Final Evaluation of the Renewable Energy Technology Development and Application Project (RETDAP)

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Evaluation Plan:
2011-2015, Maldives
Evaluation Type:
Final Project
Planned End Date:
12/2011
Completion Date:
12/2011
Status:
Completed
Management Response:
Yes
Evaluation Budget(US $):
13,799

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Title Final Evaluation of the Renewable Energy Technology Development and Application Project (RETDAP)
Atlas Project Number: 00035672
Evaluation Plan: 2011-2015, Maldives
Evaluation Type: Final Project
Status: Completed
Completion Date: 12/2011
Planned End Date: 12/2011
Management Response: Yes
Focus Area:
  • 1. Environment & Sustainable Development
Corporate Outcome and Output (UNDP Strategic Plan 2014-2017)
  • 1. Development plans and programmes integrate environmentally sustainable solutions in a manner that promotes poverty reduction, MDG achievement and low-emission climate-resilient development
  • 2. National and local governments and communities have the capacities to adapt to climate change and make inclusive and sustainable environment & energy decisions benefitting in particular under-served populations
Evaluation Budget(US $): 13,799
Source of Funding: GEF
Joint Programme: No
Joint Evaluation: No
Evaluation Team members:
Name Title Email Nationality
Mr. Roland Wong Team Leader
GEF Evaluation: Yes
Evaluation Type:
Focal Area: Climate Change
Project Type: MSP
GEF Phase: GEF-3
PIMS Number: 2131
Key Stakeholders: Government, Beneficiaries
Countries: MALDIVES
Lessons
Findings
Recommendations
1 Recommendation 1 - Provide a detailed strategic plan to implement the Energy Strategy that contains prioritized actions with timelines and financing requirements. In the opinion of the Evaluator, the detailed strategic plan needs to include rapid development of RE projects to provide the critical momentum towards achieving carbon neutrality. The strategic plan should: ? promote solar and wind resources for electricity generation as best RE options at this stage due to lower costs of the equipment, the availability of solar and wind resources throughout the Maldives and the relative simplicity of operating these technologies. One major technical issue that remains is storing solar power for night use; currently battery banks are not only expensive but also environmentally costly. The GoM should seek foreign technical assistance to find appropriate and economic technologies for storage of grid solar power for night use. This would include promising long-term energy storage technologies that may become commercialized over the next 5 years including lithium-ion batteries, flow batteries and flywheels; ? establish the feasibility of household biogas digesters in the Maldives. Waste-to-energy (WTE) solutions were found to be feasible only in cases where the waste streams exceeded 15 tons per day. The concept of forming a cooperative where one digester serves a number of households should be investigated and scaled up if there is an economic advantage (after removal of fuel subsidies), sufficient TA funding to assist in deployment and community interest; ? provide details of how the government will utilize foreign assistance to overcome barriers to RE implementation. This would include actions to: o improve local capacity to assess, plan, implement and monitor RE development in the Maldives. This would include the setup of training facilities for trainers, RE engineers, project managers and auditors; o resolving lack of institutional clarity on the roles and responsibilities of promoting and implementing RE projects. At this time, much of the RE technical and implementation expertise in the Maldives appears to lie with the MHE, and its subordinate companies STELCO and Maldives Gas (see Recommendation 2 below); o strengthening and re-capitalization of FRESA to improve rate of adoption of RE technologies. The re-capitalization of FRESA is a requirement if it is to evolve into a ?one-stop facility? where viable RE technologies (that are sold by local RE entrepreneurs or foreign technology suppliers) can be promoted, and assistance provided to potential users to efficiently access financial resources.
2 Recommendation 2 - Strengthen the institutional arrangements for Renewable Energy. The main issue in the institutional arrangement is the lack of incentive for personnel managing island utilities to reduce fossil fuel usage through renewable energy. To improve the adoption of renewable energy in the Maldives, the following actions are recommended: ? Prepare and implement a strategy that consolidates a fragmented power sector consisting of over 250 utility entities on 200 islands. Recent initiatives by the GoM have commenced a process of consolidating the power sector with the establishment of six regional utilities in addition to STELCO to provide electricity and other services including water and sewage. With the deployment of new technologies such as solar panels and inverters, an institution such as STELCO needs to be positioned as a national technology champion for renewable energy technologies (see Recommendation 3 on capacity building of STELCO). Their role can evolve into assisting island communities in the baseline data collection of power generation from diesel fuel on the islands; design and installation of solar equipment and other renewable energy technologies as deemed economical and appropriate; provision of operational assistance and technical support; and building local capacity to manage new hybrid generation facilities; ? Reform the Maldives Energy Authority (MEA) to more effectively regulate the energy sector towards carbon neutrality. Although the MEA is mandated to regulate the Maldivian energy sector, in practice, it only regulates the activities of STELCO and the six new regional utilities. MEA in its current form lacks the proper regulatory framework and legal mandate to effectively regulate the entire Maldivian energy sector as it transitions towards carbon neutrality; ? Set up an energy monitoring cell within MEA (under MHE) to monitor RE installations and resulting GHG reductions. This may involve setting up of data loggers within power generation facilities of each island utility. To save on costly travel to the various islands to collect data, a real-time web-based data collection system can be set up in collaboration with the island communities. Such a system can provide important operational information that can be used to manage and troubleshoot remote RE projects as well as inform RE policy and potential RE investors. The system can also be used to demonstrate the commitment of the GoM to improving MRV systems for GHG monitoring. The local administration can manage the collection of energy information for the island that reports to a central government authority that reports to the monitoring cell and STELCO.
