectors for GHG emissions ........................................................................ 8 2.2. Mitigation of Greenhouse Gases ........................................................................ 9 2.3. Clean Development Mechanism (CDM) in Solomon Islands ............................. 9

3. POTENTIAL CDM PROJECT OPPORTUNITIES ......................................................... 10

3.1. PoA for Promotion of Small Hydro Power in Solomon Islands ......................... 10 3.2. PoA for Solid Waste Management in Solomon Islands .................................... 12 3.3. PoA for Supply Side Energy Efficiency Improvement on Solomon Islands Electricity Authority (SIEA) power stations ................................................................. 13 3.4. Contact for further information regarding the PoAs .......................................... 14


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ABBREVIATIONS

ACP African, Caribbean and Pacific countries CDM Clean Development Mechanism CER Certified Emission Reduction CH4 Methane CO2e Carbon Dioxide equivalent CPA CDM Programme Activities DNA Designated National Authority EB CDM Executive Board GDP Gross Domestic Product GHG Greenhouse Gas IPCC Intergovernmental Panel on Climate Change IPP Independent Power Producer LDC Least Developed Country LFG Landfill gas LoA Letter of Approval LoN Letter of No-objection MEAs Multilateral Environmental Agreements

MECDM Ministry of Environment, Climate Change, Disaster Management and Meteorology

MMER Ministry of Mines, Energy and Rural Electrification MW Megawatt NAPA National Action Plan for Adaptation OECD Organization for Economic Co-operation and Development PoA CDM Programme of Activities SIDS Small Island Developing State SIEA Solomon Islands Electricity Authority UNEP United Nations Environment Programme UNFCCC United Nations Framework Convention on Climate Change


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1. ABOUT SOLOMON ISLANDS

1.1. Location, Population, and Climate Conditions

Location

Solomon Islands is located between latitude 50 and 130 south and longitude 1550 to 1690 east, to the north east of Australia as depicted in Figure 1. The country is an archipelago consisting of about one thousand islands scattered over 28,400 square kilometres in the south-west Pacific. Only one third of the islands are inhabited and all the islands are administratively grouped into nine provinces and 1 capital territory. The nine provinces are Central, Choiseul, Guadalcanal, Isabel, Makira, Malaita, Rennell and Bellona, Temotu, and Western and the country's capital is Honiara.

Figure 1 Map of Solomon Islands


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Population

The recent Census showed that the overall population of Solomon Islands on the night of 23rd November 2009 stood at 515,870 persons (26 percent) compared to the Census of 21 November 1999 which stood at 409,042 persons. Also from the recent Census (2009), the annual growth rate was 2.3 percent which was a little lower than that of 1999 (2.8%) (Statistical Bulletin: 14/2010).This was a substantial decline from the average rate of 3.5 percent per year between 1976 and 1986, but the current rate is still high by world standards.

Climate

The Solomon Islands, lying within 12 degrees latitude of the equator and more than 1500km from the nearest continent, has a climate typical of many tropical areas, being characterised by high and rather uniform temperature and humidity and, in most areas, abundant rainfall in all months. Rainfall is the least uniform of these climatic elements, as topographical effects cause significant variations between locations. The Islands, because of their low latitude, are less subject to the damaging effects of tropical cyclones than elsewhere in the Southwest Pacific, though cyclones still pose a serious threat each year. Rainy season is within the period of November to April when fierce tropical storms may be experienced. The dry season is from May to October.

1.2. Economic and energy profile

Key Economic Sectors

A per capita GDP of $340 ranks Solomon Island as a lesser developed country. Over 75% of its labor force is engaged in subsistence farming and fishing. Until 1998, when world prices for tropical timber fell steeply, timber was Solomon Islands' main export product, and in recent years, Solomon Islands forests were dangerously overexploited. Other important cash crops and exports include copra and palm oil. In 1998 Ross Mining of Australia began producing gold at Gold Ridge on Guadalcanal. Minerals exploration in other areas continued. A per capita GDP of $340 ranks Solomon Island as a lesser developed nation. Over 75% of its labour force is engaged in subsistence farming and fishing. Until 1998, when world prices for tropical timber fell steeply, timber was Solomon Islands main export product, and, in recent years, Solomon Islands forests were dangerously overexploited. Other important cash crops and exports include copra and palm oil. In 1998 Ross Mining of Australia began producing gold at Gold Ridge on Guadalcanal. Minerals exploration in other areas continued. Then the ethnic violence in June 2000 disrupted exports of palm oil and gold and caused declines in exports of timber.


