Report No. 10441-EAP Western Samoa Issues and Options in the Energy Sector Annex K July 31, 1992 The World Bank in Cooperation with The UNDP/ESCAP Pacific Energy Development Programme The Asian Developomnt Bank and the Forum Secretariat Energy Division FOR OFFICIAL USE ONLY Document of the World Bank 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. CURRENCY EQUIVALENT (February 1991) US$1.00 - WS$2.30 FISCAL YEAR January 1 - December 31 ACRONYMS ADB - Asian Development Bank AIDAB - Australian International Development Assistance Bureau CHOGRM - Commonwealth Heads of Government Regional Meeting EC - European Community EIB - European Investment Bank EMP - Environmental Management Plan EPC - Electric Power Corpc-'ation ESCAP - Economic and Social Commission for Asia and the Pacific Finapeco - Fiji National Petroleum Company FSED - Forum Secretariat Energy Division IDA - International Development Association NEC - National Energy Committee PEDP - Pacific Energy Development Programme SFP - Samoan Forest Products SIG - Samoan Industrial Gases SOPAC - South Pacific Applied Geoscience Commission SPREP - South Pacific Regonal Environment Programme STABEX - an export ea-nings stabilization scheme WESTEC - Western Samoa Trust Estate ABBREVIATIONS ADO - automotive diesel oil DWT - dead weight tonne KGOE - kilograms of oil equivalent LCT - local coastal tanker LPG - liquified petroleum gas LRMC - long run marginal cost LV - low voltage MR - medium range MT - metric ton MV - medium voltage PV - photovoltaic RE - rural electrification TOE - tonnes of oil equivalent This report is based on the findings of an energy assessment mission that visited Western Samoa in February 1991. The mission comprised Truls Holtedahl (mission leader - consultant), David Cleland (renewables specialist - Pacific Energy Development Programme), Peter Hunt (senior project engineer - Asian Development Bank) and June Morgan (petroleum officer - Forum Secretariat). FOR OFFICIAL USE ONLY WESTERN SAMOA ISSUES AND OPTIONS IN THE ENERGY SECTOR Table of Contents Pao n SUMMARY AND PRlNCIPAL RECOMMENDATIONS . . . . . . . .. .i I. ECONONIC AND INSTITUTIONAL CONTEXT . . . . . .. . . .. .1 Energy and the Economy . . . . . . . . . . . . . . . .1 Institutional Framework ... ..... ...... 5 II. ENERGY CONSUMPTION 7 The Structure of Energy Consumption . . . . . . . . . . 7 The Consumption of Petroleum Products . . . . . . . . . 8 The Consumption of Electricity . . . . . . . . . . 10 The Consumption of Biomas . . . . . . . . ..... III. ENERGY SUPPLY.... 14 Petroleum Products . ... . . . . . . . . . 14 Electricity . . . . . . . . . . . . . . . . . . . . . . 16 Biomass . . ...21 New and Renewable Energy Technologies . . . . 23 IV. POLICY ISSUES AND PRIORITIES 26 Pricing Issues 4 . . . ... 26 Petroleum Product Pricing 26 Power Tariffs and Utility Finance .. . . . 27 Regulatory Issues .. 30 Environmental Issues . . . . . .. . . . . . 31 V. INVESTMENT AND TECHNICAL ASSISTANCE PRIORITIES . . . . . . 33 Sectoral Planning and Coordination . . . . . . . . . . 33 Power Subsector .. 36 Petroleum Subsector... .. . ... 37 TABLES 1.1: Petroleum Products and the Commercial Balance 1985-89 3 2.1: Final Energy Consumption 1989 and 2000 . . . . . . 2.2: Petroleum Product Sales, 1989 and 2000 .... 2.3: System Energy Sales . .. ...... . . . . . ... . 10 2.4: Load Projections . . . . . . . . ..... . . . .. . 11 2.5: Estimated Biomass Consumption 1989 . .... . . * . . . 12 3.1: Upolu Generating Capacity . . . . . . . . . . . . . . . 16 3.2: Biomass Supply Estimated 1989 . . . . . . . . 22 4.1: Recommended Tariffs ..... ..... . . . . . . . . 28 5.1: Capital Investment Programs for EPC . . . . . . 36 ANNEXES MAP 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. ENERGY CONVERSION ANYD MEASUREMENTS Typical Typical Grose Gross Oil Unit Density Density Energy Energy Equiv. kg/liter 1 1/ton MJlkg NJ/liter toe!unit (net) Biomass Fuels Fuelvood (5% mcwb) tonne 18.0 0.42 Coconut Residues (air dry)/a Shell (15% mcwb) .,...td tonne 14.6 0.34 Husk (302 mcwb)ba ,8t81, tonne 12.0 0.28 Average (air dry)T tonne 14.0 0.33 Coconut Palm Woo (air dry) tonne 11.5 0.27 Charcoal 30.0 0.70 Vegetable and Mineral Fuels Crude Oil tonne 42.6 1.00 Coconut Oil tonne 0.920 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 '.980 1,020 42.9 42.0 1.01 Low Sulphur Fuel Oil (IFO) tonne )00 1,110 44.5 40.1 1.04 Electricity (KWh) Hydro /c MWh 0.25 Fuelvood /d MWh 0.93 Fuel Conversion Efficiency Diesel: Text uses actual where known, otherwise: Average efficiency for small (c 100 kW output) diesel engine 0.461/kwh (22Z) Average efficiency of large (> 1000 kW output) modern diesel 0.284 l/kWh (36%) Average efficiency of low speed, base load diesel (Pacific region) 0.30 - 0.33 1/kWh (28% - 322 eff). Area: 1.0 km2 - 100 hectares - 0.386 mi2 1.0 acre - 0.41 hectares Mass: 1.0 long tons - 1.016 tonnes Energy: 1 kWh 3.6 MJ - 860 kcal = 3,412 Btu - 0.86 kgoe I toe - 11.83 MWh - 42.6 GJ - 10 million keal - 39.68 million Btu 1 MJ - 238.8 kcal - 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 NJ/kg) /b Proportion: kernel 332, shell 23%, husk 442 by dry weight. /c Assumes (onversion efficiency of 30%. /d Assumes conversion efficiency of 9% (biomass - fuelled boiler). WESTERN SAMOA ISSUES AND OPTIONS IN THE ENERGY SECTOR Abstract Western Samoa, with a relatively limited and narrow energy resource base, will continue to depend on imported energy. The need for a balanced approach in energy policy between energy resource development, supply and conservation, requires that higher priority be given to overall management of the energy sector and a focus on the important energy issues. Improved management implies planning and selection of energy options that match the zountry's needs and conditions, proper maintenance and operation of existing plant, especially within the power subsector, and the use of energy pricing and direct measures to conserve energy. Institutionally, a combination of rehabilitation and strengthening of existing institutions, training and development of procedures and routines, and foreign assistance is needed. SUMMARY AND PRINCIPAL RECOMMENDATIONS Energv and the Economy 1. Western Samoa is a emall island country with a GNP/cap of about US$580 p.a., a population of about 158,000 and a land area of 2,831 km 2, based on agriculture, with an open economy, and highly dependent on oil imports for its commercial energy needs. These features influence important aspects of the energy sector. The country's ability to manage the energy sector is, furthermore, limited by the general scarcity of technical and management capabilities which reduces the scope for effective policy-making and follow-up. Western Samoa is very vulnerable to external shocks, as evidenced by the destruction caused by Cyclone Ofa in 1990. 2. Emigration of Samoans abroad explains the negligible growth of population over the last decade and is also a major factor behind the shortage of well-educated and experienced nationals. Significant sums in the form of remittances from emigrants flow, on the other hand, into the c~ountry together with substantial foreign financial and other assistance. These flows compensate for a small and narrow export base and contribute to the financing of imports, of which oil products account for around 10. The economy grew on average by somewhat less than 2X p.a. during the 1980s and has performed poorly in most recent years. Economic performance is, however, expectea to improve over the next decade though in the early 1990s, growth will be slow because of the adverse impact of Cyclones Ofa and Val. No major projects or other domestic developments are anticipated over the medium term that would significantly affect presenr. trends in energy requirements. Enera" Situation and General Issues 3. Biomass is the main source of energy supply in the country. Coconut residues and fuelvood, used by households and agro-industries, provide 652 of total energy consumed. Commercial energy in the form of petroleum products and electricity account for the balance. Final energy consumption, totalling 97,000 tonnes of oil equivalent (TOE) or approximately 600 kgoe per capita. The latter figure is low but similar to estimates for other island countries in the region. Electricity represents only 3Z of fitnal energy consumption despite the connection of an estimated 752 of the households to the grid. A small industrial and commercial sector relying to a significant extent on biomass residues for its energy needs, is part of the explanation for low electricity consumption. Apart from households, transport is the major energy consuming category and accounts for around 802 of the country's petroleum consumption. 4. Western Sanoa has limited indigenous energy resources. Hydroelectric power at present accounts for more than 502 of total generation. Potential development is hampered, however, by irregular rainfall patterns and an absence of natural storage. No hydrocarbon deposits have been discovered, and the solar regime, although favorable, is currently limited mainly to applications such as water heating. The country's main energy resource lies in its forests and coconut residues. Very little knowledge and data exist as to the size of the wood or coconut palm stock but present consumption of coconuts by households ensures the availabi±ity of large quantities of coconut residues. The country is, however, increasingly relying on imported oil to satisfy its energy needs. It is therefore vulnerable to external events that affect the price and - ii - availability of petroleum products and the export potential and foreign currency flows from remittances and aid. 5. Although the country has been able to maintain a reasonably secure and uninterrup4.d supply of energy at prices that are in line with other Pacific island countries, the energy sector faces constraints and issues that need to be taken into account both at a policy and project level. 6. The scarcity of domestic financial resources and public underbudgeting for operation and maintenance expenses easily lead to unrealized energy project benefits or even project failures. It is, therefore, generally recommended that the Government avoid energy projects and technologies with high recurrent financial and manpower resource requirements (for instance biomass gasifiers). 7. The shortage of managerial and technical skills limits the country's capacity to devise sound energy policies, to plan and design projects and programs, and to monitor their implementation. It is recommended that (a) higher priority be given to the training of nationals in energy planning and project assessments, supplemented by the use of external expertise in staff or line functions of energy institutions, and (b) a policy be pursued that limits the energy options applied in Western Samoa to robust technologies that have been proven operationally and economically in similar environments, and also focusses on managing fewer energy alternatives and existing resources well, instead of spreading limited technical and institutional capacity too thinly. 8. With commercial energy increasing its share of total energy demand, energy conservation takes on greater importance. The Government should, despite political and practical considerations, support and encourage initiatives such as (i) energy pricing to ensure that users generally pay the full cost of supply; (ii) reductions of electricity losses from the present level; and (iii) measures to save energy in government buildings and vehicles, given the importance of the public sector in the economy, but also to lead the general public in saving energy. Power Subsector 9. Power supply reliability has suffered in recent years due to a combination of factors, such as a scarcity of trained and experienced staff at all levels in EPC (Electric Power Corporation), lack of proper and regular maintenance, improper operational practices, and a lack of maintenance spares due to inadequate funds. This has resulted in a number of plant failures involving almost all hydropower and diesel plants. The plant failures are being addressed partly through a rehabilitation and expansion program for the Upolu and Savai'i systems. This program should be continued and supplemented by a series of measures aimed at dealing effectively with the root causes of the difficulties, which are primarily of an institutional and financial nature. It is understood that the Asian Development Bank (ADB) is considering funding an institutional strengthening study that will look into central planning, operations and maintenance aspects of EPC. This study, together with the recently completed system development study and the tariff and asset study, will identify the changes needed in power development and operations. It is. recommended that: - iii - the Government soften its policy of localization with a view to contracting competent expatriate expertise to fill critical positions in EPC for a period during which nationals can be hired, trained, and given the necessary experience. The hiring of relevant staff must be given pricoity to enable EPC so address urgent operational and planning issues; cost-saving measures by EPC be implemented immediately to reduce its increasing financial losses, pending an increase in revenues based on higher sales (once capacity problems are overcome) and tariff revisions; the institutional strengthening study be carried out and implemented as soon as possible as a necessary complement to the ongoing rehabilitation and expansion works; the puwer tariff be reviewed in view of the inadequate tariff increase in 1990 -r. -PC's -onsiderable future financial obligations associated with tz stem shabilitation and expanuion program. The donor agencics olved ir the Afu!lYo hydropower scheme should continue their r*ialugue with t. X Governmert on this matter; and the Government and EPC reconsider the planned rural electrification program in the light c; recent plant failures and EPC's manpower and financial constraints to live priority to improving existing systems and strengthening interral EPC aapacity. In addition, it is recommend d that: a feasibility study of the next hydropower project be carried out based on a final ranking of the most promising hydropower candidate schemes on Upolu; - the potential for firm, long-term power supply from the privately operated wood waste steam plant on Savai'i be established and, if the outcome of this investigation justifies it, that a proper purchasing and tariff agreement be drawn up; and - ongoing work be continiued to further reduce energy losses, especially in bi Savai'li system. Petroleum Subsector 10. The present arrangement whereby all the main activities in the subsector are carried out by the private sector and where the petroleum companies are the owners of storage and distribution facilities is appropriate. However, the Government through its various agencies should improve its monitoring of commercial and physical standards. With this in mind and in order to be an informed partner in a dialogue with the oil companies, it is recommended that the Energy Unit widen its focus with respect to the subsector, establish a proper petroleum data base, review storage capacities and distribution arrangements for the main islands, in cooperation with the oil companies, and assess the need for strategic reserves. - iv - 11. It is recomuended that appropriate agencies such as the Forum Secretariat be approached to assist with a review of storage facilities and distribution arrangements and that it also be consulted on the issue of optimal supply arrangements for petroleum products to the country, given the new situation created by the establishment of Fiji National Petroleum Company (Finapeco). In this connection, the Government should consider dual price monitoring, to record landed costs according to both the existing pricing formula and any new supply arrangements. The new situation should not be seen as a reason for initiatives concerning supply arrangements such as a national fuel tender, a local refinery or entrepot operations which are very difficult to justify econ6mically or financially. 12. It is furthermore recommended that the Government: - with respect to prices and pricing of petroleum products (i) review the price formula and the basis for landed costs and verify the oil companies's cost elements which should be audited on an annual basis; (ii) reconsider Goverrment charges (taxes and duties) on petroleum products, taking into conaideration conservation aspects, fiscal needs, competitiveness and social concerns; (iii) consider the introduction of differentiated petroleum product prices in the country based on location and resulting differences in domestic distribution costs; and build up Government in-house expertise and capacity to carry out price control which at present is contracted out to a consultant. - introduce and ensure the monitoring of physical standards for petroleum storage and distribution facilities in the country in order to reduce the risk of accidents. Regional petroleum storage and handling standards are under preparation by the Forum Secretariat which could be approached for this purpose and for assistance to inspect petroleum facilities on Savai'i; - request the assistance of the South Pacific Regional Environment Programme (SPREP) to prepare plans and procedures for preventing and dealing with oil spills and for disposing of waste oil, as well to train relevant personnel; and - introduce a Petroleum Standards Act and procedures for monitoring adherence to the standards in order to ensure that petroleum imports meet international product quality requirements. Renewable Eneraty 13. There is a high degree of household dependence on woodfuels for cooking, and a generally satisfactory resource and supply situation which is not expected to change significantly in the foreseeable future. However, in view of (a) limited specific knowledge regarding forest resources and biomass consumption, (b) the fact that local woodfuel shortages may appear irdependent of apparent surpluses on a national level, and (c) an uncertain future for copra and other exports of coconut products with possible negative consequences for the supply of residues, it is recommended that the Government, through the Ministry of Agriculture, Forestry and Fisheries, monitor the situation and consider localized initiatives in cooperation with the users. Apart from some ongoing small-scale fuelvood projects (such as diotribution of seedlings), no immediate or near term policy or other measures appear to be necessary from an energy perspective. 