S - '; . . NORrH PAaFK OCFAh §~~~~~~~~~~~~~~~~~~~~~~~~A jg ,, , ' ' % is- i- 4" X > ,,,<1-,. ............... ..~~~~~~~~~~~~~~Al .7i SOJTH PACIF f Oi~~~~~~~~~~~~~~~~~~~~~~~~~~~~~NOT FF4hff OCELRATINALDU CURRENCY EQUIVALENT US$1.00 = A$1.23 (Tuvalu uses the Australian dollar.) FISCAL YEAR January 1 - December 31 ACRONYMS ADB - Asian Development Bank FSED - Forum Secretariat Energy Division MFAEP - Ministry of Foreign Affairs and Economic Planning MFCP - Ministry of Finance, Commerce, and Public Corporations MLWC - Ministry of Labor, Works and Communications OPM - Office of the Prime Minister PEDP - Pacific Energy Development Programme SOPAC - South Pacific Applied Geosciences Commission TEC - Tuvalu Electricity Corporation TMS - Tuvalu Maritime School TSECS - Tuvalu Solar Electric Cooperative Society Ltd. ABBREVIATIONS kgoe - kilograms of oil equivalent LCT - local coastal tanker MR - medium range PV - photovoltaic TOE - tons of oil equivalent This report is based on the findings of an energy assessment mission, which visited Tuvalu in February, 1991. The mission comprised Andres Liebenthal (mission leader - World Bank), Herbert Wade (renewables specialist - consultant), William Matthews (petroleum specialist - consultant), Michael Charleson (power engineer - consultant), Douglas Macdonald (power economist - consultant), and Chuck Filiaga (assistant power planner - PEDP). FOR OFFICUIL USE ONLY Pacific Islands Series Report No. 1 Vclume 11 TUVALU ISSUES AND OPTIONS IN THE ENERGY SECTOR August 31, 1992 Abstract Tuvalu is constrained by its limited natural resources, the distances between its islands as well as from major international markets, and a lack of skilled management and implementation capacity. Though there has been some success with renewable energy resources, Tuvalu will remain dependent on imported petroleum. The report recommends that the government improve its monitoring of petroleum pricing, pay attention to environmental concerns, and investigate the possibility of reducing imported LPG's price. The power utility, TEC, and the Solar Cooperative, TSECS, should focus on making a better use of their assets, with a cautious expansion of capacity. For TEC, this implies an increase in the tariff along with a reduction in system losses, implementation of a system of records, and improvement in its accounting system. The government should complete the details of the corporatization of TEC. TSECS has successfully operated solar photovoltaic systems in the outer islands. The report recommends that TSECS's staff be given further training, and the tariff be raised so that it covers capital and operational costs. For program continuity, the report recommends that the government recruit a qualified Tuvaluan to work with and be trained by the expatriate Energy Planner. Industry and Energy Operations Division Country Department III East Asia & Pacific Region This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization. TUVALU ISSUES AND OPTIONS IN THE ENERGY SECTOR Table of Contents Page No. EXECUTIVE SUMMARY . . . . . . . . . . . . . . . . . . . . . . . . . i I. THE ECONOMIC AND INSTITUTIONAL CONTEXT . . . . . . . . . . . 1 Energy and the Economy . . . . . . . . . . . . . . . . . I Institutional Framework . . . . . . . . . . . . . . . . . 1 II. ENERGY CONSUMPTION . . . . . . . . . . . . . . . . . . . . . 3 Introduction .... . . . . . . . . . ....... . . . . 3 Petroleum Products . . . . . . . . . . . . . . . . . . . . 3 Electricity .... . . . . . . . . . ..... . . . . . 3 Solar.Energy . . . . . . . . . . . . . . . . . . . . . . . 6 Biomass . . . . . . . . . . . . . . . . . . . . . . . . . 7 III. ENERGY SUPPLY I . . . . . . . .. . . . . . . . . . . . . . . 8 Introduction . . . . . . . . . . . . . . . . . . . . . . . 8 Petroleum Products ... ....... . . . . . . ... . . 8 Electricity .... . . . . . . . . . . . . ........... 8 Solar Energy .... . . . . . . . . . . . . ........... 13 Biomass . ........ . . . ....... ... . . . 14 IV. POLICY AND INSTITUTIONAL ISSUES . . . . . . . . . . . . . . 15 Petroleum Subsector . . . . . . . . . . . . . . . . . . . 15 Electricity Subsector . . . . . . . . . . . . . . . . . . 18 Solar Energy . . . . . . . . . . . . . . . . . . . 20 Biomass, Wind and Ocean Energy Development . . . . . . . . 21 V. INVESTMENT AND TECHNICAL ASSISTANCE PRIORITIES . . . . . . . 23 Sectoral Development Priorities . . . . . . . . . . . . . 23 Petroleum Subsector . . . . . . . . . . ... . .. . . . 23 Power Subsector . . . . . . . . . . . . . . . . . . . . . 24 Solar Energy .... . . . . . . . . . . . . . . . . ... 26 Biomass, Wind and Ocean Energy Development . . . . . . . . 26 Tables 2.1 SUMMARY ENERGY SALES FORECASTS . . . . . . . . . . . . . . . 5 2.2 GENERATION AND PEAK DEMAND PROJECTIONS . . . . . . . . . . . 6 3.1 TEC PO-WER SYSTEM STATISTICS (1990) . . . . . . . . . . . . . 9 3.2 TEC GENERATING PLANT . . . . . . . . . . . . . . . . . . . . 9 3.3 TEC POWER SYSTEM LOSSES . . . . . . . . . . . . . . . . . . 10 3.4 POWER DEVELOPMENT PLAN SUMMARY . . . . . . . . . . . . . . . 13 4.1 POTENTIAL COST OF BULK LPG SUPPLY, FUNAFUTI . . . . . . . . 17 ENERGY CONVERSIONS AND MEASUREMENTS Typical Typical Gross Gross Oil Unit Density Density Energy Energy Equiv kg/liter 1/tonne HJ/kg MJ/liter toe/unit (net) Blamas" Fuele Fuelvood (52 mewb) tonne 18.0 0.42 Coconut Residues (air dry)/a Shell (152 mcwb)b,r ..e t,d tonne 14.6 0.34 Husk (302 mcwb)hv, ,t,d tonne 12.0 0.28 Average (air drybU.k .4 Wh.1)/b tonne 14.0 0.33 Coconut Palm Wood (air dry) tonne 11.5 0.27 Charcoal 30.0 0.70 Vegetable end Mineral Fuels Crude Oil conne 42.6 1.00 Coconut Oil tonne 0.910 1,100 38.4 0.90 LPG (propane) tonne 0.510 1,960 50.0 25.5 1.17 Ethanol tonne 27.0 0.63 Gasoline (Super) tonne 0.730 1,370 46.5 34.0 1.09 Gasoline (Unleaded) tonne 0.735 1,360 46.5 34.2 1.09 Aviation Gasoline (Avgas) tonne 0.695 1,440 47.5 33.0 1.12 Lighting Kerosene tonne 0.790 1,270 46.4 36.7 1.09 Power Kerosene (Avtur, DPK) tonne 0.795 1,260 46.4 36.9 1.09 Automotive Diesel (ADO) tonne 0.840 1,190 46.0 38.6 1.08 High Sulphur Fuel Oil (IFO) tonne 0.980 1,020 42.9 42.0 1.01 Low Sulphur Fuel Oil (IFO) tonne 0.900 1,110 44.5 40.1 1.04 Electricity (MWh) Fuelvood le MWh 0 93 Fuel Conversion Efficiency Diesel: Text uses actual where known, otherwise: Average efficiency for small (< 100 kW output) diesel engine 0.46 l/kWh (221). Average efficiency of large (>100 kW output) modern diesel 0.284 1/kWh (362). Average efficiency of low speed, base load diesel (Pacific region) 0.30-0.33 1/kWh (28-322 eff). Energy Measurements Area: 1.0 km2 * 100 hectares - 0.386 mi2 1.0 acre * 0.41 hectares Mass: 1.0 long tons a 1.016 tonnes Energy: 1 kWh a 3.6 MJ a 860 kcal - 3412 Btu - 0.086 kgoe I toe a 11.83 MWh - 42.6 GJ - 10 million kcal a 39.68 million Btu 1 NJ a 238.0 kcal a 947.8 Btu - 0.024 kgoe - 0.28 kWh /a Average yield of 2.93 air dry tonnes residues/tonne copra produced (Average NCV 14.0 MJ/kg) mewb - moisture content wet basis. NCV - net calorific value. /b Proportion: kernel 332, shell 232, husk 442 by dry weight. c Assumes conversion efficiency of 92 (biomass-fuelled boiler). EXECUTIVE SUMMARY 1. Tuvalu is composed of nine low-lying coral atolls scattered in the Central Pacific Ocean, with a land area of 26 km , and an Exclusive Economic Zone of 0.9 million km2 of ocean. The population is about 9,000, of which approximately one-third live on the capital island, Funafuti. Tuvalu's main natural economic resources are coconut trees and fish. 2. Over the period 1986-89, the performance of the Tuvalu economy has fluctuated considerably; real per capita GDP in 1989 was lower than in 1986. In 1989, Tuvalu experienced an in.ernational trade deficit, equal to approximately two-thirds of its GDP, which was financed mainly by international aid and remittances from expatriate workers. In 1989, fuel imports were approximately 16Z of total imports, but they amounted to more than 4002 of toaal exports. 3. The Tuvalu Trust Fund, which was established in 1987 with grant aid totalling A$25 million, supports the economy, but, due to certain restrictions in the Fund's charter, it is unlikely that Tuvalu will be able to withdraw any money from this Fund in 1991. i 4. Some fundamental constraints on Tuvalu's economy are the limited natural resources, the distances between the islands as well as from the major international markets, and a lack of skilled management and implementation capacity. In the medium term, Tuvalu's prospects for economic growth will depend upon the future of copra production and revenue from fishing, including licensing income from international fishing companies. Assuming sound management of the limited resources, a practical investment program, and technical assistance in selected areas, overall economic growth of 3-52 per year is possible. 5. The three known non-conventional indigenous energy resources in Tuvalu are solar energy, ocean energy, and wind energy. Of these, only solar energy has had any technical or economic success in the Pacific region. The continuing developmernt of solar energy resources for water heating and electricity production at the residential or small commercial level is appropriate. Hence, it is recommended that programs for data gathering related to wind and ocean energy be continued, but the physical development of these resources be held off until they are proven commercially in the Pacific island environment. Diesel powered generation is the principal economically and technically viable source of electricity for Funafuti. In addition, solar photovoltaics is economically appropriate for most outer island electrification. This situation is not expected to change over the next ten years. 6. An important constraint is that there is no Tuvaluan to work with the current expatriate Energy Planner. For program continuity, it is recommended that GOT recruit, as soon as possible, a suitably qualified Tuvaluan to work with and be trained by the Energy Planner. Petroleum Subsector 7. Imported pettoleum products are the basis of all of Tuvalu's commercial energy consumption. Most of these products are consumed directly, while about half of the imported ADO is used to generate electricity. The total 1990 LPG - ii - consumption is estimated to be about 7.6 tonnes, and LPG has made few inroads into the houseFold cooking market. On the outer islands, most of the energy consumption is based on traditional biomass products, with some solar energ7 for lighting. In view of this situation, the main prospects for improvement in this subsector lie in better monitoring of petroleum pricing, attention to environmental concerns, and a possibility of reducing the price of impo:ted LPG. 8. GOT should monitor the BP ex-depot wholesale prices of petroleum products to ensure that these prices reflect efficient procurement and supply norms. The mission recommends that GOT acquire from BP detailed price build-up information on a regular basis, and analyze it with assistance from a regional energy agency. 9, The health. safety and envirormental Practices, need to be augmented, principally by controlling the oily water disposal at the BP depot, and improving the unsafe storage and dispensing facilities at the Fusi Co-op and other retail outlets. It is recommended that GOT seek the assistance of specialized experts from a regional energy agency. 10. Since the LPG Drice is very high under the current system of the import of small filled cylinders from Fiji, it is recommended that a pre-feasibility study of the benefits of importing LPG in bulk or large containers, combined with local decanting, be carried out. Electricity Subsector 11. The main theme of this report for this subsector, for both TEC and TSECS, is better use of the existing assets, with a cautious expansion of capacity. TEC 12. TEC's Funafuti power system serves 429 consumers (1990), of which 402 are household consumers. Total electricity sales in 1990 were 1,120 MWh, which represented a per capita consumption, in Funafuti, of about 370 kWh per year. Overall sales are projected to grow by 4.4% per year for the period 1990-2000, with residential sales increasing at an annual rate of 2.52, commercial sales at 5.3Z, and Government sales at 4.6%. Growth beyond 1993 has been projected to grow only at about 1.5%. 13. The recommended exPansion plan for TEC is based on a conservative definition of firm capacity. This plan calls for the installation of another 150 kW unit in the existing station in 1992, and for the installation of another unit after 1995. The plan also includes the addition of a third 350 kVA main transformer (including 11 kV circuit breakers, relay protection and control) within the next two years. The total cost of this expansion until 1995 is estimated at about US$135,000 (in 1991 prices). 14. TEC's station use and distribution losses, at about 18-20%, are high. Thus, there is a substantial potential for cost savings through reduction in system losses. As an initial step towards the reduction of system losses, it is recommended that TEC carry out an investigation to establish the level of system - iii - losses and the contribution of each source. Once an accurate figure for the system lo0b is available, further investigation would be necessary to establish the sources and identify appropriate measures to reduce the losses. It is also recommended that TEC take measures to improve the system power factor. 15. TEC has some cooling Droblems that limit the output of two of its generators. To remedy the cooling system problem, it is recommended that TEC arrange for an experienced engineer to analyze the situation and recommend modifications. 16. It is essential that TEC's maintenance of the generating units and all auxiliary units be carefully planned and programmed. Further, above average stocks of materials and parts should be on hand for both planned maintenance and unexpected breakdowns. 