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Now the Gold Ridge Mining has started operation. The palm oil exports have resumed and are conducted by the Guadalcanal Plains Palm Oil Limited (GPPOL).

Figure 2: GDP Composition by Sectors of Solomon Islands, 2009

Source: Solomon Islands at a glance, World Bank

Energy Consumption

The energy sector in Solomon Islands continues to be dominated by fossil fuels, with more than 4 million litres imported on average per month. Approximately 60% of the country's imported oil is consumed in power generation by the national electricity authority, Solomon Islands Electricity Authority (SIEA) or by institutional and private sector generation plants. The remaining 40% of the oil import is consumed in roughly equal measure by the transportation sector (22%) and the household sector (18%) in the form of kerosene or petrol for power and cooking in villages. Essentially all transport fuel and the majority of power generation relies on imported petroleum products. There are two private producers of biofuel, selling to the Honiara market, but at very low volumes. There is considerable potential for coconut based biofuel production because of the massive plantings of coconut throughout the country. A number of micro‐hydro power stations are in operation in three provinces, with plans for the installation of two more. There is very significant potential for further hydroelectricity development throughout the country, with more than 330MW of generation potential, more than 70% of it identified on Guadalcanal where the capital is located

Electrification

The electrification rate in Solomon Islands is very low compared to other neighboring island countries in the Pacific. Only around 12-14% households have access to electricity from the grid. Electricity is supplied by the national electricity utility called Solomon Islands Electricity Authority (SIEA).


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Solomon Islands is still almost entirely dependent on imported fossil fuel products for its power generation needs. There is however, a developing trend in terms solar energy use particularly for lighting in homes, and institutions such as in rural schools and clinics.

2. CLIMATE CHANGE AND CDM IN SOLOMON

The Solomon Islands anticipates many impacts from climate change on its society, economy, environment and human health, all of which are exacerbated by political instability, ongoing environmental degradation, and an isolated economy. However, the country is actively cooperating with United Nations agencies and international partners to to assess these effects and develop plans for climate change adaptation and mitigation. The Solomon Islands ratified the United Nations Framework Convention on Climate Change (UNFCCC) on 28 December 1994.2 Its National Adaptation Programmes of Action (NAPA) states that all economic and social sectors are likely to be adversely affected by climate change, and that the cost of adaptation will be disproportionately high relative to the nation's Gross Domestic Product (GDP).

2.1. Main sectors for GHG emissions

The Solomon Islands assessment of GHG emissions employs IPCC 1996 guidelines and the relevant OECD and IEA guidelines. In all cases the IPCC guidelines default emission factors and conversion coefficients are used. The National Greenhouse Gas inventory focuses on energy, transport, agriculture, land-use and forestry sectors. This decision reflects the small volume of solvent and other product use in Solomon; the small size of Solomon’s industrial sector; the lack of information about GHG generation form these sectors; unreliable reporting formats; the lack of previous work to characterize waste generation; and the relative quantity of GHG emitted by various sectors and the global warming potential of gases produced.

Since end of the Civil War in 2003, Solomon Islands' fuel consumption has been increasing quickly. Its 2011 fuel consumption is 48% higher than the level in 2003, resulting in significant increases in greenhouse gas emissions.

Table 1 shows the GHG Emission from SIEA’s Power generation.

