Detail Eady Model derivation

Deriving this was one of the best experiences of my Masters

Key Points from SARI/Energy Maldives-Submarine cable Interconnection – Pre Feasibility study:

Following are the findings of a pre-feasibility study of Submarine cable interconnection in greater Male region (stretching from Thilafushi to Hulhumale) in 2010. A detail feasibility study is still pending for this huge investment with negligible financial return. But it is an investment that is desperately needed for continued power supply with in next couple of years.

Greater Male Region:

1. Thilafushi – Villigili : 3.4km, Villigili – Male: 1.5km, Male – Hulhumale: 1km
2.  Installed total capacity in the Male region: 46.16MW,  with dependable capacity  of 41.544MW
3. Thilafushi has private power producers in addition to STELCO plant
4.  In 2009 demand load in Male’ rose beyond the dependable capacity
5. The demand growth of the region is approximately 11% per year
6.  Even with the addition of the 3x8MW diesel units in 2010 and 2011, Male’ would run out of capacity by 2015 as the older units start to retire.
7.    The rapid pace of development on Hulhumale’ will use up the available supply capacity by 2010 and significant generation additions would be required
8.  Villigili has sufficient to last until 2020 when the existing units will start to be retired
9. Thilafushi will run out of  capacity in 2010 and generation additions will be required to meet both only the growth of the existing load but also to take over the industrial load now served by captive generation
10. Three options for interconnection were suggested and tentative price was estimated
• Scenario 1: Build generation capacity in Hulhumale for the future demand of Thilafushi, Villigili, Male and Hulhumale’ (which would amount to additional 110MW build up in Hulhumale by 2030 while most generators in other islands would retire).  The connections are made by laying dual cable as a fail safe.
•  Scenario 2: Build generation capacity in Hulhumale and Thilafushi for the future demand of Thilafushi, Villigili, Male and Hulhumale’ (which would amount to additional 63.2MW build up in Hulhumale and 46.8MW in Thilafushi by 2030 while most generators in other islands would retire). The connections are made by laying dual cable as a fail safe.
•  Scenario 3: Build generation capacity in Hulhumale and Thilafushi for the future demand of Thilafushi, Villigili, Male and Hulhumale’ (which would amount to additional 77.6MW build up in Hulhumale and 46.8MW in Thilafushi by 2030 while most generators in other islands would retire).
11.   Cost of scenario 1 and 2 is estimated to be USD 63.3 Million
12.  Cost Scenario 3 is estimated to be USD 43.7 Million, but this scenario requires additional installation of 16 MW in each island in case of cable outage. This is an additional capital cost of about USD 40 million. 
13. 5 US cents increase in tariff for transmission system to cover capital cost as well as O&M cost

Environmental considerations:

·         There is no significant environmental impact if the project proceeds with the proper regulations and conditions. Environmentally it helps by optimizing power generation efficiency and helps towards carbon neutrality by providing more opportunities for different RE power generation considered in Carbon Neutral paper. Calculations in  Carbon Neutral Paper by Dan Morrel (which was used as a basis of carbon neutrality policy announcement) was revised from USD 1.1 Billion  to USD 2.3 Billion

Grid Emission Factors (G.E.F) in Maldives for 2012

Grid emission factor is the amount of emission per unit of electricity used in that grid. Below I have derived the grid emission factor (GEF) for some islands on Maldives based on data of 2012.

*one kWh is equal one unit of electricity

The significance of these numbers is that it gives you an idea how much carbon footprint you would have if you were living in one of those islands. All you would have to do is take the kWh (meter) reading for a particular month and multiply with this number. And that would give the contribution of your household to global warming or climate change by the use of electricity that month or the period that reading has been taken.

Remember this just one part of your carbon footprint, there are others things like the waste u create, or the cycles, buses or taxis ride you take which adds to your carbon footprint.

True Energy Price in Maldives (updated)

When I say "true energy price" I do not mean the price of petrol/diesel available at the petrol bunks nor do I mean the price of fossil fuel per liter or per kg. It would mean the price per energy content of the fuel.

