CHAPTER TWO

ASSESSMENT OF ENERGY RESOURCES AND APPLICATIONS OF POWER GENERATION TECHNOLOGIES FOR HONDURAS

2.1 Introduction

Honduras, the second largest country in Central America, is a poor nation where approximately 70 percent of the population lives in poverty; with more than 40 percent of its residents living without access to electricity. Honduras’ 2000 per capita gross domestic product (GDP) was US $800. The nation’s economy grew at an average rate of about three percent during the 1980s through 1998. Inflation peaked at 34 percent in 1991 and stabilized near nine percent in 1992. The population growth rate of Honduras is among the highest in Central America, with a rural rate of 2.1 percent and an urban rate of 4.9 percent. The urban population increased (largely due to internal migration) from 23 percent of the nation’s total in 1966 to 40 percent in 1998. These shifts in population will affect the consumption and growth rate of electricity.

In October 1998, Honduras, El Salvador, Guatemala, and Nicaragua were struck by

Hurricane Mitch, which dumped more than five feet of rain in less than four hours on Honduras. More than 11,000 people were killed, hundreds-of-thousands were injured, and more than 2.5 million people were displaced from their homes because of flooding and mudslides. The region’s economy suffered a severe blow as jobs, businesses, and infrastructure were lost.

Hardest hit was Honduras, where the vast majority of capital resources – roads, bridges,

ports, factories, hospitals, schools, and utilities – were destroyed. Government and private estimates for the reconstruction effort are pegged at more than US $8 billion. The GNP in the following year (1999) dipped to negative 01.9 percent.

MetroVision, the economic development arm of the New Orleans Regional Chamber of

Commerce, coordinated a wide range of personal and institutional relief initiatives, including a collaborative effort with the U.S. government and military officials to secure relief supplies and the means necessary to transport this aid to the stricken areas.

In response to requests from a broad-based Honduran public-private partnership,

MetroVision convened leaders of five Louisiana universities (The University of New Orleans, Tulane University, Louisiana State University, Loyola University, and Southeastern Louisiana University) to develop a plan to deliver long-term capacity building assistance in areas where Louisiana’s academic resources are well known. MetroVision’s components are offering education, training and consultation to help rebuild Honduras’ economy, and to improve the quality of life for its citizens and enhance the country’s role in the global marketplace.

This report focuses on assessing energy resources and applications of appropriate power

generation technologies in Honduras. This is part of an overall effort to assess Honduras’ power production capability, identify energy-related problems, and provide recommendations for implementing a national energy strategy. The complete final report will be available in 2002.

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2.2 Current Energy Resources and Power Generation Status 2.2.1 Energy Resources

Honduras lacks fossil fuel resources. Oil imports for 2000 averaged 28,380 barrels per day (see Table 2.1). Of this amount, 26,230 barrels were consumed, 330 barrels per day were exported, and 52 barrels were reserved (use of 1,300 barrels were not specified). Honduras does not have an oil refinery, nor does it have natural gas production or import facilities. Honduras imported 680,000 short tons of hard coal in 2000 (Table 2.1).

Table 2.1 Honduran Energy Production and Import Data (USDOE)

Honduras Energy Data Report Year 2000 Oil (Thousand Barrels per Day, 2000)

Production

Refinery Recycled Imports Export

s Stock Build

Consumption

Unaccounted for Supply

Crude Oil 0 0.00 0.00 0.00 0.00 0.00 0.00 NGL's 0 0.00 0.00 0.00 0.00 0.00 0.00 Other Oils Fuel Oil 0 0.00 0.00 7.61 0.02 0.00 6.99 -0.60 Diesel 0 0.00 0.00 11.05 0.03 0.46 10.56 Refinery Gain 0 0.00

Gasoline 0.00 6.15 0.00 0.02 6.13 0.00 Jet Fuel 0.00 1.55 0.00 0.00 1.57 -0.03 Kerosene* 0.00 0.77 Distillate 0.00 Residual 0.00 LPG's 0.00 1.09 0.23 0.00 0.91 -0.06 Unspecified 0.00 Asphalt 0.00 0.16 0.06 0.04 0.07 Totals 0 0.00 0.00 28.38 0.33 0.52 26.23 -0.68 *No data for the month of December was available. A total imported amount is available only.

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Table 2.2 Honduran Coal Production and Import Data (USDOE)

Coal (Thousand Short Tons and Quadrillion Btu) - 2000 Production Imports Exports Stock Built

Tons Quads 103 Tons Quads Tons Quads Tons Quads

Hard Coal 680 Anthracite 0 0 0 0 0 0 0 0 Bituminous 0 0 0 0 0 0 0 0 Lignite 0 0 0 0 0 0 0 0 Total Coal 0 0 680 0 0 0 0 0

Two important energy resources: hydropower and fuelwood are not listed in Table 2.1.

Honduras’ economically exploitable hydropower is approximately 1.26 GW, which can produce about 5 TWh of electricity each year. Honduras is gifted with abundant hydropower resources, but this fact doesn’t eliminate the need to consider thermal power plants as an option for large-scale power generation. Thermal plants require the use of imported fuels, and this argument has been effectively used to craft legislation, which makes it difficult to construct large-scale thermal plants in Honduras. Discussions on the benefits of hydropower and thermal plants are made later.

Fuelwood is still used by more than 70 percent of families in Honduras for cooking.

Electricity, LPG, and kerosene are used for cooking for the remaining 30 percent of families. Direct firing of wood produces heavy smoke and pollutes the air. In the long term, natural gas should be provided to replace fuelwood and kerosene for cooking. 2.2.2 Electric Power Status

Hydropower is the country’s largest natural energy resource. As of 1998, hydro plants generated more than 60 percent of the Honduras’ total power. Thermal power plants were added in incremental steps during the last few years (for example five 5 Santa Fe and 18 MW at La Puerta). As of 2001, hydropower (432.7 MW) represents 47 percent of the total power generation capacity of 911.7 MW (Table 2.3). The remaining power capacity comes from thermal power (479MW). Of that, 388.5 MW is privately held.

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Table 2.3 Electric Power Generation Profile in December 2000 (Source: ENEE)

Electricity

Installed Capacity (MW)

Average Capacity Available (MW)

Generation (GWh) %

Hydroelectric 432.7 243.4 2260.2 47.79% Nuclear 0.0 0.0 0.0 0.00% Geothermal & Other 0.0 0.0 0.0 0.00%

Thermal (oils) 479.0 396.0 5.4 52.21% Totals 911.7 639.4 3,929.7 Losses 167.7 MW or 26.23%* Peak (738 MW) Average (475 MW) Minimum (260 MW) *Note: 26.23% losses is calculated by this report based on the average available power of 639.4 MW, whereas, ENEE officially claims the total loss to be 18.4%, which is believed to be referenced on the total installed power of 911.7 MW.

Empresa Nacional de Energía Eléctrica (ENEE) manages all state-owned power plants.

There are five hydroelectric and three thermal power plants, as well as three gas turbines on loan from the Mexican government, in operation in Honduras. ENEE also manages the country’s transmission and distribution lines. In 2000, ENEE’s combined generating capacity accounts for 503.1 MW. Five independent power producers (IPPs) add another 408.6 MW for a total of 911.7 MW. The average available power in 2000 was 639.4 MW, the total power consumption was 3.9 TWh, and peak load demand was 738 MW. Power losses due to transmission and distribution (T&D) reduced total system capacity by approximately 26.2 percent. By comparing the total installed capacity, the actual available power, the losses due to T&D, and peak load demands, the margin of installed capacity needed to satisfy peak load demands is not adequate. Frequent brownouts and blackouts are expected until more power plants are built.

Table 2.3 shows the power profile including consumption and available power (generally

lower than the power installed) from 1994-2001. The annual growth rate of power consumption has been greater than seven percent each year since 1995 with the exception of 1999, the year following Hurricane Mitch. Honduras’ power consumption rate has been historically higher than its GNP growth rate. This trend is expected to continue into the near future. ENEE’s projected growth rate is approximately six percent annually. This translates to less than 60 MW of increased capacity each year for the next five years. Meeting this annual increase in capacity with low cost electricity is one of the greatest challenges facing ENEE at this time.

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Table 2.4 Past and Projected Future Available Power and Power Consumption (Source: ENEE1)

Past and Projected Electric Power Generation

Year MW % Increase GWh % Increase

1994 473.8 - 2,790.7 - 1995 503.5 6.27 2,829.1 1.38 1996 534.0 6.06 3,029.8 7.09 1997 605.0 13.30 3,361.0 10.93 1998 649.5 7.36 3,593.9 6.93 1999 661.0 1.77 3,683.0 2.48 2000 702.0 6.20 4,027.1 9.34 Projection 2001 773.0 10.11 4,255.6 5.67 2002 822.0 6.34 4,536.2 6.59 2003 872.0 6.08 4,818.8 6.23 2004 923.0 5.85 5,103.1 5.90 2005 979.0 6.07 5,409.5 6.00

In the past, the annual demand increases were less than 40 MW. To meet these emerging

demands, ENEE had hastily added incremental power capacity through small private diesel plants from 5 MW to 70 MW under Power Purchase Agreements (PPAs). The World Bank reports that these contracts are expensive, with an average total generation cost of $0.097/kWh in the year 2000. Small diesel plants are not efficient, their power costs are high, and emissions are high. The negative aspects of PPAs can have long lasting effects, since Honduras’ existing PPAs are contracted for durations of 10 to 15 years. When private contractors were asked why they didn’t choose more efficient, economic, or cleaner systems, they generally responded that ENEE required them to construct the plants in a too short a period of time.

This practice should be replaced by a comprehensive long-range plan. Honduras should

consider building thermal power plants, with capacities of at least 200 MW and electrical efficiencies greater than 50 percent to meet demand for future baseload expansion. For peak load needs, minimum capacities should be 50 MW with electrical efficiencies above 40 percent. AES plans to build a 750 MW power plant in Honduras. However, all of this capacity will not be added to Honduras’ energy infrastructure, because a potential Honduran law, if passed, will prohibit any IPP from generating more than 25 percent of ENEE’s total installed capacity. At current capacity, this implies that AES cannot sell more than 240 MW to Honduras until other plants add more power.

1 Data in Tables 2.3 and 2.4 are provided by ENEE. However, the information for the year 2000 is not consistent. Although ENEE has not responded to our request to certify the data, the information in Table 2.3 seems more trustful.