17. TEC's generating and distribution system can be efficiently operated by a small staff using straightforward procedures and systems. The present staff level of 24 might reasonably be increased to 29-30, but the planned full complement of 34 staff is too large. Instead, TEC should provide additional training for staff at all levels. 18. Since TEC does not maintain adequate records, it is recommended that TEC implement, on an urgent basis, a simple, but comprehensive, system of records will assist management in identifying the areas of operations that need improvement, determining plant and equipment expansion needs, and assessing TEC's financial condition. 19. TEC should improve its accounting system so that its annual budget includes depreciation charges, calculated on revalued fixed assets. This would enable TEC's management to assess the relative worth of future capital investments and the effectiveness of potential engineering innovations or even of improvements in O&M. Since TEC (and Tuvalu as a whole) does not have an accountant, one option is that GOT recruit one accountant immediately, whose services would be shared by a number of government agencies, including TEC and TSECS. As an interim measure, the GOT should consider the use of UN volunteers as accountants. 20. In view of the December, 1990 corporatization of TEC, its assets and operations need to be separated from those of GOT. To accomplish this, GOT should decide (i) the value at which the fixed assets are to be transferred to TEC, (ii) the appropriate financial (debt:equity ratio) and shareholder structure for TEC. (iii) whether or not TEC is required to pay corporate income tax, (iv) the general nature of the relationship between GOT and TEC, and in particular, the extent of the autonomy to be granted to TEC to determine its own capital expenditure and revenue (tariff) policy. 21. As a further step following upon TEC's corporatization TEC'3 Board of Directors, in consultation with the General Manager, as appropriate, should determine TEC's objectives, establish clear policies, and determine the responsibilities and authority of the General Manager. Further, the Board should set targets or goals to be reached in a given time period. - iv - 22. Since TEC makes a loss when capital charges are included in expenditures, increases in electricity tariffs will be necessary. TEC's should consider (i) automatic fuel price adjustment, (ii) different tariffs for residential and non-residential consumers, and (iii) the need for the tariffs to recover the full costs of electricity, including capital charges and insurance costs, in order to ensure the financial viability of the utility. TSECS 23. TSECS provides solar energy on a fee-for-service basis to about 300 households on seven of the eight outer islands. Solar lighting kitd have also been installed on eight community meeting houses. Approximately two-thirds of the solar capacity is operational, largely due to system failures in the 170 units installed in a first phase. By year-end 1991, the combined solar PV capacity will generate approximately 44 MWh of electricity annually. 24. Over the years, TSECS has evolved to the point where it is able to properly administer and maintain about 300 outer island solar installations. TSECS has proven itself capable of operating and maintaining the systems, and maintaining general customer satisfaction. It is working well and no change in its structure or mode of operation is recommended. In particular, no attempt should be made to merge TSECS and TEC. Though the general competence of TSECS is good, TSECS would benefit from further training of its staff. 25. TSECS should attempt to secure maintenance contracts for GOT solar installations in the outer islands, notably in communications and health. This will help to better utilize TSECS resources. However, because operational costs are a significant part of its tariff, TSECS should not attempt to increase its staff or facilities, particularly office and workshop spnce, which would increase operational costs, unless near term financial returns are clearly the result. 26. Funding for the general increase in the capacity of solar systems for those customers able to pay will be needed after 1993. Though aid will be sought, these systems will be provided to wealthier customers, and their ability to pay may be sufficient to allow initial capital investment to be from loans rather than grants. New capital investment of about A$150,000 per year for five years is expectad to be needed for this purpose. 27. The present level of TSECS tariffs provides for operation and maintenance costs, but is inadequate for the replacement of the solar panels at the end of their useful life (10-15 years). It is recognized that the existing level of service is insufficient to warrant full charges to customers. However, a general upgrading of installations to a un4iformly adequate level of service is underway, and as services improve, TSECS should strive to raise its monthly fee to A$10.00 per month. 28. For solar PV systems, a system for reclaiming lead from spent lead acid batteries should be placed into effect to prevent possible environmental damage. Biomass. Wind and Ocean Energy Development 29. Given the experimental nature of these energy resources, it is recommended that, at present, no efforts be made to develop these forms of energy in Tuvalu. I THE ECONOMIC AND INSTITUTIONAL CONTEXT Energv and the Economqy 1.1 Tuvalu is composed of nine low-lying coral atolls in the Central Pacific Ocean with a total land area of 26 kM2, and an Exclusive Economic Zone of 0.9 million km2 of ocean. The nine islands are scattered, with the northernmost island more than 550 km away from the southernmost island. The total population is about 9,000, of which approximately one-third live on the capital island, Funafuti. The principal natural economic resources of Tuvalu consist of coconut trees and fish. 1.2 Gver the period 1986-89, the performance of the Tuvalu economy has fluctuated considerably, with real GDP growth of 3Z in 1987, 141 in 1988, and a decline of 13Z in 1989. In 1990, GDP is estimated to have grown by 4Z. With a population growth rate of 1.52 per annum, real per capita GDP in 1989 was lower than in 1986. In 1989, Tuvalu experienced an international trade deficit, equal to approximately two-thirds of its GDP, which was financed mainly by international aid and remittances from expatriate workers. In 1989, fuel imports were approximately 16% of total imports, but they amounted to more than 4002 of total exports. A few major indicators are shown in the Statistical Appendix, Table 1. 1.3 The Tuvalu economy is supported by the Tuvalu Trust Fund, which was established in 1987 with grant aid totalling A$25 million; currently, the Fund's offshore investments are valued at A$35 million. Withdrawal of monies from this Fund is restricted by its charter, which requires that the Fund's value be maintained in real terms. As a result, it is unlikely that Tuvalu will be able to withdraw any money from this Fund in 1991. 1.4 Some fundamental constraints on Tuvalu's economy are the limited natural resources, and the distances between the islands as well as from the major international markets. In addition, in recent years, Tuvalu has been able to use only about 502 of the foreign aid offered for capital investment projects because of (i) a lack of skilled management and implementation capacity, and (ii) cash flow difficulties arising from the requirement of some donors that the GOT provide initiisl project finance and then seek reimbursement from the donors. 1.5 In the medium term, Tuvalu's prospects for economic growth will depend upon the future of copra production and revenue from fishing, including licensing income from international fishing companies. Assuming sound management of the limited resources, a practical investment program, and technical assistance in selected areas, overall economic growth of 3-5Z per year is possible. Institutional Framework 1.6 The management of the energy sector centers around the Ministry cf Foreign Affairs and Economic Planning (MFAEP) and the Ministry of Finance, Commerce, and Public Corporations (MFCP). Within MFAEP, in the Department of Planning and Statistics, there is a an Energy Planner, currently a member of the U.S. Peace Corps, who is the focal point for energy planning, evaluation, and coordination. There is no Tuvaluan to work with the current expatriate Energy Planner. Though the three volunteers who have been in the post have done well, the two year term of the volunteers is inadequate for program continuity. Further, it is unlikely that this post can be filled indefinitely by volunteers. Therefore, it is recommended that GOT recruit, as soon as possible, a suitably qualified Tuvaluan to work with and be trained by the Energy Planner. 1.7 PP South-West Pacific, based in Suva, Fiji, is the sole petroleum marketer in Tuvalu. There is no written agreement between BP and GOT. 1.& Electricity generation and distribution on the main island of Funafuti is under the Tuvalu Electricity Corporation (TEC). TEC was incorporated in December, 1990. Prior to this change, this agency was known as the Tuvalu Electricity Authority (TEA), and it was a Division of the Ministry of Labor, Works and Communications (MLWC). At present, MLWC has oversight responsibility for TEC, but this responsibility is in the process of being shifted to MFCP.1/ 1.9 In 1984, the Tuvalu Solar Electric Cooperative Society (TSECS) was formed with assistance from the Save the Children Foundation and USAID. TSECS is a commercial enterprise, registered under Tuvalu's Cooperative Society Act, which promotes solar electricity for household lighting on the outer islands. TSECS is governed by a Management Committee, which consists of eight members, one from each of Tuvalu's eight larger islands.2/ The Hanagement Committee-is the governing body of TSECS and sets user fees. Each island has its own branch. Members of the Management Committee are elected annually to their posts by their respective branches. The day-to-day operations and project implementation are the responsibility of a Management Team, located in Funafuti, which consists of a manager appointed by the Management Committee and three technical/support staff who are appointed by the TSECS manager. On each island, TSECS has a Branch Technical Agent, who is responsible for the day-to-day maintenance and monthly fee collections. Each island also has a Branch Committee, which is composed of local co-op members. The Branch Committees act as arbiters of local disputes and makers of policy for their specific island. The GOT plays a limited role in the management of TSECS. The Management Committee is directly responsible to the Registrar of Cooperative Societies located in the MFCP. As a result, all project funds to TSECS are channeled through this Ministry. 1/ By December 1991, oversight had been shifted to MFCP. 2/ Niulakita, the southernmost island, with a population of only 61, is too small to support solar photovoltaic power at this time. - 3 - II. ENERGY CONSUMPTION Introduction 2.1 Imported petroleum products provide all of the commercial enetgy consumed in Tuvalu. While about half of the automotive diesel oil (ADO) is used to generate electricity, the remainder of the petroleum products are consumed directly in transportation, fisheries, or houlehold use (cooking and lighting). On the outer islands, moat of the energy consumption is based on traditional biomass products, though the use of solar energy for light'ng is increasing. The energy balance for Tuvalu is presented in the Statistical Appendix, Tables 3a and 3b. Petroleum Products 2.2 In 1989, Tuvalu's import of petroleum products for inland consumption, i.e., excluding jet fuel and aviation gas, amounted to 1,459 kl or 1,268 toe (Stat.Istical Appendix, Tables 3a and 3b), equivalent to about 112 kg/capita, which is relatively low for the Pacific slands. The largest component (about 36%) of petroleum inland consumptions has been automotive diesel oil (ADO) for operating the larger shipping and fhsheries vessels, followed by motor spirit (about 262), which is used mainly in outboard and other small marine engines for local transport and fishing, and ADO (about 26%) for use in power generators (Statistical Appendix, Table 3). Most households on the outer islands use kerosene for cooking and lighting, while on Funafuti, most households cook with kerosene but use electricity for lighting. In comparison with kerosene, the consumption of LPG (butane) is much lower, given the small number of houses with gas stoves, and the relatively high price of LPG. In 1989, Tuvalu's import of jet fuel and aviation gas, which are sold to the international airlines that refuel in Tuvalu, amounted to 656 kl, equivalent to approximately 45% of the total petroleum trade. 2.3 The total 1990 LPG consumption is estimated to be about 7.6 tonnes, and LPG has made few inroads into the household cooking market. 2.4 The total petroleum consumption is projected to increase at about 4% per year from about 1,500 kl in 1989 to approximately 2,300 kl in 2000 (Statistical Appendix, Table 4a). The growth rate of ADO for use in power generation by TEC is projected to be about 3X, while the growth rate to ADO "to others" is projected to be about 42. The growth rate for motor spirit is projected to be about 4%, kerosene 22, and LPG also at 2%. Electricitv 2.5 The power system on Funafuti, operated by TEC, serves 429 consumers (1990), of which 402 are household consumers. Total electricity sales in 1990 were 1,120 MWh, which represented a per capita consumption, in Funafuti, of about 370 kWh per year. Virtually 100% electrification has been achieved on this island.3/ In 1990, of TEC's total energy sales of 1,120 MWh, sales to the 3/ The other eight islands do not have conventional electricity supply, though some households do have solar electricity for lighting. - 4 - Government were about 372, residential sales about 25%, and commercial and large residential consumers accounted for the remaining 38% of sales. Electricity sales have grown at an average rate of over 7% a year since 1986 (Statistical Appendix, Table 6). The number of consumers increased at an average rate of over 52 per year, while the number of electrified households increased at an average rate of about 8% per year.4/ The consumption pattern is heavily skewed, with the ten largest consumers accounting for about 452 of sales, and the next ten largest consumers accounting for about 12% of sales (January, 1991). Though the average overall consumption per consumer is 2,400 Kwh per year, more than 85% of the consumers are below this level of sales. 