14. Renewable energy technologies should be applied in a selective way and a strategy should be followed that emphasizes the needs of the country and the users, based on alternatives that can clearly be justified from a technical and economic point of view. The country's limitsd resources should not be allocated to pilot projects and schemes utilizing unproven technologies with a limited impact on the energv situation. This recommendation would at present apply to wind, wave and OTEC where any efforts should be fully funded by interested research organizations or donors. Wood 'ired power generation should be left to the private sector for its own use or, if long-term agreements can be arranged, for sale to the grid. Secto- PlanninR and Coordination 15. Tne principal objective of an integrated energy policy and--therefore- the main tasks of the central energy unit is to contribute to a balanced approach between energy resource development and supply, on the one hand, and energy conservation, on the other. In Western Samoa at present, low priority is accorded to general management of the energy sector and t'are is a lack of focus on the more important energy issues. In order to improve the situation, it is necessary to redefine the objectives and functions of the Energy Unit located in the Treasury (at present hardly active in energy matters) and increase the allocation of human and financial resources. 16. It is recommended that the Government revive the Energy Committee which should assume the responsibility for formulating energy policies, reviewing major investment projects and pricing proposals, and for providing overall leadership and coordination of the sector. The Committee should have its membership and mandate reviewed. Further, the Energy Unit should be strengthened to serve as a secretariat for the Energy Committee and, furthermore, monitor the implementation of adopte%. policies and measures, ensure that least cost development plans are formulated and adhered to by subsector institutions, build up an energy data base, and provide guidelines, advice, information, to subsector- and other energy-related institutions. The Unit should not be directly involved in or responsible for the impleme tion of energy projects and programs. 17. With respect to subsector developmen. operations, thw energy Unit should essentially rely on existing institutious and bodies (EPC, the private oil companies, etc.) for planning and implementatiln. Nevertheless, it has specific functions related to the need for a national perspective which include considering relevant options prior to system expansions, being consulted on pricing matters, ensuring adherence to technical and other standards, advising the Government on petroleum matters, assessing, filtering and soliciting donor tunding in the field of renewable energy technologies, and acting as the primary Government agency when it comes to taking initiatives aimed at energy conservation. - vi - 18. Several. of these tasks require specific expeLtise, come up with infrequent intervals, and may exceed the capacity of the Energy Unit. It should therefore be empowered, in consuliation with the bodies responsible for coordinating requests for technical assistance, to approach donors for funding of studies and manpower assistance, as needed. 19. It is recommended that the Energy Unit be staffed with an energy planner with a technical background, an energy officer with a background in economics, and two trainees. The Unit will require the support of a senior energy expert, probably an expatriate, for a minimum period of two years, to manage it and be responsible for developing a national capability in energy policy preparation and follow-up, including the preparation and monitoring of the implementation of a training program. The Government could consider re 8t-.Ig such expertise under the UFDP count%y program or from relevant bilateral - .her multilateral organizations. The Government, in return would have to comm.( resources to fund the local positions and provide suitable candidates. I. ECONO0I4C AND INSTITUTIOjNAL CONTEXT Enertv and the Economv 1.1 Western Samoa is situaued just east of the International Dateline and comprises two main islands, Upolu and Savai'i, and five smaller islands. Total land area is 2,831 sq. km. The main islands are mountainous and mostly covered with dense natural vegetation. 1.2 The total population is estimated at about 158,000 in 1990, of which 20% live in the urban area of Apia. The majority lives mair.ly in small scattered villages. Because of large net emigration flows, population growth has been very low over the last decade (0.12 p.a.) and negligible in recent years. Western Samoa is predominantly rural, with the majority of the populatJon depending on agriculture for livelihood. 1.3 Per capita GNP was about US$580 in 1988. Recorded remittances f;om overseas nationals are significantly higher than receipts from exports and aid combined. As with all small island economies, Western Samoa is highly vulnerable to external shocks. This was evidenced by the destruction and widespread damages caused by Cyclones Ofa in 1990 and Val in 1991. The country's terms of trade show large variations from one year to another. 1.4 Agriculture is the mainstay of the economy, accounting for around 50Z of GDP and 801 of export earninis.l/ The major cash crops are coconut, taro and cocoa. Copra production and ports have declined because of the poor return to labor and banana exports, traditionally a major ex'port item, have virtually ceased. The manufacturing sector is relatively small, accounting for less than 15% of GDP. Most production is for the small domestic market and based on imported inputs. The largest component of the service sector is government administration (about 15% of GDP). 1.5 Agricultural axport performance has suffered from volatile commodity prices and declining international demand for copra products, adverse weather conditions, and poor management of some public plantations. Despite the strong growth of coconut cream and taro exports, total export volume and earnings (in nominal terms) are no higher than in the early 19809. On the positive side, the country has benefitted from strong growth in remittarces and tourist re_eipts. These two items have ensured a steady improvement in the current account deficit which was reduced to 3% of GDP in 1989. The Government has been able to finance its budget and the balance of payments through relatively high levels of aid on concessional terms (US$216 per capita in 1987). 1.6 GDP growth averaged less than 2% p.a. during the period 1982-89 and actually declined by an estimated 5% in 1990 due to Cyclone Ofa. The short-term outlook is dominated by the effects of the two cyclones (crop damage, power cuts). Barring any further shocks, the economy should recover over the next two 1/ Agriculture includes all subsistence activities, forestry and fishing. -2- to three years.2/ Real GDP is projected to rise at about 3% per year in real terms during the first half of the 1990s and to 3.5% during the rest of the decade.3/ Behind these projections is an expected improved porformance in the agricultural sector based on a package of announced policy and other measures. The small manufacturing sector is also expected to respond to improved incentives, processing primary products for export and supplying the domestic tourist industry. A growth here of 4-5% p.a. is projected in the mid-1990s, without any major new industrial or commercial projects expected to come on line that would significantly alter past trends ir output or energy requirements. Enery Resources and Supply 1.7 Despite its dependence on foreign supplies for the major part of its commercial energy needs, Western Samoa has significant indigenous energy resources to meet its present requirements. Almost two thirds of gross energy supply come from indigenous sources, mostly biomass. The country has a substantial forest cover that is estimated at roughly 50% of total land area. Although perhaps one third is protected forest and national reserves and parts of the remaining forests are difficult to access, there are significant areas that may be commercially exploited and are a source of fuelwood. The main source of biomass energy, however, is coconut residues from the ubiquitous palm tree. 1.8 So far, harnessed hydropower is concentrated on Upolu. No survey of the total potential has been carried out, but the major feature of Western Samoa's hydropower potential is the highly variable energy output due to irregular rainfall patterns and the absence of natural storage. No hydrocarbon deposits have been discovered,A/ the small geothermal resource is located far from energy demand centers, and the solar regime, although favorable, is currently limited mainly to applications such as water heating. 1.9 Commercial energy requirements are primarily met by petroleum products, wh'ch is used mainly for transportation and power production. The volume of oil imports grew by rou&:ly 30% between 1985 and 1989 and the value by some 20Z in current terms to WS$ 16.4 million (Table 1.1). Petroleum imports have accounted for around 10Z of total imports during the last 5 years, a relatively modest figure. The value of petroleum imports have equalled around 35% of exports and in 1989 were as high as 56Z. Thus, the petroleum bill is of considerable concern to the authorities, both in terms of its absolute size and in view of volatile prices of the country's export commodities and imported oil products. 2/ The economy picked up during the first three quarters of 1991, but the recovery process was reversed by the devastating effects of Cyclone Val in December 1991. 3/ There could be a substantial decline in GDP in 1992 because of the effecta of Cyclone Val. A/ The South Pacific Applied Geoscience Commission (SOPAC) in Fiji reports that no oil exploration has been carried out in Western Samoa due to poor potential. -3- Table 1.1: PETROLEUM PRODUCTS AND THE COMMERCIAL BALANCE 1985-89 1985 1987 1989 Imports of mineral fuels, etc. (WS$ million) 13.5 8.8 16.4 As % of total imports 12 7 9 As % of total exports .37 35 56 Source: Central Bank of Western Samoa: Annual Report 1989. EnerRy Conservation 1.10 Energy conservation, although acknowledged to be important, has tended to have a low priority in technical assistance programs and in terms of government initiatives. This may be partly ascribable to the fact that conservation projects are difficult to define and monitor; moreover, their output is less visible than a power project or the extension of the distribution system. Further, the most effective instrument of demand management, appropriate energy pricing reflecting the economic cost of supply, may not be easy to implement for political reasons. Nevertheless, the benefits of energy conservation are important and should be pursued. In addition to reduced oil consumption and imports, energy efficiency undertakings: (i) most often yield a financial and economic return that exceeds that of projects undertaken to increase supply, (ii) in many cases provide the opportunity for deferring investments, and (iii) have positive environmental impacts. 1.11 Two main targets for conservation initiatives are losses in the electricity supply system, and the use of electric power and petroleum products in the buildings and motor vehicle fleet of the Government itself. These are areas in which direct intervention by the authorities has a greater chance of implementation than initiatives in which a large number of independent actors are involved. Electricity losses are still quite high (13 and 20% in the two systems) despite considerable improvements in the Upolu system over the past two decades, and further reductions are feasible. Government leadership regarding energy use by its vehicles will have positive indirect impacts by increasing the general awareness, in addition to the direct savings that are feasible. Use of the price mechanism and campaigns focusing on the benefits of.fuel savings are more general avenues aimed at the general public and the Government should consider using these measures actively. Constraints on Energy Development 1.12 Constraints on energy development in Western Samoa follow from three characteristics of the economy and society more in general: (i) very limited -4- domestic financial resources; (ii) shortage of managerial and technical skills; and (iii) small and dispersed energy markets. These have to be taken into account by the Government as well as donors in dealing with issues in the energy sector. 1.13 Very limited domestic financial resources for energy projects and programs are partly compensated for by external financial assistance on grant or concessionary terms. Generally, however, donors are unwilling to provide funding for recurrent costs and since the Government, for lack of domestic funds, tGo.ds to severely underbudget operating and maintenance expenses, the result is projects with shortened economic life or a risk of malfunctioning or even to*al abandonment of energy schemes. It is therefore recommended that the Government exercise great care in the selection of technologies, emphasizing schemes with low recurrent manpower and financial resource requirements. This is an important task of the Energy Unit in the Treasury as a policy-proposing body and advisor to other institutions and of EPC. 1.14 Shortage of managerial and technical skills reduces the capacity of the country to devise sound energy policies and monitor their implementation. It also limits the extent to which the country can plan, implement and monitor complex energy schemes. From the energy perspective, there are two main avenues for dealing with limited domestic institutional and technical capacity;3/ (i) training and transfer of skills through technical assistance as a continual and persistent effort on the part of all institutions involved in energy development and operations, and not only associated with the occasional implementation of capital expenditure projects; (ii) a realistic assessment of the number and types of energy options that the country should be actively developing with or without external donor assistance. The Government should emphasize proper management of existing energy schemes and well-proven technologies and not spread limited institutional capacity too thinly. Ne' options should be restricted to those that have been demonstrated technologically and economically circumstances similar to those of Western Samoa and which can have a meaningful impact on the energy situation of the country. More esoteric technologies and options should be implemented only if the complete lifetime costs are borne by a donor. 1.15 Small and dispersed markets for energy follow from the island nature of the country and the pattern of settlement in small villages. The main c'onsequences of such a situation are: - the distribution of petroleum products, especially outside the main island, requiring transshipment, additional storage capacity and handling by drums, is costly; - power supply is costly, due to expensive generating equipment and distribution systems with small loads; 3/ Outside the scope of this study but affecting energy sector management is the complex issue of institutional weaknesses in government and the public sector in general, such as availability of qualified national candidates for public sector positions, salary levels, management skills, motivation, staff turnover, and institutional memory. - there are difficulties in establishing institutional arrangements to provide adequate support services, whether for grid-supplied electricity or for photovoltaic installations; .d - power demand forecasting is difficult in small systems because they are susceptible to the timing of one or a few new major energy-using projects. This requires a high degree of flexibility in planning and places a premium on energy projects with short implementation time. 1.16 Western Samoa has to accept the consequences of small scale in the short run, but over time, with increased population, quantities and volumes, and possibly more suitable technologies, these constraints may become more manageable. Infrastructure and maintenance problems in remote areas favor energy technologies that are robust and at least partly can be serviced by the users themselves. Institutional Framework 1.17 A National Energy Committee (NEC) was established in 1976 to provide support to the Government units responsible for energy planning and policy formulation. After a period of varying activity and no definite policy direction in the energy sector, NEC was reorganized into the Western Samoa Energy Committee, chaired by the Prime Minister and composed of representatives of other ministries and public bodies. Its function was to review and approve energy policy measures and to decide on principal issues arising in the energy sector. The Energy Committee has not convened since 1987 and at present there is no other functioning body with clear authority over energy policy. 1.18 The Petroleum Unit in the Treasury was established in 1984 to deal with petroleum pricing and supply matters. Since 1987 it has taken over some of the functions of the former Energy Planning Unit, attached to the Prime Minister's Office. In 1990, the Petroleum Unit was in principle given responsibility for the entire energy sector and renamed the Ernrgy Unit. However, its resour-es do not reflect this broader scope and, moreover, its role and functions have not been properly defined. Its main focus is still petroleum pricing and supply issues and these are handled by an Australian company under a long-term contract. The Public Services Commission is at present considering a proposal to place the Energy Unit under the Deputy Secretary for Projects and Operations within the Treasury (Annex 1.1). 