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Figure 2.1 shows that residential customers comprise the largest sector of energy sales in Honduras. Residential customers pay for approximately 40 percent of the total power sold. Commercial and industrial sales combined account for 49 percent of sales. Nonpayment from many of its government customers consists of approximately four percent of the revenue losses to ENEE. In the industrial sector, it is projected (in the mid-term) that the growth rate of demand from small industry will be greater than large industry and other sectors.

Governement3%

City1%

Others3%Public

5%

Industrial27%

Commercial21%

Residential40%

Figure 2.1: Electricity Consumption in Different Sectors (Source: ENEE, 2001)

2.2.3 Current and Future Expansion of National Power Grid

The national transmission lines are shown in Figure 2.2. The major 230 KV transmission lines run from north to south along the industrial corridor. One hundred and thirty-eight (138) KV lines cover the industrial area near the northern coast. Sixty-nine (69) KV lines cover limited areas in the west and central parts of the country. The national grid does not reach most of the rural areas. Figure 2.2 shows that thermal power plants are located in areas near consumption sites. Transmission and distribution losses are a problem in Honduras, but these losses can be minimized with proper planning and effective preventive maintenance plan, which will be discussed later in this assessment in the T&D section.

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Figure 2.2: Power Plant Sites and Transmission Lines in Honduras (Source: ENEE)

ENEE reports that 62 percent of households should have been connected to the national

grid by the end of 2001. Most of the remaining households (38 percent) are in rural or isolated areas. Secretaría de Agricultura y Ganadería (SAG) received 1,034 letters from villages requesting electric power. ENEE conducted a study to determine the cost to connect 649 of these villages to the national grid. ENEE reports that it will not bring grid connections to villages where costs exceed US $500 per household. Almost 75 percent of the villages surveyed by ENEE have connection costs higher than the $500 threshold. These 487 villages will not considered for national grid connections. (Table 2.5.)

Eighty-two percent of households in Latin America are covered by electricity. Honduras

can match this average only if it establishes a comprehensive plan, with particular attention given to distributed generation (DG) as well as plans for new power plant construction and grid extension. Table 2.6 shows ENEE’s expansion plan through 2014.

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Table 2.5 Electric Grid Connection Costs in Rural Areas

Connection Cost in US $/

Household

# of Villages

Surveyed To 300 46 301 to 400 66 401 to 500 50 501 to 600 61 601 to 700 57 701 to 800 31 801 to 900 45 901 to 1,000 44 1,001 to 1,200 66 1,201 to 1,400 57 1,401 to 1,600 35 1,601 to 1,800 19 1,801 to 2,000 18 Above 2000 54

Total 649

4666

5061

5731

4544

6657

3519

1854

300400500600700800900

1,000.001,200.001,400.001,600.001,800.002,000.002,001.00

Con

nect

ion

Cos

t U

S $/

Hou

seho

ldNumber of

Villages Surveyed

Table 2.6 Honduran Generation Capacity Expansion Plan (Source: ENEE)

Thermal Plants (MW) Hydroelectric Plants (MW)

Year Diesel Engine

Gas Turbines

Combined Cycle Leasing Cangrejal Llanitos Patuca 2 Patuca 3 Total

Add Retire Add Retire - Add Retire - - - - Add Retire 2000 - - - - - 45 - - - - - 45 - 2001 - - - - - 25 - - - - - 25 - 2002 - - - - - 50 - - - - - 50 - 2003 - - - - 210 - 120 - - - - 210 120 2004 40 - - - - - - - - - - 40 2005 - 28 - - 100 - - 50 - - - 150 28 2006 - 30 - 16 - - - - 94.1 - - 94.1 46 2007 - 24 - - - - - - - 270 - 270 24 2008 - - - - - - - - - - - - - 2009 - - - - - - - - - - - - - 2010 - 5 - - - - - - - - - - 5 2011 - 80 100 - 100 - - - - - - 200 80 2012 - 39.5 - - - - - - - - - - 39.5 2013 - - 50 - - - - - - - 161 211 - 2014 - - - - - - - - - - - - - Total 40 206.5 150 16 410 120 120 50 94.1 270 161 1295.1 342.5

2.2.4 Rural Electrification

At the end of 2001, nearly 40 percent of the Honduran population will continue to live without electricity. Most of the national efforts concentrate on providing sufficient and affordable power to meet the needs of future growth in urban and industrial zones. This focus on economic and industrial development is well placed. But efforts to stimulate rapid economic growth must also consider the needs of rural farmers and small-scale entrepreneurs. These

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people require access to land, technology, financial services, and the support of energy infrastructure. However, most of the new grid connections will be made within the industrial corridor (an area that stretches from Puerto Cortes in the north to the Gulf of Fonseca in the South). For example, AES plans to build a 373 km transmission line parallel with existing north-south backbone of transmission lines. Therefore, despite an increase to the country’s power generating capacity, at least 30 percent of the population will continue to live without electricity for next seven to 10 years.

The best method for delivering the basic need of electric power to these people is through

distributed generation (DG). A more detailed discussion of rural electrification is presented in Chapter 3. 2.2.5 Distributed Generation (DG)

Distributed generation is the application of placing power generation systems at or near power consumption sites. Its advantages include but are not limited to: a. Relatively low capital costs compared to central power plants for dedicated and specific

power needs, b. A convenient and fast method to add incremental power to current facilities c. Reduced capital costs of T&D facilities and lines, d. Minimizing T&D line losses, e. Avoiding upgrading T&D of existing system, f. Providing a stand-alone power option for remote areas where T&D infrastructure does not

exist, g. More flexible and efficient to employ combined heat and power (CHP, or co-generation) than

does a central plant, h. Increasing power quality and reliability, i. Providing a self-generating capability during high-cost peak-power periods, j. Translating higher efficiency of modern engines into low emission per kW output, and k. More affordable for fuel flexibility by operating on small-scale supplies of natural gas,

propane, and fuel gases derived from coal, pet coke, biomass, municipal wastes, etc.

Some industrial applications require near 100 percent reliability of power supply. These are: a. Computer chip manufacturers b. Internet server farms c. Hospitals d. Industries that employ continuous processing, and/or use sensitive electronic controls

The quality of Honduras’ electric power is poor. Furthermore, frequent blackouts have a negative impact on existing industries, and blackouts make it difficult to attract new business to the country. Adequate legal framework that would allow private factories to build DG system can ease investors’ concerns about the quality of Honduras’ national power supply. 2.3 Assessment of Energy Resources and Power Generation Technologies

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2.3.1 Hydropower

Electricity generation in Honduras depends heavily on hydropower. The country’s 5 TWh/year gross theoretical capacity for electric power generation via hydroelectric means is considered to be one of the highest in Central America. Indeed, since 1966, Honduras has taken advantage of this important energy resource and increased the percentage of electric power generated through hydroelectric means. By 1998, 2 TWh/year, or the equivalent of 55.6 percent of all electric power consumed in Honduras, was generated by hydroelectric means. Although, the hydropower percentage dropped to 47 percent in 2001, this still represents only 40 percent of the available hydropower potential. However, this potential can support only about 10 years of growth if Honduras were to depend upon hydroelectric power as its sole means of power generation for the future. Also, due to inadequate river flow, there can be shortages of power during the dry season, as was witnessed during the summer of 2001. Electric power transmission and distribution losses can also contribute substantially to this problem since hydropower plants are usually located in less populated areas away from the areas where most of electricity is consumed. Long-distance transmission lines are expensive to construct, and the lines face threats of damage each year with the advent of the hurricane season. Maintenance and repair of transmission lines in isolated areas is expensive; this increases the cost of O&M.

Although Honduras has exploited 40 percent of its available hydropower potential, not all of the remaining 60 percent is economically exploitable. Some of the areas surveyed show some technical potential; but, economically speaking, they do not show substantial returns on investment. High initial costs associated with hydro-project planning and construction make private financing difficult because the government usually will not offer full control over hydro sites to private developers. Because of this constraint and the country’s immediate need for restructuring its power sector, combined-cycle gas turbine technology is attractive. Combine cycle power plants would provide short and long-range solutions to the country’s problems related to energy infrastructure. In addition, combined cycle will extend the time span of exploitable hydropower potential in Honduras.

Hydropower technology is reliable, proven, and mature. The earliest hydroelectric plants were constructed more than 100 years ago. This, coupled with the fact that hydropower is a clean2, renewable energy resource with an overall energy conversion efficiency of 80-90 percent (higher than any other major power source), makes hydropower a prime candidate for further development in any long-range plans for the country. Honduras relies heavily on hydro technology for much of its electricity needs, and there is every indication that it will continue to do so, especially considering worldwide natural gas and oil reserves will near their depletion levels in approximately 40 - 50 years. Hydro is an attractive power option for Honduras, but this does not preclude the urgency and importance of building natural gas-fired combined cycle power plants now and throughout the next twenty years. 2 A November 2000 report form the World Commission on Dams finds that dams may not be so “green” after all. The Itaipu hydropower project in the south of Brazil, for example, shows that its carbon dioxide and methane emissions are comparable to those from power plants that burn fossil fuels. These emissions come from gases released by rotting vegetation flooded by the dams.

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Mini-hydropower (less than 1MW) potential has been explored by ENEE with the assistance of the Taiwan Power Company. The installation cost of mini-hydro is expensive, ranging from US $1,500 to 4,000/kW. Mini-hydro must be built along rivers. The locations are not always near villages. It is not cost effective to build long-distance transmission and distribution systems for mini-hydro plants. Therefore, it only makes sense to explore those sites that are adjacent to villages. Mini-hydro is more sensitive than large hydropower plants are to seasonal variations of water levels due to their small reservoir capacities. Mini-hydro is adequate to serve as a supplemental power generation system, but not as a primary power generator. 2.3.2 Thermal Power Plants

Currently, Honduras’ thermal generation capacity is 451.1 MW, consisting of relatively small diesel and gas turbine units. Short turn-around times from placing orders to turn-key installations of small thermal units are one of the merits of this power option. Although small diesel and gas turbine units can be employed to meet short term needs, they should not be continuously operated to support baseload. Rather, it should be carefully planned to provide long-lasting value beyond its short-term impact. For example, these small power plants could be used as standby units to meet peak load demands once the more efficient larger power plants are commissioned. The small units can also be considered for specific DG needs for nearby industries, and even be removed from the grid for these applications. The reasons for considering thermal power as part of a permanent contribution to the Honduran power strategy are:

a. The useful hydropower capacity will be exhausted within ten years if all future power growth

were to rely on hydropower; b. The time-scale for completing an average-sized hydropower plant is about one decade.

Installation of thermal power plants is a necessity to meet the projected power consumption growth; and

c. There are large distances between hydropower sites, especially proposed future sites, and populated consumer areas. Interconnections of transmission and distribution lines are expensive and subject to constant threats from inclement weather, namely, year-around rainstorms and the annual hurricane season.

