National programme for renewable energy sources based integrated rural development

United Nations Development Programme

Energy and Environment Programme

NATIONAL PROGRAMME FOR RENEWABLE ENERGY SOURCES BASED INTEGRATED RURAL DEVELOPMENT - NATIONAL SCALING

UP

-

Prepared by:

Dr. Zoran Morvaj, CTA on Energy UNDP Tajikistan

M Sc Slavica Robić, consultant

M Sc Vesna Bukarica, consultant

October, 2010

National Programme for RES based IRD-National Scaling Up 2010

E X E C U T I V E S U M M A R Y

The Republic of Tajikistan, a mountainous country located in central Asia, has faced a multitude of hardships since gaining independence from the former Soviet Union. One of key challenges is eradicating poverty which affects almost 50% of the population1. Poverty in Tajikistan is closely linked to the lack of access to secure and reliable energy sources. Despite the country’s high electrification rate of more than 90%, the supply of electricity does not meet the needs of the population, particularly during the winter months when there are many planned and unplanned cut-offs. Many areas have no electricity at all.

Given that the lack of energy has long been recognised as one of key issues in Tajikistan and that the provision of access to reliable energy supply is the key driver for development, the government of Tajikistan recently adopted the Law on the Use of RES (2010) and has amended the Energy Law (2007). Both enable the selling of electricity from RES to the grid.

In the existing strategic documents, including the Poverty Reduction Strategy (PRS), the National Development Strategy (NDS) and the Economic Development Programme by 2015, no attention has been given to the utilisation of small scale renewable energy sources for the purposes of poverty reduction and economic development. As Tajikistan has an abundant potential to utilize renewable energy, particularly for small scale applications, it is recognized that employing this potential presents the only intermediate solution to combating poverty issues and enhancing overall development progress.

As a result, three key strategic documents have been developed:

- Intermediate Strategy for RES based Integrated Rural Development; - Energy Efficiency Master Plan; - National Programme for RES Based Integrated Rural Development - National Scaling-Up

Each document is closely interlinked, and relies on the utilisation of small scale RES, particularly small hydropower plants, and is based on the principles of integrated rural development for the purposes of poverty reduction. In order to reach the most vulnerable group of the population, estimated to be approximately 1 million, this National Programme establishes specific implementation actions needed in order to achieve the targets set by the Intermediate Strategy based on the scaling-up of previously implemented projects.

The primary way to foster intermediate economic development and poverty reduction in rural Tajikistan is by providing energy based on the 4A principle, which is achieved by using sHPPs and, in some cases solar thermal and photovoltaic applications, and implementing simple EE measures based on available endemic resources and knowledge. IRD projects based on these principles not only foster an accelerated decrease in poverty levels, but also help build environmental resilience by decreasing losses to the forest cover. As less dung and fuel-wood are needed as a result of the improved access to, and decreased need for, electricity, there are corresponding positive impacts on the local biodiversity and preservation of carbon sinks, which further lead to the mitigation of soil erosion and related desertification.

1 Percent of the population living on income below 2,15 US dollar a day (%). Source: Tajikistan – Accelerating

progress towards the MDGs. UNDP Tajikistan. 2010.


Further, building national development on such foundations positively impacts women and children, who are often forced to take part in hard physical labour, e.g. collecting the required fuel-wood, dung and water, and who are also exposed to critical levels of indoor pollution.

The approach established by this National Programme supports both the achievement and acceleration of progress to all of the MDGs to which Tajikistan has been a signatory and stimulates overall national development and the economy.


List of Acronyms

4A Access, Affordability, Acceptability and Availability

EE Energy Efficiency

HPP Hydro Power Plant

IPP Independent Power Producer

IRD Integrated Rural Development

LCDs Least Developed Countries

MDGs Millennium Development Goals

NDS National Development Strategy

O&M Operation and Maintenance

PRS Poverty Reduction Strategy

PV Photovoltaic

RES Renewable Energy Sources

sHPPs Mini and Micro Hydro Power Plants (up to 500kW of installed power)

STC Solar Thermal Collector

the Fund The National Trust Fund for RES and EE

UNDP United Nations Development Programme

WBG World Bank Group


CONTENTS

1 Overview of the situation in Tajikistan ........................................................................................................... 1

1.1 Objectives and Approach – Meeting the 4A criteria ....................................................................... 2

2 Scaling-Up of the RES based iRD pilot project ............................................................................................. 5

2.1 Assessment of the Scaling-Up Impacts ................................................................................................. 5

2.1.1 Micro and Mini HPPs ............................................................................................................................... 5

2.1.2 Photovoltaics and Solar Thermal Collectors ................................................................................. 8

2.1.3 Energy Efficiency ...................................................................................................................................... 9

2.2 Enabling the environment for the scaling-up of integrated rural development projects in Tajikistan ................................................................................................................................................................. 11

2.2.1 Assessment of the financial requirements .................................................................................. 13

3 Impacts of Improved Access to Electricity on Poor Rural Households and on the environment .................................................................................................................................................................... 15

3.1 Changes to typical rural households energy balance .................................................................. 16

4 Implementation Aspects .................................................................................................................................... 19


Page | 1

1 OVERVIEW OF THE SITUATION IN TAJIKISTAN

The Republic of Tajikistan is a small mountainous central Asian country with a population of roughly 7 million, of which almost 70% inhabit rural areas. Since gaining independence from the Soviet Union, Tajikistan has been plagued by the deterioration of living standards, a population-wide increase in poverty, and severely damaged and depleted supplies of energy. As a signatory of the Millennium Development Goals (MDGs) Convention, Tajikistan has agreed to confront the challenges of development. Because of the acuteness of the situation in Tajikistan, the government has prioritized the establishment of secure energy supplies at the top of its national goals in the development challenge. Poverty reduction and development are not possible without the provision of safe and reliable energy supplies.