Table 1 SIEA’s Fuel Usage and Emissions

Year Fuel consumption (litres) Emissions (giga grams, gg) 2000 16,533,065 47.27201 2001 15,406,858 44.05191

http://climatelab.org/solomon_islands#ref_2


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2002 16,088,876 46.00197 2003 15,099,091 43.17193 2004 16,606,890 47.48309 2005 17,835,554 50.99614 2006 18,350,569 52.46869 2007 20,439,447 58.4413 2008 20,619,276 58.95547 2009 20,323,220 58.10898 2010 21,951,248 62.76390 2011 22,306,139 63.77862

2.2. Mitigation of Greenhouse Gases

Solomon Islands entirely relies on oil product import to satisfy the country's demand for fossil fuel. The high and unstable prices of fossil fuels on the international market make oil import a heavy burden on the country's economy.

Like other Pacific island countries, Solomon Islands has very good solar energy resources due to its near-equator location. The country has some resources for wind power and small hydropower development. Meanwhile, the country also has some resources for biofuel, especially in the form of coconuts, which can be used for biodiesel production, and sugar cane, which can be used for bioethanol production. Apart from that, there is also potential for energy efficiency improvement and waste.

2.3. Clean Development Mechanism (CDM) in Solomon Islands

Solomon Islands is classified as a non-Annex I country under the United Nations Framework Convention on Climate Change (UNFCCC). The country had ratified the Kyoto Protocol in 2001. The Government of Solomon has appointed a Designated National Authority (DNA) in 2011 to support the implementation of investment projects in Solomon Islands under the Clean Development Mechanism (CDM) that will lead to the reduction of greenhouse gases regulated by the Kyoto Protocol. The CDM DNA is established in the Ministry of Environment, Climate Change, Disaster Management and Meteorology (MECDM), with the National Clean Development Mechanism (CDM) Committee, an interdepartmental committee made up of senior officials from across government and mandated by the Cabinet of Solomon Islands Government as overseeing body to issue binding recommendations for the DNA when answering requests for issuing of Letters of No Objection (LoN) or Letter of Approval (LoA). Contact details for the Solomon Islands CDM DNA are on the back-cover of this booklet.


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3. POTENTIAL CDM PROJECT OPPORTUNITIES

Solomon Islands is one of the 6 Pacific countries that are covered under the CDM component of the four-year (2009-2012) ACP MEA programme that is aimed at supporting countries in Africa, Caribbean, and the Pacific (ACP) countries fully implement multilateral environmental agreements (MEAs) through capacity building. This four-year project has been jointly implemented by the United Nations Environment Programme (UNEP) and the UNEP Risoe Centre.

Like other Pacific island countries, the Solomon Islands does not have big industrial facilities and the per capita energy consumption is low. Therefore the country's greenhouse gas mitigation potential is mainly in the form of numerous small scale emission reduction opportunities that scatter among numerous locations and facilities and households. Compared with stand-alone regular CDM projects, the Programme of Activities, which allows for registration of a programme and a typical programme activity, and the adding of unlimited number of more programme activities over a maximum period of 28 years, can more effectively unlock the potential of greenhouse gas emission reduction in the Solomon Islands.

Under the CDM Component of the ACP MEA project, 3 PoA PINs have been developed by international consultant and local consultant under the guidance of the Solomon Islands Government and the UNEP Risoe Centre. Below is a brief summary of these three PoA PINs. More details about the PoA PINs can be obtained through the project website www.acp-cd4cdm.org or the Solomon Islands CDM DNA.

3.1. PoA for Promotion of Small Hydro Power in Solomon Islands

The proposed PoA will develop small scale run-of-river hydropower plants. Electricity generated will replace power generation based on imported diesel.

The Programme of Activities (PoA) will develop small scale run-of-river hydropower plants to harness the abundant hydropower resources. The first CPA will be a 1.16MW plant to be built on the Fiu River for Auki.

Background

In the Solomon Islands electricity is supplied to less than 20% of the population. Almost all generation is based on imported diesel fuel. Apart from this high dependence on external supply, the country also faces challenges in the development of the energy sector, including maintaining reliability, ensuring commercial viability of the power utility Solomon Island Electricity Authority (SIEA), and increasing access to modern energy supply. The objective of the program is to develop alternative energy resources for electricity

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generation in particular small scale hydropower for the out stations of SIEA. At least 5 viable small hydro projects in Solomon Islands have been identified to be a part of this program.