1.19 Besides the Energy Unit, several other bodies of the Government and the private sector are involved ir energy and energy-related matters: - The Electric Power Corporation, a wholly Government-owned statutory corporation established in 1972, is responsible for electricity supply in Western Samoa, and for energy conservation. It is governed by a Board (chaired by the Minister of Public Works) which is answerable to the Cabinet. The role and functions of EPC are further discussed in Chapter III. - The Forestry Division of the Ministry of Agriculture, Forestry and Fisheries handles the woodfuel aspects of the energy sector, i.e., reforestation programs, forest research, and community forestry. -6- The Ministry of Trade. Commerce and Industry is responsible for weights and measures in relation to petroleum products; and Customs collects duties and taxes on the same products. The Planning Unit in the Prime Minister's Office, together with the Treasury, evaluates and screens projects submitted by the line ministries, before the proposals are presented to the Aid Coordinating Committee, chaired by the Prime Minister. The Ministry of Foreign Affairs coordinates requests for external assistance for capital expenditure projects and technical programs. The Environment Division within the Ministry of Lands and Environment has responsibility for conservation and environmental monitoring, and coordinates the environmental activities of other departments. Two private companies, British Petroleum and Mobil supply and distribute petroleum products throughout Western Samoa. Shell discontinued operations in 1990, claiming an inability to operate profitably. 1.20 The present division of responsibilities for energy-related matters is in broad terms well justified. The different organizations perform functionally diverse and partly self-contained energy-related activities and no fundamental concentration of functions in the Energy Unit seems warranted. However, there is a clear need for the Unit to emphasize its role as an overall coordinator of energy matters, to more alearly define its areas of responsibility in practice, to set priorities for its work and to increase its capacity to perform these tasks. This has to be carried out within a framework that takes account of the country's manpower and financial resources. Proposals for institutional improvements are discussed in Chapter V. -7- II. ENERGY CONSUMPTION The Structure of EnerRv Consumption 2.1 An energy balance for Western Samoa for 1989 is presented in Annex 2.1. The quality of the data vary significantly, uncertainty being related particularly to biomass which is the major source of energy. The balance is presented to illustrate in broad terms the movement of energy through the economy, the quantities and the relative importance of the various forms of ent.rgy. 2.2 The estimated final consumption of energy, all sources combined, is around 97,000 tons of oil equivalent (TOE), corresponding to approximately 600 kgoe per capita. This is in line with figures for several other island countries in the region. Sixty-five per cent of energy used is derived from biomass, the major part by households for cooking and significant quantities also in agro- industrial processing. The balance is provided by petroleum products (almost one third of energy use) and modest quantities of electricity (3Z). Cdnsumption of commercial energy grew at an average of around 8% p.a. during the period 1983- 89, and most likely increased its share of end-use in the energy balance over the past decade. 2.3 The largest energy consuming categories are households, 441, and transport, 301, of total energy end-use. The small industrial sector is a relatively important energy consumer. Agro-industries provide themselves the major share of the energy they consume in the form of coconut residues. 2.4 Projected energy consumption in Table 2.1 is based on subsectoral forecasts, as explained in the respective chapters on petroleum, electricity and biomass. Total energy consumption is expected to increase by around 251 over the decade to year 2000, or roughly 21 p.a. The main factors influencing the development of the sector up to the turn of the century are: - continued low population growth (around 0.5Z p.a.); - continued general availability of biomass for household cooking; - no constraints with respect to commercial fuels supply with certain increases in their prices in real terms; - economic growth in the range of 2.8-3.5Z p.a., somewhat up from that of the past decade; - no major expansion of the industrial subsector, nor any large, new energy-consuming projects or activities. -8- Table 2.1: FINAL ENERGY CONSUMPTION 1989 AND 2000 Source of Energy 1989 2000 Growth 1,000 Share 1,0000 Share Rate TOE % TOE Z % p.a. Biomass 63.00 65 63.00 52 0.0 Petroleum Products 30.63 32 51.78 43 4.9 Electricity 3.22 3 5.68 5 5.3 Total 96.85 100 120.46 100 2.0 Source: Mission estimates. 2.5 Around the turn of the century, biomass will no longer dominate the energy scene to the same extent as earlier but will still account for around half of the energy consumption. Total fuelwood and residue consumption in year 2000 is expected to be at the same level as at present since rising disposable incomes will permit a gradual switch to more convenient fuels, thus offsetting the slight increase in biomass use associated with population growth. Petroleum products are expected to represent 40-45% of total energy consumption around the turn of the century. The increasing importance of petroleum underlines the significance of actively pursuing opportunities for energy conservatio,n, as indicated in the previous chapter. The increasing petroleum dependence also points to the need to keep under observation the country's petroleum procurement and supply arrangements to ensure that the least cost alternatives are pursued (Chapter III), and to monitor the oil companies' costs and cost components under the regulated price formula (Chapter IV). The Consumption of Petroleum Products 2.6 Western Samoa depends on petroleum products for 85-90% of its commercial energy needs, and its economic growth will continue to rely on the availability of competitively priced petroleum fuel as the scope for petroleum displacement by indigenous energy sources is basically confined to hydropower in limited quantities. Transportation accounts for approximately 80% of petroleum consumption and electricity generation for 15%. The requirements for electricity generation have been decreasing in relative terms as the program of increased hydro-generation continues. 2.7 The consumption of petroleum products increased at an annual rate of 8.0% p.a. between 1984 and 1989 (Annex 2.2). The largest demand growth in absolute and relative terms has been in aviation fuels and, to a lesser extent, in gasoline. Western Samoa's own airline expanded operations in 1985 and future demand for aviation fuels is linked to development in tourism. Future expansion in tourism depends, in part on whether the planned extension of the main airport can be matched by necessary increase in the country's hotel capacity. The increase in ADO consumption is expected to be moderate. The commissioning in 1993 of Afulilo, the country's first storage hydroelectric plant, is expected to -9- reduce consumption of ADO.4/ Growth in gasoline demand is expected to be moderated by the combined effect of a reduced growth in the number of new vehicles and improved fuel efficiency. The gradual shift towards more convenient cooking fuels will be reflected in growth in consumption of kerosene and LPG, with the latter showing the higher rate of increase. 2.8 Overall, the consumption of petroleum products is projected to increase on average at a rate of 4.6% p.a. during the 1990s, from some 44,000 kl in 1989 to 72,000 kl in year 2000. Table 2.2 summarizes the product demand. Despite some substitution towards hydropower, the country will increase its dependence on imported energy. Conservation efforts, such as loss reduction in the power sector, can reduce the growth in the demand for petroleum products to a limited extent. Table 2.2: PETROLEUM PRODUCT SALES, 1989 AND 2000 1989 2000 Growth Product Icl Share (%) kl Share (Z) % p.a. Gasoline 12,801 29 21,900 30 5.0 Jet fuel 9,687 22 16,600 23 5.0 Kerosene 1,822 4 2,500 3 2.9 ADO 18,251 41 29,000 40 4.3 Avgas 300 1 500 1 4.8 LPG 230/a 1 350 1 3.9 Other (lubes, solv.) 891 2 1,100 2 1.9 Total 43,982 100 71.950 100 4.6/b ia Mission estimate. /b The difference compared to the growth rate for petroleum products in Table 2.1 is explained by differences in units of measurement. Source: 1989 figures; PEDP, Fiji; projections; Mission estimates. 2.9 The petroleum consumption data presented are not very reliable. Partly, there are wide discrepancies in the figures obtained from various official sources and the oil companies, and partly data are not readily available. It is recommended that the Government take steps to improve the accuracy of data and the timeliness of collection, which can be done by the Energy Unit. A/ In the ADO projections, only the commissioning of Afulilo has been taken into consideration. Should other pump-assisted or run-of-river hydropower schemes be implemented during the 1990s, this would contribute to a further dampening of ADO demand. - 10 - The Consumption of Electricity 2.10 Electric power supply systems are established on the two main islands of Upolu and Savai'i. The Upolu system is by far the larger of the two with a maximum demand in 1989 of 7.76 MW in comparison with the Savai'i demand of 0.62 MW. Electric energy sales in 1989 were 36.14 GWh and 1.98 GWh, respectively. In Upolu the largest demand is by commercial consumers whereas the Savai'i system's load is dominated by domestic consumers. On a national basis, EPC estimates that around 75% of the households are connected to the public systems. Overall statistics for EPC's power sales and generation are shown in Annex 2.3. 2.11 Load growth on the two islands has been quite irregular which is not unexpected for small systems. From 1979 to 1989, sales on Upolu increased at an average annual rate of 4.2% although growth in the last six years has been at more vigorous and consistent rates averaging 6.0% per annum. System losses have steadily decreased in the last decade to approximately 13% for the Upolu system and the load factor has increased to 63%, which is a typical development for a maturing system. Since the first operation of the Savai'i system in 1979 growth has been high for the total period but with significant variations from one year to another. Losses are difficult to ascertain due to the urametered supply from a wood-waste fired power system of a timber mill at Asau connected in 1988 but they were over 20% prior to the Asau system connection. System performance statistics for both networks are shown in Annexes 2.4 and 2.5, and the energy sales for the past six years are summarized in Table 2.3. Table 2.3: SYSTEM ENERGY SALES Growth 1983- 1983 1986 1989 '89 (% p.a.) ----- _______- G-Wh ------------- Upolu 25.4 30.0 36.1 6.0 Savai'i 0.8 1.4 2.0 16.5 Total 26.2 31.4 38.1 6.4 Source: EPC. 2.12 Several demand forecasts have been prepared in the last few years and the most recent one, by consultants for the ADB in 1991, projects sales growth for the Upolu system of 5% p.a. In view of, among other things, the continuing rural electrification program, consumption in the Savai'i's system is expected to increase at 10% p.a. Due to the relatively low confidence in the accuracy of the projections, given poor data, the base case growth rates indicated above have been supplemented by high and low forecasts of plus and minus 50% for planning purposes. The results of these projections for the base case scenarios are shown in Annexes 2.6 and 2.7 for the Upolu and Savai'i systems, respectively, and summarized in the table below. - 11 - Table 2.4: LOAD PROJECTIONS Year Low Scenario Base Scenario High Scenario (MW) (GWh) (MW) (GWh) (MW) (GWh) Upolu. 1989 (Actual) 7.8 36.14 7.8 36.14 7.8 36.14 1993 8.5 39.89 9.3 43.93 10.2 48.27 1996 9.1 42.96 10.7 50.85 12.6 59.96 2000 9.9 47.42 12.8 61.81 16.6 80.07 Savai 1989 (Actual) .62 1.98 .62 1.98 .62 1.98 1993 .84 2.41. .90 2.77 1.08 3.47 1996 .97 2.97 1.20 3.69 1.64 5.28 2000 1.18 3.39 1.76 5.40 2.87 9.23 Source: ADB. 2.13 With substantial tariff increases likely in the near future, short term load growth may be nearer the low scenario, with long term growth dependent on the general health of the economy and other possible developments, such as large scale tourist/hotel initiatives. To accommodate possible large divergences in demand from the base forecast, it is recommended that EPC prepare development programs with sufficient flexibility to respond to sudden changes in demand. The Consumnntion of Biomass 2.14 The majority of households in Western Samoa cook with wood and coconut residues. A small amount of charcoal is made by villagers from coconut shells, primarily for household use. Fuelwood trade is commercialized mainly around Apia, where 20Z of the population lives. Fuelwood prices, reportedly around WS$ 80/MT, appear to have risen moderately in nominal terms since the mid-1980s and to have remained basically unchanged in real terms over the period. Marketed quantities of fuelwood and residues are limited, however, and most households obtain biomass "free" from household lots and customary land. Kerosene and LPG provide the balance of energy needs for cooking and for lighting (in aggregate only around 4% of household energy requirements). 2.15 Residues from coconuts and forest timber are also used extensively to meet agro-processing energy requirements and for steam raising within the industrial sector. Sawmill wastes are utilized for power generation but only on a very small scale. Altogether, various commercial users are estimated to account for some 35% of total biomass consumption, the bulk (65%) being used by households, including their need for biomass for copra drying. 2.16 Since there are no reliable data on biomass consumption for any of the user categories, the Samoan estimates are based on consumption figures in the - 12 - Pacific region.5/ Table 2.5 shows estimated biomass demand across all sectors. In aggregate, consumption is estimated to slightly exceed 180,000 MT annually, of which approximately 80X in the form of biomass residues and the balance as fuelwood. Table 2.5: ESTIMATED BIOMASS CONSUMPTION 1989 Sector MT Z Households 115,000 63 Timber Milling 13,000 7 Copra Production (for coconut oil) 35,000 19 Copra Production (for export) 2,800 2 Coconut Oil Mill 11,000 6 Cocoa Production 4,700 3 Other Industrial Production 500 - Total 182,000 100 Source: Mission estimates. 2.17 Though consumption level and pattern will vary with domestic income and with the availability of biomass resources, it is assumed 5/ that households consume on average 2.0 kg/person/day, which is the average value in the region for areas where the resource is perceived as being plentiful. Coconut residues constitute a major part of total household consumption of 115,000 MT. 2.18 Various industrial uses of biomass consist of: commercial copra production, altogether 22,250 MT in 1989 requiring an estimated 37,800 MT of coconut residues (1.7 MT per MT of copra); Samoan Coconut Products producing coconut oil utilizes a biomass fired boiler consuming some 11,000 MT of biomass/year; cocoa processing, primarily a household industry for the local and export market, with an output in 1989 of 3,530 MT required an estimated 4,700 MT of biomass (some 1.3 MT per MT of cocoa); Samoa Forest Products operates the Asau sawmill which utilizes mill wastes for ste-j raising and power generation. Only a small share (5-10%) of the 11,600 MT of available timber waste goes to electricity production, the bulk being used for steam raiding and for local domestic sales; an estimated additional 1,400 MT of timber waste is used by New Samoa Industries sawmill operations. Finally, soap aned coconut cream are manufactured by local companies utilizing small biomass fired boilers which together consume in the vicinity of 500 MT of woodfuel per year. 2.19 The consumption of biomass is expected to remain at approximately the present level during the 1990s, although a further shift is likely to take place towards coconut residues use by households as fuelwood becomes less abundant in 5/ "Energy Statistics Relevant to Household and Rural Energy Issues on the Pacific Islands," PEDP, 1990. - 13 - and around the major urban areas. The consumption pattern of other user categories is assumed to stay broadly the same as at present, their fuel consumption--and supply--being closely linked to their product output. - 14 - III. ENERGY SUPPLY Petroleum Products 3.1 Petroleum is supplied to Western Samoa by two international oil companies: Bri*ish Petroleum (BP) and Mobil Oil Australia. Shell withdrew from the market in 1990 claiming inability to operate profitably, but it still markets aviation fuels at the main airport via an into-plane contract with BP. LPG is supplied and dist.ibuted by Samoan Industrial Gases (SIG), controlled by a British company. All three companies maintain their own storage and distribution facilities in Apia on Upolu, the two first comnanies also at Asau on Savai'i. BP and Mobil are both active in the market for all the main products (gasoline, ADO, kerosene and aviation fuel). 