Success message
error message
warn message
Terminal Evaluation for Grid Connected Roof Top Photovoltaic Systems In Seychelles
Commissioning Unit: Seychelles
Evaluation Plan: 2012-2016
Evaluation Type: Project
Completion Date: 12/2016
Unit Responsible for providing Management Response: Seychelles
Documents Related to overall Management Response:
 
1. Recommendation:

Proper project timing, and strong and effective country ownership and commitment are key prerequisites for successful project implementation. The PV project matched with this time-window opportunity when the project was launched after Seychelles had adopted RE policy and targets already, but practically no PV installations were in place yet. The timing of the project can serve as the best-case example, maximizing impact against investment.

Management Response: [Added: 2016/12/15] [Last Updated: 2016/12/19]

The project indeed benefited from the onset from the huge appetite from the private sector to venture into the PV business, in effect the enabling environment for uptake of PV was already developing on its own and the project only had to support it, not create it. The demand for the technology was increasing, in particularly in the commercial sector and high consuming residential sector, due to high electricity tariffs. It could be said that the project was to some extent redundant, in that the PV market was expanding on its own, but the project had an important role in steering the process, information dissemination, making sure that financing was available such that a range of consumers could benefit rather than just the richer ones, and helping to ensure sustainability and upscaling.  The lesson learnt is that it is highly beneficial to time a project to kick in at a time of rising market interest – but also that flexibility is important for a project to adjust so as to maximize its impact as the market evolves.

Key Actions:

2. Recommendation:

High electricity tariffs combined with provisions allowing feed in of the generated power into the grid and affordable terms of financing create a strong market incentive for investors and do not require significant additional subsidies. However, PV requires 100% back-up, it does not offset utility infrastructure costs, and thus remaining electricity tariffs need to finance all utility infrastructure costs in case of a monopolistic market (or transmission/distribution costs only in case of a competitive market). PV technology makes the best economic sense in case of high marginal variable utility generation costs, i.e. high fuel costs, especially in the short/mid-term. The subsidy needed to cover the difference between avoided fuel marginal costs and PV generation costs in Seychelles can be financed either by tax payers from public budgets, or by electricity customers through utility electricity tariffs. The net-metering scheme in Seychelles with heavily cross-subsidized electricity tariffs provides a very strong incentive for high-tariff consumers to install PV at the cost of PUC/other customers, and at the same time there is no financial motivation to invest in PV for low-tariff customers.

Management Response: [Added: 2016/12/15] [Last Updated: 2016/12/19]

While it is evident that  those benefitting most from installing PV are the wealthy, high consuming households, the rebate scheme has allowed mid-consuming households also to invest. The current approval system does not allow for investment beyond household needs, with a view to becoming independent producers selling power to the grid, but this could change in the future as part of legislative reform. There is currently a plan to review the net-metering programme, since it does not provide a fair mechanism to all, and various Government schemes are in place or under development to promote uptake by poorer households. 

Concerning the differential between avoided fuel marginal costs and PV generation costs, there is a Government intent to develop new financial mechanisms such as a carbon tax, that would be used to offset the higher costs of power generated from PV and encourage IPP investment.

The lesson learnt is that there is a need to ensure PV investment is democratized, reaches all levels of society, and that mechanisms are developed to provide the financial subsidies needed to allow access by the poor to the benefits of renewable energy, and to offset perverse differentials that inhibit the uptake of PV as a commercial proposition. Seychelles is already aware of and implementing such an agenda.

Key Actions:

3. Recommendation:

Technical integration of PV into the PUC infrastructure is a more complex task than envisaged and budgeted for in the project document. Integration of PV technology impacts utilities’ capacity to control frequency and voltage in their grids. Capacity to control frequency in the grid within required limits requires sufficient fast (spinning) capacity at the utility power plant. PV generation depends on actual solar irradiation that can change quickly with clouds, and thus increases demand for frequency control capacity. The higher the PV market penetration, the greater the need for frequency control capacity. Within the scope of the PV project, with 1.79 MWp of PV installed so far, the frequency control is manageable with existing PUC technologies. However, problems with voltage controls in low-voltage networks may arise and should be addressed even with low PV penetration rate – especially in cases when a utility has difficulties with maintaining proper voltage in low-voltage networks. In such cases, projects designed to expand PV should be followed-up with an additional support on grid stability, as it is the case in Seychelles, which integrated grid strengthening into their first application for Green Climate Fund support.