Currently, the supply of energy in Tajikistan is far from reliable, particularly where it regards electricity, Tajikistan’s main energy source. Access to electricity is intermittent and is often aggravated by recurring power cut-offs. Yet the potential to utilize renewable energy is tremendous. Tajikistan has abundant hydro resources, particularly for small hydropower plants (sHPPs), which have yet to be utilized to their full capabilities.

Analysts estimate there is a vast opportunity for utilizing hydro potential for the purposes of poverty reduction in Tajikistan. The construction of small community based HPPs (up to 500kW of installed power), together with the implementation of energy efficiency measures within the integrated rural development projects, presents the only intermediate solution to reduce poverty in Tajikistan.

Multiple reasons account for this. With limited financial resources in Tajikistan, there is no likelihood that any large-scale projects (such as HPP Rogun) can be realized in the near future. Further, even if such large-scale plants could become operational, Tajikistan’s distribution power grid is dilapidated, damaged, and in many areas completely dysfunctional. Restoring it to its full functionality consumes substantial time and capital, and although it is needed, refurbishment is unlikely to occur in the immediate future.

Further, the combined use of hydro and EE measures helps to build environmental resilience by protecting biodiversity. Provision of renewable electricity and increase of energy efficiency help to decrease deforestation and the loss of the vegetation cover; both are considered a necessity for biodiversity preservation. The loss of the vegetation cover also leads to increased soil erosion, which has already proved to have devastating impacts in Tajikistan (i.e. large landslides) and also leads to salinization and eventually desertification.

Therefore, this National Programme for RES Based Integrated Rural Development aims to present possibilities for an intermediate plan for accelerating Tajikistan’s development in its most poverty stricken rural areas, while simultaneously enhancing the country’s environmental resilience.

With several actions undertaken by the UNDP’s pilot project in the Vakhdad District (south of the capital Dushanbe), it has been assessed that the local communities are


Page | 2

eager to be included in such development activities and maintain what has been provided to them. As it has been shown (i.e the case of Nepal2), capacity development, in collaboration with the involvement and education of the local community, are the keys to providing successful energy access programmes.

As this programme aims to implement integrated rural development principles based on the provision of energy access and to foster a nationwide scaling-up of the pilot project, it is essential to provide a continuous stream of activities that include local communities in the whole project cycle to the maximum extent possible.

Those activities inter alia include:

- analyzing respective community desires and needs prior to choosing project sites;

- communicating the creation of project implementation plans with community representatives and respecting their actual needs (i.e. improving the required social facilities, opening small workshops which they define as necessary);

- providing education and training to local inhabitants to enable them to operate and maintain the basics of the installed equipment

- educating the whole community on the benefits of rational energy use; - providing full time contact points/personnel to enable the sustainability of

programme benefits after the completion of such projects

Capacity building must also be enhanced at the national level, particularly where it regards the establishment of the required monitoring, verification, and evaluation (M&V&E) framework, and financing mechanisms. Such actions are already underway with the adoption of a group of legislation packages regarding renewable energy sources and the development of the Intermediate Strategy for Renewable Energy Sources with Support of Energy Efficiency in Rural Tajikistan and the Energy Efficiency Master Plan, as well as the ongoing process to establish the Trust Fund for Rural Renewable Energy Sources and Energy Efficiency.

The primary aim of these interdependent activities is to foster the development of Tajikistan through the enablement of RES based integrated rural development that meets the 4A energy criteria: Accessibility, Affordability, Availability and Acceptability.

1.1 OBJECTIVES AND APPROACH – MEETING THE 4A CRITERIA

The key to sustainable energy implementation is satisfying the 4A criteria: the Provision of Access to Affordable, locally Available and Acceptable Energy. In the case of Tajikistan, the only source of energy which meets the 4A criteria is energy derived from the sHPPs (and in some cases solar energy).