PoA Description

Numerous studies and investigations on hydropower carried out in Solomon Islands have concluded that the country is well endowed with hydropower resources, which is more than enough to meet the current electricity demand in the country. Most of Solomon Islands’ catchment receives consistent and evenly distributed rainfall in the range of 3,000 mm or more per annum. The country has a mountainous terrain. There are hundreds of river with steep enough stream gradients to allow harnessing hydropower on most inhabited islands. During the pre-feasibility study, 5 sites have been investigated as potential sites for mini hydropower project development to provide access to affordable electricity to rural areas. These five sites have been selected on basis of consultation with the Ministry of Mines, Energy and Rural Electrification (MMER) and SIEA. The details are as in the table below: Solomon Islands Electricity Authority (SIEA) expects to develop the above projects by private Independent Power Producer IPP investors to overcome landowners issue and shortage of investment funds. However this would require a framework that is able to balance interests of investors, consumers and the electricity buyer SIEA.

CDM Aspect

CO2 is the targeted emission reductions by the project activity. In the absence of this program the baseline scenario would be continued usage of diesel based electricity generation with very high operational costs due to high costs of diesel. According to the United Nations, Solomon Islands is classified both as a Least Developed Country (LDC) and Small Island Developing State (SIDS). All the CDM Programme Activities (CPAs) under this program are having installed capacity less than 5 MW and hence considered to be automatically additional as per the above EB guidelines and further demonstration of the additionality with investment analysis or barrier analysis or both is deemed not necessary. In addition, potential faces barrier in terms of technological barriers (availability of skilled labor, capacity for operation and maintenance etc.) can also be explored.

Key Facts about the PoA

Project Type: Electricity generation from hydro Project size: Small scale CERs/Year: First CPA: 10,160 tCO2e/year


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The Feasibility Studies will commence January/February 2013 after the Consultant is identified after 13 Nov2012 (due date for submission of Proposal by short-listed bidders). The government plans to develop Fiu River (Auki) soon after FS is completed and financing is finalised. It is expected to be operational by 2013. The first CER delivery is expected in 2015.

3.2. PoA for Solid Waste Management in Solomon Islands

Background

Over the several decades, waste management has become a major concern for small island countries in the Pacific region as poorly managed waste has the potential to cause negative impacts on national development activities, including tourism and trade, food supplies, public health and the environment. The objective of the Programme of Activity (PoA) is to implement effective, manageable and deliverable waste management systems to enable to reduce the amount of waste that is currently generated in the country.

PoA Description

The Solomon Islands are currently faced with environmental, social and economic risks directly related to unmanaged waste dumping. Therefore, there is an urgent need to develop better ways to manage waste in a more sustainable approach. Honiara and all the urban centers of Solomon Islands do not have proper landfills. There is no control in waste disposal and all sorts of rubbish are dumped everywhere. Under the proposed Solomon Waste Management Programme sanitary landfills will be developed in Honiara and other urban centers of country. Under the Programme first sanitized landfill will be constructed in Honiara .Currently in Honiara there is the Ranadi dumpsite with no proper management.

CDM Aspect

CH4 is the targeted emission reductions by the project activity. At the existing landfills in the country there is no segregation of waste at the dump and all types of wastes are accepted. Often there are controllers on the dumpsite who direct vehicles where to dump their loads. Usually there are also scavengers working at the dump, collecting scrap metal and other goods of value In the absence of this PoA the baseline scenario would be continued usage of landfills with no or partial collection and combustion of LFG from the landfill.

PoA Facts

PoA Type: Sanitary landfill to avoid methane emissions from unmanaged waste dumping


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Project size: Each CPA will be of small scale

CERs/Year: The proposed first CPA involves the building and operation of a Solid Waste Management at Ranadi Dump, Honiara. The estimated daily waste disposed in Honiara is 61tonnes/day. It is expected that the CPA can generate 6381 tCO2e of emission reduction each year during its first 7-year crediting period (2015-2021).