Management Response: [Added: 2016/12/16] [Last Updated: 2016/12/19]

This is correctly identified as a major constrain in upscaling PV in Seychelles, and this is recognized in the roadmap for 100% renewables currently being developed.  There are a number of projects in the pipeline aiming specifically to address this constraint: PUC is already embarking on a grid upgrade and other initiatives to prepare for the development of two solar farms that will together inject a further 9 MW of renewable energy into the grid.  A GCF proposal being prepared by UNDP in support of MEECC is specifically addressing issues of grid stability and needs for interim battery storage as these farms come online.  A team from GreenWerks, Germany, has assisted MEECC and UNDP as co-applicants to the NAMA Facility for a grant which for most of 2017 will focus on feasibility studies for increasing grid resilience and improving energy storage capacity.  The Institute of Environmental Analytics (IEA) , in partnership with MEECC and UNDP, is implementing  a proof-of-concept project focusing on Seychelles that will identify the requirements for variability modeling using historic and current EO and ground data to estimate the potential variation in RE output on a seasonal or time-specific period, taking account of environmental conditions (e.g. wind speeds, cloud cover, solar insolation).  The lesson learnt is that indeed, as pointed out by the TE consultant, there are many technical issues associated with adoption of large-scale renewable energy within a grid and power utility that is not built for it – and these have to be considered as part of a renewables agenda. Seychelles is in the process of establishing itself as a demonstration country, perhaps an example of best practice, as to how a SIDS can switch to renewable energy.

Key Actions:

4. Recommendation:

Recommendation to MEECC and SEC

The PV Rebate scheme is eligible also for PV installations already in operation, there is no time limit, until when investors shall apply for the rebate. The terms of the PV rebate scheme should be adjusted to support new PV installations only. The ex-post support during PV operation should not be eligible, because in such case the direct impact on new PV installation is minimal. The PV rebate scheme should also be adjusted in the future to the actual terms of updated net-metering scheme, or its replacement, and target primarily investors that might have difficult access to debt financing, such as low/mid-income investors. If the new support scheme to replace net- metering scheme would prove to be attractive enough, the demand would be low, and the PV rebate funds would remain unused, an exit strategy should be developed, that might include extension of the PV rebate scheme also to other RE/EE technologies, or incorporation of the remaining funds under the PV rebate scheme with the new PV support scheme.

Management Response: [Added: 2016/12/16] [Last Updated: 2016/12/19]

The PV rebate scheme is reviewed on an annual basis by the SEC and the next review is schedule for April 2017. Feedback from the terminal evaluation is noted and will be taken into account during this review, as will suggestions from PV suppliers and PV owners. On close of project the rebate scheme remains under the management of SEC and DBS.

Key Actions:

Key Action Responsible DueDate Status Comments Documents
Review of PV rebate scheme
[Added: 2016/12/16] [Last Updated: 2017/09/04]
Seychelles Energy Commission (SEC) 2017/04 Completed History
Finalize decision regarding remaining fund, whether to continue with rebate or use fund for other financial mechanism
[Added: 2016/12/16] [Last Updated: 2017/09/04]
Seychelles Energy Commission 2017/04 Completed History
Discuss eligibility of rebate mechanism (include other sectors apart from residential and commercial)
[Added: 2016/12/16] [Last Updated: 2017/09/04]
Seychelles Energy Commission, Public Utilities Corporation, Other relevant ministries 2017/04 Completed History
5. Recommendation:

Recommendation to UNDP (replication project developers and sponsors)

When developing similar PV/RE projects in other countries, the timing and actual local development context, including effectiveness of country ownership, level of electricity tariffs, financial capacity of local utility/government to subsidize PV schemes, as well as financial capacity of local investors/households to invest, and other factors are decisive and should be properly taken into account, and the project design adjusted accordingly. Although this is a well-recognized fact, it cannot be overstated. A mere replication of a successful project in a different local context will not automatically generate the same results.

Management Response: [Added: 2016/12/16] [Last Updated: 2016/12/19]

The recommendation is addressed to the wider UNDP community.  The recommendation will be considered by the RTA and colleagues as part of the project development mechanism. UNDP is currently in process of developing a series of pipeline projects for climate financing in which this recommendation may be considered, notably the SIDS-STEP project for technical advice to a series of global GCF projects.