Small Thermal Plant For Near-Term Needs

Small thermal plants (less than 50 MW) are the most economical choice for near-term DG needs in Honduras. The first step for introducing new small-scale thermal plants to the country requires decisions about technology. At this stage, the merits of diesel engines or gas turbines should be considered.

Diesel engines are a well-established and proven power generation technology with worldwide distributors and well-trained service technicians. However, gas turbines are superior to diesel engines at power capacities greater than 4 MW. At these larger capacities, gas turbines are more compact, cleaner, require less maintenance, and are less expensive to install. Until a natural gas pipeline is installed or a liquefied natural gas (LNG) facility is constructed, liquid fuels will remain the major energy source for thermal plants. Current delivery schedules for these fuels are time consuming and labor intensive. Under these conditions, smaller to medium-

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sized diesel engines would provide good options in some cases. On the other hand, due to recent improvements of gas turbine simple cycle efficiencies, there are a variety of turbines that meet Honduras’ short-term needs, which can also serve as a solid foundation for Honduras’ long-term power infrastructure. For systems that can be installed quickly, the following guidance is provided: a. Mid-size (10-50 MW) – aeroderivatives are the best choice in this range for short installation

time. An OEM has recently demonstrated a record of 28 days from receipt of the order to delivery. Mid-size towns in isolated areas and industrial parks near the northern border are potential beneficiaries

b. Small size (1-10 MW) - both aero-derivatives and industrial frame-size gas turbines are suitable for this range. Small towns away from power distribution grids as well as individual industrial factories are possible users of systems in this range. Co-generation for producing process steam has great potential to be employed by various industry users such as banana, sugar, and textile industries; and

c. Mini-size (100 kW - 1 MW) - both gas turbines and diesels can be considered, but diesels are less expensive and have higher efficiencies in this range

d. Micro-size (less than 100 KW) - Traditionally, diesel engines are the only choice in this range. With recent developments, however, microturbines are gaining market share. Microturbines produce lower emissions, operate quietly, and require less maintenance. To make microturbines competitive with diesel engines, the costs of microturbines (currently about US $1,000/kW) should be reduced, and efficiencies should be improved. In remote areas, where maintenance trips are expensive, microturbines show the potential as a preferable choice

Large Thermal Power Plants for Baseload Needs

For long-term infrastructure needs, larger thermal plants above 200 MW are necessary. To take advantage of recent improvements of combined cycle efficiency, a strategy for importation and transportation of natural gas must be determined and implemented. The combination of gas turbines and steam turbine systems is the popular combined cycle system used by most new natural gas fired power plants (including the proposed AES project in Puerto Cortés, with a capacity of 750 MW). Modern combined cycle efficiencies range from 55 percent for F-type gas turbines, to 58 percent for G-type, and 60 percent for H-type or Advanced Turbine Systems (ATS). The emissions of NOx and CO are below 10 PPM. Eighty percent of new power plants under construction in the United States will use natural gas. 2.3.3 Natural Gas

Natural gas is clean and abundant, worldwide reserves are expected to be available through 2030. However, as more natural gas fired power plants are built, and as many older plants are retrofitted, demands for natural gas will increase. As a result, natural gas prices will rise and be subjected to spikes and volatility. For example, a 300 percent price hike occurred in the first quarter of 2001 in the United States. Therefore, while it makes good sense to build natural gas fired power plants in Honduras, a sound energy strategy must be plotted that hedges the potential

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price volatility of natural gas in the future to secure diversified sources for national energy supplies. To this end, coal and other alternative energy sources should be considered. 2.3.4 Coal

Coal is not a clean fuel, but it is cheap and can be supplied by a variety of sources. In the U.S., coal provides more than 50 percent of the electricity power and 90 percent of this coal is used to generate electricity. One of the main reasons for diversifying energy sources is to maintain national energy security. Direct burning of coal causes high emissions levels of SOx and NOx. A conventional coal-fired power plant (without a clean-up system) can be built for less than US $500/kW. However, when a flue gas desulfurization system is installed to satisfy current emission standards, that cost rises to approximately US $850/kW. To meet the emissions performance of natural gas fired new gas turbine systems; the cost of a state-of-the-art coal-fired power plant would rise to US $1100/kW. The thermal efficiency of a traditional coal power plant is around 30–33 percent. A supercritical power plant can reach thermal efficiencies higher than 40 percent.

These efficiencies can’t compete with natural gas fired combined cycle systems, but coal is

cheap and its supply will remain stable for approximately 200 years.

Considering the benefits of coal as an inexpensive, stable, and readily available energy resource, the U.S. Congress recently appropriated two billion dollars to continue the clean coal technology (CCT) program at the Department of Energy (DOE). It is recommended that Honduras develop a long-range plan for coal imports that will take advantage of technology developed by the Department of Energy’s CCT program.

Currently Honduras imports about 680,000 Tons of hard coal each year. Use of the coal in large industrial plants can be monitored and controlled for environmental considerations. However, burning coal for cooking or for process steam and drying in small factories and family-run shops is difficult to monitor and control. During the course of economic development, thousands of small factories and plants will emerge. These factories will need fuel to produce electric power. Coal’s low cost is attractive, but its environmental impact should be considered. Therefore, policies should be written concerning the use of coal in small factories. One potential approach would be to provide the country with easy access to natural gas via the establishment of a national pipeline. This option will be discussed in greater detail later in this report. 2.3.5 Biomass Energy

Approximately 40 percent of the world’s population (mostly people living in less developed countries and in rural areas); use biomass as an energy source for cooking and space heating. Biomass is an attractive fuel source because it is renewable, sustainable, and indigenous. Since carbon dioxide is absorbed by photosynthesis as biomass grows, experts agree that carbon dioxide generated by combustion of bio-fuels does not contribute any net increase of carbon dioxide into the atmosphere. It is estimated that biomass consumption in rural areas of less developed countries (including all types of biomass and end-uses) remains at about one ton (15 percent moisture, 15GJ/t) per person/year and about 0.5 tons in semi-urban and urban areas.

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In relative terms traditional biomass energy consumption shows a decline, but in absolute terms it will remain stable and in some areas it may even increase. Fuelwood and Charcoals (for cooking and small industries)

World production of wood for energy use in 1996 was estimated at about 1.9 billion cubic meters or 1.4 billion tons (450 tons of oil). Wood contributes 6.7 percent of the worldwide energy supply (excluding biomass other than wood). Wood’s share of global energy supply is less than that of nuclear, but wood is the largest source of renewable energy, providing more than twice the amount of hydroelectricity worldwide. Honduras has a total forest area of about 6,100,000 hectares, the productive forest area is about 4,100,000 hectares, and fuelwood production is about 4,400,000 tons/year.

Countries with low-income levels have a greater dependence on wood as an energy source.

In its traditional use, wood is an inconvenient fuel. It is laborious to harvest, transport and store, and wood energy generally promotes higher levels of pollution and thermal energy conversion is not efficient. Wood collection and transport is frequently the work of women and children. The distance traveled to gather wood increases as supplies in areas near settlements are depleted or improperly managed. Wood is difficult to burn completely in open fires or simple stoves. As a result, pollution is high per unit of energy expended. Pollution causes respiratory infections in children and lung disease in women. It is estimated that 90 percent of human exposure to particulate air pollution occurs in developing countries; two-thirds of this pollution occurs indoors in rural areas.

Wood always has had a place in industrial energy supplies. It is used in brick and lime

kilns, for drying and smoking of agricultural products, and in the supply of charcoal for high-grade smelters. The annual use of wood for energy represents about 0.3 percent of the total stock, a rate of use well within growth rate of forests. In practice fuelwood consumption concentrated in poor, rural populations tends to be distant from forests and is dependent upon forest remnants, sparsely wooded land and trees in near settlements. These sources are at risk of depletion due to use beyond growth capacity.

Some effort is directed at offsetting the loss and depletion of forests. During the past

decade about 40 million hectares have been planted in developing countries. Two-thirds of this planting is in community woodlots, on farms and private holdings. These plantings provide industrial wood and environmental protection as well as wood for energy. There is adequate energy resource potential in existing forests including other wooded land and trees outside the forest to sustain current levels of consumption of wood for energy. However, the distribution of that potential in developing countries is such that where the need is greatest the capacity is often poor or already depleted. Conservation of forests is a needed and justifiable investment for many regions. Assessment: Fuelwood is used by more than 70 percent of rural families for cooking. Direct firing of wood produces heavy smoke and pollutes the air. Access to electricity has not helped all Honduran families change their traditional use wood for cooking. To reduce air pollution caused by burning fuelwood, establishing charcoal plants is recommended for near-term and mid-term solutions. Charcoal is produced through pyrolysis. Charcoal has higher carbon content and can

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be burned with less smoke than fuelwood. For long term scenarios, in addition to electricity and LPG, natural gas should be provided to replace fuelwood and kerosene as a clean cooking fuel. In rural areas, fuelwood will continue to be the primary cooking source. To avoid deforestation, the government must provide education and guidance on forest conservation for many regions. Biomass (including wood) for power generation

Direct firing of biomass fuels creates high emissions and offers low levels of efficiency. Direct firing of biomass in a boiler to create processed steam or to generate electricity via steam turbines is a common practice in the agricultural, forest and paper industries. However, this conventional method is also subject to low efficiencies and high emissions. The electrical energy-conversion efficiency of a typical boiler/steam turbine system runs from 15 to 20 percent. The most advanced systems can achieve 25 percent electric conversion efficiency. High-level contents of alkali, fuel-bound nitrogen, chlorine, or cadmium of some fuels can cause corrosive problems in boilers and increase operation and maintenance and (O&M) costs. It is difficult to achieve electric efficiencies of biomass-fueled steam turbines higher than 25 percent. Gasification can remove heavy metals from biomass. Gasification is a partial combustion process, which results in a composition of producer gas with a dominant content of hydrogen, carbon monoxide, and methane. The heating value of the producer gas is low, typically 5.5 - 7.5 MJ/Nm3, which is about 15-20 percent the heating value of natural gas. Producer gas can be burned in a boiler to drive a conventional steam turbine or to feed a gas turbine combined cycle system. The latter case is a new technology called BIGCC (biomass integrated gasification combined cycle). Producer gas must be cleaned before entering the gas turbine system. This results in reduced emissions, reduced costs, reduced maintenance, and increased power outputs and efficiency. However, BIGCC is not recommended in Honduras because it is still in the developmental stage.