3.2 Western Samoa, like other small Pacific Island countries, faces a long supply chain from the refinery source. Due to regional optimization schedules, Mobil and BP ship products on joint charter for their Apia bulk tanks from their New Zealand, Australian or, occasionally, Singapore refineries on a medium range (MR) vessel (25,000-30,000 DWT) in a three ports discharge pattern to Fiji, Western Samoa and American Samoa. Prior to cyclone Ofa and due to draft restrictions at Asau, products for Savai'i were transshipped from the Fiji depot aboard a local coastal tanker (LCT, 650-5,000 DWT). Until repairs were completed in mid-1991 in Asau after the cyclone, products for Savai'i were transshipped through Apia, as are products for the two small islands of Apolima and Manono. SIG imports LPG from Australia. 3.3 The commencement of the Fiji National Petroleum Company (Finapeco) operations in 1991 may affect both the routing and the cost of BP's and Mobil's landed products. The present supply arrangement implies that freight costs are shared among the three discharge points according to the quantity of cargo carried for each port. If products under a new arrangement have to be transshipped via Fiji, the Apia landed cost may well increase. The Government of Western Samoa has made its concern on this matter known to the Government of Fiji. It is recommended that the Government of Western Samoa introduce dual price monitoring to record landed costs according to both the existing pricing formula and any new supply arrangement. The assistance of appropriate agencies, such as the Forum Secretariat could be requested to attempt to resolve increased costs, if any, as well as product quality or supply disruptions, should such occur. 3.4 The main products (gasoline, ADO and kerosene) for Apolima and Manono, and minor products in general are supplied by drums. Drum distribution is more expensive than bulk distribution and the costs are compounded by fuel losses through evaporation, leakage and drum decanting. On average, these losses contribute up to 152 of total drum content. A syrthetic rubber bag (500 US gallons) as an alternative to the traditional 200 liter steel drum has been tested by Mobil Oil Fiji. An evaluotion program has tentatively established that the bag can lower freight cost for fuel supply to outer islands and rural locations where demand does not warrant bulk storage facilities. It is recommended that the Government monitor this alternative with a view to implementating it when it has proven its applicability in terms of handling and cost. - 15 - 3.5 The main Apia port at Matauta has no bulk fuel handling facilities and, moreover, a maximum draft of 9 metors which is too shallow for a fully laden MR tanker. The BP and Mobil tankers therefore discharge on the other side of the harbor, close to their bulk tanks at an MR mooring buoy with associated submarine pipelines, owned by Mobil. The port facilities at Matauta are good and currently undergoing an extension of the container handling facilities. BP and Mobil support an appraisal of an extension of the port to handle petroleum products. The Maritime Section of the Ministry of Transport estimates, however, that the draft at Matauta could only be increased to 10 meters which is insufficient. Apart from the draft restrictions and the need to consider individual transport projects in a wider transport context, it is recommended that the discharge point for petroleum products remain isolated from the main wharf area and that the Government not take on any additional responsibility for berth facilities for petroleum cargoes. It is also recommended that tile Government request the Forum Secretariat for assistance to inspect the facilities on Savai'i. 3.6 BP and Mobil currently operate on a policy of increased shipping frequency rather than increased tankage. Although no stockouts have occurred and storage and distribution are narried out by the private sector, the Government should nevertheless monitor tl,e development and future requirements ror storage facilities in the country. It is recommended that a study of the adequacy of the existing facilities be carried out in cooperation w: .'.h the oil companies and that the Forum Secretariat Energy Division (FSED) be approached. Such a study should also consider the need security stocks. If the facilities are considered inadequate it may be necessary to review the private sector investment i.Lcentives, including the petroleum product pricing structure. The legal framework for investment incentives is found in the Enterprise Incentive Scheme, the Industrial Free Zone legislation and the 1984 Incentives Act. 3.7 The physical supply and distribution of petroleum products is being adequately managed by the private sector 6/ and it is unlikely that alternative systems such as a regional or national tender, or direct purchases on the spot market, would bring about a sustainable reduction in the total cost. A national fuel supply tender was tried in Western Samoa in 1984-85, but the arrangement was terminated to adminiotrative problems. WVith the commencement of Finapeco, countries in the regioa may consider establishing themselves as entrepot or refining centers. Given tha small size of the national (and even the regional) market, Western Samoa's lack of any comparative advantage with respect to such operations, and the country's very limited domestic humar. and financial resources, there is no economic justification for the country to pursue such alternatives. 6/ As an illustration, the MR tanker in February 1991 had to leave Apia without having diecharged due to some damage it caused to the submarine pipeline. Without. government intervention, BP and Mobil rerouted another of their regional tankers and alternative supplies were brought in, gasoline was in somewLat tight supply. - 16 - Electricity Present Systems 3.8 Total installed generating -apacity in the Upolu system amounts to about 16.45 MW, comprised of 8.27 MW "run-of-river" hydroelectric plants at five locations on the island and 8.18 MW of diesel generators at the Tanugamanono power station near Apia. Due to age and other mechanical limitations, the plants have been derated to 8.07 MW and 6.20 MW for the hydro and diesel plants, respectively. Dry season hydro capacity is further reduced from 8.07 MW to 1.38 MW, as indicated in Annex 3.1 and summarized in Table 3. 1. The hydropower plants provided more than 50Z of energy generated in 1989. Table 3.1: UPOLU GENERATING CAPACITY (MW) Plant Installed Derated Dry Season Capacity Capacity Capacity -W-- Hydro Plant 8.27 8.07 1.38 Diesel Plant 8.18 6.20 6.20 Total 16.45 14.27 7.58 Source: EPC. 3.9 In addition, EPC has found it necessary to write off some 4.4 MW of diesel plant in the Tanugamanono power station during 1990-1991. This is due to both mechanical failures and accidents, and has denied the system much needed reserve plant capacity, especially in the dry season. 3.10 On Savai'i all EPC generating plant is diesel based (located at Salelolonga), although some energy generation contributions are made by on old wood waste-burning 1.5 MW steam plant in Asau operated by a private firm, Samoa Forest Products (SFP). Due to the age of the plant as well as institutional factors (logging licences) affecting the supply of resources, the contribution from the plant is unreliable. 3.11 EPC operates a 22kV primary network on Upolu which connects the widely dispersed hydro plants to the main Apia distribution grid and to the Tanugamanono diesel station. Secondary distribution is operated at 6.6kV and consumer distribution at 415/240V. Similar voltage levels are utilized on Savai'i where the primary lines are longer but more lightly loaded. 3.12 The reliability of the two systems has been poor since 1989. Additional to the write-off of diesel plant in the Upolu system, only one (Samasoni) of the five hydropower stations has operated reliably in 1990. The 1.6 MW turbine in the Fale ole Fee station was severely damaged in May 1990, due - 17 - to the failure of protection devices, and will be out of operation until 1992. Also, the Fuluasou plant has not operated since May 1988, and one machine at Lalomauga has been out of service since January 1990. Alaoa was also out of service for several months during 1990 as a result of landelips. Further operational restrictions have been caused by the unavailability for a considerable period of the 800 kW diesel unit at Tanugamanono due to overhaul. To reduce the extensive load shedding which has been necessary throughout 1990, EPC has hired a 1400 kW transportable diesel unit and another similar unit is planned to be hired. 3.13 In summary, during large parts of 1990 the situatior -,n Upolu was that - available EPC diesel capacity was reduced to 1,800 kW plus a 1,400 kW hired unit, - available dry season hydropower capacity was down to 510 kW, which totaled 3,710 kW including the hired unit, compared to a maximum demand of more than 7,000 kW. 3.14 On Savai'i, because of substantial damage from cyclone Ofa in 1990, much of the Salelolonga dieeal plant is now either unserviceable or under repair and a minimal power supply is being provided by a 750 kW hired plant. Arrangements have been made to replace the damaged plant with new diesel units as described below. System ExDansion 3.15 A substantial amount of generation expansion has already been committed, due to both earlier planned expansion and also because of the recent problems caused by natural calamities, accidents and maintenance difficulties. The Government/EPC has obtained IDA (International Development Association) financing under an existing multi-sector credit agreement for a new 3.5 MW diesel generating unit to be installed in the Tanugamanono power station. For the Savai'i system, emergency credit from ADB has been granted to supply two new 300 kW diesel sets in a new power house. Negotiations are also currently underway to allocate finance from an existing ADB multi-project loan for the rehabilitation of the Fale ole Fee, Sauniatu, Fuluasau, Samaso,1i and Alaoa hydro stations as well as of selected diesel sets at Tanugamanono. 3.16 The major planned generation project, for which construction commenced in September 1990, involves the development of the Afulilo scheme in the eastern part of Upolu. This will comprise a 4 MW generating station, based on a storage scheme. With the run-of-river plants meeting the wet season load, Afulilo will store water in that period to be utilized in the dry season. It is estimated that the scheme will contribute up to 24 GWh average energy annually to the Upolu grid, although in the initial years of operation its contribution may be limited to about half of this due to load restrictions. The project is being co-financed by several multinational institutions namely, the ADB, European Community (EC), European Investment Bank (EIB) and IDA, with ADB taking the lead role following its financing of earlier preparatory studies. 3.17 For Upolu, the addition of Afulilo plus other capacity developments means that dry season capacity (allowing for outages) will by the end of 1993 be - 18 - 9,130 kW, compared to an expected peak load of approximately 9,300 kW according to the base case projection. 3.18 In regard to uncommitted future expansion plans, a recently completed (1991) ADB system planning study has recommended various investment scenarios for the likely system load growths identified. A considerable number of studies on renewable energy sources for power generation have been undertaken in the past including a Master Planning Study in 1979 which identified a large number of hydropower projects. Other studies have covered wood-fired and copra oil-fuelled power stations. Due to the limited size of Afulilo, it is estimated that additional dry season generation will be needed in two years from the commissioning of the project (Annex 3.2). 3.19 For various reasons (principally land availability) biomass fuelled schemes previously recommended by EPC are not feasible. Attractive renewable options for future development are therefore restricted to hydro schemes which include storage, run-of-river and pump-assisted storage. Development of further storage schemes similar to Afulilo are considered impractical due to the porous soils and topographical features. A list of possible run-of-river and pumped storage schemes on Upolu is presented in Annex 3.3 which also shows capacities and preliminary energy cost estimates for the schemes. 3.20 Least cost generation development plans for Upolu have been investigated utilizing both reserve capacity reliability criteria and loss of load probability methods. The immediate future development of the system is dominated by the Afulilo hydro and the 3.5 MW diesel installation. Generally, the ADB system planning study shows that diesel generation is the preferred option in the planning period studied (to 2005). 3.21 Run-of-river schemes have low dry season output. Diesel remains least cost up to an oil price of US$25 per barrel or discount rates above 8%. At these values (combined), however, the Falese'ela run-of-river scheme becomes the preferred option. For the utilized 5% system growth rate and US$20 per barrel oil price, and assuming the 1991 and 1993 commissioning years for the 3.5 MW diesel and 4.0 MW Afulilo schemes, respectively, additional capacity will be needed in the critical year of 1992 which may be met by hiring another 3.5 MW diesel generator. Alternatively, the advance purchase of a 3.5 MW diesel generator, which is required in 1995, could be considered. Studies carried out by the ADB consultants have indicated that purchase of the diesel generator is the most attractive option. 3.22 In regard to hydropower, firm dry season hydro generation is available in the form of the Vaipu and Afiamalu pump-assisted hydro schemes. Afiamalu was earlier studied under ADB technical assistance but was found not to be economically attractive. A recommendation of the recently completed planning study is that preliminary studies be carried out on the Vaipu scheme as well as the top ranked run-of-river project. 3.23 For the Savai'i system, no hydro schemes have been identified to date which would contribute substantial energy to the system although two river basins (the Sili and Palauli) may warrant further investigations. Wood burning steam generation remains the only technically viable indigenous option and has in the past contributed significant--but now unreliable--supplies of energy to the Asau - 19 - system. A major barrier to the continuation of this supply is the lack of an agreement attractive to the producer, Samoan Forest Products (SFP). In the absence of firm renewable energy sources of generation, the only option for EPC rests with further diesel generation. Using similar reliability criteria as for the Upolu system, it is estimated that, for a projected lOZ annual rate of growth, augmentatior to the generation capacity will be required in 1993. A notional installation of one 600 kW unit has been recommended by the consultants; however, this may be too large given the size of the units presently on order (2x300 kW). 3.24 It is recommended that the SFP wood-fired option be followed up and formalized. Priority should be given to ascertaining the amount of power that may be obtained from SFP on a long term basis (i.e. taking into account forest resources, logging licences, plant capability etc.) and that proper purchase and tariff arrangements be drawn up between EPC and SFP. In addition, and in view of the primarily rural nature of the Savai'i system, it is recommended that EPC consider the relaxation of the recommended reliability criterion (two generating units out of service) and utilize a less rigorous criterion (one unit out) to lessen the capital investment requirements. 3.25 Rural electrification (RE) in Western Samoa is confined to the outer regions of Upolu and to most of Savai'i. EPC has been funding RE programs on both islands, with Government assistance, and expects this to continue up to 1993. Government assistance for RE has totalled WS$15 million to date and the current program is expected to be completed in 1991 although Additional funds are being sought from bilateral sources. Extensive rural electrification programs have been implemented in Savai'i over the last seven years and a majority (EPC estimate: 67Z) of the island's population now has access to power. From 1982 the number of consumers has increased threefold, from 812 to 2,457. It is estimated that these numbers will increase by about 300 a year in the near term and expand by about 5 Z p.a. thereafter. EPC has estimated that its contribution to RE programs (not including Government contributions) will range from WS$240,000/290,000 in 1990/91 down to WS$75,000 in 1993 for Upolu and WS$90,000/110,000 down to WS$25,000 for Savai'i. 3.26 In view of (a) the low reliability of the present systems due to numerous plant failures, and (b) the serious manpower and financial constraints that EPC faces (see below), the question of priorities needs to be addressed prior to the allocation of additional resources to RE, in particular since it is unclear to what extent the beneficiaries of this program are asked to cover costs. It is therefore recommended that this issue be included in the study on institutional strengthening of EPC that ADB is considering to finance (see below). Institutional AsDects 3.27 EPC has a total staff of 258 comprising 219 technical/skilled/unskilled and 39 accounting/administrative personnel. Of these, professional staff numbered 10 in 1990. Following the recent retirement of its expatriate general manager, the Government appointed a national to this position in January 1991. The deputy general manager, engineering position is currently vacant, as is the manager, generation position. Temporary arrangements have been made. - 20 - 3.28 Vital functions in EPC such as planning, maintenance and (to a lesser extent) operations have lagged in recent years due, in part, to insufficient staff and inadequate training at ma.agement, professional and lower levels. There are, for example, six vacancies in the engineering/technical positions including senior engineers/managers (3), resident engineers (2) and a foreman. EPC has had difficulty in attracting and holding the requisite staff. Up to about 1985, the majority of senior positions were held by expatriates. Since then, the Government has carried out a policy of Samoanization which has been quite strictly enforced and too swiftly implemented. 