2.6 There does not appear to be any seasonal vat iation in energy demand or peak load. The daily peak lasts about 2 hours in the evening, driven primarily by residential lighting and small appliance load. Accordingly, there is little scope for moderating the peak demand by structural changes in the electricity tariff. Load Forecast 2.7 Any load forecast for a supply system as small as TEC's inevitably has a wide margin of error because a single development project can cause a sudden and marked increase in electricity demand. The summary load forecast for TEC presented in Table 2.1 is subject to this caveat. No attempt has been made to develop alternatIve contingency projections of load growth, given the scarcity of reliable information abcut future development. Based on the available information, overall sales are projected to grow by 4.4% per year for the period 1990-2000, with residential sales increasing at an annual rate of 2.5%, commercial sales at 5.3%, and Government sales at 4.6%. The 4.4% annual growth rate reflects mainly a sharp increase of more than 102 per year in demand in the period 1991-93, due to the Government's Telecoms project and a commercial hotel project. Growth beyond 1993 has been projected at a much lower annual rate of about 1.5%. 2.8 The residential consumption on Funafuti is projected to grow at an average annual rate of 2.5% from 1990 to 2000. On Funafuti, the number of consumers is likely to remain stable, because this densely populated island has limited room for population growth, and most of the existing houses are already electrified. Thus, growth in residential consumptior will only occur as increases in personal incomes lead to the purchase of more electrical appliances. This growth in sales will be tempered by increases in electricity tariffs, which will be necessary if TEC is to cover both its capital and operating costs. 2.9 The only major commercial development anticipated in the near futuru is a 16-room hotel, which is likely to start operating in mid-1992. In the Pacific islands region, it is common, and also desirable that such establishments use solar hot water heating, and it is recommended that this hotel follow this practice. Based upon t;.e typical energy demand for such a hotel, given solar 4/ While the historical system records of TEC are limited and unreliable, it has been possible to gather sufficient data to establish the general growth in electricity consumption, and some patterns of consumption among the different types of consumers. water heating, its estimated annual consumption will be about 150 MWh when it is in full operation. Table 2.1: SUMMARY ENERGY SALES FORECASTS Year Government Commercial La Domestic Lb Total -------------- ---------------NMWh----^---------------------- 1990 412 424 284 1,120 1991 448 433 304 1,185 1995 602 643 332 1,577 2000 647 709 362 1,718 Av. annual growth (Z) 4.6 5.3 2.5 4.4 1990-2000 /a Private consumers, commercial and residential exceeding 200 kWh/month. lb Private consumers consuming less than 200 kWh/month. Source: Mission projections; Annex 2. 2.10 Reliable detailed information, such as the likely date of completion or probable electrical demand, about planned Government projects is generally not available, even for projects that are scheduled for completion in 1991. An exception is the new Telecoms development, which is expected to consume about 150-170 MWh per year when it is fully operational in about 1993. Other planned near-term Government developments include a chicken processing plant, extensions to the craft buildi..g, including a kitchen, a new airport terminal building, a building for the Education Department, ward extensions at the hospital; further into the future, there are plans for major modifications and extensions to the hospital, and an expansion of the main Government building. All of these projects are dependent upon overseas assistance. Accordingly, many of them are likely to be delayed by several years. As each of these projects signifies a major increase in the load on TEC's system, it is important to provide appropriate incentives to encourage energy conservation or the use of alternative technologies, such as the use of solar hot water heaters. To provide the correct signals, it is recommended that TEC consider the adoption of a two-part tariff for its current and prospective larger customers. The forthcoming tariff study should provide an appropriate basis for designing and introducing such a tariff. (See paragraph 4.14) 2.11 In the absence of adequate information on the demand and load pattern of future developments, the projections of peak demand must necessarily be imprecise. The peak demand projections (Table 2.2) have assumed that the daytime demand, particularly from air conditioning, will increase, and this would tend to increase the load factor. However, the new hotel is expected to have a large evening demand coincident with the peak, and this, together with the peak demand of the new domestic consumers in the south, is expected to result in a slight - 6 - overall decline in the load factor during the next two years. A subsequent gradual improvement is expected in 1993-2000. On this basis, the load factor is projected to decline from the present level of about 662 to about 59X in 2000. The overall level of station use and energy losses has been assumed, conservatively, to remain at the present level of 182, in the absence of any firm project and timetable to reduce this level. Table 2.2: GENERATION AND PEAK DEMAND PROJECTIONS Year Generation Peak Demand (MWh) (kW) 1990 (Actual) 1,366 235 1991 1,446 273 1995 1,924 376 2000 2,096 407 Average annual growth rate (2) (1990-2000) 4.4 5.6 Source: Mission projections. Solar Energy 2.12 TSECS provides solar energy on a fee-for-service basis to about 300 households 5/ on seven of the eight outer islands. Solar lighting kits have also been installed on eight community meeting houses. However, many of the 170 units installed in the initial phase experienced system failures and are in being replaced. 2.13 By year-end 1991, based on the assumptions that (i) all 342 currently enrolled members of TSECS are out-fitted with two-panel household systems, and (ii) all system upgrades and repairs have been completed, it is estimated that the total solar PV capacity (including household and meeting hall lighting and dispensary refrigeration units), will generate approximately 46 MWh of electricity annually, which will be approximately 10 of total 1991 household electricity consumption. 2.14 By the end of 1993, it is expected that over 500 households will have lighting kits installed. The market for rural households desiring and able to afford PV lighting is estimated to be 600-700, of the approximately 1,000 households in the islands, and this number is expected to be reached before the year 2000. In view of the growing energy demand from the consumers, a trend toward more puwerful PV systems, capable of operating VCRs and household refrigerators, is expected to begin after 1993, and come close to its full potential by 2000. 5/ In June 1990, 265 systems were installed or in development, and 77 households were awaiting delivery and installation of lighting kits. 2.15 Solar PV refrigerators were introduced in Tuvalu in 1987 for use in medical dispensaries in the outer islands. Ten refrigerators were installed under this project, each with a six-panel system, which were later upgraded to a ten-panel system. GOT is the owner of these refrigerators, and TSECS is pursuing a service contract for regular maintenance.One refrigeration unit was also provided for Motufoua Secondary School with funds from France. Biomass 2.16 Coconut husks, shell and fronds together with other woods are used for cooking, most often in open fires, and for some copra drying. On Funafuti, kerosene has increasingly replaced wood fuel for cooking. On the outer islands, the biomass fuel used in cooking is approximately 4,800 kg per household per year. While there does not appear to be any problem of sustainability with biomass, the burning of coconut tree by-products represents a loss of nutrients that would have been available to enrich the soil if they were returned to the ground as compost. 2.17 In the period 1983-88, Save the Children Foundation conducted a project to replace the traditional open fire with a concrete stove, primarily to provide convenience and comfort in cooking. This project was not successful, and most of the stoves are reportedly no longer in use. -8- III. ENERGY SUPPLY Introduction 3.1 Tuvalu depends almost entirely on imported petroleum and diesel- generated electricity to meet the demand for energy on Funafuti; on the outer islands, the demand for energy is met by biomass, and to a much lesser extent, solar power. This pattern of supply is expected to continue in the medium-term. In the long term , it may be possible to develop other resources such as wind power or ocean energy. Petroleum Products 3.2 All of Tuvalu's supplies are acquired through the BP supply network, vla a drop-off of small parcels at the BP Funafuti terminal on a multi-port local coastal tanker (LCT) voyage originating at the Vuda terminal in Fiji. The typical LCT parcel drop size for Funafuti is 150-200 tonnes every 6 to 8 weeks. The LCT usually has been the "Pacific Explorer," of about 1,600 DWT, which typically follows three-port discharge circuits such as: (a) Vuda (load) - Tarawa - Funafuti - Wallis (b) Vuda (load) - Funafuti - Tarawa - Santo The supply sources for Fiji are Australia, New Zealand and Singapore. While most of the petroleum is imported from Australia, the pricing is based on Singapore as the source of the product. Thus, oil companies' actual freight costs are less than the allowed freight costs from Singapore. 3.3 Only three products are received in bulk: motor spirit, dual-purpose kerosene/jet Al and ADO. The Funafuti marine receiving terminal, owned and operated by BP, has a capacity of approximately 600 tonnes for these three products. Aviation gasoline is received in drums and pumped into one of the two aviation fuelling trailers. There is a dedicated terminal for jet fuel only. In addition, there are two ADO trailers, which are used for delivery to TEC and for bunkering ships. LPG 3.4 At present, small amounts of LPG (butane) are imported in 9, 13, 18, and 50 kg bottles from Fiji. The total 1990 volume is estimated at approximately 7.6 tonnes, which serves a small number of households. Since the LPG payload is less than half the total weight being shipped, this leads to high transportation costs, which is one of the factors behind the very high price of LPG in Tuvalu, averaging approximately A$2.40 per kg over 1988-90. Electricity Funafuti Power System 3.5 The TEC system comprises a diesel powered generating station, with four 150 kW sets, and an underground 11 kV distribution system supplying five substations, from which power is distributed to the consumers at low voltage by _9- underground cables. Power system statistics for 1990 are shown in Table 3.1. By any standards, the TEC operation is very small. Table 3.1: TEC POWER SYSTEM STATISTICS (1990) Installed capacity diesel 4 x 150 kW - 600 !XW Peak demand 263 kVt Generation 1,401 MWh Load factor 60.8 Z Sales 1,120 M1Ih Losses including station use La 20.1 % Power factor 0.8 (0.7 - 0.84) i la Losses measured as percentage of gross generation. Source: TEC. 3.6 The present diesel power station was completed in 1982 with the commissioning of four 150 KW diesel generators. TEC is currently experiencing operational problems that limit the output of two of these generators, apparently due to inadequacies in the cooling system; otherwise, the units are in reasonably sound condition and should be capable of providing reliable services for another ten years or more. To remedy the cooling system problem, it is recommended that TEC arrange for an experienced mechanical engineer (diesel station/ventilation) to analyze the situation and recommend modification to ensure that the units can produce their full output. The details of the current generating units are shown in Table 3.2. Table 3.2: TEC GENERATING PLANT /a Unit 1 Unit 2 Unit 3 Unit 4 Manufacturer/Type Cummins/Onan NT855G/ODFE-515H Speed (rpm) 1,500 1,500 1,500 1,500 Capacity (kW) 150 150 150 150 Year installed 1982 1982 1982 1982 Total Operating Hours 24,359 26,680 24,806 24,565 la As of January 1991. Source: TEC 3.7 Outside of TEC, the Mechanical Section of the Public Works Division of the MWC is responsible for the daily operation of the generator at the Motufoua - 10 - Secondary School, while maintenance is supplied by TEC. The genset at the Tuvalu Maritime School (TMS) is operated and maintained by TMS staff, while major TMS maintenance programs are handled by TEC. In addition, there are a few very small private diesel generating units in Tuvalu, but no information on these is available. In Funafuti, apart from the telecoms and broadcasting operations, the installed private diesel capacity is insignificant. System Losses 3.8 The level of energy losses, including station use and distribution loss, on the TEC system appears to be high, of the order of 18 to 202 of gross generation (Table 3.3), although there are some doubts about the reliability of these estimates On a small, well-run system, the losses should not exceed 8-92. Based upon data for 1989 and 1990, the station use is about 9Z, though typical station use for diesel powered systems is less than 3%. Similarly, the distribution loes is about 102, though for the small TEC system it should probably not exceed 5-6%. Thus, there appears to be a substantial potential for cost savings through reduction in system losses. Table 3.3: TEC POWER SYSTEM LOSSES /a Distribution Station Total System Use Losses Year MWh Z MWh 2 2 1986 119.8 11.4 90.2 8.6 19.9 1987 n.a. 11.1 92.5 7.8 18.9 1988 n.a. n.a. n.a. n.a. 17.7 1989 146.7 11.4 112.9 8.8 20.2 1990 147.9 10.5 133.1 9.5 20.1 /a Losses expressed as percentage of gross generation. Source: TEC and various studies and reports. 