Given the different types of fossil fuel imported to Maldives over the past 10 years and how it is measured (LPG in kg while diesel in liters) it and its different energy content(diesel have higher energy content than petrol), it would be completely impossible to give an accurate picture of which fuel is more expensive and which is cheaper. In order to give an accurate comparison of the cost of fossil fuels imported, I had to convert the amount of fuel imports in that period to its respective energy content. And that energy content is measured against the monetary value expended to buy that fuel. The diagram below shows such a comparison of the 4 major fossil fuel imports in Maldives over 10 years (2001 to 2010). This just for information.

The data provided for this analysis is from Maldives Customs Services, and the data has been used without any changes to the original data. Furthermore this analysis is not a reviewed or a published analysis. 

Global Warming and Energy Consumption

The figure above shows the relation between energy consumption and atmospheric temperature. It shows a clear relation between rising temperature with energy use. This means the rising temperature exhibited  in the long term temperature trend (as shown in figure below) from Hulhule' Met station would translate into an increase in energy consumption in Male region.

And this creates a vicious cycle. That is more electricity used means more GHG in Male' meaning more global warming, higher temperatures and again more electricity. More electricity also mean we spend a lot more money of fuel which frankly Maldives cannot really afford to do for mid and long term. The other issue is the relation between development and electricity or energy as a whole. The following figure shows how closely energy consumption is related to GDP growth.

It infers that increase in economy, leads to increase in Energy, which leads to increase in fossil fuel consumption and increase in CO2 emission and global warming. As i said before due to high dependence of fossil fuel we can't afford to increase our energy usage as it is. Even if we have to slow down and look for other options we will run into a wall sooner rather than later. We need to choose an option which would decouple development/ energy consumption from fossil fuel/ CO2 emission. And the Urgency is now.

GHG emissions in Maldives overtime. (Updated)

The figure shows the increase of GHG emission in the maldives overtime. The method used to derive the numbers was using top to bottom approach and using standard emission factors from IPCC EFDB. The  gap from 95 to 2000 is due to lack of data. The unit Gg is equivalent to kilo-ton equivalent of CO2. The 2012 (the red bar) is projected emission for this year based on the 1st quarter of the year.

Male' in 1922 and today

Story of CDM - part 1

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It was the year 1997, place Kyoto, Japan. One of the milestone meetings held under United Nations Framework Convention on Climate Change (UNFCCC). After much debate Conference of Parties (COP) adopted Kyoto Protocol(Kyoto Protocol) as an immediate solution for climate change issues. As a testament to the issues it had, Kyoto Protocol took 8 years of its 15yrs of its 1^st Commitment Period (CP1) to enter into force under the UNFCCC. Nevertheless KP gave birth to whole new market mechanisms, introducing a whole new commercial product which went on to revolutionized the world of innovators, financiers and overall development of the whole world. Those mechanisms are known as Joint Implementation (JI) and Clean Development Mechanism(CDM) and that commercial product is better known as Carbon Credits.

Clean Development Mechanism, and Joint Implementation are the paternal twins of KP. Where the JI focused only developed countries, CDM focused on rest of the world. Reason why CDM is more popular than JI is because of the larger audience CDM catered to. Now this isn’t about the controversial KP or the rivalry between the brothers JI and CDM. Its only about CDM.

Clean Development Mechanism or CDM is a market mechanism which dictated that the Country A who had technology, financing and any other resource of importance/use to reduce carbon emission would use those in a CountryB which has no such technology, finance or any other resource of importance/use. And in return the emission reduced or the Carbon Credits produced would be owned by the Country A.The idea behind is the credits earned by Country A from Country B using CDM would be used to offset the emissions of Country A so as to meet the any commitment (if any) of Country A under the KP.

Ok before I head on, I should explain, under KP, the Parties to KP were categorized into 2 groups. The Developed Countries aka Annex 1 countries and Developing Countries aka Non-Annex 1 countries. Annex 1s are the have it alls, and Non-Annex 1s are the want it alls. Although imperfect CDM gave an avenue under KP to let them both have what they want (I.e. to be have it alls). This particular grouping is the main reason why KP is under fire today, but will not talk about that here.