3.29 A solution to this situation is urgently required to prevent the further deterioration of EPC's assets, to improve the reliability of operations and to plan, finance, and implement major capital works. Several options have been suggested which include: (i) relaxation of Samoanisation; (ii) engagement of expatriate advisors (but retaining nationals in all key positions); (iii) contracting out to consultants/firms such functions as planning and plant maintenance; (iv) retaining project contracting firms to operate/maintain major investments (i.e. BOT (build, operate and transfer) schemes) or, alternatively, contracting out maintenance; and (v) privatization. 3.30 For the immediate future, relaxation of Samoanization may prove to be the only timely arrangement to fill management functions with a combination of options (iii) and (iv) necessary to overcome maintenance and operational deficiencies. Option (ii) may offer the most practical medium term arrangement especially if bilateral or other assistance can be obtained to finance two or three of the more vital positions. This arrangement appears to operate satisfactorily in two of the larger and smaller South Pacific power utilities and it is recommended that the Government consider this alternative with a view to approaching suitable agencies for assistance in the near future. 3.31 In regard to skilled tradesmen needed for the maintenance and operation of EPC's assets, it is noted that the number of personnel are presently adequate, although the level of skills is lower than required. Training is therefore necessary although, in the past, this has not reaped great dividends since highly skilled tradespeople are more inclined to emigrate. Wage levels and benefits, including the softening of rigid linkages to the Government salary structure, are in urgent need to be addressed to retain valuable staff. It is recommended that the Government give this and training requirements serious attention prior to implementation of the rehabilitation and expansion program under preparation. 3.32 The consequences of the situation described in the preceding paragraphs have been numerous plant failures and a critical shortage of generating capacity. The loss of sales due to power rationing and the high cost of hiring generators have led to fir.ancial losses for EPC and placed the utility in a serious financial situation. 3.33 Therefore, in addition to strengthening the staff, which is a number one priority, EPC must address the operational issues in order to meet the current generation problems. It must improve operational practices and maintenance procedures. Lack of proper procedures and inadequate execution of procedures where they exist are important factors in explaining most plant failures in the past. The lack of spares due to inadequate funds have also restricted egular maintenance. It is understood that the ADB is considering - 21 - additional technical assistance to EPC in the form of an institutional strengthening study to identify the means by which the corporation may improve its planning, cperational and maintenance practices. Such a study is strongly supported. Biomass Resources and SuDDlV 3.34 No biomass resource inventory exists for Western Samoa and data on fuelvood and biomasss residue supply are very limited. Some rough indications of biomass supply may, however, be inferred or calculated indirectly. 3.35 Coconut residues. The coconut palm is an integral part of the Samoan farming system and is used to supply food (both human and animal), drink, fuel, building materials, medicines and materials for decoration and the making of kitchen utensils. Most new land is being planted to coconuts, together with other crops, early in the farming cycle. 3.36 Coconut stemwood is potentially an abundant source of wood from senile trees. Some 45X of the estimated more than 4 million palm trees in the country are classified as senile (and require replacement). Thus, based on an assumed stem weight of 0.9 MT (56% m.c.w.b.),7/ 1.7 million MT of coconut stemwood are available as fuel or timber. But the feasibility of harvesting and processing these palms has not been determined and, moreover, the resistance of stemwood to "chipping" renders it unsuitable for household energy purposes. In a woodfuel context, it is the coconut husks and shells that are the main source of biomass energy. 3.37 In order to have a rough idea of the residue resource situation, the availability of biomass residues from agricultural and agroindustrial activities has been estimated. Basically, the supply of residues from these activities is a by-product of the consumption or processing of coconuts and to some extent wood. These activities to a large degree generate their own energy supply. 3.38 Total annual consumption of coconuts among households is estimated at some 115 million tons. Average consumption over the entire population is 0.7 nuts/person/day for human consumption and an additional 1.3 nuts/person/day as animal feed.8/ Assuming an average of 1.0 kg (air dry) residue per nut, this implies approximately 2.0 kg/person/day or a total of 115,000 NT/year of available residue (see Table 3.2). This figure compares, on a national scale, well with the estimated domestic biomass demand which, moreover, consists partly of residues and partly of fuelwood (Annex 2.1). 7/ Moisture content wet basis. 8/ "Western Samoa: Agricultural Census 1989". Government of Western Samoa, 1989. - 22 - Table 3.2: BTOMASS SUPPLY ESTIMATE 1989 Sector MT Domestic (coconut residues) 115,000 Copra Production 72,000 Timber Mill Wastes 13,000 Total 200t000 Sourcet Mission estimates. 3.39 The principal uses of coconut as an export commodity is in the production of coconut oil, coconut cream and copra. With very low international prices for copra, coconut oil has become by far the most important product. In 1989, 9,500 MT of coconut oil were produced from 20,600 MT of copra; 1,625 MT of copra were exported as such; and coconut cream production required some 2,000 MT of coconut. Assuming 3 MT of residues available per MT of copra, the preceding figures imply a supply slightly exceeding 70,000 MT of residues. 3.40 Together with residues from timber milling, a total of some 200,000 MT/year of residues are associated with the activities mentioned above. In conclusion, although only a partial and very approximate picture is available, biomass residues alone, leaving out fuelwood, can cover total biomass requirements by households and agro-processing industries, as shown in Chapter II. This does not preclude the existence of areas of less plentiful supply of biomass, in and around urban centers. But if prices of fuelvood are an indication of the relative balance between supply and demand (Chapter II), the situation appears not to have changed materially around Apia during much of the 1980s. 3.41 Net returns to labor for copra production have declined significantly due to low international prices, and exports of copra and coconut oil have fallen significantly with wide variations from one year to another. With increasing competition for land from other higher value commercial crops and the elimination of the STABEX 9/ price stabilization scheme for copra growers, the future of the export coconut product industry is highly uncertain. This could over the longer term have an impact on the coconut residue supply. Domestic coconut consumption and, therefore, the associated residue supply should be less affected by these factors. 3.42 Fuelwood. Of total forest area estimated in 1985 at 150,000 ha, some 55,000 ha is protected forest and perhaps an additional 30,000 ha is on steep terrain and not considered accessible.10/ This leaves some 60,000 ha 9/ An export earnings stabilization scheme. 10/ Western Samoa: Agricultural Sector Study". Asian Development Bank, 1985. - 23 - available for commercial exploitation, basically for the production of timber. Assuming an annual average increment of 5 m3/ha, gross timber yield is estimated at some 300,000 m3 annually. Compared to the estimated fuelwood consumption of 35,000 MT (60,000 m ), this figure is more of theoretical than practical interest, however, since its availability for fuelwood purposes depends, in part, on ownership, location and other uses of wood. In practice, the supply of fuelvood comes from scattered trees and shrubs on individual plots of land and from the gathering of dead branches and twigs. Wood surpluses arising from agricultural land clearance are probably another major source of firewood. The gross timber yield referred to above, however, illustrates that total wood resources are large compared to fuelwood needs and that consumption on a national scale appears to be sustainable. Biomass Proarams 3.43 A reduction in forest-covered areas is reportedly taking place at a rate of 1,000 ha/year due to land clearance for agricultural purposes. In response, community forestry projects and intercropping techniques have been initiated by the Forestry Division in the Ministry of Agriculture, Forestry and Fisheries. Villages and householders, particularly at the outskirts of urban areas, are being encouraged to plant fast-growing forest species for fuelwood and poles, with 50,000 seedlings being made available annually for the purpose. The growing of fuelwood in the vicinity of Apia is intended to relieve the pressure and subsequent degradation of water catchment areas caused by people collecting wood either for sale or to satisfy their own fuelwood needs. It is hoped that the use of intercropping techniques will result in a reduction of land cleared for shifting cultivation. 3.44 New Zealand has been involved in forestry assistance programs since the early 1970s. The program supports reforestation projects on Sa-ai'i and on Upolu. Funding for the next 3 years will be NZ$ 4.0 million, approximately the same as during the preceding 3 years. 3.45 Apart from the ongoing fuelwood projects, no immediate or near term policy or other measures appear to be necessary from an energy perspective. The present situation with respect to biomass supply for energy purposes in Western Samoa appears overall to be satjofactory. Moreover, this situation should not change in the foreseeable future, as biomass demand is expected to remain roughly at the present level. However, in view of (a) the high degree of dependence of households on biomass fuels, (b) the fact that local woodfuel shortages may appear independent of surpluses on a national scale, and (c) an uncertain future for copra and other exports of coconut products with possible negative consequences for the supply of residues, the Government through the Ministry of Agriculture, Forestry and Fisheries should monitor the situation and consider localized initiatives in cooperation with the users as the situation calls for. New and Renewable Energv Technolaies Solar Enerav 3.46 Western Samoa is located in a region with abundant sunshine. It is estimated that most parts of the country receives a daily average insolation of - 24 - over 5.0 kWhim2 .11/ Currently, this resource has two main applications: solar water heating and photovoltaic (PV) systems for rural lighting and telecommunication. 3.47 The extent of application of solar water heating in the commercial and industrial sectors or among urban households, is not known. Two major hotels have installed solar water heaters which reduces their electricity costs as well as the peak demand on the grid system, with beneficial consequences for both fuel and capacity costs. As the financial and economic viability of this technology is well demonstrated in the region, it is recommended that the potential for application in hospitals, restaurants, hotels and other commercial activities be investigated. The Energy Unit, in cooperation with the Electric Power Corporation, should initiate studies among the main potential users indicated and present the findings to them. Actual implementation should be left to the beneficiaries themselves. 3.48 Given the geography of Western Samoa, grid extension is a technically feasible option for the supply of electricity to the majority of rural households on the two main islands. Therefore, the potential application of PV systems is limited to small scale remote applications (offshore islands, marine signalling, telecommunications). Other Renewable Energv Technologies 3.49 There has been little systematic assessment or monitoring of the wind energy resource potential in Western Samoa. According to available meteorological records, the annual mean wind speed within the Pacific region is in the range of 2-6 m/s which is marginal in terms of potential cost competitiveness with other technologies.12/ Experience within the region with the technology is very limited, with no definitive demonstration of technical or economic viability within an appropriate operating environment. Per unit cost of electricity produced by these systems is likely to be higher than the existing energy conversion technology (diesel and hydropower) utilized in Western Samoa. Considering the presently limited technical and infrastructural capacity in the country and the resources now being devoted to hydropower development, low priority should be given at this time to wind technology. 3.50 In 1984, a proposal was advanced by EPC in collaboration with the New Zealand Government to establish a foreign financed 5 MW wood fired power station utilizing coconut residues, plantation fuelwood and senile palms. In addition to the plant equipment, investments would be required for a dedicated fuelwood plantation. The proposal was deferred, however, pending further investigations related to project viability, long-term security of fuel supply, fuel supply logistics and land acquisition for the fuelwood plantation. A similar project II/ "Photovoltaics in Western Samoa: Social Considerations for Rural Electrification." EPC, 1985. 12/ "An Overview of Renewable Energy Resources in the South Pacific Island Countries." Dr. S. Prasad, USP (paper presented at the Pacific Household and Rural Energy Seminar, Port Vila, Vanuatu, November 1990). - 25 - was proposed in 1985 as part of the EC Lome II Regional Energy Programme.13/ The project involved the installation of two 600 kW gasifier/diesel systems for rural electricity generation using coconut husks and shells. It was cancelled due to concern over fuel supply. 3.51 It is recommended that these technologies be not pursued at Government or EPC expense. There are no known successes in the region and a number of abandoned projects attest to the difficulties of making such installations technically and financially successful. 3.52 Greater success has, on the other hand, been achieved by an AIDAB/CHOGRM 14/ financed project involving the retrofitting of boilers and driers at three sites (Samoan Tropical Products, WESTEC Soap Factory,15/ and the Cocoa Board) with biomass burners/gasifiers and hot air generators. The project was implemented in 1984 with the involvement from a local equipment manufacturer. As a result, a reduction in fuel imports has been realized. Initiatives based on local supply of biomass wastes and proven technologies are supported but should be justified and implemented as a result of considerations by the potential users. 3.53 The monitoring and assessment of the seawave potential in Western Samoa is being carried out by the South Pacific Appl4.ed Geoscience Commission. The technical and economic viability of the technology has, however, not yet been demonstrated. It is recommended that the Government not consider the application of wave power in the country, even if the seawave potential were established. Only in the case where the foreign developer provides all the funding, manages the operation and undertakes the training of local perponnel for an extended period of time, should Western Samoa become involved in a new technology such as wave power. The country's limited financial and manpower resources dictate that it concentrate on existing and well-proven energy technologies. 13/ A regional program administered by PSED to install and monitor energy pilot projects in nine Pacific regional countries. 14/ Australian International Development Assistance Bureau; and Commonwealth Heads of Government Regional Meeting 15/ Western Samoa Trust Estate. - 26 - IV. POLICY ISSUES AND PRIORITIES Pricing Issues 4.1 Around two thirds of energy consumed, i.e., practically all biomass energy in Western Samoa, is not traded and hence pricing is not an issue. Pricing of commercial energy 16/ is administered and carried out by different government or government-controlled agencies. Thus, the prices of petroleum products are set by the Energy Unit in the Treasury (based on an approved formula), and power tariffs are proposed by EPC and approved by Cabinet after recommendation by the Treasury. A small amount of fuelwood is marketed in some urban centers and prices are established on the basis of supply and demand. The prices of petroleum products and electricity have fallen in real terms during the 19809. There are some indications that fuelwood prices in nominal terms may also have risen less than the general price level over the same period. 