3.9 As an initial step towards the reduction of system losses, it is recommended that TEC carry out an investigation to establish the level of system losses and the contribution of each source. This could be done through the accurate metering of (i) the units generated and the units used for station service, (ii) the largest 15-20 consumers, and (iii) a limited number of randomly selected other consumers. Once an accurate figure for the system loss is available, further investigation would be necessary to establish the sources (e.g., transformers, 11 kV cable, low voltage cables, non-technical loss, etc.). Based upon these findings, appropriate measures can be :!.dentified and taken to reduce the losses to an economically and technically satisfactory level to say, 8-9%. 3.10 As an example of the likely causes or sources of the high losses, spot readings taken by the mission indicate that the loading on the three phases of - 11 - both the main supply transformer and the station auxiliary supply was quite unbalanced. This condition creates additional power losses as well as poor voltage conditions, and it should be corrected by reconnecting appropriate loads. Based upon a brief perusal of station log sheets, the system power factor is low, with an average value of 0.8, and a range of 0.70 to 0.84. Measures, such as adding capacitors, to improve the system power factor to at least 0.9 will certainly be economically justifiable in reducing system energy losses. Funafuti System Expansion 3.11 Generation. Given the investment in the existing system and the size and density of the electric load, diesel powered generation is the only economically and technically viable source of electricity for Funafuti. However, solar photovoltaics is economically more appropriate for most outer island electrification than diesel systems, and this situation is not expected to change over the next ten years, while the household loads are limited to very small loads (lighting, radios) and larger loads such as refrigerators. 3.12 Since TEC has no formal system development plan, a preliminary least cost development plan has been prepared (Table 3.4 and Annex 4). This plan is based on the projected average annual growth rates of 4.4% for energy sales and 5.6% for peak demand. The reserve capacity criterion is that the installed capacity should be sufficient to meet peak demand in the absence of the two largeRt units, which is similar to the criterion in use now. This criterion is appropriate for Tuvalu, given its distance from suppliers of parts, equipment, and technical services. Further, under normal operating conditions, the capacity of the diesel units is considered to be 85% of their nameplate rating. Diesel units are designed typically to achieve maximum technical efficiency (lowest fuel consumption per kWh) at 80-85% of their nameplate rating. Further, operation at this level, rather than at the nameplate level, is less stressful on the units, which leads ;o more reliable operations and longer operating lives. 3.13 On this basis, the 1992 projected peak demand of 343 kW exceeds the firm capacity (255 kW) available with the existing units. In other words, three of the four units will have to operated at the time of peak demand. When a unit is down for maintenance or on fault, there will be inadequate capacity to meet the peak demand if another unit should be unavailable for whatever reason. Thus, the installation of additional generating capacity in 1991/92 is essential to maintain reliable service security. 3.14 To meet the increase in demand, the least cost option is to install another 150 kW unit in the remaining spare bay of the existing station. This should suffice to meet the projected demand until about 1996. To meet the growing demand beyond that date, TEC would have to install a new station and consider the alternatives of continuing with the 150 kW units or beginning a new series of 250 kW units. In view of the uncertainties associated with the long term forecast, it is recommended that TEC review this question with updated information in 1993, when a decision on the new plant would have to be made. 3.15 Transformers. The capacity of the two existing main transformers, which step up the generated power to 11 kV, to distribute power in the system is rated at 350 kVA, which has been adequate to provide security of supply in the past in the event of the failure of one of the transformers. However, in the - 12 - future, based upon the projected peak demand and the poor system power factor, it is estimated that one transformer will no longer be able to carry the full load. Thus, if one of the two transformers failed, selective load shedding will be necessary at peak demand time during the many months it could take for a replacement transformer to reach remote Tuvalu. Hence, it is desirable to add a third 350 kVA main transformer (including 11 kV circuit breakers, relay protection and control) i,ithin the next two years, even though the probability of transformer failure is low. Apart from increasing the security of supply, this additional transformer will also bring the loading on the transformers closer to the level that would minimize system losses. 3.16 Distribution. The ring-main 11 kV underground cable distribution system appears adequate to meet the foreseeable requirements. As shown in Table 3.4 additional substations and transformers can be integrated into the system to provide adequate capacity to supply major new consumers or cater for heavy load growth.6/ 3.17 Investments. In the 1991-1995 period, the main capital expenditures envisaged are for additional generating capacity, an additional main transformer, and additional transformer substations (Table 3.4). Some capital expenses, which will depend upon the recommendations of the proposed System Loss study (paragraph 3.9), will also be likely necessary to improve the system power factor. For the sake of completeness, notional sums related to system power factor improvement have been included in the Plan, which is shown in Annex 4. On this basis, the total investment requirements for the period are estimated to be about US$135,000 in 1991 prices.7/ 6/ Information on a proposed extension of the 11 kV spur distribution feeder from the wharf northwards was not available to the mission in February 1991. However, a study "Asset Revaluation and tariff Study for the Tuvalu Electricity Authority," April 1991 indicates that extension will serve about 50 households, 6 chicken farms, a piggery, a guest house, a Catholic center, and a large, two-storey boarding secondary school. Z/ According to the "Asset Revaluation and Tariff Study for the Tuvalu Electricity Authority," the cost of the proposed northwards extension will be A$743,000. Given this high cost, and the limited number of customers this extension will serve, it is recommended that GOT consider alternative means of serving these customers. - 13 - Table 3.4: POWER DEVELOPMENT PLAN SUMMARY Year Project Cost USS '000. Constant 1991 Foreign Local Total Component Component .992 Install and comnission 1 x 150 kW diesel generator and associated auxiliary equipment, elec. switchgear and 61 3 64 controls. 7 0 7 Spare parts (incl. In main contract). 1992 Install 11 kV - 415/240 v 160 kVA substation to meet additional demand (Telecom., new hotel). 11 1 12 1993 Install 350 kVA main transformer including associated cabling, circuit breakers, protection and control, modify existing substation. 27 3 30 1993 Capital projects for loss reduction as recommended in study 8.5 1.5 10 to be made in 1992. 1994 Install 11 kV - 415/240 kW substation. 11 1 12 1992-95 Total 125.5 9.5 135 Source: Mission projections and estimates. 3.18 To implement the recommended Power Development Plan, TEC should arrange for the necessary studies and investigations as well as for the financing for the additional 150 kW generating unit. The work should be scheduled to achieve an in-service date for this generating unit to be no later than the end of 1992, and earlier, if possible. Solar Energv 3.19 The solar resource appears good on all the islands, with few long cloudy periods and high levels of radiation on clear days due to the clean air. The chief agency responsible for developing the energy potential of this resource is TSECS. The initial funds for TSECS came from USAID, and this allowed the installation of 170 single-panel PV systems for minim..l lighting purposes. Unfortunately, the systems were installed without charge/discharge controllers for the storage batteries. Consequently, battery failures began occurring within six months after installation. In 1985, a European Community (EC) project provided an additional 150 units. These also encountered problems due to a poot design of the charge/discharge controller. Also, the battery chosen by the EC later proved to be unsatisfactory. The design flaws of these initial systems were overcome through a French Government grant, which provided 200 replacement batteries and controllers, thereby making all the systems operational. 3.20 The customers frequently complained that the single-panel systems were inadequate, and a study by the Energy Studies Unit of the University of the South Pacific confirmed this. Following this, the EC agreed to upgrade 170 systems to two panels, and to provide replacements for the poor quality controllers, lights, and batteries received under the 1985 scheme. When the upgrade project is - 14 - complete, nearly all the systems will have two panels, a reliable battery, and a controller that has been well proven in the Pacific environment. Biomass 3.21 The biomass available for energy use consists almost exclusively of products of the coconut trees. Though the primary fuel from the coconut tree is coconut husks and shells, fronds and stems are also used as fuel. Pandanus and breadfruit trees are present in quantity but their use results in little biomass waste useful for energy purposes. Mangrove areas also common in most of the islands, but their ecological significance for fish breeding, etc., precludes their use for fuelwood other than on a minor, household basis. 3.22 The present rate of production of copra does not provide sufficient husk and shell waste to meet more than normal household fuel needs. Should the price of coconut products rise dramatically and copra production increase several fold (which is a remote possibility), sufficient waste might become available for a small steam power plant, but it is not recommended that investment in such systems be made without assurance of fuel supply for at least ten years. 3.23 The replacement of senile coconut trees for plantation rejuvenation could provide sufficient biomass for energy use beyond the household fuel level. On some of the larger islands, senile coconut tree cutting could provide as much as a ten year supply of wood fuel for a village steam electricity system. Since the long term storage of cut coconut trees is impractical, it would be necessary to carefully schedule tree cutting to directly meet wood fuel demand. With tree ownership spread over hundreds of households, this is a very difficult task. Before any investment is made, the potential modest energy benefits need to be carefully weighed against the social and administrative problems that could result. - 15 - IV. POLICY AND INSTITUTIONAL ISwUES Petroleum Subsector Petroleum Product Prices 4.1 Petroleum product prices are set by the supplier (BP) on the basis of its own landed costs plus customs duties and sales taxes, which are set by the GOT. The sales tax is charged as 52 of the FOB value plus local customs duty. The duty for motor spirit is A$0.06/liter, and for ADO, A$0.005/liter, while aviation gas and kerosene/jet Al are free of local customs duty. These rates of taxation are extremely low in comparison with other countries; for example, for motor spirit, which is the most heavily taxed petroleum product, the customs duty and sales tax are less than 10% of the retail price. 4.2 Price Monitorinft. There is no system of petroleum product price control or even monitoring in Tuvalu. The detailed price build-up for the Tuvalu landed cost appears to be unknown to local authorities, including the local BP manager. The Tuvalu BP manager changes the wholesale ex-depot prices only on specific instructions from the finance manager BP Fiji. In the absence of any such instructions, the prices were not changed from April, 1990, to November, 1990, even though changes in the Singapore price indicate a possible downward adjustment in August or September, 1990. This is indicative of the need to monitor prices to ensure that Tuvalu pays the lowest possible price of imported petroleum products. 4.3 To keep the GOT in2ormed of the oil companies practices in this regard, and to assist it in identifying and addressing problems as they arise, it is recommended that GOT acquire from BP detailed price build-up information on a regular basis. However, at present, GOT does not have the capability of assessing the reasonableness of price levels and adjustments from such information. To overcome this shortcoming, it is recommended that GOT arrange for additional support from a regional energy agency in the form of the standard sets of international petroleum product price and freight information required to analyze each line on the BP landed product cost build-up. About one year ago, on the basis of talks with BP, the Tuvalu energy planner prepared a draft "Guidelines" paper on petroleum pricing in Tuvalu, and how GOT could monitor prices. It is recommended that GOT request some regional experts to critinue and update this study, and to train a Tuvaluan to monitor prices with the assistance of some spreadsheet templates. These experts should also assist in running through a few test calculations on past price adjustments.!