3 Recommendation 3 - Build technical capacity to support project activities towards the goal of carbon neutrality by 2020. Technical assistance is required to: ? assist the Government of Maldives in formulating investment plans and proposals for foreign aid to facilitate investments and support in alternative energy projects in the Maldives. With several new renewable energy and energy efficiency technologies being passed through various government departments, technical assistance is required to evaluate and accept RE proposals that are most appropriate for the Maldives in its quest to become carbon neutral by 2020; ? set up national standards for RE technologies and projects. Under a reformed MEA, minimal standards for RE generation using solar, wind and biomass resources needs to be set. This could include ISO standards or standards for solar and other renewable technologies under IEC. In addition, there should also be contractual standards set for RE equipment installation contractors that defines their scope of services, payment modalities and arbitration rules; ? strengthen STELCO capacity as national technology champion on RE for island grids. Using the syllabus developed under RETDAP for the Polytechnique course on ?Renewable Energy Systems and Maintenance?, STELCO trainers can be trained on the design, installation, operation and maintenance of renewable energy systems, as well as O&M of small grids. These STELCO trainers, in turn, can then provide in-country training of other utility technicians in the Maldives, notably communities outside of Male. Currently, there are no such training courses in the Maldives; ? improving national MRV capacity for GHG monitoring. Technical assistance should be provided to MEA (under MHE) to improve their monitoring, reporting and verification capacities on diesel fuel consumption and offsetting renewable energy generation.
4 Recommendation 4 - Financing future RE projects through a re-branded FRESA: This would entail the continuation of FRESA as a self-standing fund with improved procedures. This would essentially consist of improving the current operational procedures of FRESA in line with previous concerns of the need to significantly recapitalize and increase FRESA funds. One possibility that will require further assessment is linking FRESA with the Laamu Atoll Development, a UNDP-project initiative funded by DANIDA. Since one-third of this project?s funds are for renewable energy development, a portion of these funds could be used to re-capitalize FRESA . FRESA design and operational procedures will also need to be improved to: ? ensure there are sufficient resources for fund promotional activities; ? provide technical assistance for borrowers; ? lend primarily to entrepreneurs to develop the local ?green? industry that will contribute to economic growth and generate new employment in the area. With the development of this domestic industry in the areas of renewables, energy efficiency and waste management technology, valuable expertise can be developed for the maintenance and repair of these technologies; ? link with the MEA monitoring cell and its improved MRV capacity to report on the Fund?s achievements in GHG reductions on its RE and EE loans; and ? serve as a vehicle to attract other sources of capitalization. This would include climate funds, Gold Standard carbon credits, and philanthropy. The GoM can even consider diversion of diesel fuel subsidies and the deposit of green taxes on resorts and other tourism sector transactions such as souvenir sales, merchandise and diving schools.
5 Recommendation 5 - Provide assistance on determination of best technologies for small island grids to become carbon neutral. With improvements in battery technology expected over the next few years, the GoM should be apprised of such developments should they become more cost effective. This would include promising long-term energy storage technologies that may become commercialized over the next 5 years including lithium-ion batteries, flow batteries and flywheels.
6 Recommendation 6 - Improve participation of the tourism sector in RE development. To date, the involvement of the island resorts in RE development has been minimal. Given that the tourism sector consumes more than 32% of the country?s primary energy resources, the GoM needs to have a collaborative approach with the industry to contribute to the vision of carbon neutrality by 2020. A pilot project to implement RE development for a selected resort may be the catalyst required for RE development in the sector. Moreover, marketing of carbon neutral resorts could accelerate the rate of RE adoption by all resorts in the Maldives.
1. Recommendation: Recommendation 1 - Provide a detailed strategic plan to implement the Energy Strategy that contains prioritized actions with timelines and financing requirements. In the opinion of the Evaluator, the detailed strategic plan needs to include rapid development of RE projects to provide the critical momentum towards achieving carbon neutrality. The strategic plan should: ? promote solar and wind resources for electricity generation as best RE options at this stage due to lower costs of the equipment, the availability of solar and wind resources throughout the Maldives and the relative simplicity of operating these technologies. One major technical issue that remains is storing solar power for night use; currently battery banks are not only expensive but also environmentally costly. The GoM should seek foreign technical assistance to find appropriate and economic technologies for storage of grid solar power for night use. This would include promising long-term energy storage technologies that may become commercialized over the next 5 years including lithium-ion batteries, flow batteries and flywheels; ? establish the feasibility of household biogas digesters in the Maldives. Waste-to-energy (WTE) solutions were found to be feasible only in cases where the waste streams exceeded 15 tons per day. The concept of forming a cooperative where one digester serves a number of households should be investigated and scaled up if there is an economic advantage (after removal of fuel subsidies), sufficient TA funding to assist in deployment and community interest; ? provide details of how the government will utilize foreign assistance to overcome barriers to RE implementation. This would include actions to: o improve local capacity to assess, plan, implement and monitor RE development in the Maldives. This would include the setup of training facilities for trainers, RE engineers, project managers and auditors; o resolving lack of institutional clarity on the roles and responsibilities of promoting and implementing RE projects. At this time, much of the RE technical and implementation expertise in the Maldives appears to lie with the MHE, and its subordinate companies STELCO and Maldives Gas (see Recommendation 2 below); o strengthening and re-capitalization of FRESA to improve rate of adoption of RE technologies. The re-capitalization of FRESA is a requirement if it is to evolve into a ?one-stop facility? where viable RE technologies (that are sold by local RE entrepreneurs or foreign technology suppliers) can be promoted, and assistance provided to potential users to efficiently access financial resources.
Management Response: [Added: 2012/04/18] [Last Updated: 2012/04/18]