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Figure 2.3 Schematic of a BIGCC Power Plant Assessment: In most rural areas of Honduras, where there is no grid power available, it is expensive and difficult to deliver liquid/gaseous fuels. In these areas, biomass is often plentiful and the benefits of implementing bio-energy project can be maximized. The costs to build a biomass power plant and generate 1 kWh should not be compared with the costs of delivering grid power to urban areas; rather it should be considered as an investment with an acceptable rate of return.

In areas currently covered by the national grid, it is not feasible to build biomass power plants to generate electricity for public sale unless the government offers tax incentives or subsidies. Power generation from biomass waste could be an option if the power would be used internally and optimized for co-generation. For example, a sugarcane plant can cost-effectively use bagasse to generate its electricity and process steam. However, these plants must also consider the costs of fuel to be used during the off-season. They must also consider issues related to standby fees and exit fees imposed by the utility company.

The idea of harvesting fast-growing crops for feedstocks is not encouraged and needs to be carefully evaluated because (in many cases) the land can be utilized to grow higher-value conventional crops. Using marginal land to grow energy crops is usually not desirable either because energy crops do not grow well in marginal soils. The costs and efforts associated with growing and maintaining sustainable energy crops on such land is usually not economically feasible for power production without subsidies. Residues from forestry and agriculture are invaluable as immediate and relatively cheap energy resources to provide the initial feedstock for

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the development of bio-energy industries. They are also an environmentally acceptable way of disposing of wastes, but their use must encompass environmental sustainability.

Near term or interim solutions can employ small biomass-fueled power generators in rural or isolated areas of Honduras. Commercially available systems are modularized and portable with an output range between 10 -15 kW. These systems consist of three major parts: a gasifier, a flue gas cleanup system, and an internal combustion engine. These commercial systems have been successfully tested using coconut shells as a feedstock. With some modification, this system should be able to accept other biomass feedstocks such as coffee bean skins and nutshells.

Winrock International of the United States investigated the potential of gasifying sugarcane bagasse from eight sugar factories. Winrock reports that Honduras’ power capacity from bagasse is about 60 MW. Four biomass-fueled power plants (La Grecia, Tres Valles, Lean, and Aguan) have signed PPA agreements with ENEE. Sugarcane bagasse is used as the feedstock at La Grecia and Tres Valles. African Palm refuse is used at Lean and Aguan. Azucarera Yojoa, another biomass power plant, produces an average of 8 MW of power each year, since 2000. This power plant uses sugarcane bagasse as its fuel source. There also exists good potential for forest waste products and coffee bean skins to produce energy in Honduras especially in isolated areas. More studies should be conducted to explore these opportunities. 2.3.6 Co-generation

Co-generation (Cogen) is a process that produces electricity with other energy forms including hot gas, steam (for space heating, drying, and other process needs), chilled water (using absorption method), etc. The process steam used by industries usually is at relatively low temperatures below 450oC. Steam used for space heating is even lower, at temperatures below 130oC. Directly burning fuels in a boiler to obtain low-grade steam is not an efficient process. Cogen will allow high-grade energy to be directly converted from the combustion process to generate electricity first through gas or/and steam turbines and then use the waste heat to produce thermal energy, typically in the form of steam at different pressures and temperatures. Cogen using gas turbines will provide higher (electric energy)/(thermal energy) ratios and higher grades of steam than steam turbines. It is common for a co-generation system to achieve an overall energy conversion efficiency (thermal plus electric efficiency) up to 85-90 percent.

Co-generation faces many challenges in Honduras. The chief challenges include:

• Capital Investment Limitations: Honduras and its industrial sector do not have the necessary

funds for innovative technology applications such as cogeneration. • Primary Fuel Limitations: Honduras has no national pipeline for liquid or gaseous fuels. Fuels

are currently transported to industrial sites and stored for long-term usage. This issue also limits the availability of fuel oil supplies, and there is no natural gas available in the country. LPG is the only gas available in Honduras. Cogeneration systems based on the use of these primary fuels will not be cost effective under these constraints. Furthermore, reliable supplies of these primary fuels at remote industrial sites are questionable, because Honduras’ existing transportation network is inadequate and fragile.

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• Limited Skilled Labor: There is a lack of well trained, skilled labor in the country, especially

for manning high-tech, power generation and conversion equipment. Skilled labor is required for operation and routine maintenance on these systems.

• Imported Equipment and Support Services: All equipment and support services associated with cogeneration systems must be imported by Honduras. Reliance on equipment imports and external service expertise complicates the application and longer-term operation of any sophisticated power generation equipment.

These issues (which are usually not concerns in developed countries) are important to the

successful application of cogen in Honduras. Because of these constrains, many cogen system options that would typically be applicable in developed areas may not be suitable in Honduras. Assessment: Cogen is a popular form of DG, especially for industries requiring process steam and other forms of energy. Cogen also helps industries to reduce peak load power bills by generating dependable on-site power. Cogen usually presents extra pressure and responsibility for utility companies, but co-gen is an important aspect of industrial applications. Cogen faces many challenges in Honduras. Chief considerations include fuel supply infrastructure, limited investment equity, a shortage of well trained technical personnel, and lack of high-tech capabilities. It is essential to alleviate these specific constraints, and it is also important to establish an adequate legal framework to make Cogen successful in Honduras. The engineering and economic calculations of investment return for a Cogen system is straightforward. The complex part of Cogen is related to standby fees, exit fees, and interconnection to the grid. Therefore, it is vital for Cogen’s success, that laws addressing this matter are clearly written and effectively streamlined. 2.3.7 Wind Energy

Wind turbines obtain their power input (fuel) by converting the force of wind acting on the blades into mechanical torque. The amount of energy that is transferred to the rotor depends on air density, rotor area, and wind speed. The kinetic energy of a moving body is proportional to its mass. The kinetic energy in the wind depends on the density of the air. Cold air has a higher density value than hot air. Thus at high altitudes, such as mountains or towers, air is “heavier” than at sea level. Wind turbines deflect the wind. This happens even before the wind reaches the rotor plane. As a result, no wind turbine is capable of capturing the total potential energy stored in wind.

Rotor area determines how much energy the turbine can collect from the wind. A typical 600 kW wind turbine has a rotor diameter of 43 to 44 m. Since rotor area increases by the square power magnitude of the rotor diameter, a turbine that is twice as large will collect four times more energy from the wind.

In less developed countries small wind turbines are used for a wide range of rural energy applications and there are also many “off-grid” applications in the developed world. For example, these units provide power for navigation beacons and water pumps. Since they are not connected to a grid, many of these machines use DC generators and run at variable speeds. The

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range of design options is wide. Laced multi-blade rotors are used for high-torque, slow-speed applications such as water pumping, but many small rotors are directly connected to AC or DC generators, as rotational speeds around 200-500 rpm can be used with rotors of about one or two meters in diameter.

Wind turbines have increased in size during the past 10 years. In the late 80’s the average rating was around 100 kW, but several commercial turbines now have ratings of about 1MW. There is no precise definition for “small” wind turbine, but it usually applies to machines rated lower than 10 kW in power output. Rating philosophies vary between manufactures but most machines are designed to operate with a peak power output in the range 250-500 W/m2 of swept area. This means in practice that machines with 20 m blade diameters have ratings of about 200 kW and machines with 55m blades have ratings of about 1 MW. Wind turbines today generate more energy than earlier models. This is in part because efficiency and availability have improved, and because larger turbines are mounted on tall towers or at high altitudes, in order to take advantage of wind speeds at higher altitudes. Wind Farms: Utility companies can use wind farms for peak shaving electric power. A wind farm used in this manner would typically be comprised of 10 to 100 turbines, each of 300 to 750 kW power output. Early examples in Western Europe and the United States, mostly with smaller machines, have been duplicated elsewhere across the world. As wind technology becomes more affordable and reliable, it becomes an attractive option for power generation in less developed countries. Off-Grid Applications: Wind energy is also used to meet specific needs for electricity in remote regions throughout the world. Rural electrification of homes, villages, farms, and small industries can be achieved using wind energy. Wind turbines can power many modern electrical appliances. Offshore Wind: Offshore wind farms have the potential to deliver larger amounts of energy than onshore wind farms. Although wind speeds increase with distance from the shore, so do costs. Despite higher wind speeds offshore, wind turbulence is lower, which slightly ameliorates wind load on the turbines. However, the structures must be designed to withstand wave loads and some complex wind/wave interaction. The cost of cable connections to shore and O&M must also be considered. No studies have been conducted on Honduras’ offshore wind capacity. Economic Feasibility: Is wind energy economically feasible? There is no single answer to this question. Delivering wind power is relative to the price of competing energy sources, and institutional and governmental factors. The capital-intensive nature of wind technology, coupled with the current low price for fossil fuels, makes it difficult for wind farms to compete with traditional means of generating electric power. In much of the less developed world, however, fossil fuels can be more expensive than in the developed world, whereas labor for the construction of wind farms is not. This may give wind energy a competitive advantage. Wind energy is a renewable resource, but wind energy prices are also subject to price fluctuations as a result of varying wind speeds. Further study is necessary to consider large-scale wind applications in Honduras.

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The economic feasibility of small wind turbines is a different case. In many remote locations energy prices are competitive for sizes above 250 watts. At larger sizes the economic feasibility of wind power improves. It may be cost-effective at even lower wind speeds. Installation costs range from US $1,500 - 1,000 per kW. Since 1980, the cost of electricity from the most efficient wind system has been reduced from US $ 0.35/kWh to 0.06/kWh today. Future Developments: Although wind technology has seen many advances during the last decade, further improvements are expected in performance and total cost reduction. Fossil fuel prices also will play an important variable as tax incentives for renewable energy projects such as wind farms become more common. Total world wind power is now approximately 7000 MW. Wind power capacity is increasing at about 1000 MW per year. In parallel with the development of wind energy for centralized electricity generation, many applications using DG wind energy can also be explored. Distributed generation using wind energy might prove favorable in remote regions; on islands, and in cases where wind could supplement diesel or other fuel-based DG systems. Small wind turbines currently supply electric power to farms and rural homes in many countries. It is expected that this trend will continue. Assessment: The mountainous terrain of Honduras suggests some potential for farming wind energy. However, there is little wind potential in Honduras with the exception of higher altitudes. A private developer, Enron Wind Development Corporation (EWDC), is currently considering an option to build a 60MW wind farm with 80 turbines of 750kW each, or 40 turbines of 1.5kW each in the Department of Francisco Morazan. This wind farm would be located approximately 24 km from Tegucigalpa. Total cost for the project is yet to be determined, but is estimated to be US $1,000 - 1100 /kW. This wind farm would be connected to the national grid, and ENEE would purchase all the power generated through a PPA with Enron.