/ 4.4 There are several retail outlets on Funafuti, which sell the three fuels supplied by BP. The main outlet is the Fusi Co-op. Near the Fusi, there are several other small shops, which also sell these three products from drums. Again, there is no control or monitoring of the retail prices set by the Fusi or the smaller outlets. A survey on February 12, 1991 showed that on that day Fusi 8/ By December 1991, BP was supplying GOT with a detailed price build-up for the Tuvalu landed cost of petroleum. GOT assesses the reasonableness of this information with the assistance of FSED. - 16 - and two other shops charged the same price for kerosene (A$0.90/liter), but Fusi charged more for motor spirit than the two shops. Only one of the two shops sold ADO, and its price of A$0.82/liter was more than Fusi's price of A$0.65/liter. Petroleum Products and Reftulatorl Concerns 4.5 There is an important environmental concern related to the marine terminal used in the import of petroleum products. While the general condition of the BP termiu.al yard and facilities appears to be acceptable, there is a lack of an oily water collection system and separator, which would prevent oil spillage from inside tank firevalls and the general yard area from finding its way into the lagoon. To control this environmental hazard, it is reco mended that GOT seek the assistance of experts from a regional energy agency, or other sources, as appropriate. 4.6 The Fusi Co-op has two above-ground horizontal tanks for motor spirit and kerosene, as well as drums of ADO, outside its store in built-up area of the town. This operation has many potential hazards: (a) a high risk of fire/explosion because of poor equipment and substandard filling procedures. The tanks appear to be poorly maintained, the vents are pouring out volatile fumes, the customers' containers are splash-filled, and the ground around the ADO drum area is saturated with oil. (b) a high likelihood of the spread of any fire/explosion to the surrounding population. The clearances are practically non-existent; there is a school building within 6 meters of the tanks; there are no firewalls (bunding) to contain the contents of the tank in the event of rupture. (c) the pollution arising from the very obvious volatile, lead-containing fumes escaping from the gasoline tank, and from the spillage around the filling area. The smaller shops near Fusi are also unsafe, since the drum storage/dispensing areas are generally indoors, and there is evidence of spillage on the floors. 4.7 There is a clear need to control these potential hazards. It is recommended that GOT seek the assistance of specialized experts from a regional energy agency. Possible Reduction in LPG Price 4.8 One of the reasons for the current relatively high price of LPG of $2.40/kg is high transportation costs associated with low levels of LPG imports. Therefore, one issue is the extent to which LPG price would fall if the scale of the market increased. Taking into account heat value and efficiency differentials, at this LPG price, for most consumers it would be worthwhile to switch from kerosene to LPG only if the kerosene price is more than A$1.10 - 1.20/liter. Since kerosene currently sells for A$O.90/liter, it is not surprising that LPG has made few inroads into the household cooking market. In the long term, however, kerosene prices should decline to about A$0.70/literg - 17 - based on present international prices. At this lower price of kerosene, for most consumers it would be worthwhile to switch to LPG only if the LPG price is A$1.50/kg or less. 4.9 Provided the LPG price is A$1.50/kg or less, the total penetration of the Funafuti household cooking market would imply a total annual consumption of approximately 100 tonnes of LPG. At this scale of the market, which is approximately twelve times the current scale of 7.6 tonnes, one possible way of reducing the LPG supply cost and associated burner-tip price is the bulk supply of LPG via tanks on the deck of the vessels of a regular shipping line (e.g., Pacific Forum Line) into a small receiving terminal at Funafuti. A preliminary analysis (Table 4.1) indicates that it worthwhile undertaking a more detailed pre-feasibility study to analyze the economic potential of replacing kerosene by LPG in cooking. Another possible way of reducing LPG costs would be the supply of LPG in larger containers or cylinders, combined with local decanting into 13 kg bottles. It should be noted that an entrepreneur in Tarawa, Kiribati, who currently imports 50 kg LPG cylinders and decants to smaller sizes, is anticipating a switch to bulk importation, based on offloading from on-deck tanks of a Pacific Forum line freighter loaded in Fiji. There is the possibility of integrating a drop-off in Funafuti with this supply movement to Tarawa. Table 4.1: POTENTIAL COST OF BULK LPG SUPPLY, FUNAFUTI Element of Cost Cost /a A$/tonne LPG, FOB Australia/Singapore 200 Freight to Fiji 350 Fiji Depot Costs 50 Freight to Funafuti 500 Funafuti Depot/Distribution Costs 300 Total Costs 1.400 Equivalent to A$1.40/kg /a Preliminary estimates. Source: Mission estimates. 4.10 In view of the above, it is recommended that a pre-feasibility study be conducted to determine the benefits of importing LPG in bulk or large containers, combined with local decanting. This study should compare four options: (i) the base case, which is the current system, (ii) import of filled 50 kg cylinders from Fiji, with local decantinS to smaller sizes, (iii) import of standard containers (about one tonne each) from Fiji, with local decanting to smaller sizes, (iv) bulk import from Fiji, with offloading of LPG from on-deck pressurized tanks of the freighter into a small receiving depot, with local - 18 - decanting to smaller sizes. This study will require ,;wo work-months, with a cost of approximately $30,000.9/ Electricity Subsector Power Tariff 4.11 For all consumers, TEC's present tariff is A$0.30/kWh for the first 100 kWh per month and A$0.38/kWh for the consumption in excess of 100 kWh per month. This tariff has remained unchanged since 1982. 4.12 Although TEC's financial figures for 1989, the latest year for which accounts are available, show a surplus of revenue over expenditures, these expenditures exclude capital oharges or insurance expenses. If capital charges are included in expenditures on an annuitized basis, then TEC makes a loss, with an implied subsidy on electric consumption of A$0.04/kWh. TEC's capital assets (including engines, generators, power house, transmission and distribution system) were largely provided through overseas aid. Since TEC's tariff makes no allowance for fluctuations in fuel prices, the extent to which TEC's revenues cover expenditures varies with the price of fuel. 4.13 TEC is presently undertaking a review of its tariffs, and it is recommended that this study address: (a) the desirability of incorporating an automatic fuel price adjustment clause within the published tariff. (b) the desirability of different tariffs for residential and non- residential consumers, reflecting the variances in electricity consumption patterns between these consumer groups. (c) the need for the tariffs to recover the full costs of electricity, including capital charges and irsurance costs, in order to ensure the financial viability of the utility.10/ Strengthening TEC 4.14 The Tuvalu Electric Authority Corporation Act of 1990 changed TEC's status from a Government agency to a corporation, but has left unresolved a number of issues. Thus, there still remains an urgent need to strengthen TEC. 9/ In December 1991, the GOT was considering shifting the responsibility for LPG imports either to a privately-owned and operated company or the Tuvalu Cooperative Wholesale Society. 10/ The study, completed in April 1991, recommended that an automatic fuel price adjustment clause be incorporated in the tariff. By December 1991, this clause has already been incorporated. The study recommended against different tariffs for residential and non-residential consumers, but proposed peak/off-peak pricing for major consumers, and different fixed charges for single-phase and three-phase supply. The study recommended that tariffs recover the full costs of electricity supply. - 19 - 4.15 Corporate Accounting. At present, from a financial viewpoint, TEC is still treated as a Government department rather than as a corporation or a statutory authority. In parzicular, TEC's annual budget is allocated by the Treasury from Government revenues baied solely on TEC's expected operating expenditures, which are mainly fuel costs and wages. However, TEC's actual costs also include depreciation charges, calculated on revalued fixed assets. As a result of the failure to take account of depreciation charges, there is no real connection between the budget allocations and TEC's actual costs. Further, under the present accounting system, TEC's management is unable to assess the effectiveness of potential engineering innovations or even of improvements in O&M, much less the relative worth of future capital investments. If the full benefits of TEC's change in status are to be realized, then the necessary first step towards the commercialization of TEC is the establishment of a proper corporate accounting system. 4.16 Adequacv of Records. In addit:.on, at present TEC lacks an adequate system of records for operating data, including power station and distribution system loading information, fuel consumption, energy generated, peak load, energy sold, and revenues. TEC cannot operate efficiently without this information. To remedy this shortcoming, it is recommended that TEC implement a simple, but comprehensive, system of records designed to assist management in identifying the areas of operations that need improvement, determining plant and equipment expansion needs, and assessing TEC's financial condition. TEC should establish such a management information system on an urgent basis, and maintain the records on a routine basis. This would not be expensive, as it could be done on two AT- class PCs (one PC as a back-up) with standard spreadsheet software. 4.17 Staffing and Oreanization. TEC's organization chart shows separate positions for an Accountant and an Accounts Clerk, but the Accountant position is vacant. This position may be difficult to fill because, at present, Tuvalu does not have a single certified accountant. However, at TEC's present level of operations, the Accountant and Accounts Clerk positions could be combined into one. One possible option is that GOT recruit one accountant immediately, whose services would be shared by a number of government agencies, including TEC and TSECS. As an interim measure, which would also be useful to train a qualified Tuvaluan, the GOT should consider the use of UN volunteers as accountants. 4.18 Corporate Obiectives. TEC's status change has resulted in much greater responsibility for the General Manager and other senior staff members. It is necessary for the Board of Directors, in consultation with the General Manager, as appropriate, to determine TEC's objectives, to establish clear policies, and to determine the responsibilities and authority of the General Manager. Further, the Board should set targets or goals to be reached in a given time period. 4.19 Organizational Structure. TEC's generating and distribution system can be efficiently operated by a small organization using straightforward procedures and systems. The present organizational structure (Annex 5) and manning level are appropriate in general arrangement, but would benefit from some modifications. While present staff level of 24 is reasonable, the role of the Inspection Division could probably be filled by one person instead of the current two persons, and the meter reading duties, currently under the Inspection Division, could be moved to the Finance Division. One secretary should be adequate for all of TEC. - 20 - 4.20 Trainina. The future effectiveness of TEC's operations will depend more upon the competence of the staff than on the number of employees. There is a need for additional training of TEC staff at all levels. In the absence of training facilities in Tuvalu, the training can take place in neighboring Fiji, where a training school is operated by the Fiji Electric Authority. 4.21 Maintenance. As a general practice, but particularly at present, as plant reserve margins decline with increasing system demand, it is essential that the maintenance of the generating units and all auxiliary units be carefully planned and programmed. Further, in view of Tuvalu's distance from major suppliers and long delivery times, above average stocks of materials and parts should be on hand for both planned maintenance and unexpected breakdowns, based on the experience at the station. 