Now under CDM, green technologies (which were environment friendly and reduces the green house gas) which were expensive than normal technologies got a financial edge. That is by the emission reduced by using green technology instead of using normal technology will be counted as Certified Emission Reduction (CER). By the way 1 CER is 1ton of CO2 equivalent. Due to the emission reduction commitments of Annex 1 countries and the high cost of reducing that much emission whithin their country left them needing CER to meet their commitments. And with lower cost of CO2 reduction in Non-Annex 1 Countries in comparison with the same in Annex 1 countries, CDM became attractive. But CDM was new and it took time to set up some rules/guidelines and whatever else needed for it. And that caused the huge demand and low supply of CER by CDM in the beginning, the price of CER in the market sky rocketed attracting everyone and anyone who had something to offer into the carbon business (technology developers, financiers, brokers etc...). And thus began the story of CDM.

Fate of Kyoto Protocol

It been almost 14 years since the Conference of Parties to UNFCCC met in Kyoto, Japan which gave birth to infamous Kyoto Protocol. It was the very first legal framework to combat climate change born out of the convention and as it is now the only one. Kyoto Protocol has been a source of controversy ever since it came into existence. Kyoto Protocol is based on the following principles:

• ·         Emission reduction commitments from Annex I countries (developed countries)
• ·         Implementations of supplementary mechanism that would help Annex I countries to achieve their commitments. These mechanisms is better known as Clean Development Mechanism (CDM), Joint Implementation (JI) and Emission Trading System (ETS)
• ·         Establishment of adaptation fund to assist developing countries to adapt to climate change
• ·         Accounting, Reporting, Reviewing and compliance of the commitments

Kyoto protocol has tried to address all aspects of the struggle against climate change, but it is far from complete. Especially when the biggest GHG emitter at the time refused to take part, i.e. America, in the protocol and forming an umbrella group with countries of similar mindset. In this context it is strange that in formulating the protocol Americans gave huge inputs. And over the period of last one and half decade all new sets of problem has cropped up like countries who championed Kyoto Protocol like Japan, Russia, Canada has expressed their disdain for the extension of protocol. And they have good reason to be so. That is;

• ·         The resources put into achieving the commitments have put huge burdens on their economy and in some cases economy has shrunk. And still could not achieve the targets
• ·         They are no longer the only large emitters with emergence of China, India, Brazil, Mexico, South Africa, Indonesia, Korea and etc who are non-Annex I as larger emitters and do not have a commitment.
• ·         And the fact that zero emission from Annex I would not have enough impact achieve the required levels of Global emissions.

Thus it is apparent there needs to be some major changes required. But there is some serious opposition to the changes to Annex I list to include all major emitters or to have legal commitments as before. Although, there are no provision that would enable the COP to punish a country for not adhering to their commitment under the protocol (making Kyoto protocol a toothless one).

The COP has been going back and forth about the improvement and extension of KP under the alias of AWG-KP. At the same time discussion is going on a separate negotiation track under the convention AWG-LCA to have a new agreement which could supplement or even replace the KP. AWG-KP now has a little over one year(deadline is 2012), to formulate a mutually agreeable terms for the KP extension (2^nd Commitment Period), endorse within the COP and give enough time for enough number of parties to ratify it within their government. Given the 7 year time frame taken by the parties from adoption of KP to enforcement of KP, it is widely agreed that one year might not be enough to adopt and enforce the extension of KP. And having a gap between CP1 and CP2 of KP is not acceptable to many parties. And the gap could a reason to kill the KP.