Key Actions:

6. Recommendation:

Recommendation to UNDP (replication project developers and sponsors)

PV/RE development projects should not focus only on strengthening PV/RE supply chain, and on development of a RE legislation supporting financial integration of the PV/RE into the local electricity market, but they need to address also effective technical integration of RE into power utility infrastructure. The technical integration becomes more important especially with higher RE power generation targets, and in case when utility infrastructure has not been fully modernized to current standards yet. The technical integration of RE is a bigger challenge primarily for smaller utilities that do not have sufficient financial and technical capacity to upgrade their infrastructure. Further technical and financial assistance to PUC is needed to improve PV absorption capacity both on a central power generation site (sufficient fast/spinning frequency control capacity), and especially in low-voltage distribution networks (voltage control within a standard voltage interval).

Management Response: [Added: 2016/12/16] [Last Updated: 2016/12/19]

The recommendation could equally be applied to MEECC which is the lead Ministry for the development of climate finance projects, and overall responsible for management of PUC and delivery of the 100% renewables agenda.

MEECC is aware of the issues pointed out by the TE consultant, and PUC is in fact already working towards grid upgrade and introduction of battery storage to cope with the influx of renewable energy into the grid.  Addressing these issues also forms a key element of Seychelles’ first GCF proposal which is expected to be submitted in early 2017. A NAMA Facility proposal developed in 2016 by MEECC, with UNDP as co-applicant, also aims to support the process of enabling the grid, and PUC, for the switch to renewables.

Key Actions:

Key Action Responsible DueDate Status Comments Documents
NAMA Facility proposal to include provision for further technical and financial assistance to PUC as indicated above
[Added: 2016/12/16]
MEECC, PUC,SEC No due date Completed Although this is done, the notice of approval is awaited; and in the event of a non-approval the required elements will be transferred to a request for GCF Readiness funding.
GCF proposal to include elements as recommended
[Added: 2016/12/16] [Last Updated: 2017/09/04]
MEECC, UNDP and other partners 2017/07 Completed History
7. Recommendation:

Recommendation to GOS (MEECC)

There is a continuous need for PV/RE related training and capacity strengthening at all levels, including government, utility, and PV installers since PV/RE is a new and fast growing branch. GOS should integrate targeted RE trainings and capacity strengthening activities into their other RE related projects and facilitate training integration also with other donors/projects.

Management Response: [Added: 2016/12/16] [Last Updated: 2016/12/19]

The recommendation could equally be applied to UNDP, which continues to supporting MEECC in capacity building initiatives related to CCM and climate finance project.

The project, prior to termination, is paying for one staff member of SEC (Principal Officer for Engineering and Technical Affairs) to take an online course “Certificate in competence in photovoltaic power”. This course covers the two Engineering Recommendations EREC G83 and G59 which SEC, PUC and the Grid Code Committee are considering adopting for Seychelles.

The project, with leverage funding from the Environmental Trust Fund (ETF), has purchased equipment for the Seychelles Institute of Technology (SIT) to support a PV training courses they are developing. A formal handover ceremony is being planned in January 2017 and SIT have agreed to conduct a certification course for PV installers. Additionally, PUC have agreed to assist SIT in sourcing instructors and will pay for a Training of Trainers course in early 2017

SIT and SEC have finalized an MoU under the GOS-UNDP-GEF RE project for strengthening of existing relationship between SIT and SEC and for the establishment a framework for communication, cooperation and coordination, with the aim to put in place a training platform to support the deployment of Renewable Energy and Resource Efficient Technologies. A signing ceremony is being planned for January 2017.

Substantial capacity building measures are included within NAMA Facility proposal submitted in 2016, and complementary capacity building, particularly for PUC, is included within the GCF proposal to be submitted in early 2017.