4.22 Regulatorv Issues. TEC's change of status has also raised a number of other issues that need to be resolved. These includet (a) the value at which the fixed assets are to be transferred to TEC. (b) the appropriate financial (debt:equity ratio) and shareholder structure for TEC. (c) whether or not TEC is required to pay corporate income tax. (d) the general nature of the relationship between GOT and TEC, and in particular, the extent of the autonomy to be granted to TEC to determine its own capital expenditure and revenue (tariff) policy. Solar Energy 4.23 Role of TSECS. Over the years, TSECS has evolved to the point where it is able to properly administer and maintain nearly 300 outer island solar installations. After some teething problems, TSECS has now proven itself capable of operating and maintaining the systems, and maintaining general customer satisfaction. It is working well, and no change in its structure or mode of operation is recommended. In particular, no attempt should be made to merge TSECS and TEC. Though the general competence of TSECS is good, technical assistance to TSECS in the form of periodic expert visits would be valuable to solve specific problems, to identify trends, to assist in budgeting and planning, and to assist in upgrading the quality of accounting and businesses practices. TSECS staff in Funafuti would benefit from shott courses in management, accounting, computer use, and solar technology. For the field staff, there are already some courses, based on materials provided by PEDP and SPIRE, but the training quality could be improved by the provision of specialized training equipment, training videos, and text material in the Tuvaluan language. 4.24 To achieve better utilization of its resources, it is recommended that TSECS attempt to secure maintenance contracts for GOT solar installations in the outer islands, notably in communications and health. However, because TSECS operational costs are a significant part of the TSECS tariff, TSECS should not attempt to increase its staff or facilities, particularly office and workshop space, which would increase operational costs, unless near term financial returns will clearly result. - 21 - 4.25 Pricing. At the present time, membership in TSECS costs A$50, with a monthly fee of A$6.25 for a single-panel system, and A$7.60 for a two-panel system. At present, TSECS earns roughly A$1.00 per month (out of the single- panel A$6.25 charge). The break-even point for TSECS operations is roughly 300 members, not including replacement costs. Thus, the present level of tariffs provides for operation and maintenance costs, but is inadequate for the expansion or the replacement of the solar panels at the end of their useful life (10-15 years). It is recognized that the existing level of service is insufficient to warrant full charges to customers. However, a general upgrading of installations to a uniformly adequate level of service is underway, and as services improve, TSECS should strive to bring its tariff structure to a level that provides for full capital replacement costs, which should be determined by open market tender. It is estimated that, given the membership fee and TSECS current reserves, a monthly charge of A$10.00 per month would be sufficient to ensure the long term financial viability of TSECS, assuming a membership base of 500, and the awarding of all solar power-related government contracts to TSECS. While this cost is considerably above TEC's current tariff on Funafuti (on a per kWh basis), it is estimated that solar energy will remain the least cost alternative for lighting on the outer islands until such time as the load densities increase significantly. 4.26 Investments. Funding for the general increase in the capacity of solar systems for those customers able to pay will be needed after 1993. Though aid will be sought, these systems will be provided to wealthier customers, and their ability to pay may be sufficient to allow initial capital investment to be from loans rather than grants. New capital investment of about A$150,000 per year for five years is expected to be needed for this purpose. 4.27 Environmental Concern. For solar PV systems, a system for reclaiming lead from spent lead acid batteries should be developed to prevent possible environmental damage. Biomass. Wind and Ocean Energy DeveloDment 4.28 Biomass. The adverse environmental effects of biomass based energy development could be significant, and caution is urged in the development of this resource. Only development that is based on sustainable agricultural waste should be contemplated. Fuel wood plantations are not appropriate in the limited space and fragile ecosystems of the atoll environment. The use of senile coconut trees for biomass must also be viewed with caution, due to the requirement for vehicular access and resulting environmental damage. 4.29 Wind Energy. Wind measurements are available from all the islands. Winds are very seasonal with consistent energy quality winds from about November to March, but for the rest of the year, the winds are weak and variable. Winds are similar throughout the country. Since the islands are uniformly low, with no topographic features, few wind microclimates exist, and the location of a wind machine is not critical so long as it is high enough to be clear of the turbulence from trees. Since trees are typically 30 meters high, the machine would have to 40-50 meters high. This problem and the combination of a poor wind regime and the difficulty of maintaining rotating mechanical and electrical equipment in the corrosive atoll environment precludes the use of wind-power for - 22 - anything more than the non-critical task of water pumping. Therefore, it is recommended that no efforts be made to develop wind energy in a major way. 4.30 OTEC. There is some OTEC potential in Tuvalu, but given the very limited land areas of the country and its fragile ecosyshtem, it is recommended that OTEC development not be considered until commercially operated systems have been in operation long enough to judge their economics and their effect on the environment. 4.31 Tidal Energy. The enclosed lagoon at Vaitupu has a small entrance way which could be the vite of a tidal energy system, but it is recommended that such development not take place because partially isolating the lagoon could have adverse effects on the ecology of the lagoon. The use of the lagoon as a food resource appears much more appropriate than as an energy resource. 4.32 Wave energv is limited, though it appears to be a significant energy resource. In the absence of any coastal features other than low-lying reefs, wave energy is expected to be difficult and expensive to tap even when comma:cially proven equipment is generally available in the future. At present, it is recommended that wave energy not be considered until commercially operated systems have been in operation long enough to judge their economics and their effect on the environment. However, it is worthwhile for GOT to request an agency such as SOPAC to measure and monitor the wave energy potential, assuming there are no opportunity costs of doing so. - 23 - V. INVESTMENT AND TECHNICAL ASSISTANCE PRIORITIES Sectoral Development Priorities 5.1 According to the Tuvalu National Development Plan, 1988-1991, the overall aim of the GOT is to ensure that the supply of energy is consistent with its development objectives - that is, increased rural production, support for the growth in commercial activities, and support for the social and economic development of the outer islands. The specific aims are to: (a) reduce the cost of energy by improving the efficiency of its use, and where possible, by reducing the supply price of primary fuels; (b) ensure that the cost of the different forms of energy being provided are affordable and are equitably shared by all sections of the population; (c) develop forms of energy production that are appropriate to the climate, conditions and technological status of the country. 5.2 Over the next ten years, Tuvalu's energy sector will continue to depend upon imported petroleum products, which will be used throughout Tuvalu, and solar energy, which will be used on the outer islands. The main themes for the next decade will be better use of existing assets and resource, and cautious expansion. Apart from solar energy, the other known indigenous resources in Tuvalu are biomass, ocean energy and wind energy. Since these two resources have not yet had any technical or economic success in the Pacific region, it is recommended that GOT take advantage of any programs that exist for data gathering related to wind and ocean energy, but the physical development of these resources be postponed until they are proven commercially in the Pacific island environment. 5.3 While biomass will continue to be used by households for cooking and lighting, the use of solar power for lighting and LPG/kerosene for cooking will increase. The adverse environmental effects of biomass based energy development could be significant, and it is recommended that caution be used in considering the development of this resource. Only development that is based on sustainable agricultural waste should be contemplated. Fuel wood plantations are not appropriate in the limited space and fragile ecosystems of the atoll environment. The use of senile coconut trees for biomass must also be viewed with caution, due to the requirement for vehicular access and resulting environmental damage. Petroleum Subsector 5.4 Price Monitorina There is no system of petroleum product price control or even monitoring in Tuvalu, and the detailed price build-up for the Tuvalu landed cost appears to be unknown to local authorities. It is recommended that GOT acquire from BP detailed price build-up information on a regular basis, and assess the reasonableness of price levels and adjustments with the assistance of regional experts. (See paragraphs 4.2-4.3) 5.5 Reaulatorv Concerns There is an important environmental concern related to the marine terminal used in the import of petroleum products. The BP - 24 - marine terminal lacks an oily water collection system and separator, which would prevent oil spillage from finding its way into the lagoon. It is recommended that GOT seek the assistance of regional experts to control this environmental hazard. (See paragraph 4.5.) 5.6 The Fusi Co-op and the smaller nearby shops have many potential hazards, such as a high risk of fire/explosion, a high likelihood of the spread of any fire/explosion to the surrounding population, and the pollution from the fumes escaping from the gasoline tanks and from the spillage around the filling areas. It is recommended that GOT seek the assistance of specialized technical experts from a regional energy agency, or other sources, as appropriate. Further, it is recommended that the Director of Works, GOT, with assistance from regional experts, prepare and maintain a complete file on these facilities and locument their deficiencies. Later, the elimination of these deficiencies could be pursued, again with external support from regional experts, in a continuous and sustained way. (See paragraphs 4.6 and 4.7) 5.7 LPG. It is recommended that a pre-feasibility study be conducted to determine of the potential reduction in LPG costs by importing LPG in bulk or large containers, combined with local decanting. (See paragraph 4.10) Power Subsector Strengthening TEC 5.8 While TEC's status has changed from a Government department to a corporation, there remain a number of unresolved issues related to this change. First, TEC's annual budget should take account of depreciation charges, calculated on revalued fixed assets. Since a proper corporate accounting system is needed to take full advantage of TEC's corporate status, it is recommended that TEC take the necessary steps to implement such a system. For this purpose, TEC may combine the Accounts Clerk and the Accountant position, and use one accountant whose services would be shared by a number of government agencies. Another option is to try to get a UN volunteer accountant. (See paragraphs 4.15 and 4.17.) 5.9 Second, it is recommended that the GOT determine TEC's financial status and the extent of TEC's autonomy to determine its own capital expenditure and tariff policy. (See paragraph 4.22.) 5.10 Third, it is recommended that TEC's Board of Directors, in consultation with the General Manager, determine TEC's overall objectives and policies, the role of the General Manager, and set targets to be reached in a given time period. (See paragraph 4.18.) 5.11 At present TEC lacks an adequate system of records for operating data, without which it cannot operate efficiently. It is recommended that TEC urgently implement a simple, but comprehensive, system of records designed to assist management in identifying the areas of operations that need improvement, determining plant and equipment expansion needs, and assessing TEC's financial condition. (See paragraph 4.16.) - 25 - 5.12 While TEC's organizational structure and manning level are generally appropriate, the present staff level of 24 may be increased to 29-30, but not to the full authorized level of 34 staff. There is a need for additional training of TEC staff at all levels, which could take place in Fiji. (See paragraph 4.17 and 4.19.) Power Tariffs 5.13 It is recommended that TEC's forthcoming study of tariffs address (i) the desirability of incorporating an automatic fuel price adjustment clause, (ii) the desirability of different tariffs for residential and non-residential consumers, and (iii) the need for the tariffs to recover the full costs of electricity, including capital charges and insurance costs. (See paragraph 4.13) Operational Lesues 5.14 TEC's Cooling System. TEC's output from two of its is generators is limited by inadequacies in the cooling system. It is recommended that TEC arrange for an experienced engineer to analyze this problem and recommend steps to ensure that the generating units can produce their full output. (See paragraph 3.6.) 5.15 Loss Reduction Study. TEC should reduce its relatively high system losses (20%). As an initial step, it is recommended that TEC should carry out an investigation to establish the level of system losses and the contribution of each source. Based upon these findings, appropriate measures can be identified and taken to reduce the losses to an economically and technically satisfactory level. Spot readings taken by the mission indicate that the loading on the three phases of both the main supply transformer and the station auxiliary supply was quite unbalanced. This condition creates additional power losses as well as poor voltage conditions, and it is recommended that this problem should be corrected by reconnecting appropriate loads. (See paragraphs 3.8-3.10.) 