The Honduran government will need to provide incentive packages for a wind farm of this size to be profitable. These packages may include tariff exemptions, tax reductions, and/or other incentives. The government must give careful consideration to what might be compromised by these incentives, and it must also study the possibility of Enron’s ability to continue the project’s operation after incentives expire.

The biggest disadvantage of wind energy is its nature for non-continuous output. The

capacity of this proposed wind farm is equivalent to six and a half percent of Honduras’ current total installed power capacity. Careful consideration should be given before placing this percentage of the country’s power generation capacity in one, non-continuous generation source. Careful management for power dispatch is required, and this percentage could affect stability. Other disadvantages associated with wind farms include large land requirements (203 square kilometers in this case) and noise pollution.

Wind energy is most appropriate as a supplemental generation source. Installation of wind

turbines in remote areas as the primary generation source is not recommended. Furthermore, maintenance of mechanical and electrical voltage conversion systems requires professional technical services. It is difficult to perform these services in remote areas.

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2.3.8 Solar Energy

Solar energy is typically harvested for producing hot water or generating electricity. In Honduras, hot water can be more conveniently obtained by using other fuels (kerosene, propane, and fuelwood) than using solar energy, so the following discussion focuses only on solar-electric systems. A solar-electric system includes several key components that work together to deliver electricity to the user. Cells are composed of layers of semiconductors and other materials that produce electric current in response to sunlight. Individual cells are connected in strings that comprise photovoltaic (PV) modules that are protected from the weather by encapsulation. PV modules generate direct current (DC) that can be stored in batteries. Charge regulators prevent batteries from overcharging or undercharging. When alternating current (AC) is needed, such as for conventional appliances or for interconnection to a utility grid, an inverter or power conditioner is necessary.

Current PV modules are expensive. Intensive research and development are being

conducted to improve conversion efficiencies and to reduce costs. This research is promising, but expanded use of solar electric systems is not likely in the near future. Solar electric systems differ from normal generator set power in that: 1. Systems are based on low voltage DC, rather than 110/220 volts AC 2. Systems usually store power in batteries 3. Power is generated on site by PV equipment Advantages: • Solar systems produce electricity without giving off exhaust gases or pollutants • Compared to conventional generator sets, solar electric systems require less maintenance • Solar modules have no moving parts and can last up to 20 years if well operated and

maintained • Solar electric systems are economical for small applications • Solar electric systems can be tailored to the power needs of individual applications • Solar electric systems are easily expandable by adding modules and batteries • Properly installed solar electric systems are safe. Risk of electric shock is low Disadvantages: • The initial cost of a solar electric system is high • Subject to whether conditions • Loss of efficiency via converter if AC is required • When electric power demand is constant solar electric systems can only be used for peak

shaving • Batteries must be carefully maintained and periodically replaced. The performance of systems

is dependent on the quality of batteries available on the market

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• These systems require specially trained technicians for installation and maintenance There is a shortage of adequately trained personnel in this field, which can lead to poorly designed systems being installed or serviced

• PV efficiency decreases with time (off 30 percent in the first five years) Economics: • Installed cost: US $3,000 - 5,000/kW for DC and US $5,000 - 7,000/kW for AC • Energy cost: US $0.40/kWh with no credits and no subsidies

Currently the total world manufacturing capacity for photovoltaics is about 400 MW. Despite a dramatic lowering of costs to produce photovoltaics in the last decade, and an increase in overall energy costs, photovoltaics remain a minor player in global energy supply. In fact, at the current rate of world PV production, it would take 175 years before photovoltaics supplied one percent of the world’s energy needs. Assessment: Due to the inherent features of photovoltaic system, solar electric systems are only adequate as supplemental systems. High initial capital costs (per unit power) prohibit large-scale operations. It is very expensive to step up low photovoltaic DC output to the high AC voltage of the grid. For off-grid applications in residential households, DC voltage can power radios, TVs, and DC refrigerators but DC does not provide sufficient power for tools or machines in small industrial needs. In order to stimulate rural economic development, larger power generators such as diesel engines and microturbines should be considered instead. Successful stories of solar energy applications are usually accompanied by using solar systems with other conventional generators (Ref: Small Wind Electric Systems, USDOE 2001). Some successful solar energy systems are used in isolated areas where resource options are limited, and in most of these cases, cost is not an issue.

Photovoltaics produce a negligible amount of Honduras’ current energy capacity. COHCIT completed its first solar village project that provides limited electric power to one village using solar panels. About 618 kWh of energy is generated each month. COHCIT gained valuable experience from this project, and the lessons learned here can be used in other rural electrification projects. Delivering solar energy to a dozen isolated villages may be worthwhile to promote social values, but solar energy does not seem to be a cost effective means of delivering electric power to the remaining 2,000 villages (many of which have road access for fuel delivery) for stimulating sustainable economic development. 2.3.9 Nuclear Energy

Nuclear power plants generate two orders of magnitude lower green house gas emissions per unit of deliverable electric power than fossil-fueled power plants. During the last two decades, growth in operating capacity has been witnessed primarily in Asia. Nuclear power expansion has almost come to a stand still in the Western industrialized nations, and its has experienced very modest growth rates in Eastern Europe. This almost stagnant growth curve is primarily a result of negative public opinion following the Three Mile Island and the Chernobyl accidents. Difficulties in utilities management, aging installations, slow progress in nuclear

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waste management, market deregulation, and the increasing competition of inexpensive natural gas are also factors that have affected nuclear power generation. Fuel rod disposal presents the greatest problem in managing nuclear power plants. Until public opinion shifts on matters of safety, operating procedures, and spent-fuel disposal processes, anti-nuclear sentiment will remain high in most countries. Assessment: Nuclear power is a proven and reliable technology, but in many cases it is hampered by lack of political will and pressures from public opinion. In Honduras, nuclear power is not recommended for the following reasons: (a) the decade-long permitting process can send the costs skyrocketing; (b) public concerns about spent-fuel disposal can block the permitting process; (c) technical issues could be transformed into political issues by some politicians for individual interests; (d) lack of educated work force and trained personnel (e) nuclear power plants may be subject to sabotage during periods of regional political instability. 2.3.10 Fuel Cells

Fuel cells have emerged in the last decade as one of the most promising new technologies for meeting energy needs well into the 21st century. Unlike power plants that use conventional technologies, fuel cell plants that generate electricity and usable heat can be built in a wide range of sizes from 5 to 10 kW units for powering homes to 200 kW units suitable for powering commercial buildings to 100 MW plants that can add base load capacity to utility power plants.

Fuel cells are similar to batteries in that both produce a DC current by using an

electrochemical process. Two electrodes, an anode and a cathode, are separated by an electrolyte. Like batteries, fuel cells are combined into groups, called stacks, to obtain a usable voltage and power output. Unlike batteries, however, fuel cells do not release energy stored in the cell or run down when the energy is gone. Instead, they convert the energy in a hydrogen-rich fuel directly into electricity and operate as long as they are supplied with fuel. Fuel cells emit almost none of the sulphur and nitrogen compounds released by conventional power generating methods, and can utilize a wide variety of fuels: pure hydrogen, natural gas, diesel fuel, coal-derived gas, landfill gas, biogas, or alcohols. The principal by-products are water, carbon dioxide, and heat.

With efficiencies approaching 60 percent, even without cogeneration, fuel cell power

plants are nearly twice as efficient as conventional power plants. Furthermore, fuel cell efficiency is not a function of plant size or load. Small-scale fuel cell plants are just as efficient as large ones, and operation at partial load is just as efficient as operation at full load. Types of Fuel Cells Basic Types: There are five basic types of fuel cells available, which are categorized according to the type of electrolyte used: • Proton Exchange Membrane (PEM) • Solid Oxide (SOFC) • Phosphoric Acid (PAFC)

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• Molten Carbonate (MCFC) • Alkaline

Proton Exchange Membrane Fuel Cells: These cells operate at relatively low temperatures (about 200°F), have high power density, can vary their output quickly to meet shifts in power demand, and are suited for applications, – such as in automobiles – where quick startup is required. The proton exchange membrane is a thin plastic sheet that allows hydrogen ions to pass through it.

Solid Oxide Fuel Cells: Another highly promising fuel cell, the solid oxide fuel cell

(SOFC) could be used in big, high-power applications including industrial and large-scale central electricity generating stations. A solid oxide system usually uses a hard ceramic material instead of a liquid electrolyte, allowing operating temperatures to reach 1,800 degrees F. Power generating efficiencies could reach 60%.

Phosphoric Acid Fuel Cells: This type of fuel cell is commercially available. More than

200 fuel cell systems have been installed worldwide – in hospitals, hotels, office buildings, schools, utility power plants, and airport terminals. Phosphoric acid fuel cells generate electricity at more than 40 percent efficiency – and nearly 85 percent of the steam these fuel cell produce is used for cogeneration. This compares to about 35 percent for the utility power grid in the United States. Operating temperatures are in the range of 400°F.

Table 2.7 Characteristics of Fuel Cells

PAFC MCFC SOFC PEMFC

Electrolyte Phosphoric Acid

Molten Carbonate Ceramic Polymer

Operating Temperature

375°F (190°C) 1200°F (650°C)

1830°F (1000°C)

175°F (80°C)

Fuels Hydrogen (H2) Reformate

H2/CO/ Reformate

H2/CO2/CH4 Reformate

H2 Reformate

Reforming External External/Internal External/Internal External

Oxidant O2/Air CO2/O2/Air O2/Air O2/Air Efficiency (HHV) 40-50% 50-60% 45-55% 40-50%

Molten Carbonate Fuel Cells: Molten carbonate fuel cells promise high fuel-to-electricity efficiencies and operate at about 1,200°F. To date, molten carbonate fuel cells have been operated on hydrogen, carbon monoxide, natural gas, propane, landfill gas, marine diesel, and simulated coal gasification products.