The provision of provide basic amounts of renewable electricity (see Chapter 2) to the most vulnerable groups of people, together with increased energy efficiency measures, meets the 4A criteria and accelerates progress towards the achievement of the MDGs

2 UNDP Report: Capacity Development for Scaling Up Decentralized Energy Access Programmes, June 2010.


Page | 3

The implementation of integrated rural development projects based on renewable energy sources (RES) and energy efficiency (EE) contributes to multiple MDGs largely because of the wide range of positive outcomes, including:

- MDG1: Eradicate extreme poverty and hunger o direct income generation opportunities related to RES and EE (such as

O&M, construction, engineering, manufacturing) o indirect income generation opportunities through various profit

generating initiatives enabled by the improved access to energy (i.e. small vegetable/fruit/diary processing units)

o improved crop yields as a result of energy availability (i.e. greenhouses) and a higher availability of dung, typically used for cooking and heating

- MDG 2: Achieve universal primary education o in poorer communities, children spend a substantial amount of time

collecting firewood and dung, collecting water, and cooking; providing electricity eases these burdens, and simultaneously improves conditions for studying (i.e. available lighting and other energy demanding services)

- MDG 3: Promote gender equality and empower women o in Tajikistan, where many women run households due to the high

percentage of men working abroad, the provision of safe and reliable energy positively impacts women; they will likely spend less time on demanding physical labour (e.g. collecting firewood, dung, and water and working in the fields) and invest more time into developing small community run workshops that will improve household profit generation

- MDG 4,5 and 6: Reduce child mortality, Improve maternal health and Combat HIV/AIDS

o IRD projects include the refurbishment of societal needs such as schools, kindergartens, and hospitals, which directly contribute to these three MDGs, as well as MDGs 2 and 3.

o The positive impacts on MDGs 4 and 5 will also bring about a reduction of indoor pollution and physical labour currently being done by women and children

- MDG 7: Ensure environmental sustainability o biodiversity preservation

� decreased levels of deforestation resulting from the diminished need for cooking and heating fuel-wood

� decreased levels of soil erosion resulting from a better preserved forest cover

� decreased levels of desertification and salinization resulting from a better preserved vegetation cover

o climate protection � decreased levels of CO2 emissions resulting from better preserved

carbon sinks and the increased use of RES and EE - MDG 8: Develop a global partnership for development

o the primary perquisite for any international partnership and its development is the provision of modern communication technologies (i.e. computers, telephones, mobiles) which all require electricity

These multiple benefits, together with the acceleration of progress towards the achievement of MDGs, have been demonstrated in the previously implemented pilot


Page | 4

project. Moreover, the completed analyses of the national impacts reveal the potential for the multiplication of such benefits throughout the country.


Page | 5

2 SCALING-UP OF THE RES BASED IRD PILOT PROJECT

In order to accelerate progress towards the achievement of MDGs in Tajikistan, RES based integrated rural development projects must be implemented throughout the country. These can only be successful by designing and implementing pilot projects, defining the key lessons learned at each step of the process, and scaling-up such projects throughout the country.

Roughly 50% of Tajikistan’s population lives below the poverty line ($41USD monthly) and approximately 1 million of citizens inhabit the most vulnerable group3. Thus, the aim of this programme is primarily to address the needs of this most vulnerable group by implementing the necessary programmes in a prudent and carefully planned manner.

2.1 ASSESSMENT OF THE SCALING-UP IMPACTS

2.1.1 MICRO AND MINI HPPS

For the purposes of scaling-up the current assessments, the following assumptions and data listed in Table 1 were considered. It is estimated that roughly 1 million people are considered the most poverty stricken and have no consistent year-round access to electricity. Other estimates regarding finances, grid time, and fuel consumption derive from the pilot project and surveys conducted.

TABLE 1 INPUT DATA USED IN THE SHPP SCALING-UP EXERCISES

Population of Tajikistan 7.500.000

Number of most vulnerable population 1.000.000

Number of most vulnerable households1 100.000

Average installed capacity of sHPP [kW] 100

Estimated investment costs for the average sHPP of 100kW2 [US$] 100.000

Share of local goods and services related to HPP construction 50%

Jobs created per 1MW of HPP installed3 400

On-grid time [h/a] 3500

Average electricity production price4[US$/kWh] 0,01

Guaranteed power purchase price5[US$/kWh] 0,02

On-grid power [share of the nominal HPP power] 50%

Estimated per capita annual consumption of fuelwood for cooking6 [m3] 0,5

Estimated per capita total annual consumption of fuelwood [m3] 2,5

Estimated absorption of CO2 in trees [tCO2/m3] 1,8 1 Assumed 10 people per household 2 Costs are estimated based on the existing pilot project and on the results of surveys 3 Based on the results of scaling up sHPPs in Nepal – more than 500 jobs were created for approximately total of 1MW installed 5The price System Operator pays to the Fund for electricity taken over from IPPs 5 To be paid by the Fund to IPPs 6 Estimation of per capita consumption of fuel-wood does not include shrubs or cotton stems

3 living below the poverty line, not having adequate access to food or sanitation and with increased child mortality rate


Page | 6

TABLE 2 SCALING-UP ANALYSIS FOR PROVISION OF 1-3KW OF SHPP BASED ELECTRICITY FOR MOST VULNERABLE GROUP

Energy provided per household [kW] 1 2 3

Total installed power capacity needed [MW] 100 200 300

Total number of sHPPs needed 1.000 2.000 3.000

Total investment required [US$] 100.000.000 200.000.000 300.000.000

Financial return to the local economy [US$] 50.000.000 100.000.000 150.000.000

Total jobs created 40.000 80.000 120.000

Annual return to the local economy in form of incentives for grid connected RES [US$] 1.750.000 3.500.000 5.250.000

Annual decrease of fuelwood consumption [m3] n/a 500.000 2.500.000

Emissions saved [tCO2] n/a 900.000 4.500.000

Support from the Trust Fund required [US$] 101.750.000 203.500.000 305.250.000

As has been shown in the case of Nepal where similar actions were taken, it is likely that the impacts of scaling-up (the impacts of scale on price) would make the costs of 500kW units the same as the initial cost of a 100kW unit utilized in the pilot programme. Estimations of the cost effects are presented in Figure 1. Using a 500kW unit as an average size for scaling-up, it is possible to provide most households with up to 3kW of installed capacity in the short term.