Key Actions:

Key Action Responsible DueDate Status Comments Documents
SEC staff member completes “certificate in competence in photovoltaic power”.
[Added: 2016/12/16] [Last Updated: 2017/09/04]
SEC 2017/03 Completed History
Equipment handover to SIT and signing of MOU between SIT and PUC for training support
[Added: 2016/12/16] [Last Updated: 2017/09/04]
SEC, SIT, PUC 2017/03 Completed History
SIT to conduct certification course for PV installers
[Added: 2016/12/16] [Last Updated: 2021/07/07]
SIT, SEC, PUC 2018/03 Completed Completed History
SIT to incorporate PV in all SIT modules
[Added: 2016/12/16] [Last Updated: 2021/07/07]
SIT, SEC, PUC 2018/01 Completed Completed History
Initiation of capacity building under NAMA Facility and GCF proposals, if/when approved
[Added: 2016/12/16] [Last Updated: 2017/09/04]
MEECC, UNDP, PUC, SEC 2018/06 No Longer Applicable [Justification: Proposal submitted under NAMA was not approved]
History
8. Recommendation:

Recommendation addressed to SEC, UNDP (MEECC, PUC)

Information developed by the PV project and published on the project web site should remain online even after the PV project termination, either at the UNDP sponsored sites (PCU) or governmental and partners’ web sites, such as MEECC, SEC and/or PUC web site. Potential PV investors might benefit also from simple but real-life examples of financial performance of PV installation and actual cash flow.

Management Response: [Added: 2016/12/16] [Last Updated: 2016/12/19]

The domain name of the PV project website (www.pvproject.sc) was renewed in July 2016 and it will be valid for the next 2 years. The project, prior to termination, has also made an upfront payment to Maven for a website support contract of 12 months, with SEC agreeing to pay for any additional expenses that may arise during 2017. The website content will be updated by the data manager at SEC in conjunction with their own website (www.sec.sc). By the end of 2017, SEC and UNDP will decide if the website will be incorporated under one of the upcoming climate finance projects (i.e. NAMA Facility or GCF, or another) or continue to remain under SEC.

Key Actions:

Key Action Responsible DueDate Status Comments Documents
Continue with current administration of PV website (paid-up)
[Added: 2016/12/16] [Last Updated: 2021/07/07]
SEC 2017/12 Completed Completed History
Migrate the website to SEC website or determine another means of continuing
[Added: 2016/12/16] [Last Updated: 2021/07/07]
SEC 2017/12 Completed Completed History
9. Recommendation:

Recommendation to UNDP (replication project developers)

Log-frame indicators and targets should be defined for project objective, outcomes and outputs, not only formally, but de facto as well. Too detailed specification of project output indicators, which in fact refer rather to activity level indicators, is not suitable for monitoring of overall project results. More detailed project activity level indicators are defined in annual and quarterly work plans and monitored by project manager as a standard routine of a daily project management, as well as in quarterly and annual project reports.

Management Response: [Added: 2016/12/16] [Last Updated: 2016/12/19]

This recommendation relates to the design of project log frames and is duly noted by UNDP.  UNDP agrees that overly complex and detailed specification of output indicators need not be applied, and indeed this project has indicated the value of flexibility, or adaptive management, to respond to a rapidly evolving project environment. This recommendation is also coming out of other GEF Evaluations and will be taken into consideration for future project development.

Key Actions:

10. Recommendation:

Recommendation to GOS (SEC, MEECC), UNDP (replication project developers)

When designing the legally formalized PV/RE support scheme with remuneration for PV power purchase based on a combination of avoided fuel costs and a premium, the total amount of funding needed to finance the premium should be estimated as well as the financing sources identified and funding secured.

Management Response: [Added: 2016/12/16] [Last Updated: 2016/12/19]

Both the GCF and NAMA Facility proposals aim to work in close collaboration with SEC, PUC and MFTBE to conduct feasibility studies and develop policies and relevant legal frameworks for legally binding remuneration schemes that take into account avoided fuel costs and a premium, while ensuring the sustainability of PUC. As part of the GCF proposal, a full economic analysis is being undertaken to this end. Financial incentives, including means of ironing out fluctuations in fuel cost, will need to continue to form a part of PV projects (and of IPP agreements) as Government tries to achieve 100% renewables by 2035.

Key Actions:

Key Action Responsible DueDate Status Comments Documents
Economic analysis for PV investment and a future tariff structure completed as part of the GCF proposal
[Added: 2016/12/16] [Last Updated: 2021/07/07]
UNDP, PUC, SEC 2017/12 Completed Completed History
Drafting of pilot power purchase agreement (in connection with lagoon solar farm tendering process)
[Added: 2016/12/16] [Last Updated: 2021/07/07]
SEC, MEECC 2018/12 Completed Completed History

Latest Evaluations

Contact us

1 UN Plaza
DC1-20th Floor
New York, NY 10017
Tel. +1 646 781 4200
Fax. +1 646 781 4213
erc.support@undp.org