Status of project: Feasibility Study Finished and Project Idea Note (PIN) available. The PoA is expected to be operational by 2015. The first CER delivery is expected in 2016.

3.3. PoA for Supply Side Energy Efficiency Improvement on Solomon Islands Electricity Authority (SIEA) power stations

Background

In Solomon Islands, electricity is generated and supplied by the Solomon Islands Electricity Authority (SIEA), which is a state-owned electricity utility that has the sole mandate to provide power across the country. The objective of the Programme of Activity (PoA) is to implement energy efficiency measures in all SIEA power stations which will reduce fuel consumption in the diesel generators used for power generation.

Figure 3: The Biofuel Generator at the Auki Power Station.

Source: Photo supplied by Generhard Zieroth

PoA Description

The country currently faces considerable challenges in the development of the energy sector, including maintaining reliability of energy supply, ensuring commercial viability of the public utility SIEA, increasing access and improving energy security by reducing dependence on imported fossil fuel. In 2010, the Government of Japan organized training for Solomon Islands and other Pacific Island countries on how to operate their diesel-


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generators efficiently. The training was held in Okinawa and Solomon Islands sent 2 participants from SIEA and Ministry of Mines, Energy & Rural Electrification. There was a follow up Workshop held in December 2011 in Suva, Fiji. The training was conducted by Okinawa Enetech Company’s Research & Development Department.

CDM Aspect

CO2 is the targeted emission reductions by the project activity. Electricity supply in the Solomon Islands is provided to less than 20 % of the population. Almost all generation is based on imported diesel fuel. Apart from this high dependence on external supply, the country also faces challenges in terms of the development of the energy sector, including maintaining reliability, ensuring commercial viability of the power utility SIEA and increasing access to modern energy supply. A historically poor performance of the power industry also presents a serious constraint to private sector development and economic growth. With few exceptions, electrification is confined to Honiara and the provincial centers. Outside of these centers, only about 5% of the rural population has access to electricity through a small number of off-grid and individual household systems. The PoA Coordinating and Managing Entity is Solomon Islands Electricity Authority under Ministry of Energy, Mines and Rural Electrification

Project facts

Project Type: Energy efficiency for electricity generation

Project size: Each CPA will be of small scale

CERs/Year: The proposed first CPA involves installation of EDC system at Noro Munda power station. It is estimated that the project activity on an average will lead to diesel savings of the tune of 5,369,877 litres per year over a period of 21 years at Noro Munda Power Station. This CPA is expected to generate 9137 tCO2e of emission reduction per year during its first 7-year crediting period (2014-2020).

Status of acceptance of the Host Country: The project has been chosen by the Solomon Islands government for PIN development.

Status of project: Pre-Feasibility Study Finished. The project is expected to be operational by 2013. The first CER delivery is expected in 2014.

3.4. Contact for further information regarding the PoAs

Mr. John Isidoro Korinihona


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Director of Energy Division Ministry of Mines, Energy & Rural Electrification Solomon Islands Government Eagle Street, Lengakiki Ridge PO BOX G37 Honiara Solomon Islands E-mail: [email protected] Tel: +677 215 22 Ext 205 or +677 21525 (Office) Mobile: +677 74 06852 (Mobile)

Mr. Douglas Yee Director, Climate Change Division Ministry of Environment Climate Change, Disaster Management and Meteorology P.O. Box 21 Honiara Solomon Islands E-mail: [email protected] Phone: +677 24074 Fax: +677 28054

CDM Designated National Authority of Solomon Islands

Permanent Secretary

Ministry of Environment

Climate Change, Disaster Management and Meteorology

P.O. Box 21

Honiara

Solomon Islands

E-mail: [email protected]

Phone: (+677) 23031

Fax: (+677) 28054

mailto:[email protected]

Photo: Geo-tech drilling work at Tina River Hydro Scheme site in Solomon Islands

More information about the CDM component of the ACP MEA Project available at: http//:acp-cd4cdm.org

cdm project opportunities solomon islands

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