So, in conclusion, KP talks have been delayed too much and any more delay would lead to a gap between CP1 and CP2. And the COP has just one year and 2 COP meetings to resolve the issues and save the KP. There are still ambiguities about KP, but one thing is for sure the decision whether KP lives or dies will be decided in COP18 in Durban

Sea swell incident in Huvadhoo in 2011

 Path the wave took onto Hoadhehdhoo main road

 The reach of the wave on the main road of Hoadhehdhoo (roughly 500ft from beach)

 The dust lines mark the height of water on the flooded main road of Rathafandhoo

 Near southwest shore of rathafandhoo (this is where the wave came in most)

 The natural protection at rathafandhoo breached at western shoreline

 Waste washed off at Fares mathoda with the wave

 Protection build up by locals in anticipation of the wave in Fares mathoda

Fares maathoda bay (this is where the wave came in

Climate Change adaptation for Ministry

Picture taken on 13th April 2011 at the from gate of Ministry of Housing and Environment. Its pretty clear why Maldives needs to adapt to climate change as fast as possible.

CDM in Maldives

Agreement of Collaboration being signed between the Ministry of Housing and Environment and UNEP Risoe on development of CDM (clean development mechanism: if you dont know refer to http://unfccc.int/kyoto_protocol/mechanisms/clean_development_mechanism/items/2718.php)  and LCS (Low carbon strategy). This whole thing is funded by the Danish

Dhiffushi PV project

The signing of dhiffushi Solar PV project. 40kW PV to be installed and hybridized with the existing 140kW diesel generator sets. Installation work  to start early 2012 and finish by the end of 2012

Carbon Neutrality – Environmental Option or Economic Necessity for Maldives

Over two years ago, when Maldives announced their intent of becoming carbon neutral in 10 years, I was left pondering what it meant, what would have to be done and what would it achieve ultimately. Back then the news was met with huge criticisms both nationally and internationally. Two and half years later I find myself justifying and promoting that goal but not as a tool of environmental sustainability but as a tool for self sustaining the Maldivian economy.

I may not be an economic expert, but it’s not rocket science to understand the link between energy use and economy. They are proportional more or less. So I jot down some stats in this regard as my justification.

•          Since 2003 in Maldives annual GDP growth is 11% with 2004 tsunami and 2008 economic shocks
•          In comparison annual growth in energy demand is 9%.

Seems fair enough, but the problem is here,

•          99% of that energy demand is met fossil fuels and the
•          In 2010 price of fossil energy is more than 3X what it was at the start of this century.
•          Price of fossil fuel energy has been rising at an annual rate of about 20% with huge volatility between the years.
•          Maldives fossil fuel energy expenditure has been rising at roughly 30% annually

And ultimately as the above figures suggests, fossil fuel expenditure is gaining 1.4% every year in its share in the national expenditure. Now for country hard pressed for having expenditure greater than their income, this is bad news. And as a newly graduated Middle income country, there is an exceeding risk of regression back to a Least Developed Country. Not only that, but in long term if it continues the same the collapse of the economy is inevitable. But the solution is obvious, go low carbon. Exploiting energy conservation, energy efficiency and locally available renewable energy opportunities will definitely save a huge portion of the energy bill. Reducing the overall expenditure, and attaining better balance of payment. The new and emerging green industries like energy servicing companies, carbon auditing firms and climate financial institutes can take the economy to new heights.

Hence this new source of income and the reduction of old expenditure, can self sustain this troubled economy. And environmental benefits and carbon reductions looks nothing more than a simple byproduct in comparison to its long term economic gain. And for those who are wondering what the monetary value of all the above stats, in 2010 Maldives energy bill was a little over 245 million dollars against a GDP of 1.448 billion dollars.

Maldives Energy Policies and Strategies

Undoubtedly energy is one of the main driving factors of economies around the world. Energy sector in Maldives is highly dependent on imports and thus impedes on potential economic growth of the country. The policies and strategies to tackle energy situation has been evolving with the changing nature of the sector. At the end of last millennia the main priority of the government was the electrification of all inhabited islands. Prices of Renewable Energy at that time did not make it a feasible option in comparison with the conventional energy sources.

However, the situation has changed drastically over years with increasing oil price and continuously reducing price of renewable technologies. The high prices of fossil fuel in 2008 caused huge losses to the economy and showed a backward growth. The government ended up spending millions of dollars as bail out to the energy producing companies.