FIGURE 1 ANALYSIS OF THE TOTAL INVESTMENTS NEEDED

The intermediate goal of the National Programme for RES Based IRD should clearly stipulate that, by 2015 each household has access to a minimum of 1kW per household of safe and reliable electricity.

If the average size of 100kW for sHPP installation is considered, approximately 1000 of these facilities should be constructed in Tajikistan (or less if larger units are built on suitable sites). The actual size of the plant will be customized and adjusted according to

0

50,000,000

100,000,000

150,000,000

200,000,000

250,000,000

300,000,000

350,000,000

100 200 300 400 500

To

tal

Inv

est

me

nt

Ne

ed

ed

US

$

Average Installed Capacity per Location [kW]

1 2 3

Amount of Electricity Provided per

Household [kW]

Note: Changes in the total investment costs needed with the assumend cost of

100.000 US$ per installed plant and with a goal to provide electricity to a total od

100.000 households


Page | 7

the potential of the location and the needs of the local community. Tajikistan has vast potentials for such sHPPs; most of the rivers do not freeze due to their high currents, as well, locals understand which flows are constant. Therefore, there are not expected to be any physical barriers in constructing the required plants.

More significant benefits become apparent when 2kW or 3kW of installed power per household is provided. The provision of these amounts mitigates the need to use fuel-wood for cooking, which in turn prevents deforestation (the loss of the vegetation cover). The average rural household needs approximately 40 kilos of collected fuel-wood per day. Women and children are primarily tasked with the responsibility of collecting firewood and dung, which as noted above, consumes time and exacerbates the current high levels of physical hardship.

The collection of fuel-wood sufficient for the daily needs of households takes up to 6 hours each day. Many of the households also use dung (compressed into the kizyak), particularly in the winter, because it has better heat properties than shrubs. In many of the poorer households, women and children collect dung every morning and evening and make kizyaks. If electricity could be provided, women and children would be allotted more time to devote to for-profit opportunities and studying; more they would not have to endure such debilitating labour on a daily basis. Further, there are evident positive externalities for the environment.

FIGURE 2 ASSESSMENT OF THE FINANCIAL RETURN TO THE NATIONAL ECONOMY DEPENDING ON THE SHARE OF LOCAL GOODS AND SERVICES IN THE HPP CONSTRUCTION PROCESS

In the scenarios presented in Table 2, it is assumed that there will be an “incentive” buy-back price for the plants selling their electricity to the national grid. This price will be administered and maintained through the National Trust Fund for rural RES and EE Projects (see Chapter 2.2 for further details).

0

20,000,000

40,000,000

60,000,000

80,000,000

100,000,000

120,000,000

140,000,000

160,000,000

180,000,000

200,000,000

Re

turn

to

th

e n

ati

on

al

eco

no

my

[US

$]

Capital Insvestment [USD]

40%

50%

60%

Share of local goods and services


Page | 8

2.1.2 PHOTOVOLTAICS AND SOLAR THERMAL COLLECTORS

Besides having exceptional hydro potential, Tajikistan also possesses abundant but underutilized solar energy resources. In addition, a strong correlation exists between the most vulnerable areas and the highest availability of resources. The mountainous areas possess the largest potential for solar energy. There are between 280-330 sunny days and the average insulation varies from 3.5 to 4.5 kWh/m2/day (for the places with the lowest insulation), and up to 5.3 kWh/m2/day on the year. The excellent solar potential presents opportunities for the implementation of photovoltaic (PV) and solar thermal collector systems (STC).

Photovoltaic systems should be constructed for larger public facilities, such as hospitals, schools, kindergartens, and where applicable and needed, other key social institutions. Because of the vast solar energy potential and availability of affordable Chinese photovoltaic systems, the development of larger solar systems could play a pivotal role in reducing overall energy poverty in Tajikistan. With an approximate cost of $9,600 USD4 for the installation of a PV system of 1kWp, including 12V 100A batteries (estimates used for the calculation of scaling-up are provided in Table 3), these installations present a cost-effective and environmentally sound method of combating Tajikistan’s current energy deficits (See Table 4).