We note the recommendation. Currently, activities are being implemented to address the recommendation. The Renewable energy investment plan (through 2020) has been drafted under SREP funding. Capacity building on RE agreements, PPAs and IPPs for MEA and MHE were conducted through a Japanese Grant aid project on Clean Energy Development in Male?.

Key Actions:

Key Action Responsible DueDate Status Comments Documents
Renewable Energy investment plan (through 2020) is being drafted under SREP funding. The finalization of draft will be completed by end-2012.
[Added: 2012/04/18]
SREP PMU 2012/12 Overdue-Initiated
Capacity building on RE agreements, PPAs and IPPs for MEA and MHE being conducted.
[Added: 2012/04/18]
MHE 2013/12 Overdue-Initiated
2. Recommendation: Recommendation 2 - Strengthen the institutional arrangements for Renewable Energy. The main issue in the institutional arrangement is the lack of incentive for personnel managing island utilities to reduce fossil fuel usage through renewable energy. To improve the adoption of renewable energy in the Maldives, the following actions are recommended: ? Prepare and implement a strategy that consolidates a fragmented power sector consisting of over 250 utility entities on 200 islands. Recent initiatives by the GoM have commenced a process of consolidating the power sector with the establishment of six regional utilities in addition to STELCO to provide electricity and other services including water and sewage. With the deployment of new technologies such as solar panels and inverters, an institution such as STELCO needs to be positioned as a national technology champion for renewable energy technologies (see Recommendation 3 on capacity building of STELCO). Their role can evolve into assisting island communities in the baseline data collection of power generation from diesel fuel on the islands; design and installation of solar equipment and other renewable energy technologies as deemed economical and appropriate; provision of operational assistance and technical support; and building local capacity to manage new hybrid generation facilities; ? Reform the Maldives Energy Authority (MEA) to more effectively regulate the energy sector towards carbon neutrality. Although the MEA is mandated to regulate the Maldivian energy sector, in practice, it only regulates the activities of STELCO and the six new regional utilities. MEA in its current form lacks the proper regulatory framework and legal mandate to effectively regulate the entire Maldivian energy sector as it transitions towards carbon neutrality; ? Set up an energy monitoring cell within MEA (under MHE) to monitor RE installations and resulting GHG reductions. This may involve setting up of data loggers within power generation facilities of each island utility. To save on costly travel to the various islands to collect data, a real-time web-based data collection system can be set up in collaboration with the island communities. Such a system can provide important operational information that can be used to manage and troubleshoot remote RE projects as well as inform RE policy and potential RE investors. The system can also be used to demonstrate the commitment of the GoM to improving MRV systems for GHG monitoring. The local administration can manage the collection of energy information for the island that reports to a central government authority that reports to the monitoring cell and STELCO.
Management Response: [Added: 2012/04/18] [Last Updated: 2012/04/18]