4.2 The Government should make use of energy pricing as the most important instrument of demand management, in order to increase energy efficiency and promote conservation. Since the public authorities can effectively influence the prices of both petroleum products and electricity through taxation and direct price stipulation, it is recommended that the Government adopt the principle that the users pay the full cost of the energy they consume.17/ This implies charging a price that includes capital replacement or expansion as required, adequate maintenance of the supply facilities, and full operating costs. In general subsidies should be eliminated, but where they are justified to certain users on social grounds, they should be made explicit and preferably form a separate part of the Government budget for social service. Petroleum Product Pricing 4.3 Mobil and BP are the main suppliers and their respective market shares are to a large extent determined by factors such as the fact that Mobil has been winning the Government's bi-annual fuel supply contract (including EPC's requirement) and that BP has a virtual monopoly on the aviation market (as owner and operator of the airport refuelling facilities). The Western Samoan market is small and isolated and the withdrawal of Shell from the ground market in 1990 implies reduced competition. Thus, monitoring of the petroleum industry is important. Furthermore, SIG is the sole supplier of LPG. It is unlikely that more companies will enter the Samoan petroleum market (and quite possibly not desirable in view of minimum costs required to operate in a small environment), but at the same time it is important that the two principals remain in the market. 4.4 In recognition of the market situation, wholesale and retail prices for the three prime consumer-sensitive products, gasoline, ADO and kerosene, are 16/ The term commercial energy here denotes petroleum products and electricity. 17/ The Government appears to be willing to apply the principle of cost recovery in other sectors, as indicated by the policy announcement by the Minister of Finance in 1990 in relation to the agricultural sector. - 27 controlled by the Government through the Energy Unit. The role of the Unit is limited, however, to verifying the build-up of each company's landed and distribution costs which, together with profit margins, form the basis for the approved price for each company. Prices in the market are in practice determined by the company with the lowest costs. Annex 4.1 shows a sample price build-up. The freight cost component is reasonable and the transshipment costs to Apia zero because of the ability of MR vessels to discharge at Apia. The retail mark-up on gasoline, on the other hand, seems high, compared to other countries in the region. 4.5 The present system implies that variations in the international prices for products are reflected in the domestic market prices, which is appropriate. The official prices of the three products mentioned are the same on all islands, however, which means that there is a subsidization of consumers outside the main center. A general price review is recommended and the extent of this subsidization should be determined in order to decide whether or not to differentiate prices on the basis of differences in distribution costs. 4.6 The limited degree of competition and the restricted capacity of the Energy Unit to examine the cost basis of the oil companies are the main reasons to proceed with a study of petroleum prices. It is recommended that a full price review of all the major products, including LPG, be carried out. This review should comprise an analysis of the basis for landed cost and of the price formula itself, a verification of the oil companies' cost elements (which should also be audited on a regular (annual) basis), and an assessment of the level of government charges (see below). At the same time there is a clear need to build up the Government's in-house expertise and capacity to carry out regular price control, as thij work has for some years been contracted to a consultant. 4.7 Government charges constitute 23X, 22% and 102 of retail prices for gasoline, diesel and kerosene, respectively. A balance needs to be struck for the various types of fuels between conservation, competitiveness of the Samoan economy and social concerns. The first consideration would imply high taxes and prices whereas the last two imply low taxes and prices. Since industry and households are minor users o. petroleum products compared to transport and power generation, there appears to be a case for relatively high taxation and prices of gasoline and ADO based on conservation and fiscal considerations. Government, -harges and conservation aspects should be part of the price review. Power Tariffs and Utility Finance 4.8 EPC charges a single flat rate tariff for all consumers. From July 1983 to July 1990 the tariff remained at 28.1 sene per kWh. The cofinanc'ars of the Afulilo project considered that the lack of tariff adjustments since 1983 was the root cause of EPC's poor financial condition. As part of the loan covenants for the project, the Government commissioned a tariff and asset revaluation study, which was published in September 1990. 4.9 The report recommended the introduction of a power tariff based on the long run marginal cost (LRMC) of supply for both the Upolu and Savai'i systems. The calculations were based on the development of the Afulilo scheme in Upolu and then diesel generation, with purely diesel generation for Savai'i. - 28 - 4.10 To conform with the Government's policy, the cofinanciers agreed that a single tariff should apply to both systems, implying a subsidization of Savai'i consumers by the much larger Upolu system. Based on a financial performance target of 5% rate of return on revalued fixed assets for EPC, it was found that the tariff needed an adjustment from i July 1990 of 15X on top of the LRMC. A tariff increase was recommended which would mean an effective rise of 29% in the average tariff for the year. The recommended tariff incorporated the following: (a) a fixed charge per day; (b) unified standard charges for Upolu and Savaili; (c) a special charge for major consumers, including peak/off peak charges;le/ and (d) a dry season and wet season tariff for Upolu. 4.11 In addition, the introduction of a monthly automatic fuel price adjustment clause was proposed amounting to 1 sene per kWh for every 3 sene per liter change in the fuel price. The recommended tariffs are summarised in the table below. Table 4.1: RECOMMENDED TARIFFS Dry Season Wet Season Standard Tariff Fixed charge, sene/day - single-phase supply 31 31 - three-phase supply 68 68 Energy charge, sene/kWh /a 42 33 Special Tariff /b Fixed charge, sene/day 68 68 Energy charges, sene/kWh /L - peak 46 33 - off peak 23 23 /a Subject to adjustment for fuel price. Lb For major consumers only. Source: Tariff and asset revaluation study. EC, 1990. 18/ The study perceived that there was no justification for differentiating between different consumer categories and, therefore, simple single rate energy charges at common tariff rates were formulated for the majority of consumers on both Upolu and Savai'i. For major consumers, who account for only one per cent of energy consumption, peak and off-peak energy charges were formulated. - 29 - 4.12 The Government approved a 14.3% increase in the tariff to 32.1 seneikWh from 1 July 1990 after receipt of the consultant's report. No change in the structure itself of the tariff was made, however, since it was considered that the introduction of a fixed charge would be too great a burden on low income groups. As a result of the rise in oil prices caused by the Gulf crisis, the tariff was increased by a further 25Z to 40 sene/kWh on 1 November 1990. This resulted in an average tariff for 1990 oi 30.5 sene/kWh compared to the consultant's calculated requirement of 56.0 sene/kWh. This tariff is insufficient in relation to EPC present serious financial situation and future capital expenditure requirements. 4.13 EPC's financial statement for 1989 and preliminary accounts and financial projections for 1990 and 1991, respectively, indicate increasing losses for the reasons mentioned earlier. Losses in 1989 were WS$1.8 million and may have increased to three or four times that amount in the subsequent years, despite the tariff increase in 1990 to try to get the financial situation under control, the utility must implement cost-saving measures in addition to dealing with the generation problems. 4.14 While EPC does rnot have any financial performance targets set out in its Act, certain targets have been covenanted by multilateral and other donors who have assisted EPC with the financing of the ongoing Afulilo project and previous projects whose loan agreements are still current. EPC's performance targets are: (a) a rate of return such that a minimum annual return, on net fixed assets, of at least 5% is achieved by 1990 and at least 8% by 1995; (b) a debt service requirement such that internal cash generation must exceed 1.3 times EPC's debt service; and (c) a self-financing ratio such that EPC's gross internal cash generation after debt service should be equivalent to not less than 20X of its capital expenditure based on a five year moving average. 4.15 Using estimates of capital expenditure derived from their recommendations in the system development study, the ADB consultants analyzed the tariff requirements needed to achieve the specified covenants, specifically the all-encompassing rate of return target and the debt service commitments. Capital expenditures over the ten year planning period are estimated to be most heavy during 1991 and 1992, primarily due to to the construction of the Afulilo hydro plant, new diesel procuremer.t and diesel rehabilitation. Capital requirements will range. from WS$45.5 million in 1991, WS$38.2 million in 1992 to WS$2.2 million in 1993 (all 1991 prices). These expenditures will place considerable strain on EPC taking into account its present poor technical and financial situation. The consultants therefore concluded that the achievement of the covenanted 8% rate of return is not practicable in the near term and even the - 30 - target of 5Z may only be attained over a longer time frame due to the difficulty of implementing the needed tariff increases.19/ 4.16 EPC's financial situation and tariff structure need further review by the financing agencies with the intent to consolidate the corporation's finances and permit it to adequately rehabilitate its plant and provide for future investment requirements. It is recommended that the Government, in cooperation with the financing agencies, consider acceptable formulas for tariff levels and structure that, on the one hand, enable EPC to meet the financial and operational requirements that lie ahead and, on the other hand, take into consideration the ability to pay of the different consumer categories. This is important not only with the upcoming generation rehabilitation and expansion program but also in view of the plans to extend electricity to new rural areas on Upolu and Savai'i. Rezulatory Issues 4.17 Government regulation of the oil industry needs improvement. As far as product quality standards are concerned, regulations or legislation are required to assure that all products imported ) Western Samoa meet international standards. At present, while all products are believed to meet these standards there is no legal requirement that they do so and control of the quality of imported products is currently only being performed by the oil companies themselves. It is therefore recommended that the Government introduce a Petroleum Standards Act and establish procedures for monitoring adherence to the standards.20/ On the other hand, the country should avoid paying too much for its gasoline, to the extent that the quality of the product being supplied is superfluous to the country's needs. Thus, it is possible that present gasoline octane rating is too high. A regional review of this issue is being conducted by the Forum Secretariat. 4.18 There are at present no requirements that petroleum storage and distribution facilities meet any minimum standards of safety. Although installations appear to be in a reasonable condition, it is recommended that the Government introduce and monitor standards to reduce the risk of accidents to people and to the environment. It is recommended that the country request the Forum Secretariat to complete its regional petroleum storage and handling standards and make the necessary preparations for the enforcement of these or similar standards. Monitoring against physical standards (engineering, quality, quantity and safety) cot.d be carried out by the Public Works Department in consultation with the Energy Unit. 19/ For instance, under certain capital funding arrangements, tariff increases in real terms to meet a 5S target by 1993 would need to be 17% in 1992 and 16% in 1993. However, tariff increases of 5Z in each year to 1994 result in a rate of return (ROR) of 4.6Z in 1994 and 5.2Z in 1995. 20/ A relatively simple procedure would be for the relevant institution to send samples abroad a few times per year for assessment. - 31 - Environmental Issues 4.19 The Environment Division was established early in 1990 within the Ministry of Lands and Environment. An Environmental Planning Act was passed in 1990 and forms the basis for the establishment of the Division and includes provisional legislation. An Environmental Pollution Control Act is expected to be passed by the Government in 1991. The Asian Development Bank and New Zealand are providing technical assistance to strengthen the Environment Division and to develop an environmental management program for land and marine resources in the country. 4.20 One of the primary tasks of the Division should be to develop and implement an Environmental Management Plan (EMP) to provide a framework for the assessment and moniroring of environmental aspects of energy projects and programs to ensure conformity with established regulations. It is recommended that the South Pacific Regonal Enviornment Programme (SPREP) be approached for assistance in this respect.21/ 4.21 The implementation of the EMP will in principle include the review by the Division of all energy projects. Where there are doubts about about the quality or coverage of the environmental impact assessment, the Division should be empowered to request donor assistance for carrying out further studies. It is also recommended that the Division be provided with ths -resources and authority to monitor the implementation of energy projects to ensure that actions and precautions proposed in the environmental assessment are carried out. Where these tasks are beyond the capacity of the Division, which at present is very limited in terms of manpower and financial resources, donors should be approached to provide the necessary support. Petroleum Subsector 4.22 In addition to standards for petroleum storage and distribution, the country needs environme..tal standards. Proper procedures and facilities to prevent or handle emergencies, spills and product contamination have to be developed and the current indiscriminate and hazardous disposal of waste oil and ballast and bilge water needs to be rectified. For example, petroleum contaminated effluent is discharged into public areas, bunds are too low to be effective, bund floors are permeable, and isolation between bulk storage tanks is inadequate. Further, EPC needs assistance to correct its current waste oil disposal methods. Training in the detection, monitoring and clean-up of environmental hazards and spills is also required. Finally, contingency plans for land or sea accidents must be developed. It is recommended that SPREP be requested to advise and assist the Government on the environmental issues indicated above. Electricity Subsector 4.23 EPC has constructed several run-of-river plants that, being essentially pipeline projects, had little effect on the surrounding environs. The Afulilo 21/ By early 1992, SPREP will move to Apia. The new location should result in better access to sound enviornmental advice. - 32 - project under construction is a storage scheme which will produce a reservoir if 10 million m3 capacity, approximately 2.5 km long by 1.5 km wide. The reservoir will inundate a swamp area and a small area of tropical forest. While existing vegetation communities will be lost, it has been confirmed that no rare or endangered species of flora or fauna will be jeopardized. Effects of the scheme should therefore be limited to changes in flow regimes in streams, changes in water composition in the reservoir due to decaying matter and the effect of this on reef areas in Fagaloa Bay. Mitigating measures have been recommended by the project consultants and the loan documents provide covenants to ensure that watershed management programs are implemented. 4.24 In regard to EPC's diesel generation plants, cooling water and other run-off is discharged from Tanugamanono power station in Apia into a stream which runs through the centre of Apia and discharges directly into Apia harbor. Since considerable fuel and lubrication oil spillage is flushed into the stream during rain storms, there have been many complaints from residents on the consequential pollution of the river and harbour. It is recommended that the forthcomming ADB Institutional Strengthening Study for EPC also investigate measures to reduce this pollution. This study should also review the implementation of the Afulilo reservoir area management program to obviate deleterious effects on the operation of the scheme and, also, to avoid complaints from the population on apparent damage to the environment. - 33 - V. INVESTMENT AND TECHNICAL ASSISTANCE PRIORITIES Sectoral Plannina and Coordination 5.1 The principal objective of an integrated energy policy--and therefore the main task of the central energy units--is to provide a balanced approach between energy resource development and supply, on the one hand, and energy conservation, on the other, in order to satisfy the basic energy needs of the population and to sustain national economic growth. 5.2 The main shortcomings of present energy management in Western Samoa lie in the low priority given by the Government to the overall coordinatic- of the sector and the lack of focus on the important energy issues requiring the attention of some central authority or possibly governm-nt intervention. In order for the Government to play a meaningful role in relation to the sector, its scope of involvement should be broadened and the functions to be carried out by the central energy institutions should be defined. This has implications in terms of manpower and financial resource requirements, on a moderate scale. 