TABLE 3 INPUT DATA USED FOR ASSESSMENT OF THE SOLAR SCALING UP

Investment costs for a 1kWp installed PV capacity [US$] 9600

Investment costs for a 100l installed solar thermal collector [US$] 1400

Number of most vulnerable households 100000

Average number of households per 1 social object 2000

Number of targeted social objects in the Jamoat 3

Share of local goods and services 30%

TABLE 4 RESULTS OF THE SOLAR SCALING UP FOR THE KEY SOCIAL OBJECTS

Total number of PV+STC systems needed 150

Total investment costs needed [US$] 1.650.000

Return to the local economy [US$] 495.000

Solar thermal systems represent a further potential of solar power. These systems may provide households with domestic hot water and energy for heating systems. As in the case of photovoltaic systems, the main target groups are larger public buildings and social infrastructure. The price of the 1000 l system (installation and equipment included) is approximately $1400 USD4. Development of these systems offers the possibility to create jobs, enhance the production of local goods and services, and alleviate the use of traditional biomasses for domestic hot water and heating (See Table 4). One potential concern of using solar thermal systems in rural areas is that harsh weather conditions in the winter months may cause pipes to freeze and subsequently break. Thus it is necessary that any activities associated with constructing STC systems

4 Cost estimates for both photovoltaic and solar thermal systems are made based on the experience of the Pilot Project in the Jamoat B. Burunov


Page | 9

must provide adequate training to the chosen community members responsible for their upkeep.

At the very least, one person per community must be trained to maintain and monitor STC systems:

- O&M, including emptying the system when there is the potential of pipes freezing, monitoring the pressure in case of overheating, cleaning the collectors in case of snow or dirt accumulation

2.1.3 ENERGY EFFICIENCY

In addition to providing a reliable RES based source of energy to the most vulnerable citizens, it is essential to implement adequate EE measures in the selected communities. The implementation of EE measures must work in collaboration with the IRD projects in order to ensure the rational use of scarce energy that is to be provided to local communities.

EE measures should primarily be implemented in social facilities in order to advance the communities’ trust in utilizing the services provided (i.e. leaving children at the kindergarten during the winter months and augmenting standards in health centres/hospitals and schools).

The selected EE measures should include the following:

- improving building insulation by using locally available resources (straw and cane) and technologies (lathing and furring);

- enhancing single glazed windows with a double glazing - improving cooking/heating stoves

FIGURE 3 SUGGESTED EE IMPROVEMENTS WITH LOCALLY AVAILABLE RESOURCES AND CAPACITIES

The average costs for these proposed actions are provided in Table 5 (and are based on the results of field analyses of the actual costs to implement EE measures with locally available resources and intermediate technologies).


Page | 10

TABLE 5 AVERAGE COSTS FOR EE MEASURES WITH LOCALLY AVAILABLE RESOURCES AND CAPACITIES

Costs [US$/m2] Min Max

Wall insulation (incl. roof) 3 6

Floor insulation (straw) 2 4

Floor insulation (straw+ foam concrete) 10 14

Windows double glazing [average] 50

TABLE 6 COST ESTIMATES FOR EE MEASURES PER DWELLING

Surface per house [m2] Costs per house [US$] Min Max

Walls (incl. roof) 50 150 300

Floor 25 50 100

Windows 4,5 225

Total costs 425 625

Surface per social object [m2] Costs per social object [US$] Min Max

Walls (incl. roof) 400 1200 2400

Floor 200 2000 2800

Windows 67,5 3375

Total costs 6575 8575

As the targeted group consists of approximately 100.000 households, the total costs may vary based on both the costs of EE improvements per household and the total households targeted in the period. It can be estimated, however, that the average price of EE improvements for a single household within the most vulnerable group is approximately $500 USD (red line in Figure 4), which projects the total required funding to be $50 million USD.

FIGURE 4 COST ESTIMATES FOR IMPLEMENTING EE MEASURES IN HOUSEHOLDS AND SOCIAL OBJECTS

0

10,000,000

20,000,000

30,000,000

40,000,000

50,000,000

60,000,000

70,000,000

80,000,000

To

tal

cost

s re

qu

ire

d [

US

$]

Number of targeted households

400

500

600

700

Av. costs per household [US$]


Page | 11

The positive impacts on both the local and national economy, incurred by income generation, the resourceful use of domestically available technologies and manpower, the subsequent transfer of money to the local communities, together with the multiple positive externalities associated with environmental preservation, all demonstrate the importance of scaling-up the integrated rural development projects based on RES and EE. Thus, it is important to establish adequate financing mechanisms (the National Trust Fund for RES and EE, which will be discussed in detail in the following chapter) and improve upon the state of the national power grid.

2.2 ENABLING THE ENVIRONMENT FOR THE SCALING-UP OF INTEGRATED RURAL DEVELOPMENT PROJECTS IN TAJIKISTAN

For the purposes of providing the necessary quantities of electricity, funding mechanisms need to be established in order to secure financing for both the capital costs and the support for plants selling electricity to the grid. The primary mechanism envisaged to provide such funds to conduct a successful scaling-up of the RES based IRD projects in Tajikistan is the National Trust Fund for Renewable Energy and Energy Efficiency in Rural Tajikistan.

The Trust Fund will play the crucial role in the system of creating incentives for community-based RES electricity production in rural areas. Further, the Fund will act as an intermediary institution between the producers and the utility, and with the regulatory mandate it has been provided, it will ensure the regular transfer of payments and money flow.