We note the recommendation. Capacity building on RE agreements, PPAs and IPPs for Utilities are being conducted. Technical assistance provided to MHE/Utilities to improve and address the emerging issues in the regulation with regards to RE technology deployment. A capacity development plan is being developed for MEA/MHE/ Utilities and other energy companies on data collection and standardizing the data collected under the Second National Communication Project. Establishment of data sharing network for National communication purposes (GHG inventory) is on-going.

Key Actions:

Key Action Responsible DueDate Status Comments Documents
Capacity building on RE agreements, PPAs and IPPs for Utilities.
[Added: 2012/04/18]
MHE 2013/12 Overdue-Initiated Training covers legal and financial mechanisms for grid feed as well as for energy management system
Technical assistance to improve and address the emerging issues in the regulation with regards to RE technology deployment.
[Added: 2012/04/18]
MHE 2013/12 Overdue-Initiated The assistance also covers governance restructuring if need be.
Capacity development for MEA/MHE/Utilities and other energy companies on data collection and standardizing the data collected under Second National Communication Project.
[Added: 2012/04/18]
MHE/MEA 2013/06 Overdue-Initiated
Establishment of data sharing network for National communication purposes (GHG inventory).
[Added: 2012/04/18]
MHE 2013/06 Overdue-Initiated
3. Recommendation: Recommendation 3 - Build technical capacity to support project activities towards the goal of carbon neutrality by 2020. Technical assistance is required to: ? assist the Government of Maldives in formulating investment plans and proposals for foreign aid to facilitate investments and support in alternative energy projects in the Maldives. With several new renewable energy and energy efficiency technologies being passed through various government departments, technical assistance is required to evaluate and accept RE proposals that are most appropriate for the Maldives in its quest to become carbon neutral by 2020; ? set up national standards for RE technologies and projects. Under a reformed MEA, minimal standards for RE generation using solar, wind and biomass resources needs to be set. This could include ISO standards or standards for solar and other renewable technologies under IEC. In addition, there should also be contractual standards set for RE equipment installation contractors that defines their scope of services, payment modalities and arbitration rules; ? strengthen STELCO capacity as national technology champion on RE for island grids. Using the syllabus developed under RETDAP for the Polytechnique course on ?Renewable Energy Systems and Maintenance?, STELCO trainers can be trained on the design, installation, operation and maintenance of renewable energy systems, as well as O&M of small grids. These STELCO trainers, in turn, can then provide in-country training of other utility technicians in the Maldives, notably communities outside of Male. Currently, there are no such training courses in the Maldives; ? improving national MRV capacity for GHG monitoring. Technical assistance should be provided to MEA (under MHE) to improve their monitoring, reporting and verification capacities on diesel fuel consumption and offsetting renewable energy generation.
Management Response: [Added: 2012/04/18]

We note the recommendation. Capacity building for basics of PV systems, its planning and maintenance have been conducted under the Clean Energy Promotion in Male?. On-site training is planned for local utilities in Thinadhoo for PV system installation and energy management systems which is envisioned to be replicated in other islands. Draft standards for Grid-connected PV systems, and IPP licensing regulations is already developed but needs to be finalized. Capacity building and trainings are planned for major stakeholders on GHG inventories and mitigation plan development using computer modeling. Establishment of data sharing network for National communication purposes (GHG inventory) is also on-going.

Key Actions:

Key Action Responsible DueDate Status Comments Documents
Capacity building for basics of PV systems, its planning and maintenance under Clean Energy Promotion.
[Added: 2012/04/18]
MHE 2013/12 Overdue-Initiated Has covered basics of solar PV and EE and EC systems, for all utilities.
On-site training for local utilities in Thinadhoo for PV system installation and energy management systems.
[Added: 2012/04/18]
MHE 2012/12 Overdue-Initiated Consultants would be hired by project to assist Utilities in maintenance and training.
Finalize draft standards for Grid-connected PV systems, and IPP licensing regulations
[Added: 2012/04/18]
MEA 2012/12 Overdue-Initiated
Capacity building for major stakeholders on GHG inventories and mitigation plan development using computer modeling.
[Added: 2012/04/18]
MHE 2013/06 Overdue-Initiated Under second NC project
4. Recommendation: Recommendation 4 - Financing future RE projects through a re-branded FRESA: This would entail the continuation of FRESA as a self-standing fund with improved procedures. This would essentially consist of improving the current operational procedures of FRESA in line with previous concerns of the need to significantly recapitalize and increase FRESA funds. One possibility that will require further assessment is linking FRESA with the Laamu Atoll Development, a UNDP-project initiative funded by DANIDA. Since one-third of this project?s funds are for renewable energy development, a portion of these funds could be used to re-capitalize FRESA . FRESA design and operational procedures will also need to be improved to: ? ensure there are sufficient resources for fund promotional activities; ? provide technical assistance for borrowers; ? lend primarily to entrepreneurs to develop the local ?green? industry that will contribute to economic growth and generate new employment in the area. With the development of this domestic industry in the areas of renewables, energy efficiency and waste management technology, valuable expertise can be developed for the maintenance and repair of these technologies; ? link with the MEA monitoring cell and its improved MRV capacity to report on the Fund?s achievements in GHG reductions on its RE and EE loans; and ? serve as a vehicle to attract other sources of capitalization. This would include climate funds, Gold Standard carbon credits, and philanthropy. The GoM can even consider diversion of diesel fuel subsidies and the deposit of green taxes on resorts and other tourism sector transactions such as souvenir sales, merchandise and diving schools.
Management Response: [Added: 2012/04/18]

Partially agree. The government?s strategy is not to recapitalize FRESA but to develop a Green Fund to finance all environment and climate change projects including RE projects. Lessons learnt from FRESA and AEC conservation fund would be utilized for the set- up.

Key Actions:

Key Action Responsible DueDate Status Comments Documents
Develop Green Fund to finance all environment and climate change projects including RE projects
[Added: 2012/04/18]
MHE No due date No deadline established ToR for consultant ready
Utilize lessons learnt from FRESA and AEC conservation fund for the set up
[Added: 2012/04/18]
UNDP No due date No deadline established
5. Recommendation: Recommendation 5 - Provide assistance on determination of best technologies for small island grids to become carbon neutral. With improvements in battery technology expected over the next few years, the GoM should be apprised of such developments should they become more cost effective. This would include promising long-term energy storage technologies that may become commercialized over the next 5 years including lithium-ion batteries, flow batteries and flywheels.
Management Response: [Added: 2012/04/18]

The recommendation is noted. One island, GDh. Thinadhoo is being developed as a model island implementing carbon neutral using RE and EE technologies. On-going activities on PV projects to cover 30% power needs of 6 islands, based on lessons learnt from both Mandhoo and Clean Energy Promotion Project.

Key Actions:

Key Action Responsible DueDate Status Comments Documents
Develop Thinadhoo climate mitigation plan (EE and RE investments). Develop Thinadhoo as a model for carbon neutral island using both RE and EE technologies
[Added: 2012/04/18]
MHE 2012/12 Overdue-Initiated Bidding Process ongoing
PV projects to cov er 30% power needs of 6 islands, based on lessons learnt from both Mandhoo and Clean Energy Promotion in Male? project
[Added: 2012/04/18]
STELCO 2012/06 Overdue-Initiated
6. Recommendation: Recommendation 6 - Improve participation of the tourism sector in RE development. To date, the involvement of the island resorts in RE development has been minimal. Given that the tourism sector consumes more than 32% of the country?s primary energy resources, the GoM needs to have a collaborative approach with the industry to contribute to the vision of carbon neutrality by 2020. A pilot project to implement RE development for a selected resort may be the catalyst required for RE development in the sector. Moreover, marketing of carbon neutral resorts could accelerate the rate of RE adoption by all resorts in the Maldives.
Management Response: [Added: 2012/04/18]

Strongly agree. A plan is prepared to conduct Energy audits for participating resorts under the IFC program. CDM is introduced to attract more private players into Renewable energy investments. Mitigation Chapters of Second National Communication Plan will include data collected from resorts and will also include their mitigation plans.

Key Actions:

Key Action Responsible DueDate Status Comments Documents
Introduction of CDM to attract more private players into Renewable energy investments
[Added: 2012/04/18]
MHE 2012/12 Overdue-Initiated
Promote RE through the partnerships established under the Tourism Adaptation Project
[Added: 2012/04/18]
UNDP 2014/12 Overdue-Initiated Project signed this year (2012)
Energy audits for participating resort s
[Added: 2012/04/18]
IFC, MHE No due date No deadline established

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