5.3 The present tasks of the Energy Unit are basically limited to control of petroleum prices and some petroleum supply issues. The narrow scope of the unit, the very modest resources allocated to it (it has a staff of one person working only part-*ime on energy (petroleum matters), and the fact that the national body with clear authority over energy policy, the Energy Committee, has not convened for several years, are factors that reflect the ad-hoc attitude of the Government with respect to energy matters. The present involvement is basically one of reacting to perceived crises rather than defining priorities and developing policies and plans of action aimed at dealing with the short and long term issues in the sector. 5.4 On this background, changes are suggested and recommendations are made with respect to institutional matters in the energy sector, as outlined below. The EnerRy Committee 5.5 To provide a national perspective on energy matters and to ensure overall harmonization of policies and investments, the Energy Committee should be revived and assume its responsibility for formulating policies and reviewing all price and major investment proposals before submission to the Cabinet. Its membership should be increased to include public representatives of all energy subsectors and other energy-related institutions. The Committee would thereby be in a position to ensure coordination at the highest level. There are two pre- requisites for the proper functioning of the Committee. First, it will need a secretariat with the necessary capacity and skills to come up with sound and well-documented proposals for consideration. The Energy Unit, possibly reinforced by the Economic Research Unit in the Treasury, should provide the secretariat. Second, the Committee should be given a sufficiently wide mandate and the necessary authority to deal with energy matters at the highest level. The Energv Unit 5.6 The basic task of the Energy Unit chould be to provide a framework within which the subsector institutions operate by (i) formulating policy - 34 - proposals to the Government on energy- and energy-related matters, (ii) overseeing the implementation of adopted policies and measures, (iii) providing guidelines, advice, information and other types of services to the subsector- and other energy-related institutions, and (iv) ensuring coordination within the sector. The Unit should, however, not become involved in or directly responsible for the implementation of energy projects and programs. 5.7 In relation to the electricitV subsector, the responsibility for operation and maintenance of the systems should rest with EPC. Similarly, planning of the expansion of the supply system and implementation of projects should lie under EPC which in principle operates according to commercial criteria and therefore must be held accountable for long term development decisions and their implementation. The Energy Unit should, however, provide EPC with information on possible non-conventional options to thermal power generation when expansion or the potential for diesel substitution is considered. It should arrange data collection, organize feasibility studies for such alternatives, and provide the initial donor contacts for studies and project implementation. The Unit should, moreover, monitor the following: (i) the development program of EPC prior to submission to the Energy Committee to ensure it is least cost and timely, (ii) the financial position of the utility and its ability to carry out the development program, and (iii) EPC's adherence to technical standards. As part of the overall coordination of energy prices, EPC would consult with the Energy Unit prior to tariff changes. The Unit would, however, in many cases, have to commission consultancy studies or advice on these matters due to their scope and complexity. With scarce local manpower resources with the necessary qualifications and the relative infrequency of larger energy projects requiring special competence, it would be appropriate to hire short-term external expertise. The Government should consider approaching one of the locally represented donor countries for a revolving fund for this purpose. 5.8 At present, the involvement of the Energy Unit in the petroleum subsector is limited. However, acting as adviser to the Government on petroleum policies and their implementation should be one of its main responsibilies. In addition to petroleum pricing, the adequacy of storag^ and distribution facilities, security stocks, and public fuel purchases are areas in which the Unit should be engaged and it should maintain a dialogue on behalf of the Government with the oil companies on these issues and, where necessary, commission studies (e.g., on storage capacities). Physical standards and fuel quality, on the other hand, should be monitored by the Public Works Department and the Ministry of Trade, Commerce, and Industry, respectively. It is recommended that the Energy Unit be responsible for establishing a petroleum data base and that its staff be given training through RPU to enable it to provide information and advice on petroleum matters in general to other government entities. One particular area is assistance with negotiations of public fuel purchases. 5.9 In the area of renewable energy technologies, the Energy Unit has a role to play in assessing, filtering and soliciting donor projects. The potential contribution of these technologies to the energy needs of the country is generally modest, in particular in relation to their manpower and financial demands. The Energy Unit should examine all donor propositions to establish the technical maturity and economic viability of renewable energy projects, screening - 35 - out those which are of a speculative or experimental nature, as well as those which have high recurrent manpower and financial costs. When necessary, the assistance of regional bodies with experience in the field should be requested. The Unit should assess projects to ensure that the resources for their continued maintenance and repair, and eventual replacement, are available in the country or will be provided by the donor agency concerned. 5.10 At present, EPC has general responsibility for eneray conservation but, although the utility can be a major contributor through measures to reduce losses and specific diesel consumption of its plants, the overall responsibility for organizing initiatives among energy producers and users naturally falls on the Energy Unit. The latter should therefore be assigned the task of initiating campaigns to raise public awareness and, with outside assistance, undertake energy audits and energy surveys, thereby identifying measures and costs and presenting findings to the beneficiaries for subsequent implementation by the latter. It should also be the taker of initiatives with respect to energy savings in government buildings and vehicles. 5.11 In the field of biomass and household energv the Energy Unit should monitor the situation with respect to the demand and supply of woodfuels and conr-'der localized initiatives in cooperation with the users, as the situation may call for. It should, however, in this respect basically rely on and liaise with the Ministry of Agriculture, Forestry and Fisheries and other bodies more directly involved in these matters. Staffing of the Energv Unit 5.12 The location of the Energy Unit in the Treasury has historical reasons and there are alternatives such as the Planning Department in the Prime Minister's Office. However, with the limited capacity of the Planning Department, the links of the Energy Unit to other units in the Treasury, and the involvement of senior officials in the Treasury in energy matters, it is recommended that for the present the Unit should remain where it is. The present staffing of the Unit is, on the other hand, quite indaquate. Only by developing its own internal capabilities will the Energy Unit be in a position to carry out its tasks as outlined above and to serve as a body that can prepare energy matters for consideration by the Energy Committee. 5.13 It is recommended that the staff of the Energy Unit consist of: - an energy/petroleum planner who will be responsible for the overall and more technically oriented issues related to power, petroleum, new and renewable energy technologies, biomass fuels, and energy conservation; - an energy officer with background in economics who will advise on pricing matters, carry out economic assessments, financial evaluations and general data analyses; and - two trainees to work, inter alia, on building up and maintaining data bases, assisting with the planning of energy conservation measures, and following up on technical standards within the petroleum and electricity subsectors. - 36 - 5.14 For a period of at least two years, the Unit will require the support of a senior energy expert with a technical background combined with a sound understanding of economic and financial issues. This person wculd head the Energy Unit and be responsible for developing the local capability in energy planning and management. One of the main tasks of such a person would be to prepare and monitor the implementation of a training program for the staff. This should be coordinated with the training of personnel involved in energy matters in other government agencies. It is likely that the energy expert would have to be found (and funded) externally and it is therefore recommended that the Government approach suitable technical assistance agencies. The Government, in return, would have to commit resources to fund the local positions and provide suitable candidates for them. Power Subsector 5.15 Based on the least-cost development ilan drawn up early in 1991 by the ADB consultants, a notional capital investment program for EPC has been outlined which includes generation, transmission and distribution augmentation and rehabilitation. For the period 1991 to 1995 the following projects/programs have been identified with associated costs and financiers indicated. Table 5.1: CAPITAL INVESTMENT PROGRAMS FOR EPC Project/Programs Cost (WS$ million) /a Financiers Afulilo hydropower 61.01 ADB/IDA/EEC/EIB Hydro rehabilitation 6.87 ADB Upolu 3.5HW diesel No.12 6.45 IDA Upolu " " No.13 6.45 Savai'i diesels (2x300kW) 1.86 ADB Savai'i diesel (1x600kW) 1.86 Distribution 1.11 EPC Total 85.61 /a 1990 price level. Source: Mission estimates. 5.16 In addition to these projects, totalling some WS$86 million, the Government wishes to continue its rural electrification program and is seeking external assistance of about WS$32 million to assist in the financing of a WS$37 million program to 1995. As indicated, it is strongly recommended that the technical, institutional and financial problems of EPC be addressed prior to further RE development. 5.17 Technical assistance to EPC which has been identified earlier or is being proposed now includes: _ 37 - - EPC institutional strengthening study (US$280,000) to advise on aspects of planning, operations and maintenance; - a hydropower development study (US$400,000) to arrive at a final ranking of the most promising candidate schemes in the Upolu system and a feasibility study of the most economic alternative; and - a diesel expansion feasibility study (US$150,000) to determine the requirements (optimization of diesel unit ratings and the status of existing power house facilities and services) prior to the purchase of the second 3.5 MW unit for Apia and the unit(s) to follow the ADB financed 2x300 kW units for Savai'i. 5.18 Funding arrangements for EPC's development and rehabilitation program in 1991-1995 are now fairly well defined except for the second 3.5 MW diesel set for Apia. The need for a feasibility study for this unit has to be established, particularly in regard to power station facilities, possible rehabilitation of other plant or the hire of additional plant for the critical period prior to Afulilo's commissioning. A common strategy among all interested donor agencies to develop a practical solution for the short term period is urgently required and it is recommended that the Government take an initiative in this respect. Petroleum Subsector 5.19 The major investment requirements will be covered by the private oil companies which are the main agents in this subsector. 5.20 The priority technical assistance requirements in the subsector are as follows: - long-term institutional support to the Energy Unit to further develop in-house capabilities with respect to petroleum pricing, negotiations, and analyses, and with the establishment of a data base; - a review of the price formula for petroleum products (cost elements and the question of price differentiation according to domestic distribution costs), a verification of the oil companies' costs, and an assessment of government charges; - an assessment of supply arrangements and dual price monitoring after the commencement of Finaneco; - establishment of engineering standards for storage facilities and quality standards for petroleum products; training of staff in monitoring adherence to standards; engineering audit of present storage and port facilities outside Upolu; - a study of the adequacy of existing storage facilities against forecast demand and the need for strategic reserves; and - establishment of contingency plans for dealing with oil spills and accidents; procedures for dealing with waste oil; training of personnel in detection, monitorint and clean-up of spills. - 38 - 5.21 A request for the above assistance should be made to appropriate agencies such as the Forum Secretariat, that have the resources to carry out or help organize the outlined tasks. WESTERN SAMOA ISSUES AND OPTIONS IN THE ENERGY SECTOR Treasury M INIStER| Financial Secretry Dep. Secretary -Financ Dep. Secretary - Projects A Operationsl l l l l | Asst. Secretary | | St.Asst. Secrtetry rControle o Government Admi n. Seecs| 5Economics Projects,| of Stores LPrinter| Economic Re-|_ _ f ~~~~~seanrch/Policy| Note: Organization structure under consideration by the Government February 1991. Levels on the chart do not necessarily deonote equal seniority. Source: treasury. WESTERN SAMOA ISSUES AND OPTIONS IN THE ENERGY SECTOR Energy Balance for Western Samoa, 1989 (1,000 TOE) Coconut Total Hydro- Total Total Fuelwood residues biomass electricity Electricity GasoliLe Jet Al Kerosene ADO Avgas LPG petroleum energy Primary Supplies Production 15.12 48.18 63.30 5.81 69.11 Imports 10.34 8.51 1.57 15.68 0.23 0.14 36.47 36.47 0 4 GROSS AVAILABLE 15.12 48.18 63.30 5.81 10.34 8.51 1.57 15.68 0.23 0.14 36.47 105.58 Conversions/Losses Public Power Genration (0.30) (0.30) (5.81) 11.95 (5.84) (5.84) (0.00) Transformation LosseslStation Use (8.23) (8.23) Transmission/Distribution Losses (0.50) (0.50) NET SUPPLIED 14.82 48.18 63.00 0.00 3.22 10.34 8.51 1.57 9.84 0.23 0.14 30.63 96.85 Final Consumption Domestic 9.66 30.36 40.02 0.98 1.57 0.14 1.71 42.71 Transport 10.34 8.51 9.84 0.23 28.92 2;.92 Agro end Other ludustries and Services 5.16 17.82 22.98 2.24 25.22 TOTAL 14.82 48.18 63.00 3.22 10.34 8.51 1.57 9.84 0.23 0.14 30.63 96.85 Sources Mission estiates. - 41 - ANNEX 2.2 WESTERN SAMOA ISSUES AND OPTIONS IN THE ENERGY SECTOR Petroleum Products Annual Sales Volumes 1984-89 1984-89 Products 1984 1985 1986 1987 1988 1989 X increase ------------------------------ kl -__________________ Gasoline 9,375 9,731 10,077 11,469 11,428 12,801 6.4 Jet fuel 2,991 4,525 5,229 8,210 8,799 9,687 26.5 Kerosene 1,505 1,565 1,545 1,709 1,759 1,822 3.9 ADO 15,172 17,032 13,594 14,914 15,989 18,251 3.8 Lubes 573 378 479 530 568 563 0 Avgas 130 122 125 136 239 300 18.2 Solvent 186 296 256 283 229 328 12.0 LPG n.a. 189 n.a. 207 n.a. 230/a - Total 29,932 33,838 31,305 37,458 39,011 43,982 8.0 /a Mission estimate. n.a. = not available. Source: PEDP, Fiji. - 42 - ANNEX 2.3 WESTERN SAMOA ISSUES AND OPTIONS IN THE ENERGY SECTOR ELECTRIC POWER CORPORATION Electricity Statistics, 1983-1989 1983 1985 1987 1989 Gener. Capacity Installed (kW) /a 16,782 20,282 20,863 21,990 of which: Hydro 5,000 8,500 8,270 8,270 Diesel 11,782 11,782 12,593 13,720 Production (GWh) 31.91 35.88 40.22 44.07 of which: Hydro 12.12 24.41 23.83 23.25 Diesel 19.79 11.47 16.39 20.82 Sales (GWh) 25.24 29.70 33.76 38.12 of which: Commercial 10.55 12.81 14.12 15.84 Domestic 7.34 7.86 9.73 11.61 Industrial 3.37 3.72 3.80 4.31 Others 3.98 5.31 6.11 6.36 Distribution Losses (Z) 17.6 15.4 14.4 12.0 /a Generating capacity are nameplate ratings only. Actual machine capacity are derated depending on machine age and cooling efficiency. Source: Electric Power Corporation. - 43 - ANNEX 2.4 WESTERN SAMOA ISSUES AND OPTIONS IN THE ENERGY SECTOR UDolu Power System Performance. 1970-1990 Maximum Energy Energy Losses Energy Energy Sales Load Year Demand Generation (GWh) (%) a/ Sales Growth p.a. Factor (MW) (GWh) (GWh) (Z (2) 1970 2.40 11.20 2.60 23.2 8.60 11.7 53.27 1971 2.77 12.80 3.10 24.2 9.70 12.8 52.75 1972 3.33 15.49 3.79 24.5 11.70 20.6 53.10 1973 3.74 18.18 4.18 23.0 14.00 19.7 55.49 1974 3.75 18.11 3.78 20.9 14.33 2.4 57.14 1975 4.17 20.41 4.47 21.9 15.94 11.2 55.87 1976 4.51 22.51 5.00 22.2 17.51 9.9 56.98 1977 4.86 24.87 5.37 21.6 19.50 11.4 58.42 1978 5.48 28.47 6.50 22.8 21.97 12.7 59.31 1979 5.78 31.43 7.40 23.5 24.03 9.4 62.07 1980 5.76 30.96 7.23 23.3 23.73 -1.1 61.36 1981 5.60 29.79 5.33 17.9 24.46 3.1 60.73 1982 5.56 30.28 5.80 19.2 24.46 0.0 62.17 1983 5.74 31.10 5.67 18.2 25.43 3.9 61.85 1984 6.15 32.95 5.35 16.2 27.60 8.5 61.16 1985 6.26 34.76 5.98 17.2 28.70 4.3 63.49 1986 6.37 35.95 5.91 16.4 30.04 4.4 64.43 1987 6.97 38.25 6.17 16.1 32.08 6.8 62.65 1988 7.37 41.28 7.84 19.0 33.44 4.2 63.94 1989 7.76 41.91 5.77 13.8 36.14 8.1 61.66 19901b 7.24 39.72 5.41 13.62 34.31 -0.5 62.67 /a System and station usage losses combined. /b Results for 1990 are estimates based on 10 months figures. Source: EPC; ADB Draft Report. ANNEX 2.5 - 44 - WESTERN SAMO ISSUES AND OPTIONS IN THE ENERGY SECTOR Savaii Power System Performance. 