The Fund will act as a legal body with the following responsibilities:

� Collecting fees for incentivizing RES and EE in rural areas from sources as defined by legislation of the Republic of Tajikistan

� Managing the electricity buy back mechanism for the grid connected RES power plants (entering into contracts for the purchase of electricity with the utility on behalf of independent power producers)

� Providing adequate financial support for the RES and EE projects in rural areas not covered by the electricity buy back mechanism. As such, the following activities will also be eligible for co-financing from the Fund:

� Promotional campaigns for the use of RES and other more efficient uses of energy (in full amount)

� Education programmes for professionals performing tasks related to RES installations and EE improvements (in full amount)

� Financial aid for the preparation of RES/EE project documentation including investment studies (up to 40% of the total costs)

� Financial aid for thermal and off-grid RES electrical installations, e.g. solar thermal collectors and standalone sHPPs, as well as for EE improvement projects (in rural areas and in the public sector up to 100% of the investment, and in all other cases, up to 40% of total investment,)

� Fund raising for RES and EE projects in Tajikistan and mediation related to funding provided by other states, international financial institutions and bodies, and domestic and foreign legal and physical persons;

� Cooperating with national and international financial institutions (banks) to ensure funding for RES and EE projects in Tajikistan;


Page | 12

� Initiating and supporting international cooperation and micro-financing in the field of RES and EE;

� Establishing and maintaining a database for all RES and EE projects financed by the Fund including those that scrutinize the financial means spent for these purposes, as well as those related to providing a full monitoring and verification system

FIGURE 5 ORGANIZATIONAL SET-UP OF THE FUND FOR RES AND EE IN RURAL AREAS

Money flows and relations between stakeholders are shown in Figure 5. It must be noted that the difference between the “incentive price”, as stated in the tariff system, and the average electricity price in the system will be compensated by the Fund; electricity suppliers will pay to the Fund for redeemed electricity at the average system price. The “incentive price” in this case, however, is not similar to the European Feed-in-Tariff schemes where the idea is to make renewable energies competitive with other technologies. Rather, the Fund offers the incentive to cover the difference between the price determined by the tariff system (affordable to customers) and the actual production price.

Although, Tajikistan currently has weak power connection with its neighbouring states and is incapable of exporting the desired amount of electricity, which subsequently results with an excess of electricity in the system even without additional sHPPs connected, the establishment of incentives mechanisms for grid-connected production of electricity from RES is necessary. The reason is that the scheme is envisaged in such a way that all the money accumulated from the buy-back of electricity goes to local communities to combat poverty reduction, as well as the numerous additional benefits noted above. Further, transmission lines towards Afghanistan and Pakistan are currently being constructed; significant trade of electricity to those countries should begin within two years.


Page | 13

Upon the realization of these transmission connections, it is expected that the envisaged principle of buying off the electricity from sHPPs will be profitable even in a “pure market” sense.

2.2.1 ASSESSMENT OF THE FINANCIAL REQUIREMENTS

A preliminary assessment of the finances needed for the successful operation of the Fund revealed that in 2011 roughly $5.5 million USD will be needed for “incentivising” the sHPPs connected to the grid, according to the Government Programme for the Development of Small Hydro Power Plants for the Period 2009-2020 (see Table 7). An additional $5 million USD would be needed for the standalone plants and, together with EE improvements for the chosen households and social facilities, the needed money would amount to approximately $12 million USD.

The electricity prices used for this estimation were the same as those provided in Table 1.

TABLE 7 PLAN FOR INSTALLED SHPP CAPACITY FOR THE PERIOD 2009-2020

Period

Planned total

installed grid

connected sHPP

capacity [kW]

Additional stand alone

capacity sHPP [kW]

Planned annual electricity

production from the installed capacity

[MWh/year]

Required money to

incentivize newly installed capacity in the given period

[US$]

Total required money in the given period

for incentives [US$]

Required money to cover

investment costs of the stand alone sHPPs

[US$]

2009-2011 43.530 5.000 280.843 5.616.868 5.616.868 5.000.000

2012-2015 32.850 18.620 185.067 3.701.344 9.318.212 18.620.000

2016-2020 26.801 73.199 175.735 3.514.706 12.832.918 73.199.000

Total 2009-2020

103.181 96.819 641.646 12.832.918 12.832.918 96.819.000

Total installed capacity

[MW]

200

Total [US$] 109.651.918

* The total amount of money needed for guaranteed buy-back of electricity form micro and small HPPs is calculated using the following formula: Req. money (USD) = Elec. production (kWh) x [Guaranteed power purchase price (USD/kWh) - Average

elec.production price (USD/kWh)]

It is important to note that the cumulative financial needs for the “incentives” of grid connected sHPP production alone may be greater than noted depending on the speed of the grid connection per given period (i.e. if the planned installed capacity is fully implemented at the beginning of the period 2012-2015, the additional money necessary for the period would be three times greater because each year the full amount would have to be paid).