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Alkaline Fuel Cells: Long used by NASA on space missions, these cells can achieve power-generating efficiencies of up to 70 percent. They use alkaline potassium hydroxide as the electrolyte. Until recently they were too costly for commercial applications, but several companies are examining ways to reduce costs and improve operating flexibility. Other Types of Fuel Cells

Direct Methanol: These cells are similar to the PEM cells in that they both use a polymer membrane as the electrolyte. However, in the DMFC, the anode catalyst itself draws the hydrogen from the liquid methanol, eliminating the need for a fuel reformer. Efficiencies of about 40 percent are expected with this type of fuel cell, which would typically operate at a temperature between 120-190 degrees F. Higher efficiencies are achieved at higher temperatures. Regenerative: Still a very young member of the fuel cell family, regenerative fuel cells would be attractive as a closed-loop form of power generation. NASA and others are currently researching these types of fuel cells worldwide. Advantages and Disadvantages

Fuel cells are efficient, environmentally clean, and very flexible. They can be used and are being developed for every conceivable power demand, from charging batteries to power for the grid. These are the advantages and disadvantages of fuel cells. Advantages: • Environmentally friendly • High power density • High energy conversion efficiency • Operation at low temperatures and pressures • Very low emissions • Site flexibility • Very low chemical and acoustical pollution • Cogeneration capability • Responsiveness to load variations • Suitable for multiple applications Disadvantages: • High costs of catalysts • Initial capital costs (US $2,000 - 4,000/kW) • Heavy weight

Smaller scale distributed configuration power plants are perfect for commercial buildings,

prisons, factories, hospitals, telephone switching facilities, hotels, schools, and other facilities. On-site power conditioning eliminates the voltage spikes and harmonic distortion typical of

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utility grid power, making fuel cell power plants suitable even for sensitive electronic loads like computers and hospital equipment. Application in Less Developed Countries

Fuel cells can be used with renewable fuels. One phosphoric acid fuel cell operating on biogas is being developed at TERI (in India) and should produce electricity at R2.40/kWh. While this is a costly and unproven venture, it offers the possibility of producing up to three times the amount of electricity per unit of dung as the dual-fuel biogas/diesel engine route. Producer gas generated from the thermo-chemical conversion of biomass is a mixture of carbon monoxide and hydrogen with other non-combustible gases. The carbon monoxide can be reformed by steam to carbon dioxide and more hydrogen. Thus, a hydrogen-rich gas could be generated from a gasifier and used to operate a fuel cell. Further commercial experience is needed to resolve some of the uncertainties about cost and performance before fuel cells can be used with confidence in developing countries. Assessment: Fuel cells produce clean energy. Part of the reason is that the fuel cells are mostly fed with clean fuel, hydrogen. Fuel cells do not produce NOx as combustion process does. Fuel cells are promising, but they are still expensive and heavy. Fuel cells are not recommended for grid power generation in Honduras. Biomass fueled fuel cells system using gasification technology has good potential for remote areas, but the technology is not mature yet. Except for some niche markets, fuel cells are not ready for commercial use. 2.3.11 Geothermal Energy

Geothermal energy represents an environmentally benign and reliable energy resource. Unlike other sustainable energy resources such as wind or solar, geothermal resources provide firm power, 24 hours per day, 365 days per year. It is not unusual to find geothermal plants with annual availability factors in excess of 98 percent, so load factors can be high. For a given installed capacity, energy supplied by geothermal is 3.5 times greater than from a wind plant. This firmness in itself can be a considerable asset to the utilities.

The disadvantages of geothermal systems are the geological risk and high initial

investment. Problems of noxious gases (especially H2S), solid and liquid wastes (silica and iron deposits, brines, etc.) and, in extreme cases, of surface subsidence due to the over-extraction of ground water, are significant concerns. Gaseous and solid wastes can be reduced to negligible levels, albeit at increased cost, and the move toward re-injection of waste fluids will eliminate the already rare risk of subsidence. Re-injection, in fact, brings many benefits; not only is subsidence risk eliminated, but the far more common problem of loss of reservoir pressure – hence reduced output – is also addressed. More important than any of these, however, are the advantages which re-injection gives to geothermal over fossil sources. Operating geothermal systems as a closed loop system, and re-injecting contaminants along with cooled water, can reduce environmental impact to almost zero.

Many countries which use geothermal resources, use geothermal for direct heating rather

than for power generation. This simply reflects the fact that, with presently available technologies, the so-called high enthalpy resources suitable for power generation are

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geographically restricted. In the longer term, it is hoped that development of hot dry rock technology will alter this situation but, for the time being, the majority of countries are restricted to using their geothermal resources for relatively low-temperature applications like space heating.

Recently, several large-scale arrays have been installed to feed larger systems where

suitable supplies of deep geothermal water are not available. In the largest development to date, 4 000 units, each with a borehole, have been established on a US Army base in Louisiana to provide heating and cooling. Peak electrical demand has dropped by 6.7 MWe compared with the previous installation, gas saving amounts to 2.6 TJ/year and – perhaps most interesting – service calls have dropped to nearly zero. Assessment: SNC-Shawinigan of Canada has identified four sites of good geothermal potential (approximately 20MW) in Honduras. These are: Platanares, Azacualpa, San Ignacio, and La Pavana. Among them, La Pavana has the lowest potential, but holds the greatest interest because it is located close to the grid and has good access. However, the capital cost is prohibitively high at US $2,000/kW. Geothermal power potential for Honduras can be placed as a low priority. 2.3.12 Peat

Peat is a soft organic material consisting of partly decayed plant matter together with deposited minerals. It covers three percent of the land area of the world. Peat occurs mainly in wetlands where microorganisms promoting the decomposition of dead vegetation are unable to decompose all the material. Honduras has an estimated area of 453,000 hectares of peat.

Gasification of peat for power generation provides some interesting options. The main

drawback to the use of peat as a gasification feedstock is its high moisture content. Once peat’s moisture is reduced, its high reactivity and volatile content are an advantage. In geological terms, peat may be regarded as a young coal. In fuel terms, peat exhibits properties that are close to those of wood. The organic component of peat has a fairly constant anhydrous, ash-free calorific value of 20-22 MJ/kg, and if the total quantity of organic material is known, together with the average moisture and ash content, then peat reserves may be equated with standard energy units. Peat production is labor-intensive, and it is not usually economical to transport peat over long distances (> 100km). Drying and Processing

In order to use peat as a fuel it is necessary to remove much of the water naturally present in the deposit. Peat harvesting may be carried out by either dry or wet methods. Hand cutting was the earliest method of peat harvesting; this is still done on a small scale mainly in rural areas. Mechanized recovery started in several European countries more than a century ago, and fuel peat is currently extracted either as sods, or as so-called milled material. In the dry method, lowering the water table, and allowing much of the water to simply drain away, reduces peat’s moisture level.

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Scandinavia, Belarus, Russia and Ireland use a milling process to dry peat. In this method, the peat bog is prepared with a level surface. The miller is driven over the bog, and this granulates the top layer to a depth of about 10-20 mm. These peat granules are exposed to air/solar drying. This top layer is turned over a number of times to speed the drying process. When sufficient water is removed, it is pushed into piles by an angled-ridger, and collected for transfer and storage.

In sod peat production, peat is removed mechanically from below the bog surface, down to

a depth of about 1 m. This ensures a mixture of peat types in the sods. The peat is macerated, extruded and spread in strings over the adjacent bog surface for drying.

In wet harvesting, peat is removed from the deposit as a slurry, and it is air-dried. This

process is no longer practiced because spreading the slurry for drying is labor-intensive. There was considerable interest during the 1980s in developing an economically feasible wet-drying system. They should be less weather-dependent than those relying solely on air drying. In addition, deposits can be mined or harvested vertically rather than horizontally, meaning that only a small part of the bog need be disturbed at any one time. Wet harvesting was demonstrated on a limited scale, but the overall economics, including the cost of water removal, have not yet justified major investment.

Peat is cut into briquettes for domestic and small-scale industrial use, and for safe

transportation. The dried feed at about 50 percent moisture content is homogenized. It is crushed, screened, and dried to about 10 percent moisture content. This processed peat can be formed into briquettes without the use of binders. This process is employed by many of the major peat producers, including Belarus, Estonia, Latvia and Ukraine. Energy Production

Peat has been used as a fuel on a small scale for centuries. Industrial-scale applications date from the 1920s. It was extensively used in some central European countries, but is now used mainly in Belarus, the Russian Federation, Finland, Ireland, Sweden and Ukraine. There is potential for peat in tropical areas where there are relatively thick deposits. In remote areas it can provide a local and secure energy source. There is also some peat used as fuel in China, Estonia, Indonesia and Latvia.

Peat has been gasified on a commercial scale principally in Finland. This gasification plant

was commissioned in 1988 but peat is not currently used because of the decline in the oil prices. The process was demonstrated and a number of commissioning problems were overcome. Gasification opens up a wide range of options, which were actively investigated in a number of countries, including the USA and Canada during the 1980s.

Up to 70 percent of peat that is extracted is used for non-energy purposes, principally in

agriculture and horticulture. This has a bearing on the economy of extraction, and on environmental sensitivities.

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Peat handling presents particular problems because of the highly fibrous nature of the material and the presence of roots, tree stumps and sometimes stones in the deposit. In addition, when dried it is dusty and susceptible to spontaneous combustion, which means that strict precautions are essential during storage and use. Environmental Considerations

Recently there have been increased environmental pressures against the extraction of peat in a number of countries. Many people regard wetlands as valuable ecosystems and natural wildlife habitats. The areas which are (or might be) exploited for producing fuel peat are small when compared to the overall land area, but environmental protection plays a large role in public and political discussions.

Furthermore, development of bogs for harvesting fuel peat will change drainage patterns in

these areas, and care must be taken to minimize the effects on the surrounding waterways. Sedimentation ponds are used to reduce the loss of particulates. Assessment: Since Honduras has an estimated area of 453,000 hectares of peat; it is worthwhile to investigate the potential of using it to replace some fuelwood consumption. 2.4 Energy Infrastructure 2.4.1 Primary Fuel Availability and National Fuel Pipeline Proposal

The country has no pipeline system infrastructure for either liquid or gaseous fuels, which therefore requires that all primary energy fuels be transported to power generation sites and stored for longer term usage. This issue also limits the availability of fuel oil supplies and there is basically no natural gas available in the country other than converted LPG. Power generation systems based on the use of these primary fuels will likely be constrained by these costs, and delivering reliable supplies to remote sites is questionable given the country’s existing transportation network and fragile infrastructure.

In the near term, opportunities exist to locate new, strategic (large-scale) power generation

along the more developed regions of the country’s coast. These areas have existing access to marine tanker fuel supplies at reasonable prices, and reliable supply could be assured. This would be a valuable short-term strategy; especially considering that U.S. oil giant Texaco could import the fuel through Puerto Cortés, Honduras’ principal Caribbean port. This would be the first step in a series of concessions that Honduras might offer private investors in the country. AES plans to construct a LNG terminal at Puerto Cortés with a capacity larger than the amount of natural gas needed for its power plant. This would allow the fuel supplier to import and distribute gas through the LNG terminal. This would facilitate the sale of natural gas to industrial and residential consumers as well as to the electric power sector, thus making the market more attractive to fuel suppliers.