5.16 Power Factor Improvement. TEC's system power factor is low, with an average value of 0.8, and a range of 0.70 to 0.84. It is recommended that measures be taken to improve the system power factor to at least 0.9, as this will reduce system energy losses. (See paragraph 3.10.) 5.17 Maintenance Planninx. The maintenance of the generating units and all auxiliary units be carefully planned and programmed. In view of Tuvalu's distance from major suppliers, it is recommended that TEC maintain above average stocks of matcrials and parts. (See paragraph 4.21) ExDansion Plan for TEC 5.18 Given the existing system and the size and density of the electric load, expansion of diesel powered generation is appropriate for Funafuti, but not for the outer islands, where it is appropriate to expand solar photovoltaics. To meet the increase in demand on Funafuti, the least cost option is to install another 150 kW unit in the remaining spare bay of the existing station. This should suffice to meet the projected demand until 1996. To meet the growth in demand after 1996, TEC should review its options with updated information in - 26 - 1993, when a decision on the new plant would have to be made. (See paragraphs 3.11-3.14.) 5.19 It is desirable to add a 350 kVA main transformer (including 11 kV circuit breakers, relay protection and control) within the next two years. Apart from increasing the security of supply, this additional transformer will also bring the loading on the transformers closer to the level that would minimize system losses. (See paragraph 3.15.) 5.20 In the 1991-1995 period, the total investment requirements for the period are tentatively estimated to be about US$135,000 in 1991 prices. (See paragraph 3.17.) 5.21 TEC should immediately arrange for the studies and the financing associated with the additional 150 kW generating unit. (See paragraph 3.18.) Solar EnerRY 5.22 Role of TSECS. TSECS is working well, and it is recommended that there be no change in its structure or mode of operation. In particular, no attempt should be made to merge TSECS and TEC. TSECS needs technical assistance in the form of periodic expert visits, and TSECS staff in Funafuti and the field need further training. To achieve better utilization of its resources, it is recommended that TSECS attempt to secure maintenance contracts for GOT solar installations in the outer islands. However, TSECS should not attempt to increase its staff or facilities unless near term financial returns will clearly result. (See paragraphs 4.23 and 4.24.) 5.23 Pricine. The present level of TSECS tariffs is inadequate for the expansion or the replacement of the solar panels at the end of their useful life. It is recommended that, over time, TSECS raise its tariff so that it recovers full capital replacement costs. (See paragraph 4.25.) 5.24 Investments. Investments of about A$150,000 per year for five years are expected to be needed for the expansion of solar capacity after 1993. Though aid will be sought, these systems will be provided to wealthier customers, and their ability to pay may be sufficient to allow initial capital investme--t to be from loans rather than grants. (See paragraph 4.26.) 5.25 Environmental Concern. It is recommended that TSECS develop a system for reclaiming lead from spent batteries to prevent possible environmental damage. (See paragraph 4.26.) Biomass. Wind and Ocean Energv Development 5.26 It is recommended that, at present, no efforts be made to develop these forms of energy in Tuvalu. (See paragraphs 4.28-4.32) TUVALU COUNTRY ENERGY ASSESSMENT Tuvalu - TEC Historical Electrical Statistics (1985-90) No. of Energy Sales Distribution Total Energy Load Peak No. of electric Year sales growth losses Station Use loses generation factor demand consumers households (MWh) (Z) (MWh) (%)La (MWh) (%)la (%)la (MWh) (% (kW) 1986 842.7 n.a. n.a. 11.3 90.2 8.6 19.9 1,052.7 58.6 205 381 292 1987 962.2 14.2 n.a. 11.1 92.5 7.8 18.9 1,186.1 64.5 210 423 354 1988 1,025.3 .6.6 n.a. n.a. n.a. - 17.7 1,245.5 66.1 215 n.a. 361 1989 1,025.1 0.0 146.7 11.4 112.9 8.8 20.2 1,284.8 63.8 230 n.a. 370 1990 1,120.3 9.3 115.4 8.5 129.9 9.5 18.0 1,365.6 66.3 235 469 401 Av. annual growth (Z) 1986-90 7.4 6.7 3.5 7.2 6.6 1988-90 4.5 4.4 4.5 5.5 /a Losses expressed as a percent of gross generation. Source: TEC, MFCP and various studies and reports. - 28 - ANNEX 2 TUVALU COUNTRY ENERGY ASSESSMENT Projected Electricity Generation, Peak Demand and Sales (1990-2000) Energy Energy Energy Peak Load Year sales losses La generation demand factor (MWh) (MWh) (MWh) (kW) (%) 1990 (Actual) 1,120 246 1,366 235 66.4 1991 1,185 261 1,446 273 60.4 1992 1,376 303 1,679 343 55.8 1993 1,530 337 1,867 365 58.4 1994 1,556 342 1,898 371 58.4 1995 1,577 347 1,924 376 58.4 1996 1,609 354 1,963 383 58.5 1997 1,634 359 1,993 389 58.5 1998 1,655 364 2,019 394 58.5 1999 1,687 371 2,058 400 58.7 2000 1,718 378 2,096 407 58.8 Av. annual growth (%) 1990-1995 7.1 9.9 1995-2000 1.3 1.6 1990-2000 4.4 5.6 /a Losses assumed to remain at the 1990 level of 18% of gross generation. Losses include distribution losses and station use. Source: Mission projections. - 29 - ANNEX 3 TUVALU COUNTRY ENERGY ASSESSMENT Prolected Electricity Sales by Consumer Classification (1990-2000) Commercial & Total Year Government large residential Domestic sales ------------------------ (MWh) ------------------------ 1990 (Actual) 412 424 284 1,120 1991 448 433 304 1,185 1992 554 497 315 1,376 1993 587 622 321 1,530 1994 595 634 327 1,556 1995 602 643 332 1,577 1996 613 658 338 1,609 1997 619 670 345 1,634 1998 626 679 350 1,655 1999 638 693 356 1,687 2000 647 709 362 1,718 Av. annual growte (%) 1990-1995 7.9 8.7 3.2 7.1 1995-2o60 1.5 2.0 1.7 1.6 1990-2000 4.6 5.3 2.5 4.4 Source: Mission projections. - 30 - ANNEX 4 Page 1 of 3 TUVALU COUNTRY ENERGY ASSESSMENT Power Development Plan Alternative generating options were compared for a period from 1991 to 2005. This end date provided a reasonably equivalent basis for the comparison of the schemes. The capital costs, fuel cost, and operation and maintensnce costs were included in the least cost analysis. COST ESTIMATES US$ Diesel generator (1991) Landed price Funafuti cif of 1 x 150 kW air-cooled (radiator) diesel powered, generating at 415 v 3-phase 50 hz, complete with all accessories 35,000 Local transportation and handling 900 Electrical panel, controls, cabling etc. 13,000 Installation, testing and commissioning 15,500 Subtotal 64.400 Contingencies 9,500 Total, excluding taxes and duties 70,900 of which Foreign exchange component 68,000 Local cost component 2,900 - 31- ANNEX 4 Page 2 of 3 Power Station Building A prefabricated structure of relatively simple construction and arrangement is assumed. It would be erected on a concrete slab, designed to accommodate the loadings of the diesel units and other equipment. No overhead crane is envisaged. US$ (1991) Prefabricated building landed in Funafuti cif 37,000 Civil works 10,000 Fuel storage, piping etc. 6,000 Mechanical, electrical and other building services 3,000 Subtotal 56.000 Contingencies 4,000 Total 60,000 of which Foreign exchange component 52,800 Local cost component 7,200 POWER DEVELOPMENT PLAN - TEC FUNAFUTI SYSTEM 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 Projected generation (MWh) 1,446 1,679 1,867 1,898 1,924 1,963 1,993 2,019 2,058 2,096 Projected peak demand (kW) 273 343 365 371 376 383 389 394 400 407 Installed capacity (start of year) 600 600 750 750 750 750 900 900 900 900 New capacity added (kW) - 150 - - 150 - - - - Total Capacity 600 750 750 750 750 900 900 900 900 900 Normal capacity 510 638 638 638 638 765 765 765 765 765 System firm capacity 255 383 383 383 383 510 510 510 510 510 INVESTMENT STREAMS ------------------------------US$ '000 (1991 prices)-------------------------------- Generation Investments New power station building 0 0 0 0 0 60 0 0 0 0 Diesel generator4l x 150 kW complete iucl. spares 0 71 0 0 0 71 0 0 0 0 Subtotal - Generation 0 71 0 0 0 131 0 0 0 0 Distribution System Investments Additional main transformer and associate gear 0 0 30 0 0 0 0 0 0 0 Capital expenditure for loss reduction 0 0 10 0 0 0 0 0 0 0 Miscellaneous reinforcement 0 12 0 12 0 0 12 0 0 0 Subtotal - Distribution 0 12 40 12 0 0 12 0 0 0 Total Investment 0 83 40 12 0 131 12 0 0 0 > Source: Mission projections. 0 TUVALU ISSUES AND OPTIONS IN THE ENERGY SECTOR Tuvalu Electricity Corporation BOARD OF DIRECTORS General Manager (Finance -D ion) (Inspection Division) (Generation Division) (Distribution Division) l Operations Manager l l (Vacant) I Accountant Electrical Inspector Generation Engineer Distribution Engineer (Vacant) (Vacant) I I I I Assistant Accountant Assistant Assistant Electronic Assistant Assistant Electrical Generation Technician Distribution Consumer Inspector Engineer (vacant) Engineer Services Engineer _______________________ ~~~~(vacant) Accounts Officer ! l I Corporation I Senior Operators Mechanic Electrician Electrician Secretary (2 vacant) (1 vacant) (1 vacant) (vacant) l 1 l lI Opera tors Handyman i Storekeeper Meter Readers Electrical Assistant z (vacant) (vacant) l Electrical Trainees X (2 vacant) Ln Note: All the positions indicated on this chart are not meant to be filled at the same time. For example, either the Accountant position or the Assistant Accountant position will be filled at any given time. Source: TEC. - 34 - ANNEX 6 Page 1 of 2 TUVALU COUNTRY ENERGY ASSESSMENT Study of System Losses Introduction Electrical power on the island of Funafuti, Tuvalu, is generated and distributed by the Tuvalu Electricity Corporation (TEC). The generating station has four 150 kW diesel generating units and power is distributed by an underground 11 kV ring-main system. Power is distributed to consumers from five substation by underground low voltage (415/240 volt 3-phase, 50 hz) cables. The peak demand is about 260 kW (January 1991). Based upon the data available the system losses are about 18-20 percent, which is excessive, particularly for such a small system. These losses include station use and losses in the distribution system. No information is available on the source of losses in the distribution system. The indicated station use is 8-9 percent of gross generation, compared to typical levels of 2 percent or less. It has been observed that the loading of the phases, based upon spot readings, is quite unbalanced, and that the system power factor, from a perusal of station logs, ranges between 0.7 and 0.84, with a typical value of 0.8. Both of these conditions will increase system losses unnecessarily, but do not begin to explain the high level of losses. The absence of information on transformer and circuit loadings precludes even an initial assessment of the situation. In order to improve the operating efficiency and to plan for the future development, it is essential that the actual losses and their source be established. Appropriate measures must then be implemented to reduce the system losses to a level that can be achieved technically and justified economically. The proposed study will involve the checking of the generating station metering accuracy, obtaining operating information throughout the distribution system, the analysis of the data obtained to determine the level and source of system losses, and to make specific recommendations aimed at reducing the level of system losses to appropriate levels based upon sound technical and economic considerations. Work to be done 1. Determine the source and level of distribution system losses and the actual station use. 2. Check all station metering and associated instrument transformers if any to ensure that the indicated readings are accurate. 3. Obtain all necessary distribution system operating data for carrying out the study. This will include the use of appropriate instrumentation, metering and recording devices to determine loadings and losses in various parts of the system. The necessary instrumentation is not available in Tuvalu. - 35 - ANNEX 6 Page 2 of 2 4. Check the accuracy of the billing meters of the 10-15 largest consumers and also the meters of a random selection of other consumers to ascertain the general condition and accuracy of the billing meters. 5. Obtain whatever other information may be required to complete an adequate assessment of the source and magnitude of the system losses, and to enable recommendations to be made for improving the situation. 