TABLE 8 PLAN FOR INSTALLED PV AND STC SYSTEMS TOGETHER WITH EE IMPROVEMENTS

Period Number of

targeted households

Number of targeted social

facilities

Required money to incentivize EE improvements[US$]

Required money for installing stand alone PV and

STC systems [US$]

2010-2011 1.000 10 555.000 110.000

2012-2015 20.000 60 10.330.000 660.000

2016-2020 79.000 80 39.940.000 880.000

Total 2009-2020 100.000 150 50.825.000 1.650.000


Page | 14

The estimates for social facilities were completed on the basis that for an average of 2000 households, there is one set of three social facilities – a school, hospital and kindergarten – all with the same surfaces to be retrofitted with EE improvements. The average costs of EE improvements considered were $500 USD per house and $5500 USD per social facility5. The total costs estimates are provided in Table 9.

TABLE 9 TOTAL COSTS ESTIMATES FOR THE PERIOD 2010 -2020

Total money required [US$] Period sHPPs EE improvements PV+STC systems Total

2009-2011 10.616.868 555.000 110.000 11.281.868

2012-2015 27.938.212 10.330.000 660.000 38.928.212

2016-2020 86.031.918 39.940.000 880.000 126.851.918

Total 2009-2020 109.651.918 50.825.000 1.650.000 162.126.918

5 Assumptions based on results of the field survey analyses with the assumed surface of 50 m2 of walls (including roof), 25 m2 of floor and 4,5 m2 of windows per house, and 400 m2 of walls (including roof), 200 m2 of floor and 67,5 m2 of windows per social facility.


Page | 15

3 IMPACTS OF IMPROVED ACCESS TO ELECTRICITY ON POOR RURAL HOUSEHOLDS AND ON THE ENVIRONMENT

In the approach presented in Chapter Error! Reference source not found., the poorest and most marginalized would directly benefit from the use of renewable energy. A basic amount of electricity would ease the burden of the primarily female-run households, responsible for the collection of firewood and dung. Women and children would have more time for money making activities and studying. As well, both groups would be eased of the physical burdens required to collect and carry up to 40 kilos of fuel-wood on a daily basis, which as noted above consumes up to 6 hours daily.

FIGURE 6 TAJIK WOMEN COLLECTING FUEL WOOD AND A TYPICAL RURAL HOUSE

Improvements in EE in the household have multiple benefits – from decreasing the need for energy (and thus related expenditures) with the improvement of stoves, indoor pollution is decreased and higher rates of comfort are achieved.

Even relatively cheap adaptations to stoves, such as providing brick “insulation” rather than the typical method of using metal without insulation, decreases the amount of fuel needed and increases the comfort level in the dwelling (Figure 7).

FIGURE 7 SIMPLE IMPROVEMENTS TO THE COOKING/HEATING STOVES (ADDING A LAYER OF BRICK TO THE TYPICAL METAL STOVE)

Further, as mentioned above, along with the decreased need for collecting fuel-wood and dung, there are multiple positive environmental externalities, including the


Page | 16

preservation of the forest cover, decreased soil erosion, fewer instances of desertification, and the preservation of valuable carbon sinks which play a key role in preventing climate change.

The multiple benefits for poverty stricken people can be illustrated by analyzing the changes to the typical households energy balance.

3.1 CHANGES TO TYPICAL RURAL HOUSEHOLDS ENERGY BALANCE

A sketch of the fuels and energy used in a typical Tajik household is provided in Figure 8. Figure 9 depicts the energy balance upon the implementation of the integrated rural development projects based on RES and EE.

Access to renewable year-round electricity, together with improved household energy efficiency, significantly decreases the need for fuel-wood and dung use, and positively impacts the overall health and sanitation conditions within the household. Further, as the integrated rural development projects also target all of the relevant social community facilities, such as schools, hospitals, and kindergartens, health and sanitation conditions will be significantly improved throughout all levels of the community.

The better availability of social and health care services further benefits women and children, and creates a solid ground for community development and higher standards of living.

FIGURE 8 TYPICAL TAJIK HOUSEHOLD’S ENERGY BALANCE AND THE LIVING CONDITIONS


Page | 17

FIGURE 9 TAJIK HOUSEHOLD’S ENERGY BALANCE AND LIVING CONDITIONS UPON IMPLEMENTATION OF THE INTEGRATED RURAL DEVELOPMENT PROJECTS

Reduced reliance on old and inefficient indoor furnaces (See Figure 10), a common contributor of indoor pollution, would have a positive impact on the overall health of the population via the decreased levels of indoor pollution. In addition, if the quality of insulation is improved, the high levels of indoor humidity, a known cause of many respiratory diseases, would also decrease. These furnaces can be improved and modified in such a way that they still serve the traditional purposes of rural Tajik households, and at the same time ameliorate efficiency and decrease indoor pollution. Some approaches have already been implemented with the support of the international donor community – i.e. modifying furnaces so that they are able to heat larger home surfaces and dry clothes.

Figure 10 Typical Tajik tandyr owen

In addition to furnaces, which are used primarily for winter heating (and winter cooking in some cases), tandyrs (see Figure 10) are used for baking bread and summer cooking. As the use of tandyrs plays an important traditional role and cannot be replaced, electrical heaters (that run on the electricity provided from the sHPP) could be installed in the tandyr such that fuel wood is not necessary. Prior to implementing this measure, however, it is important to check with the selected households to determine their willingness to forgo the use of fuel-wood for baking bread.