The realization of Maldives vulnerability to the fossil fuel prices world-wide, forced some major changes in policies towards renewable energy. Increase in the financial viability of the RE technology and its relevance of being environment friendly, the government decided to mainstream renewable energy in the Maldives. As such the renewable energy target was revised from 15% (energy policy 2005) to 50% renewable energy of total energy of the Maldives by 2015 (NSDS 2009) and to become carbon neutral by 2020 (energy policy 2009).

The declaration of carbon neutrality at UN General Assembly of 2009 boosted the works done on reduction of emissions in Maldives. As energy sector is the major contributor of emission (99% of emissions are from energy: First National Communication 2001) in the Maldives, the focus on renewable energy and energy efficiency was enhanced.

Current Policies and Strategies

The government views energy services as a basic human right. Policies and strategies are designed to provide these services at an affordable and sustainable manner, keeping in mind emission reduction and the carbon neutral goal. The newly formulated policies are as follows;

1. Provide all citizens with access to affordable and reliable electricity
2. Achieve carbon neutrality by 2020
3. Promote energy efficiency and energy conservation to reduce energy cost
4. Increase national energy security by diversifying sources of energy
5. Promote renewable energy technologies
6. Strengthen institutional and legal frame work for the energy sector.

Carbon Tax for Maldives – Food for thought

Carbon Tax for Maldives – Food for thought

Carbon tax is one of the few tools that are considered among experts as means to reduce GHG emissions. But it is been plagued by word tax at the end of it.  When a new tax is thought of, it would be natural that a person’s thought would interpret as increased cost of goods and living conditions. But Carbon Tax may be the most effective tool to accurately administer “common but differentiated responsibilities” principle within a country to reduce emissions. According to IPCC models a carbon tax of 56.8USD/ton of CO2 would reduce emissions of 35% from Business As Usual scenario[i]

Carbon Tax is essentially a tax levied on the amount of carbon-equivalent emission potential. In a country like Maldives such a tax could do miracles in terms of going low carbon. And it would be much easier to administer. Unlike Cap and Trade, to administer carbon tax we would not require additional capacity of carbon auditors, detailed MRV protocols. We would have to add Carbon tax alongside the existing import tax and all the required capacity needed would be catered within the same process. But unlike import tax which is a percentage of the price of the goods, carbon tax would be fixed based on the carbon content making this even simpler than import tax. 

Levying carbon tax should be limited to fossil fuels in case of Maldives to make it simpler and easily digestible. And should be started with a modest level of may be 25USD/ton of CO2 which could be increased as time goes on. That’s additional revenue of roughly 25.1 million USD for Maldives at current level of emissions. On the flipside, there would be an increase of fossil fuel price, for example diesel price would increase by roughly 95laari per liter, petrol price would rise by 80laari per liter and LPG 20kg tank price would rise by 20rf per tank. These laari amounts can easily add up to a sum which could be a real burden to the average citizens. Carbon tax revenue can be used to subsidize basic services (similar to NSPA program) like water services, public transport services and electricity services so that those prices would remain as in the normal condition and alleviate the burden on average citizen. And whatever fund remaining either could be used for public welfare spending and reap the benefits of double dividend or even setting up RE subsidy fund and other projects to reduce emission from other major sectors.

The domino effect of such a measure is many and below are some of them,

• ·         In tourism sector, increased price of fossil fuel based energy services would make RE technologies more economically viable and catalyze the transition to low carbon technologies
• ·         Energy efficient equipments and office appliances would become more popular.
• ·         Private sea transport would be reduced and ferry services would be utilized more making it efficient
• ·         Road transport would lessen as more and more car and motorcycle owners avoid unwanted rides/trips reducing traffic burden on capital making it a bit safer. It would also motivate more environmentally friendly and healthy transport methods like bicycle and walking.

·         And if the revenue used correctly could reduce the gap between the classes of rich and poor

There could be many more after effects and some may be even negative but it definitely looks like that  grass could be much greener in the future with Carbon Tax than without it.

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[i] Climate Change 2007, Mitigation of Climate Change, Page 237-238