6. Prepare a report of the findings regarding the level and source of the system losses and make recommendations to reduce the level of losses, based upon sound technical and economic criteria. The report shall including the following: (a) description of the condition and accuracy of the station metering, and recommendations for improvements, if any. Comment on the provision of metering to record system peak demand, and other quantities that might be desirable. (b) discussion of the findings on consumer meters, and make any recommendations considered appropriate. (c) provide information on the present level of station auxiliary use and distribution system losses, and their source. (d) make specific recommendations for reducing the level of system losses to an economically justified level. Indicate the sequence in which the various measures should be implemented, and the overall effect on system losses of each step. (e) make any further recommendations, considered appropriate, to improve the overall efficiency of system operation. Requirements The study will require an engineer with practical experience in power system metering, and with experience in the analysis of system data to determine appropriate measures to reduce losses, and to rank the measures in terms of their cost effectiveness. It is estimated that the complete study will require approximately 2-2˝ work-months, of which about one work-month will be in the field. - 36 - STATISTICAL APPENDIX Table 1 TUVALU: SELECTED DEVELOPMENT INDICATORS Table 2 TUVALU: SELECTED PROJECTIONS Table 3a TUVALU: ENERGY BALANCE, 1989 (ORIGINAL UNITS) Table 3b TUVALU: ENERGY BALANCE, 1989 (TOE) Table 4a TUVALU: ENERGY BALANCE, 2000 (ORIGINAL UNITS) Table 4b TUVALU: ENERGY BALANCE, 2000 (TOE) Table 5 TUVALU: PETROLEUM MARKET PRODUCTS CONSUMPTION, 1985-1989 Table 6 TUVALU: NATIONAL PUBLIC ELECTRIFICATION SYSTEM Table 7 TUVALU: ELECTRIFICATION PERFORMANCE INDICATORS, 1990 - 37 - TABLE 1 TUVALU: SELECTED DEVELOPMENT INDICATORS 1985 1986 1987 1988 1989 1990 GDP ('000 AU$)' :.. . | 5,034 6,257 7,033 8,616 8,036 8,357 Per capita (AUS) 612 747 832 973 862 884 Total Imports2 ('000 AU$) | 4.126 4.577 5,337 7.529 5,626 na Total Exports3 ('000 AU$) 597 486 232 311 212 na Inflation Rate4 (%) 3.8 8.6 9.1 7.4 2.9 na Exchange Rate5 (AU$/USS) 1.43 1.49 1.43 1.27 1.26 1.28 Sea Area (sq. kin) 900,000 Land Area (sq. km) 24 Wage & Salary Employment6 1,166 na na na na na Average Wage (AU$/hr) m na na na na na na Total Population' 8,229 8.372 8,458 8.854 9,325 9,450 % urban 35 32 32 32 32 32 Overseas Development Assistance Annual ODA (thousands AU$)r na na 20.096 10,100 6,352 na Mulitlateral (thousands AU$) na na l 896 710 834 na Bilateral (thousands AU$) na na 19,200 9,390 5,518 na ODA as % of GDP na na | 286 117 79 na ODA as % Current Government Income na na na na na na ODA per Capita (AU$) na na 2.376 1,141 681 na Sources: Preliminary Abstract of Tuvalu Energy Statistics (1991 draft). An Abstract of Agricultural Statistics (1980-1990). UNDP Development Co-operation Reports. lMission Estimates (February 1991). Notes: (1) Current prices at Factor Cost. 1990 figure estimated using growth of 4%. (2) CIF actual figures. (3) FOB actual figures. (4) Adapted from 1980- 1989 Agricultural Statistics. (5) Average throughout the year. (6) 1985 data from 1985 census. (7) Mid-year estimates. Includes overseas seamen. overseas students, and Tuvaluans abroad. 1989 from 1989 census. 1990 figure estimated from Agricultural Statistics. Urban percentage estimated as population on Funafuti. (8) UNDP Development Co-operation Reports for 1987. 1988. 1989. Multilaterals Include UNDP. but do not include NGO's assistantce. Bilaterals include: Australia, Canada. Malaysia, Japan, S. Korea. France, W. Germany, New Zealand, United Kingdom and USA. - 38 - TABLE 2 TUVALU: SELECTED PROJECTIONS L.. __. s . . 7 1990 1995 2000 Population': urban 3,024 3,455 3,947 rural 6,426 7,342 8,388 Total 9,450 10,797 12,335 GDP ('000 AU$)2: high growth at 5% 8,357 10,666 13,613 med growth at 4% 8,357 10,168 12,977 low growth at 3% 8,357 9,688 12,365 GDP/Capita3: 884 942 1,052 Electricity Generation (kWh)4: 1,366 1,924 2,096 Peak demand (kW) 235 376 407 Fuel Consumption (kl)5: Gasoline 386 488 594 Kerosene 150 169 187 ADO 904 1,275 1,464 Lubes 6 8 9 Avgas 107 95 87 Solvent 2 2 2 LPG 11 12 14 Total Inland 1,566 2,050 2,357 Total Av/Bunkers 549 695 45_ Total Trade Z115 2,744 3,202 Rural electricity consumers6: grid na na na isolated 300 500 700 Sources: Abstract of Agricultural Statistics (1980-1990). Mission Estimates. Notes: (1) 1990 from Agricultural Abstract. 1995 & 2000 values estimated at growth rate of 2.7%. (2) 1990 figure estimated from 1989 actual data at 4% growth. (3) Medium growth scenario. (4) TEC grid on Funafuti. (5) Actual data from 1989 rather than 1990. TEC fuel consumption for 1995/2000 calculated by multiplying estimated generation data by a factor of 31/315 litres per kWh. (6) Isolated consumers are all members of the Solar Co-op. TABLE 3a TUVALU: ENERGY BALANCE, 1989 (Original units) Fuelwood Coconut Total Electricity Gasoline Jet Al Kerosene ADO Avgas LPG Total Residues Biomass Petroleum5 (tonnes) (tonnes) (tonnes) (Mwh) (ki) (Id) (Id) (kd) (ki) (Id) (kl) Primary Supplies: Production 1L106 4,714 5,820 Imports 386 549 150 904 107 11 2.107 BunkeringEorts1 (549) (107 (656) i GROSS AVAILABLE 106 4.714 5,820 0 386 0 150 904 0 11 C451 Conversion: Power Generation2 1,285 (375) (375) Station use (113) Transnission/Distribution Losses (147) I NET SUPPLIED 1,106 4,714 5,820 1,025 386 0 150 529 0 11 L076 Final Consumption: Households3 1,106 4,714 5,820 260 150 11 161 Transport 386 529 915 Goveniment 377 Commercial 388 Agro-industries4 Others TOTAL L106 4,714 5,820 1025 386 0 150 529 0 11 076 Source: Mission estimates. Notes: (1) Avgasused by Fiji Air flights to Funafuti which were discontinued in May 1990. (2) Private power generation is considered negligible. (3) Population data estimated from figures in Agriculttural Statistics (9,450), 32% urban estimated as population of Funafuti. Biomass consunption is based on VaitupuWFunafuti cooking patterns. Assume 7.2 persons/urban HH with 93% urban population using bicm ass and 6.4 persons/urban HH with 100%o rural population using biomass. Urban consumption is estimated at 2858 kg/Hiyear (1.1 kglcap/day). rural consunption is estirnated at 4800 kglHuear (2.0 kglcap/day). Biomass consumption is estimated as follows Urban: 9,450 people x 32% x 1.1 kg/cap/day x 93% x 365 days/year/1000 kg/tonie = 1,129 tonnes Rural: 9,450 people x 68% x 2.0 kglcap/day x 100o x 365 days/yearl1000/katonne 4.691 tonmes Total household consumption (assumed to be 81% coconut waste and 19%/o fuelwood) = 5,820 tonoes (4) Copra production estimated at 35 tonnes. Biomnass consumption is negligible. (5) Energy Balance does not include consumption of Lubes (61d) and Solvents (2kl). TABLE 3b TUVALU: ENERGY BALANCE, 1989 (TOE) Fuelwood Coconut Total Electricity Gasoune Jet Al Kerosene ADO Avgas LPG Total Total Residues Biomass PetroleumS Energy Primary Supplies: Production 464 1,593 2,058 2,058 Imports 312 474 130 813 84 7 1,820 1.820 Bunkering/Exportst (474) (84) (558) (558) GROSS AVAILABLE 464 1,593 2,058 0 312 0 130 813 0 7 1,261 3,319 Conversion: Public Power Generation2 337 (337) (337) (0) Transformation Losses (228) (228) l Station use (10) (10) Transmission/Distribution Losses (12) (12) o NET SUPPLIED 464 1,593 2,058 87 312 0 130 476 0 7 924 3,069 t Final Consumption: Households3 464 1,593 2,058 22 130 7 137 2,217 Transport 312 476 787 787 Government 32 32 Commercial 33 33 Agro-industries4 0 Others 0 | TOTAL 464 1.593 2,058 87 312 0 130 476 0 7 924 3,0691 Source: Mission estimates. Notes: (1) Avgas used by Fiji Air flights to Funafuti which were discontinued in May 1990. (2) Private power generation is considered negligible. (3) Population data estimated from figures in Agriculttural Statistics (9,450),32% urban estimated as population of Funafuti. Biomass consumption is based on Vaitupu/Funafuti cooking patterns. Assume 7.2 persons/ueban HH with 93% urban population using biomass and 6.4 persons/urban HH with 100% rural population usingbiomass. Urban consumption is estimated at 2858 kg/HH/year (1.1 kg/cap/day), rural consumption is estimated at 4800 kg/HH/year (2.0 kgfcap/day) Biomass consumption is estimated as follows: Urban: 9,450 people x 32% x 1.1 kg/cap/day x 93% x 365 days/ear/l000 kg/tonne = 1,129 tonnes Rural: 9,450 peoplex 68% x 2.0 kgtcap/dayx 100% x 365 days/year/10001kg/tonne = 4,691 tonnes Total household consumption (assumed to be 81% coconut waste and 19% fuelwood) = 5,820 tonnes (4) Copra production estimated at 35 tonnes. Biomass consumption is negligible. (5) Energy Balance does not include consumption of Lubes (6kl) and Solvents (2kl) TABLE 4a TUVALU: ENERGY BALANCE, 2000 (Original units) Fuelwood Coconut Total Electricity Gasoline Jet Al Kerosene ADO Avgas LPG Total Rcsidues Biomass Petroleum5 (tonnes) (tonnes) (tonnes) (MWh) (ki) (kl) fkl) (ki) (ki) (kl) (ki) Primary Supplies: Production 1,433 6,110 7,543 Imports 594 845 187 1,464 87 14 3,191 BunkeringfExportst (845) (87) (932) | GROSS AVAILABLE 1,433 6,110 7,543 0 594 0 187 1,464 0 14 2,2591 Conversion: Power Generation2 2,096 (650) (650) Station use (199) Transmission/Distribution Losses (178) lNETSUPPLIBD 1,433 6.110 7,543 1.719 594 0 187 814 0 14 1.609 Final Consumption: Households3 1,433 6,110 7,543 362 187 14 201 Transport 594 814 1,408 Government 647 Commercial 709 Agro-industries4 Others ITOTAL 1,433 6110 7,543 1,718 594 0 187 814 0 14 1,609 Source: Mission estimates. Notes: (1) Avgas used by Fiji Air flights to Funafuti which were discontinued in May 1990. (2) Private power generation is considered negligible. (3) Population estimated at 12324 (32% urban). Biomass consumption is based on VaitupulFunafuti cooking patterns. Assume 7.2 persons/urban HH with 90% urban population using biomass and 6.4 persons/urban HH with 100% rural population using biomass. Urban consumption is estimated at 2858 kg/HH/year (1.1 kg/cap/day), rural consumption is estimated at 4800 kg/HH/year (2.0 kg/cap/day). Biomass consumption is estimated as follows: Urban: 12,324 people x 32% x 1.1 kg/cap/day x 90% x 365 daystyear/1000 kg/tonne = 1.425 tonnes Rural: 12,324 people x 68% x 2.0 kg/cap/day x 100% x 365 days/year/1000ikgttonne = 6,118 tonnes Total household consumption (assumed to be 81% coconut waste and 19% fuelwood) = 7,543 tonnes (4) Copra production estimated at 35 tonnes. Biomass consumption is negligible. (5) Energy Balance does not include consumption of Lubes and Solvents. TABLE 4b TUVALU: ENERGY BALANCE, 2000 (TOE) Fuehrood Coconut Total Electricity Gasoline Jet Al Kerosene ADO Avgas LPG Total Tota1 Residues Biomass Petroleums EnergT Primary Supplies: Production 602 2,065 2,667 2,667 Imports 480 730 162 1,316 68 9 2,765 2,765 Bunkering/Exports' (730) (68) (7981 (798' LC;ROSS AVAILABLE 602 2.065 2.667 0 480 0 162 1.316 0 9 1.967 4.6341 Conversion: Public Power Generation2 584 (584) (584) (0) Transformation Losses (407) (407) Station use (17) (17) Transmission/Distribution Losses (15) (15) INET SUPPUED 602 2,065 2.667 145 480 0 162 732 0 9 1,382 4,195 I Fmal Consumption: Households3 602 2,065 2,667 31 162 9 171 2,868 Transport 480 732 1,212 1,212 Government 55 5S Commercial 60 60 Agro-industries4 0 Others 0 TOTAL 602 2,065 2,667 145 480 0 162 732 0 9 1.382 4,1951 Source: Mission estimates. Notes: (1) Avgas used by Fiji Air flights to Funafuti which were discontinued in May 1990. (2) Private power generation is considered negligible. (3) Population estimated at 12324 (32% urban). Biomass consumption is based on Vaitupu/Funafuti cooking patterns. Assume 7.2 persons/urban HH with 90% urban population using biomass and 6.4 persons/urban HH with 100% rural population using biomass. Urban consumption is estimated at 2858 kg/HH/year (1.1 kg/cap/day), rural consumption is estimated at 4800 kg1/Hi/year (2.0 kg/cap/day). Biomass consumption is estimated as follows: Urban: 12,324 people x 32% x 1.1 kg/cap/day x 90% x 365 days/year/1000 kgAonne = 1,425 tonnes Rural: 12,324 people x 68% x 2.0 kg/capfdayx 100% x 365 days/year/1000/kghtonne = 6.118 tonnes Total bousehold consumption (assumed to be 81% coconut waste and 19% fuelwood) = 7,543 tosses (4) Copra production estimated at 35 tonnes. Biomass consumption is negligible. (5) Energy Balanoe does not include consumption of Lubes and Solvents. - 43 - TABLE 5 TUVALU: PETROLEUM MARKET PRODUCTS CONSUMPTION, 1985-1989 (kl) 1985 1986 1987 1988 1989 Product: Gasoline 225 351 348 386 386 Kerosene 138 141 144 147 150 ADO 544 576 745 641 904 Lubes 1 1 16 23 6 Solvents 0 0 0 2 2 LPG 11 14 14 17 11 Total Inland Trade 919 1,083 1,267 1,216 1,459 Bunkers: Jet Al 84 59 287 318 549 Avgas 163 184 141 138 107 Total Trade 1,166 1,326 1,695 1,672 2,115 Sources: BP statistics Mission Estimates. - 44 - TABLE 6 TUVALU: NATIONAL PUBLIC ELECTRIFICATION SYSTEM 1985 1986 1987 1988 1989 1990 Consumers': Household Consumers na 292k 3541 361 370 I 4021 Total Consumers I na I 3811 423 j na na 429 Capacity (kW): Installed Diesel2 | 600 600 | 600 600 | 6001 600 Available Diesel3 1 5101 5101 _ 101 5101 5101 510] | Max Demand | 1851 2051 2101 2151 2301 2353 Output (MWh): TEC Generation 920 1,053 1,186 1,246 1,285 1,367 Station usage 89 90 93 na 113 130 Total sent out 831 963 1,094 1,147 1,182 1,237 Distribution losses na 120 na na 147 115 Net Consumption 6601- 843 962 1,025 1,035 1,122 Source: Mission Estimates. TEA. Considerations for Planned Commercialisation (PEDP 1990). Country Paper prepared for Regional Power Meeting (PEDP 1990). Electrification Study of Tuvalu Electricity Authority (1988). Tuvalu Electricity Coporation Statistics (1991). Notes: (1) TEC does not classify customers by type. (2) Manufacturer nameplate rating for all 4 units. (3) "De-rated" to 85% of nameplate rating assuming all units operational. _ 45 - TABLE 7 TUVALU: ELECTRIFICATION PERFORMANCE INDICATORS, 1990 TUVALU ELECTRICITY COPORATION (TEC) Fixed Assets (million US$) na Average Revenue (US˘/KWh) na Average Cost (USe/KWh) Capital na Fuel na Other operating na Estimated ROI (%) na Fuel Consumption (1/kWh) 0.315 Households Electrified' (%) 90.0 kWh/year/consumer2 3,186 kWh/year/employee3 42,719 Employees/MW installed 19 Outages Number na Ave. duration (hrs) na Customers affected (%) na Voltage drop/increase na Source: Mission Estimates. Notes: (1) Households on Funafuti only. (2) Total Generation. (3) 32 total TEC employees. I;O- 177 - w s 1ves - - - 17rl0;--- - --- ------ - IBRD 2.~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~IRD2. qANUMEA ',.- NIUTAO T faiumhfl NANUMANGA Amoluku WWiNI TUVALU . \,zaV FUNAFUTI Fo\ fl Fooom NUKUFbTAU ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~~~~~~~~Fngfl fd,~~~~~~~~~~~~~~~~S FUNAFUTI & 1 _. tns°^lo ~~~~~~~~~~~~~~~~VAIAU OCEAN Funwmenu Fua - 176. 177. Urt 179- r i -ell; || ll ^~~~~~~~~~~~~~~~~~~~~~~~~~Mak ENERGY SUPP1LY WANDSOM FUNAFUT GXXJ= g ~MARSSHLL P.AC:IFIC OCEAN"t Lumidu j - * \ * 10 I, ~ ~~~~~~~~~~~~~~~~~~~~ ~ ~ ~ ~~~~~~~~~~~~~~~- EYJ5TING I IkVUESTIO _ SEAT OFGOVERNMENT .Taef \ . ~~~~~~~~~~~~~ 0 t __ _ ... Fun~~~~~~~~~~~~~~~~~hakwe PETROLEUM PRODUCTS STORAkGE TANKS iDg*tCS e FEDERATED SATAES Fa _r hngo OF MaCRONESUA r T ukngq -_-_-_-_-_-_-_-_-_- - -INTERNAnoNAL BOUNDAR TnSUu - _ , Ni~~~mzURU|~l_| \~ UNES OF DEMWTIAC. 4 rQeU tbb ONESLA *U-r\NBI WQ _N