In view of this potential, construction of a national fuel pipeline should be considered even

if no extensive local distribution systems are immediately planned. This would allow strategic

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power plant locations to be assigned along this fuel supply “backbone” that will be of considerable value as the country expands in coming decades. In addition, this fuel supply will attract additional industrialized development, which is also constrained by the current limited availability of primary fuel. A strategic fuel supply pipeline will provide the needed basis for improvement in both the power system infrastructure as well as for expanded national industrialization.

As countries moves towards industrialization, they generally proceed through certain

stages of development. Many small factories and processing plants emerge during the first stage. This places a high demand on thermal energy with various processing needs (e.g. hot air drying or process steam). Thousands of small and low-efficiency boilers would be used, and in the interest of saving money, owners tend to use cheap coal or less expensive oils as fuels. Emissions from these small boilers are usually high. It is difficult to enforce environmental regulations on these small operators. But easy access to a clean fuel, such as natural gas, via a “backbone” pipeline will help the government write laws which require the small factories to use natural gas. Furthermore, residential use of natural gas can be also tapped from this pipeline. Availability of natural gas also makes cogeneration more attractive, economic, and efficient. 2.4.2 Transmission and Distribution (T&D)

Electric power transmission and distribution losses are problems associated with cost, reliability, and maintainability of the T&D system rather than with power generation technologies. After hurricane Mitch hit Honduras, most of the country’s power distribution grid was severely damaged. Most of the temporary repairs have been in place since then, but system reliability is well below acceptable values. Any attempt to reconstruct Honduras’ power sector must seriously address this problem.

Along with scenarios for using hydropower, thermal generation, and/or a combination of

both, goes the question of power transmission throughout the country. If energy production is concentrated in a few large plants, rather than in a decentralized system, then transmission becomes a major concern. For example, if hydropower is to be fully exploited, extensive transmission lines must be built since most of the new hydro generation will be in the southern half of the country whereas most of the heavy industry is in the north portion of the country. The operational feasibility of energizing long transmission lines and synchronizing remote hydro power plants is a serious problem. Base thermal generation is recommended be located on the coast, close to existing fuel facilities. It is estimated that transmission and expansion costs for a hydro/thermal scenario would be US $595 million. Long-line transmission connections with Honduras’ neighbors, Nicaragua, Costa Rica, and Panama must also be considered. AES’ proposed plant in Puerto Cortés plans to do just this by building a 750 MW power plant near Honduras’ northern coast, then transmitting power to neighboring countries.

Transmission voltages currently are 230, 138 and 69 kV. The primary distribution system

for areas outside the urban environment is 34.5 kV, and the urban areas utilize 13.8 kV systems. The secondary networks are 120/240 volt single-phase systems. The Honduran system is especially weak in transformation; this problem is exacerbated after Mitch.

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T&D Losses

T&D losses can be separated into two categories: technical and non-technical. Technical losses include the system parasitic losses inevitable with the heating of the distribution system caused by the flow of electricity. Energy theft is a subset of what T&D managers and technicians refer to as “non-technical” losses, a category that includes illegal connections, meter failures, improper installations, as well as incorrect meter reading and billing processes.

ENEE stated that T&D losses of as much as 167.7 MW or 18.4 percent occurred in 2000.

However, it is pointed out in Table 2 that the number of 18.4 percent becomes 26 percent if the reference is based on the available power of 639.4 MW instead of the total installed capacity of 911.4 MW. Based on the statistics in Western Europe and U.S., Honduras’ 18 percent losses are more likely due to the technical T&D losses. The actual gross losses are more likely to be 25-30 percent when theft and other non-technical losses are included.

The typical transmission and distribution system losses for a network in a less developed

country could easily exceed 10 percent depending on design, O&M, and distance per connection. For instance, in a well-run T&D system such as in Western Europe or the U.S., losses average approximately nine percent. Of that, five to seven percent can be lost in the transmission system. In less developed countries however, these losses can higher than 18 percent. ENEE officials also admit that hardware quality of the country’s T&D system is poor and requires upgrades.

Distribution transformers, which are estimated to be the largest contributor to distribution

system inefficiencies, are often overlooked as the roots of problems associated with T&D losses. Even small improvements in efficiency can yield impressive savings. The US Environmental Protection Agency (EPA) estimates that approximately 55 percent of distribution losses annually in the U.S. can be attributed to transformers. The losses occur even though the average maximum efficiency for individual transformers may exceed 97 percent. This is mainly due to the fact that transformer core losses are constant, while winding losses increase with the square of the actual load applied. Thus, core losses make up a greater share of the losses on a lightly loaded transformer and winding losses make up a greater share of the losses at high loads.

Large transformers tend to be heavily loaded, while transformers that serve smaller

residential and commercial customers tend to be more lightly loaded. Because there are typically such a large number of small transformers with light loading on a system especially in less developed countries, they have become the focus for improving system efficiencies. Utilities are typically reluctant to install energy-efficient distribution transformers because of the higher initial cost, however these costs can be easily justified over the life of the transformer using the total “life-cycle” cost method. Accordingly, as power costs increase, these investment paybacks become much shorter and can even approach 1 to 3 years depending on specific circumstances. In any event, high efficient (low core loss) transformers should be a standard policy for any system expansions or replacements.

Energy losses in the transmission system are typically fairly small (5-7 percent) because of

the inherent efficiency of electrical equipment, but these losses increase as the system is pressed to carry larger loads or as the system expands to rural areas with low population densities.

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However, energy losses related to under investment in infrastructure, inefficient system operation, and theft increase system losses and force additional energy to be generated and in some cases, additional capacity to be installed. This situation is currently occurring in Honduras.

Proposals have been discussed to upgrade the quality of T&D cables and systems.

However, it must be remembered that hurricane season is an annular event, so annual damage of T&D is expected. Another approach to reduce the T&D problems is to eliminate transmission and most of the distribution by selectively employing distributed generation (DG).

To reduce T&D losses and prevent circuit damage during peak load periods, infrared

thermographic technology can help identify imbalanced fuses, faulty circuits, hot components, and energy leakage. For example, the 1999 fire incident occurred in the hydropower plant, El Cajón, could have been avoided if the faulty circuit could be detected earlier by using the infrared thermographic technology. Currently ENEE does not posses infrared thermography capability. Therefore, it is strongly recommend that ENEE and private power producers acquire the instruments and technology associated with infrared thermographic imaging systems, and incorporate infrared thermography audits as part of a regular preventive maintenance program. Non-Technical T&D Losses

As explained earlier, “non-technical” distribution losses typically include illegal connections, meter failures, improper installations, as well as incorrect meter reading and billing processes. Usually it is assumed that the system losses are gross values, which actually compare the known energy (kWh) generated to the total energy ultimately billed over a fixed period of time. In Honduras, many governmental offices and buildings do not pay the bills. This makes the calculation of gross losses difficult.

It is unclear how the average usage per “legal connection” would compare to estimates per

“illegal connection”, but it is likely the usage for illegal connections would be lower than that for the average. While illegal connections are known to be prevalent in less developed countries, the issue is only applicable in areas where there is a power system to physically “connect” to (or steal from). Therefore, in countries where there are large portions of the population with no access to the power system such as Honduras, it is questionable as to how the estimates for theft percentages versus system losses are documented.

How much revenue is lost to theft each year can be a subject of debate. The International

Utilities Revenue Protection Assn. (IURPA – a group of more than 2000 representatives from nearly 400 utility companies worldwide) estimates energy theft in some countries is extremely high ranging from 10-20 percent in Mexico, 10-16 percent in South America, and 20-40 percent in India. In the US, the consensus seems to be that theft costs utility companies between 0.5 percent and 3.5 percent of annual gross revenue. Based on these data, it is reasonably to assume that energy theft is around eight percent. All considered, the gross losses in Honduras is estimated to be 26 percent, which is consistent with the value listed in Table 2 using available power as the base for comparison instead of the total installed capacity. This issue is important when evaluating the total connection percentages for the country.

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It should be stressed here that “energy theft” is a major problem, especially in the less developed world. It compounds other problems to improve the entire system by draining away those funds, which typically represent the premium profit margins, which can be invested for the benefit of the entire system. Improved collection can provide a significant source of funds necessary for infrastructure improvements, system expansion, and efficiency improvements.

Approximately four percent of ENEE’s revenue losses can be traced to nonpayment from

many of its government customers. Currently, ENEE does not have an efficient means for collecting revenues. ENEE lacks a modern information technology (IT) infrastructure. Privatization might resolve bill collection problems related to government customers, but introducing modern IT infrastructure is a necessary requirement to reduce theft and improve overall efficiency of revenue collection. 2.5 Digital Maps

In the past two decades, digital technology has added usefulness and diversification to many existing technologies. These enhanced technologies are more efficient and offer many advantages to business and industry. Among the technologies of this “e-information evolution”, digital mapping, when combined with comprehensive database management applications, has become a powerful tool for obtaining and transmitting vital information. The power industry and public utility service companies can reap benefits from this technology. The Honduran power company, ENEE, has been working to create digital maps in order to streamline its repair reporting process and to more effectively manage its infrastructure assets. However, due to a lack of well-defined objectives and limited knowledge of current technology, ENEE’s progress is almost stagnant. ECCC decided to assist ENEE in this endeavor by identifying the hurdles blocking progress, and by making recommendations so ENEE can overcome these hurdles and proceed with its digital mapping project. 2.5.1 Current Hurdles Blocking ENEE's Digital Mapping Progress

ECCC identified the following hurdles to ENEE’s digital mapping progress after meeting with a group of ENEE’s engineers: a. A company-wide value with comprehensive goals has not been established for the digital

mapping project. Furthermore, ENEE’s existing databases have not been systematically evaluated, and the value of digital mapping has not been given serious consideration within the company’s strategic plan.

b. The digital mapping project was begun without clear short term or long term goals. c. Personnel assigned to the digital mapping project have not been properly trained in the use of

the latest technology, and the digital mapping project is hampered by technical difficulties. d. ENEE’s computer hardware and software are out of date. These tools must be upgraded to

implement a successful digital mapping project, to operate more efficiently, and to incorporate information from large databases.

ECCC recommends the following approaches to overcome the above hurdles:

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a. Provide ENEE with an introduction to the value of a properly implemented digital mapping program, and explain the steps involved in implementation.

b. Provide advice for updating hardware and software c. Provide technical advice for implementing digital map databases and discuss sample digital

maps of Honduras.

