Jul 22, 2020
Something as simple as turning on a light has been an expensive proposition in the Maldives, until recently. With few sources of energy, the country has resorted to importing almost all of it. Tankerloads of diesel and other fossil fuels absorbed a fifth of gross domestic product in 2016. People had to pay some of the highest prices for electricity in South Asia – three times more than in neighbors like India or Sri Lanka.
Moving into locally sourced greener energy was one obvious solution, but past experiences with so-called renewables had shown mixed results. Further, for a country with a small economy and constrained resources, a major new investment in energy infrastructure at first seemed out of reach.
The POISED project, standing for Preparing Outer Islands for Sustainable Energy Development, offered a way to get started. Backed largely by the CIF and the Asian Development Bank, POISED has helped demonstrate how to systematically design, set up and run a series of solar-photovoltaic (PV)-diesel hybrid energy systems. Not only do they use 28 percent less fuel compared to the diesel-only systems still powering much of the Maldives, but they have shown that renewable energy can be a sound bet, one worthy of continued investment.
The Maldives has dealt successfully with energy challenges in the past. By 2008, it had overcome one major hurdle by extending modern energy services to its entire population. This was no small feat considering a territory sprawling over 1,192 islands, 187 of which are inhabited. Yet a further challenge remained: how to overcome reliance on imported fuel with sometimes drastic prices swings. And in the era of climate change, how to move towards green energy supplies with lower greenhouse gas emissions and less of a role in rising temperatures.
Although the Maldives contributes very little to global emissions, as a small island developing state, it faces some of the world’s most onerous risks from climate change, including from rising seas. To make a point about the urgency for action, the government set a target for carbon neutrality. A large part of achieving it would require finding new ways to power homes and businesses.
POISED first emerged as an important component of an investment plan that the government developed in 2012 through the Scaling Up Renewable Energy Program in Low Income Countries (SREP), a dedicated funding window of the CIF. Starting in 2015, POISED put together an unprecedented package of nearly $129 million in concessional grants and loans to begin rolling out the first large-scale installation of solar-PV-battery-diesel hybrid systems. That year, installed renewable energy capacity was 3.9 MW. By 2018, it had jumped to 16.5 MW, including 4.63 MW from the new hybrid systems, with another 2.9 MW under construction. Over 25 years, efforts under POISED will cut emissions by 1 million metric tonnes of CO2 equivalent per year.
To manage barriers related to cost and unfamiliarity with new technology, POISED has been implemented in phases, with adaptations along the way. The first phase targeted five outlying islands, each with its own generation system, but fully dependent on diesel fuel transported from Male, the capital. Operating at low capacity given small populations and limited demand, the systems were particularly inefficient and costly to run and maintain.
One initial task was to work with island communities to raise awareness of the new systems, and to broker agreement that the roofs of schools, health-care centres and local administrative buildings could be covered with new solar panels. An immediate selling point was reductions in the running time of diesel-powered engines, a source of noise and air pollution. Other expected benefits were business and employment opportunities during project construction, and the eventual reduction of electricity rates.
Once installation moved forward, the project had to smooth the gap between the foreign contractors who provided new technology and the local operators who would run and maintain the systems. The former had extensive experience with solar installations, but had to quickly come up to speed on some of the complexities of operating in the Maldives, such as the reliance on boats for transport between islands. Comprehensive training for local operators was instituted so they could acquire new skills, with an emphasis on hands-on problem-solving that proved highly effective. The training later became the basis for a solar energy syllabus at Maldives Polytechnic, aimed at cultivating a new national network of solar PV technicians.
Complementary support operated on a broader scale, where POISED help the two national utility companies develop tools and capacities for planning and managing the next generation of renewable energy systems. The programme introduced sophisticated energy modeling in the form of HOMER, or the Hybrid Optimization Model for Electric Renewables. It analyses the technical and economic performance of energy systems. Hourly-average solar resource data, for instance, helps optimize system design to better match demand and cash flows.
Since POISED began, it has fostered ongoing coordination between island councils and national ministries, local and international companies, development finance institutions, and multilateral and bilateral donors. This has sustained a flow of knowledge and finance, and spread the sharing of risks. When some loans did not materialize, putting the project in danger, POISED drew partners together and mobilized new funds to close the gap. By strategically ensuring that whole systems on individual islands were completed, it definitively demonstrated their value, the surest way to maintain interest and investment.
Today, the new systems operate on 41 islands, with plans to eventually install them on 160. Public support is gaining steam through ongoing public outreach to island councils, women leaders, government officers, youth and NGOs – altogether, nearly 12,000 people on 88 islands.
In many communities in the Maldives, neat rows of glass solar panels now line the roofs of larger buildings. When the sun shines, the blue color vividly plays off the deep turquoise of the surrounding seas. It is proof that with a modicum of carefully designed support, small islands can dream up big solutions, and go not just blue, but green.
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Case Study: Preparing Outer Island Sustainable Electricity Development Project (POISED)