1979-1990 Maximum Energy Enerzv Losses Energy Energy Sales Load Year Demand Generation (GWh) (Z) /a Sales Growth p.a. Factor (kW) (GWh) (GWh) (X) (Z) 1979 /b 193 0.469 0.188 40.1 0.281 - 28 1980 270 0.729 0.183 25.1 0.546 94.3 31 1981 263 0.801 0.052 6.5 0.749 37.2 35 1982 293 0.898 0.130 14.5 0.768 2.5 35 1983 280 0.883 0.069 7.8 0.814 6.0 36 1984 298 0.853 0.053 6.2 0.800 -1.7 33 1985 280 1.017 0.173 17.0 0.844 5.5 41 1986 552 1.865 0.415 22.3 1.450 71.8 39 1987 526 1.972 0.417 21.2 1.555 7.2 43 1988 /c 525 1.491 -0.456 -33.1 1.947 25.2 32 1989 617 2..L63 0.179 8.3 1.984 1.9 40 1990 Id 722 2.531 0.448 17.7 2.083 5.0 40 .La Includes system losses plus station usage. /b First year of operation of Salelologa system. Le Asau system connected to Salelologa system. /d Results for 1990 are estimated based on 10 months figures. Source: EPC; ADB Draft Report, 1991. ANNEX 2.6 -45 - WESTERN SAMOA ISSUES AND OPTIONS IN THE ENERGY SECTOR Load Prolections for Upolu System Maximum Energy Energy Losses Energy Energy Sales Load Year Demand Generation (GWh) (Z) /a Sales Growth p.a. Factor (MW) (GWh) (GWh) (Z) (X) 1989 7.8 41.91 4.98 13.8 36.14 5.0 61.7 1990 8.2 44.76 6.01 13.4 37.95 5.0 62.7 1991 X.5 46.82 6.13 13.1 39.85 5.0 62.7 1992 8.9 48.97 6.25 12.8 41.84 5.0 62.7 1993 9.3 51.23 6.38 12.4 43.93 5.0 62.7 1994 9.8 53.60 6.51 12.1 46.13 5.0 62.7 1995 '.0.2 56.09 6.64 11.8 48.43 5.0 62.7 1996 10.7 58,70 6.77 11.5 50.85 5.0 62.7 1997 11.2 61.43 6.91 11.2 53.40 5.0 62.7 1998 11.7 64.30 7.05 11.0 56.07 5.0 62.7 1999 12.3 67.31 7.20 10.7 58.87 5.0 62.7 200 12.8 70.46 7.35 10.4 61.81 5.0 62.7 2001 13.4 73.77 8.87 10.2 64.90 5.0 62.7 2002 14.1 77.32 9.17 10.0 68.15 5.0 62.7 2003 14.8 81.18 9.63 10.0 71.56 5.0 62.7 2004 15.5 85.24 10.11 10.0 75.13 5.0 62.7 2005 16.3 89.50 10.61 10.0 78.89 5.0 62.7 /a System losses only, excludes station usage. Source: ADB Draft Report, 1991. ANNEX 2.7 - 46 - WESTERN SAMOA ISSUES AND OPTIONS IN THE ENERGY SECTOR Load Proiections for Savaii System Maximum Energy Energy Energy Sales Load Year Demand Generation EnerRy Losses Sales Growth p.a. Factor (MW) (GWh) (GWh) (%) /a (GWh) () (Z) 1990 0.68 2.52 0.37 15.0 2.08 10.0 40 1991 0.75 2.77 0.40 15.0 2.29 10.0 40 1992 0.82 3.05 0.45 15.0 2.52 10.0 40 1993 0.90 3.35 0.49 15.0 2.77 10.0 40 1994 0.99 3.69 0.54 15.0 3.05 10.0 40 1995 1.09 4.06 0.59 15.0 3.36 10.0 40 1996 1.20 4.46 0.65 15.0 3.69 10.0 40 1997 1.32 4.91 0.72 15.0 4.06 10.0 40 1998 1.46 5.40 0.79 15.0 4.47 10.0 40 1999 1.60 5.94 0.87 15.0 4.91 10.0 40 2000 1.76 6.53 0.95 15.0 5.40 10.0 40 2001 1.94 7.18 1.05 15.0 5.94 10.0 40 2002 2.13 7.90 1.15 15.0 6.54 10.0 40 2003 2.34 8.70 1.27 15.0 7.19 10.0 40 2004 2.58 9.56 1.40 15.0 7.91 10.0 40 2005 2.84 10.52 1.54 15.0 8.70 10.0 40 La System losses only, excludes station usage. Source: ADB Draft Report, 1991. WESTERN SAMO ISSUES AND OPTIONS IN THE ENERGY SECTOR Existing Generating Units in EPC's Systems Power Unit Model/ Speed Year of Nameplate Available Station No. Manufacturer Type (rpm) Installation Rating Capacity (kW) Wet (kW) Dry UPOLU SYSTEM Diesel Tanugamanono 5 MAN 428 1966 1,672 1,200 6 MAN 428 1973 1,456 1,000 8 Niigata 600 1979 1,800 1,200 9 Mirrlees K8 1984 2,250 2,000 10 Mirrlees MB190 1988 1,000 800 Hydro-Electric Aiaoa 1 GG & G Turgo 600 1951 1,000 1,000 310 Samasoni 1 GG & G Turgo 500 1982 900 800 } 320 2 GG & G Turgo 500 1982 900 800 } Fale Ole Fee 1 Voith Pelton 1,000 1982 1,600 1,600 350 Lalomauga 1 Boving Francis 1,000 1985 1,750 1,750 ) 380 2 Boving Francis 1,000 1985 1,750 1,750 Fuluasou 1 GG & G Turgo 428 1951 230 - - 2 Ossberger Crossflow 472 1985 370 370 20 SAVA!'T SYSTEM Diesel Salelolonga Ia 1 Yanmar 1,500 i978 100 100 2 Cummins 1,500 1976 300 250/b 3 Yanmar 1,500 1973 100 100- 4 Cummins 1,500 1989 480 480 5 Yanmar 1,500 1978 60 60 6 Yanmar 1,500 1978 60 60 7 Mirrlees 750 1954 273 200 8 Detroit - 1986 412 412/b > M la Most machines damaged in cyclone of February 1990. Capacities indicated are those estimated to be X available if machines repaired/overhauled. Nearly all machines, however, are likely to be scrapped on installation of two new ADB funded 300 kW machines in 1991. /b Under repair. Source: Electric Power Corporation. ANNEX 3.2 - 48 - WESTERN SAMOA ISSUES AND OPTIONS IN THE ENERGY SECTOR EPC Generation Development Program. 1991-2000 FY 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 ----------------------------------------- kW ----------------------------------------- UPolu System Existing capacity: vet season 8,230 8,230 13,030 16,350 16,350 16,350 16,350 16,950 20,450 23.95 dry season 7,480 11,780 12,280 15,310 15,310 15,310 15,310 15,620 22,620 22,62 Capacity: added 1x3,500 1x3,500 4,000 - - - - 1x3,500 1x3,500 repaired 1x 800 - 600 - - - - - - retired - 4,000 - - - - - - - Available capacity: Wet season 8,230 13,030 16,200 16,350 16,350 16,350 16,950 16,950 20,450 23,950 dry season 11,780 12,280 15,310 15,310 15,310 15,310 15,620 19,120 22,620 22,620 Peak load 8,528 8,921 9,333 9,764 10,217 10,692 11,191 11,713 12,261 12,835 Margin: wet season -298 4,109 6,867 6,586 6,133 5,658 5,759 5,237 8,189 11,115 dry season 3,252 3,359 5,977 5,546 5,093 4,628 4,429 7,407 10,359 9,785 Outage allowance: Wet season 3,200 4,700 4,800 4,800 7,100 7,100 7,400 7,400 7,400 7,400 dry season 5,820 5,820 6,180 6,180 7,480 7,480 7,950 7,950 7,950 7,900 Security margin: wet season -3,498 -591 2,067 1,786 -967 -1,442 -1,641 -2,163 789 3,715 dry season -2,568 -2,461 -203 -634 -2,587 -3,052 -3,521 -543 2,409 1,835 Savaili System Existing capacity 772 1,372 1,372 1,972 1,972 1,972 1,972 2,572 2,572 2,572 Capacity added 2X300 - 1x600 - - - 1x600 - - - Capacity retired - - - - - - - - - Total capacity 1,372 1,372 1,972 1,972 1,972 1,972 2,572 2,572 2,572 2,572 Peak load 747 822 904 994 1,094 1,203 1,323 1,456 1,601 1,761 Margin 625 550 1,068 978 878 769 1,249 1,116 971 811 Outage allowance 772 772 1,012 1,012 1,012 1,012 1,200 1,200 1,200 1,200 Security margin -147 -222 56 -34 -134 -243 49 -84 -229 -389 Source: ADB Draft Report, 1991. WESTERN SAMOA ISSUES AND OPTIONS IN THE ENERGY SECTOR UPOLU POWER SYSTEM Candidate Hydroelectric Plant Average Cost of Cost of Installed Gross Firm Energy Usable Capital O&M Average Usable Name of Project Capacity Head Energyja Potential/b Energy Cost Cost Energy Energy (kW) (m) (MWh/mth) (GWh/yr) (GWh/yr) (US$M) (US$M/yr) (US*/kWh) (USą/kWh) Falese'ela 2 x 400 125 54 3.46 1.6-3.5 3.27 0.02 10.7 14.2 1 Lotofaga High Head 2 x 750 235 244 7.20 2.9-7.2 6.02 0.03 9.4 13.4 > Lotofaga Low Head 2 x 200 30 83 2.44 1.2-2.4 4.36 0.02 20.1 25.9 Molololelei 2 x 1,000 425 113 7.16 2.9-7.2 6.26 0.03 9.8 14.0 Namo 2 x 800 100 47 6.80 2.8-6.8 11.51 0.04 18.8 26.8 Sopoaga Ic 2 x 700 90 31 6.37 2.6-6.4 4.77 0.02 8.4 11.9 Sopoaga-Vaipu /d 2 x 700 90 31 4.60 2.0-4.6 4.77 0.02 11.6 15.8 Tafitoala 2 x 450 80 20 5.40 2.3-5.4 6.22 0.03 12.9 17.8 Afiamalu 1 x 5,000 705 291 10.00 5.4-10.0 24.38 0.08 27.0 37.1 Tl'avea 2 x 850 220 37 5.80 2.4-5.8 8.40 0.04 16.2 22.5 Vaipu 1 x 2,000 310 241 5.94 3.3-5.9 5.05 0.03 9.5 12.5 la Firm energy is the continuous energy which a project can generate during a critical dry period. For candidate plant, it is based on the flow exceeded 90 percent of the time at 90 percent probability as given in 1979 Master Planning Study Report. /b Average energy potential is the long-term average energy available from a project assuming all energy produced can be utilized by the system. For candidate plant, it is based on the annual energy at 50 percent E probability as given in MRM 1979 Report. For Sopoaga and Vaipu schemes, annual energy was calculated from flow duration curves in MRM's 1986 Report on Afulilo. /c Before construction of Vaipu. 1d After construction of Vaipu. Source: ADB Draft Report, 1991. -50- ANNEX 4.1 WESTERN SAMOA ISSUES AND OPTIONS IN THE ENERGY SECTOR Petroleum Products: Price Buildup /a Sample Calculations Gasoline Diesel Kerosene USą/1 Z USą/1 2 USą/1 Z FOB 20 35 23 50 24 57 Freight 2 4 2 4 2 5 Distribution and ROI /b 7 12 7 15 8 19 Government charges 13 23 10 22 4 10 Wholesale price 42 74 41 89 38 90 Retail price 57 100 46 100 42 100 /a Lowest-cost supplier, January 1991. lb Return on investment. Source: The Energy Unit. - 51 - STATISTICAL APPENDIX Table 1 WESTERN SAMOA: SELECTED DEVELOPMENT INDICATORS Table 2 WESTERN SAMOA: SELECTED PROJECTIONS 1990 - 2000 Table 3 WESTERN SAMOA: ENERGY BALANCE ESTIMATE FOR WESTERN SAMOA (1989) ('000 TOE) Table 3a WESTERN SAMOA: ENERGY BALANCE ESTIMATE FOR WESTERN SAMOA (1989) (Original Units) Table 4 WESTERN SAMOA: ENERGY BALANCE ESTIMATE FOR WESTERN SAMOA (2000) ('000 TOE) Table 4a WESTERN SAMOA: ENERGY BALANCE ESTIMATE FOR WESTERN SAMOA (2000) (Original Units) Table 5 WESTERN SAMOA: PETROLEUM MARKET (KL) Table 6 WESTERN SAMOA: NATIONAL PUBLIC ELECTRIFICATION SYSTEM Table 7 WESTERN SAMOA: ELECTRICITY TARIFF STRUCTURE Table 8 WESTERN SAMOA: NON-CONVENTIONAL ENERGY RESOURCES AND USE - 52 - TABLE 1 WESTERN SAMOA SELECTED DEVELOPMENT INDICATORS 1985 1986 1987 1988 1989 1990 GDP (current prices)1(US$mil) 89.8 93.0 103.5 115.5 109.4 n.a. Total Imports (c.i.f.)(US$mil) 51.2 47.1 61.3 74.6 75.5 82.8 (est) Total Exports (fo.b.)(US$mil) 16.1 10.5 11.8 15.1 12.9 9.1 Exchange Rate (WS$/$US) 2.19 2.24 2.12 2.08 2.27 2.33 Land Area (kmi2) 2,857 Wage & Salary Employment (No.) 17,600 n.a. Average Wage/Salary (WS$/hr skilled) 4.15 Economically Active (No.) 42.386 Population Total 157.400 158,000 Urban 32.196 Aid AnnualODA(US$mil) 11.8 16.1 17.7 17.7 16 n.a. ODA(% GDP) 13 17 17 15 15 ODA (% Govt.Income) 35 35 % Bilateral n.a. n.a. ODA/Capita (US$) 101 Notes: (1) Source: Western Samoa Development Survey (World Bank 1990) - 53 - TABLE 2 WESTERN SAMOA SELECTED PROJECTlONS 1990-2000 1983-86 1987 1988 1989 1990 1991-1995 1996-2000i Population Total 158,000 160,400 165,300 Urban 31.557 31,243 31,635 Projected Growth 0.3% 0.6% GDP growth rate3 p.a.(real) 3.3% 1.2% -0.1% -0.1% -2.6% 2.8% 3.5% Subsistence 1.5% -1.5% -2.6% 3.9% n.a. 1.0% 1.0% Agriculture 2.6% -6.1% -9.4% 10.0% n.a. 1.9% 2.8% Manufacturing 7.8% 1.6% 1.6% -10.3% n.a. 4.4% 5.0% Others 3.5% 7.2% 5.5% -3.5% n.a. 3.9% 4.5% 1987 1988 1989 1990 1995 2000 Imports (WS$mil cif) 130 155.7 171.4 193 Petroleum 8.8 10.5 16.4 n.a. Exports (WS$mil fob) 25 31.4 29.3 21.2 External Grants (US$mil) 17.7 17.7 16 Excha.nge Rates (WSSIUS$) 2.12 2.08 2.27 2.33 GDP/capita 1989 (US$1989) 690 Inflation Rate (cpi) 4.6% 8.7% 6.2% 12.0% 6.7% 4.0% Electricity Generation' (GWh) 41.65 50.95 Fuel Consumption (kL) Gasoline 8.447 14,076 12,801 14,545 16,800 Jet Al 8,391 12,117 9,657 12,981 16,600 Kerosene 1,852 2,476 2,500 ADO 13,331 16,377 18,251 19,458 26,200 IDO IFO 62 Lubes 348 568 563 634 700 Avgas 203 239 300 400 500 Solvents 229 328 370 400 LPG 207 230 290 350 White Benzine Others Total Inland 30,989 43,606 43,982 51,154 64,050 Notes: (1) Public/national utility (2) Fiscal year ends 31 December (3) GDP growth rates 1988, 1989 and 1990 are estimates only TABIE 3 ENERGY BALANr:E ESTlMAIE FOR WETSIERN SAMOA (1989) ('000 TOE) Fucewood Coconut Total Hydro- Electricity Gasoline Jet Al Kerosene ADO Avgas LPG Petroleum Total Residues Biomass Electricity EnerRs Primary Supplies Production 15.00 48.09 63.09 5.08 6S.17 Imports 10.34 8.48 1.59 16.27 023 0.10 37.01 37.01 Bunkerint | GROSS AVAILABLE 15.00 48.09 63.09 5.08 0.00 10.34 8.48 1.59 16.27 0.23 0.10 37.01 105.18 Conversions Public Power Generation (0.30) (0.30) (5.08) 11.82 (644) (6.44) 0.00 Transformation LossesiStation Use (8.13) 0.00 (8.13) Transmission/Distribution Losses (0.52) 0.00 (052) FNETSUPPLIED 14.70 48.09 62.79 0.00 3.17 10.34 8.48 1.59 9.84 0.23 0.10 30.57 96.53 Final Consumption Domestic 9.45 30.36 39.81 0.97 1.59 0.10 1.69 4247 Un Transport 10.34 8.48 9.84 0.23 28.88 28.88 P ManufacturinglCommercial 1.48 1.48 1 Industrial 0.36 0.36 Agroindustries 5.25 17.73 22.98 22.98 Others 0.36 0.36 FTOTAL 14.70 48.09 62.79 3.17 10.34 8.48 1.59 9.84 0.23 0.10 30.57 96.54 Source: Mission Estimates 1990 TABLE 3a ENERGY BALANCE. EMMATE FOR WESTERN SAMOA (1989) (Original Units) Fuewood Coconut Total Hydro- Electricity' Gasoline JetAl Kerosene ADO Avgas LPG Total Residues Biomass Electricity Petroleum | ~~~~~~~~~(tonnes) (tonnes) (toonecs) (GWb) (GWh) (kl) (k ) (ki) (id) , kl (k) (kl) ,s Ptumary Supplies production 35.715 145,72- 181,437 20.31 Imports 12,80t 9,657 1,852 18,251 300 230 43,091 Bunkering I GROSS AVAILABLE 35,715 t145,722 181,437 20.31 0.00 12.801 9,657 1,852 18,751 300 230 43.091 Cowversions PublcPowver GenerstiDn (714) (714) (20.31) 43.68 (7.221) (7,221) Transformation LosseslStation Use Transmission/Distribution Losses (6.14) Fnal Consumption J Domestic 22,500 92,00D 114,50 11.47 1,852 230 2,082 Ln Transport 12,801 9.657 11.03D 300 33,788 GovernmentAr,onui1ercial 17.54 Industrial 4.27 Agro-indtustries 12,501 53,7Z2 66.223 Otbers 4.28 TOTAL 35.001 145.722 180.723 0.00 37.55 12.801 9.657 1.852 11.030 300 230 35.870 Notes: (1) Includes Savaii (Saleblogo and Asau) Source: Mission Estimates 1990 TABLE 4 ENERGY BALANCE ESTIMATE FOR WESTERN SAMOA (2000) ('000 TOE) Fuelwood Coconut Total Hydro- Electricity Gasoline JetAl Kerosene ADO Avgas LPG Petroleum Total Residues Biomass Electricity Energv Primary Supplies Production 12.81 50.00 62.81 11.83 74.64 Inports 13.56 14.58 2.15 23.36 0.39 0.24 5427 54.27 Bunkering i GROSS AVAILABLE 12.81 50.00 62.81 11.83 0.00 13.56 14.58 2.15 23.36 0.39 0.24 54.27 128.91 Conmersions Public Power Generation (11.83) 17.92 (6.09) (6.09) 0.00 Transformation LossesJStation Use (11.86) (116) I Transmission/Distribution Losses (0.80) (0.80) L, NET SUPPLIED 12.81 50.00 62.81 0.01 5.26 13.56 14.58 2.15 17.27 0.39 0.24 48.18 116.25 Fmal Consumption Domestic 7.35 .32.01 39.36 1.61 2.15 0.24 2.38 43.36 Transport 13.56 14.58 17.27 0.39 45.80 45.80 Manufacturing/Commercial 5.46 3.80 9.26 2.44 11.69 Industrial 0.60 0.60 Agroindustries 14.19 14.19 14.19 Others 0.61 0.61 TOTAL 12.81 50.00 62.81 5.26 13.56 14.58 2.15 17.27 0.39 0.24 48.18 116.25 Source: Mission Estimates 1990 TABLE 4a ENERGY BALANCE ESI1MATE FOR WESTERN SAMOA (2000) (Original Units) Puelwood Coconut Total Hydro- Electricity' Gasoline Jet Al Kerosene ADO Avgas LPG Total Residues Biomass Electricity Petroleum (tonnes) (tonnes) (tonnes) (GWb) (GWh) (kl) (kl) (l)Mi)() (Id) (i, Primary Supplies Production 30,500 151,500 182,000 47.30 Imports 16,800 16,600 2,500 26,200 500 350 62,950 Bunkmring I GRO6S AVAILABIE 30,500 151,500 182000 47.30 0.00 16.800 16.600 2,500 26200 500 350 62.950 Consersions Public Power Generation (47.30) 71.67 (6,830) (6,830) Transfornation Losses/Station Use Ln Transmission/Distribution Losses (9.41) INET SUPPLIED 30,500 151,500 182000 0.00 62.26 16.800 16.600 2.500 19.370 500 350 56.120 Fmal Consumption Domestic 17.0 97,000 114,500 19.10 2.500 350 2.850 Transport 16,800 16.600 19,370 500 53,270 Govemmnent/Commercial 13.000 11.500 24,500 28.87 Industrial 7.13 Agro-industries 43,000 43,000 Others 7.16 (TOTAL '0500 151,500 182.000 0.00 62.26 16.800 16.600 2,500 19,370 500 350 56,120 Notes: (1) Excludes Asau Source: Mission Estimates 1991 Asset Revaluation and Tariff Study for Electric Power Corporation (September. 1990) - 58 - TABLES WESTRN SAMOA PETROLEUM MARKET (KL) r_ PRODUCT 1985 1986 1987 1988 1989 Gasoline 9,731 10,077 11,469 11,428 12,801 Jet Al 4,525 5,229 8,210 12,117 9,657 Kerosene 1,565 1,545 1,709 1,759 1,852 ADO 17,032 13,594 14,914 15,989 18,251 IDO IFO Lubes 378 479 530 568 563 Avgas 122 125 136 239 300 Solvents 296 256 283 229 328 LPG 189 207 230 Others 4,147 352 Total Inland Trade 33,838 31,305 41,605 42,681 43,982 Source: Mission Estimates - 59 - TABLE 6 WESTERN SAMOA NATIONAL PUBLIC ELECTRIFICATION SYSTEM 1985 1986 1987 1988 1989 1990 Installed Capacity (kW) Hydro 8,500 8,270 8,270 Diesel 11,782 12,593 13,720 Total 20,282 20,863 21,990 Maximum Demand (kW) 6,540 6,920 7,496 7,895 8,377 Output (MWh) Hydro 24,410 23,830 23,250 Diesel 11,470 16,392 20,823 Gross Generation 35,880 37,815 40,222 42,771 44,073 Losses (% generation) 17 17 16 17 14 Net Consumption 29,700 31,490 33,760 35,390 38,120 Source: EPC - 60 - TABLE 7 WESTERN SAMOA ELECTRICITY TARIFF STRUCTURE Flat Rate: WS$0.40 / kWh (incorporates fuel surcharge of WS$0.08) - 61 - TABLE 8 WESTERN SAMOA NON-CONVENTIONAL ENERGY RESOURCES AND USE Systems Installed Photovoltaics' Number 0 0 kWpk Micro-hydro2 Number 0 O kW,.w Biomass5 Number 1 2.5 kW,,k Solar Thermal Units Applications n.a. Resources OTEC (delT)' 22-23 °C Distance from shore (kms) 1-10 kms Tidal range5 1.0 m (Apia) Solar6 5.51 kWh/m2/day Monitoring Site n.a. Notes: (1) Systems installed by end December 1990 (2) 100kW and less (3) Power gasifiers, steam, heat gasifiers (4) 0-lOOm °C, distance from shore (5) Indicate location (6) Outer islands, indicate monitoring site (Average daily kWlm2/day) - 62 - TABLE 9 WESTERN SAMOA BIOMASS RESOURCES Resource 1985 1990 Forest Cover (ha)' Primaty Protection Forest 55,000 Protection Forest (steep terrain) 30,000 Plantation n.a. Secondary' n.a. Total 150,000 2 Estimated Deforestation Rate (ha/year) 1,000 Agricultural Wastes (tonnes/year) Domestic Coconut Production 115,000 Commercial Copra Production 72,750 Timber Wastes 13,000 Total 200,750 Mangroves na. Agricultural Plantations (ha)4 Coconut 23,000 Other Total Total Notes: (1) Include estimate of % on steep land, inaccessible to harvest (2) Estimated 30,000 ha exploitable (3) Disturbed forest by logging, shifting agriculture (4) Single Crop Equivalent Area of plantation and small holdings Tlr4o' 172120' WESTERN SAMOA ENERGY SUPPLY PETILEUM ROUCTS ;FCRAOE - AVD2 ROADS 22 kV TRASMMISSION LINES RO0ROS 6 1 TRANSMISSION LtNES IMPROAIS * EXSIiNG DIESEL STATIONS PLANTATlON ROADS - EXISTIN HYDRO STATONS -......UNIMROVED ROADS SAVAI I m HYDRO STATIO UNSER CONSTRUCTION. FERy A WOOD-FIRED STEAM TUR8OGENERATOR1 S.101pi F~~~~~IGHLANDS 0VER 2050 FEET t AIRPOR i ~~~~~~~~~~~~~~RIVRS INTERNATTONAI eOUNDAMEs SAtANs Stuns E AWi~~~~~ F.I.I. ~ ~ SEO~ 50100045. 054015 ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ A-"04, - 1 * w tz?Pfall > t4 O'- gwwrl.~~ ~ ~~~~~~ ~ ~~~ i IAN., Os0oowt t,I50dO.O) I.',45Atnu s 9XOt ~~~~15. ZFMAP 17272D 7200' ' 0 -MR"~ JUNE 1 99U