A successfully managed digital mapping program requires adaptive thinking and attention to details. It is a daunting proposition, but the project can be accomplished by implementing a sequence of affordable and achievable milestones. Each of these milestones can serve as a short term goal as well as starting points for incremental phases of the project. The ultimate goal should be company-wide use of this technology to improve service, cut costs, and manage assets. 2.5.2 Updating Hardware and Software

A brief examination of ENEE’s current technical difficulty with regards to digital mapping reveals that the company’s computer hardware and software are out of date. This is the easiest and the least expensive hurdle to overcome, and it is the first step in developing a well-planned digital mapping program. ENEE should consider an initial investment of between US $30,000 - $40,000. This investment would go towards the purchase of two personal computers, a networked server, digital mapping software, and a GIS data sets of Honduras.

We also recommend ENEE to consider implementing Automated Mapping/Facilities

Management and GIS (AM/FM/GIS) technology. ENEE should establish a list of priorities in relation to these technologies. Chief among these priorities would be the clear definition of ENEE’s operations, an accounting of ENEE’s current land-based map archives and an open discussion on desired goals related to new technology purchases. This effort would culminate with the decision on whether or not to implement a comprehensive digital mapping project. The following section will address that matter in length, but in brief, the ECCC recommends consideration of an automated mapping/facilities maintenance (AM/FM) system, enhanced with a graphical user (GUI)/non-technical user interface. This program would be implemented in a series of incremental phases, and would be integrated for cross-departmental operation. 2.5.3 Introduction of Sample Digital Map Sets

The ECCC completed a set of digital map images for Honduras. These maps provide graphical information on the national electric power grid, display areas served by the grid as well as areas off grid, offer individual maps for each of the country’s 18 departments, and illustrate power generating capacity compared with power needs. These maps serve as an introduction to graphical user interface (GUI) technology, and provide ENEE with sample map sets, but they are limited to the power generation and transmission systems. ECCC’s images serve solely as an introduction to an image-based, digital map system. Such as system is useful in cost analysis, project management, and energy management programs. Some example maps are shown below.

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Figure 2.4 Sample Map of Power Plant Sites and Transmission Lines in Honduras

(Source: ENEE)

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Figure 2.5 Sample Map of Department of Comayagua Locator

These maps can be expanded to work with a database of statistical information of the country’s population, industry figures and electric power statistics. ENEE could use these maps to track power coverage and to keep service and maintenance records at the national and departmental levels, but it is recommended that ENEE first purchase up-to-date computer hardware and software. This report reviews the potential benefits of such a program and provides information on commercial products available to accomplish tasks related to implementing such a program.

In the development of an AM/FM system, project definition takes place between initial

feasibility studies and the systems analysis and design phase. We conclude that the majority of system-wide digital mapping errors can be traced to inadequate planning and improper definitions during this phase. Thorough definitions require that consideration be given to areas concerning information system design, operations management, organizational framework and cross-departmental interoperability.

There are numerous commercial, “off-the-shelf” software packages available that could

provide ENEE with a digital map image set of Honduras. These map packages offer some value, but many of the accompanying data sets are limited. Implementation of a comprehensive

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mapping plan would require a commitment of at least two years. This commitment would encompass a company-wide project/goals assessment, development of data sets, paper map conversions and updated GPS/GIS information, and an introduction/integration of applicable software packages and hardware requirements.

The ECCC’s introductory Honduran map set is not a replacement for the above-mentioned

commercial mapping packages, nor is it comprehensive. ECCC’s map set was developed using commercial vector drawing and photo enhancement software. These images were created to serve as an introduction to the value of digital mapping at ENEE, and the set displays the potential for improving data flow, problem response time and repair tracking. ECCC’s staff used MacroMedia’s Freehand, and Adobe’s Photoshop – software applicable to an artistic interpretation of ENEE’s spatial data with references to power plant location, transmission line routing, etc.

ENEE’s needs extend beyond the ECCC’s goals of simple graphical representations. A

properly implemented digital mapping program should link geographic information (where things are) with descriptive information (what things are like). Unlike a flat paper map, where “what you see is what you get,” a GIS mapping system can have many layers of information. This link between layered information and geographic representation is one of the key elements to improving operations at ENEE.

The first stage of the ECCC’s “sample” map imagery is complete. Hard copies of these

maps, and a clickable, digital version are available upon request. The second stage of a proper digital mapping AM/FM introduction would include a simulated journey through ENEE’s power network. This journey would address several scenarios such as a standard work/repair order, an updated set of demographic information for system expansion in new neighborhoods or growing regions, and a view of assets at a power plant, a sub-station and along a distribution line. 2.5.4 Key Considerations for a Company-Wide Digital Mapping Program

at ENEE

The ECCC team explored automated mapping as a solution to managing ENEE’s power distribution system. The goals of this portion of our study were to provide ENEE with an introduction to available mapping products, to effectively display the value of these products on improving customer service, and to show ENEE that digital maps can be used to provide quicker responses to power outages and to track expansion of its operations across Honduras.

It is recommended that ENEE implement a digital mapping, AM/FM/GIS program during

the course of the next two to three years. ECCC’s recommendations for each stage are: 1. Audit of existing paper maps, microfiche and existing databases. This stage can be

accomplished by a team of ENEE personnel. The goal of this stage is to locate and account for all current company information with regards to paper or microfiche maps. Organize the map sets into categories such as nationwide/system level, transmission assets, substations, distribution assets, and customer assets. Catalog these maps and associated relational data (if any) and proceed to stage 2.

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2. Basemap creation. This stage requires ENEE to meet with a professional consulting team, which concentrates on GIS mapping for utility companies. All papers maps would be reviewed for accuracy and recent updates, and the consulting company would work with ENEE to create a set of basemaps that would accurately display Honduras at the national, departmental and city/town levels. These basemaps would provide information on total area, political boundaries, and topographic features such as mountains, lakes, rivers and roads.

3. Data conversion of existing paper maps. It is recommended that ENEE work with a professional consulting firm to set criteria and establish a plan for conversion of its existing paper maps into digital formats. These digital maps would be created using software such as ESRI’s ArcInfo or AutoDesk’s GenMap. Data conversion would include, but would not be limited to information such as overall land area, topographic features, extensive road data and intersection information, total coverage area, total length of transmission and distribution lines, power plants and substations. ENEE would work with its consultants to purchase at least one license of a professional mapping/vector drawing program that can later be integrated and viewed within an AM/FM/GIS software package.

4. Field inventory and verification. ENEE would either continue working with a professional engineering/GIS consulting company, or would designate a team of ENEE personnel to complete a comprehensive field audit of its existing field level infrastructure. This stage is the most time consuming, but also the most important aspect of any digital mapping project. Every item must be accounted for and located using handheld GPS devices. This inventory would account for, but would not be limited to such items as: utility poles, wire sizes riding atop those poles, transformers, poletop assemblies, number of meters, number of circuits, etc. This accounting is necessary for a successful implementation to the digital domain.

5. Software introduction and training. At this stage, ENEE would work with its consulting contractor to purchase appropriate AM/FM/GIS software. ENEE would work with its consultants to confirm that its existing computer hardware meets the requirements of the new software. Any adjustments to the computer network and hardware system would be made at this time. Once a purchase agreement is made with an appropriate number of licenses, ENEE can proceed to train its personnel on the new software. This stage can take anywhere from two to six months. It is recommended that ENEE enter into a one-year professional services contract with its chosen consultants in order to receive software updates, and additional training necessary to “tweak” the system to meet specific needs.

Although many benefits of a digital map project may not be quantifiable right away, it is

recommended that ENEE consider some tangible savings to justify its initial funding. Here are some items to consider during the review of this first stage:

First and foremost, why not? As ENEE looks closely at cost justification for a digital map

program, it should consider the costs of not having this technology. These costs include: • Cost of having inaccurate records that the field crews can’t help correct • Cost of not giving field crews and managers quick access to up-to-date information to assist

in making decisions • Costs associated with additional office staff supporting the field crews (phone calls, printing,

and research) • Costs and delays of getting paper maps to crews in emergency situations

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A secondary, but equally important consideration for a company-wide map-viewing

project centers on map distribution costs. Many electric companies have found that all money spent related to paper or microfiche alone, could pay for PC and software expenses associated with a new digital mapping program. These costs usually include: • Printing (reproduction) • Paper • Distribution

A key justification for implementing a company-wide mapping project at ENEE is the ability to provide mapping and engineering data to multiple departments including site locating, maintenance, and drafting.

Furthermore, sales and marketing personnel could use these maps to quickly provide

information about service availability and costs to customers. Engineering and site use planners could use the mapping system to analyze existing facilities and plan new sub stations and power distribution routes. ENEE’s personnel could also determine the impact of any new projects on ENEE’s existing facilities with a few clicks of a mouse.

It might be difficult to put a “Lempira” amount on potential savings achieved by

implementing a digital map program, but ENEE’s personnel will discover new ways to use a digital map system each week that the program expands, and as more people throughout the company begin to ask pertinent questions about the usefulness and availability of the system. 2.5.6 Benefits of Expanding a Mapping Program Company-Wide

Many power companies implement digital mapping programs for their facilities maintenance and asset management needs, but few companies provide use of this mapping data to non-technical or non-engineering departments. Many power companies use paper or microfiche to distribute mapping data. This is labor intensive, time consuming and expensive.

With fast, low-cost hardware and the task-specific software, non-technical users can view

maps seamlessly, with access to full facility and land-based data. This information can be viewed from desktop PCs or laptop computers.

There are many benefits to company-wide sharing of digital map records, and the payback

can be significant, especially when access is extended to field workers. Listed below are several ways through which ENEE can increase productivity and reduce costs: • Cut microfiche and paper reproduction costs • Avoid additional expenses on full AM/FM/GIS workstations • Access most current, up-to-date data at all times • Eliminate time wasted searching for paper maps • See what is needed on a single image

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These benefits are real. Yet each department and person is affected differently when

they’re given access to digital map records. It is recommended that ENEE foster an environment for further discussions with ECCC personnel to implement an assessment and priority study for a digital map program. Furthermore, ENEE should explore the benefits of a company-wide map-viewing database that would improve productivity, increase the value of shared information and speed repair time and customer response time. 2.5.7 Recommendation

ENEE has been implementing digital maps; however, the progress is almost at a standstill. ECCC has identified the hurdles and recommends that ENEE consider spending between US $30,000 - 40,000 to update the hardware and software as a “new” starting point for a long-term digital mapping project. It is further recommended that ENEE consider implementing Automated Mapping/Facilities Management and GIS (AM/FM/GIS) technology following a five-step, three-year agenda and that ENEE seek assistance from a professional consulting company specialized in digital mapping/GIS.