Fuel wood an dung

Unprocessed water from rivers

Electricity From sHPPs

Cooking (year round)

wiht improved stoves

Winter heating

(with improved stoves and/or electricity)

Lighting

Drinking

Washing

Improved EE of

the household with insulation

and more efficient

stoves and furnances

Water pumps

and

processing

No indoor pollution as

result of

improved stoves

and furnaces


Page | 18

It is crucial to understand the strong energy-environment-water and poverty nexus in Tajikistan, and to apply integrated rural development projects based on renewable energy sources and energy efficiency throughout the country, while bearing in mind the specific local conditions.


Page | 19

4 IMPLEMENTATION ASPECTS

The integrated rural development pilot project has already been undertaken in the Vakhdad District (near Dushanben). UNDP Tajikistan has implemented this project together with the involvement of the local community. National scaling-up will build upon the results and lessons learned from the pilot project and aim to reach the 1 million most vulnerable citizens of Tajikistan. The implementation of activities plan is shown in Figure 11.

FIGURE 11 TIMELINE OF SCALING UP IMPLEMENTATION PLAN

Implementation begins with designing and enabling the pilot project in the Jamoat B. Burunom in the Vakhdad District. Activities related to this project officially began in October 2009; the pilot stage is expected to finish in 2011.

PHASE 1 START-UP OF THE PILOT PROJECT 2010-2011

Building a sHPP

In the initial phase of the pilot project, the sHPP Nurofar (100kW installed capacity) in the Jamoat B.Burunov of the Vakhdad District was refurbished and now provides electricity to 100 households (1kW limitators have been installed in the households).

The initial phase also included the refurbishment of the local health centre/hospital, which had been identified as the key social facility in need of the most immediate attention due to its deteriorating and hazardous state.

Spreading of the Pilot Project with Integration of other Activities in the same Jamoat

In the second phase of the pilot project, an additional HPP unit shall be constructed in the HPP Nurofar, which will then be connected to the national grid and serve as the pilot to use the newly established financial mechanism administered by the Trust Fund for Rural RES (once it becomes operational).

Further, the village’s pumping station has been refurbished. Ongoing activities for its improvement will be provided in order to retain a more reliable and constant access to water.

A second HPP unit will also be completed, along with the integration of a small milk processing unit to be powered by the HPP.

The hospital located on the pilot project site was in particularly poor condition. A full refurbishment with the implementation of EE measures has been decided upon in accordance with the above mentioned principles.


Page | 20

FIGURE 12 HOSPITAL IN JAMOAT B. BURUNOV. LEFT – TOILETS AND DETERIORATED STATE PRIOR TO RECONSTRUCTION; RIGHT – HOSPITAL WITH IMPROVED INSULATION, PHOTOVOLTAICS PANEL AND REPLACED WINDOWS

The improvements to the hospital include roof repairs, improved building envelope insulation, heating system reconstruction, window replacement (from single glazed to double glazed), installation of a photovoltaic and solar thermal system, and structural repairs where necessary.

Improvement of the energy efficiency in the kindergarten and school

The third phase of the pilot project shall be to address the poor conditions in the kindergarten (and school) in order to ensure suitable conditions for the successful integration of the other activities planned in this programme. The kindergarten and school facilities must be refurbished in order to provide a secure place for women to leave their children, particularly in the winter months so that women are able to participate in workshops dedicated to improving health conditions.

Actions to be taken:

1. Improved cooking stoves in the kindergarten/school 2. Installation of a solar thermal collector in the kindergarten/school6 3. Improved heating system in the kindergarten/school 4. Improved water access in the kindergarten/school and refurbishment of the

bathroom

PHASE 2: SPREADING THE PILOT PROJECT ACTIVITIES TO OTHER JAMOATS WITHIN THE SAME DISTRICT

Building a sHPP

In the second phase of the pilot project, activities will be spread to other parts of the Vakhdad District. Jamoat Romit has been chosen as the second location. Activities are underway for the construction of a 500kW HPP that will supply electricity to three villages (256 households).

6 Currently women leave water in old plastic bottles outside the hospital to heat the water for washing children in the summer; in the winter they heat water on the outside open fires (although not many children attend kindergarten in the winter due to poor conditions)


Page | 21

The HPP should provide 1kW for each household with additional electricity to be used for social institutions.

Improving the conditions of the social objects

According to the needs of the community and the conditions in the main social facilities, adequate energy efficiency measures will be implemented together with the instalment of solar thermal collectors and photovoltaic panels on the selected facilities.

Standardization of the technology

In order to mitigate costs and increase domestic manufacturing and production potential, technologies should be standardized and operated accordingly.

PHASE 3: STARTING THE SCALING UP OF THE PROJECT

The scaling-up of the tested pilot project will aim to reach the 1 million most vulnerable Tajik people in order to provide them with a minimum of 1kW of reliable electricity supply per household and improve the standards of the local social facilities.

Scaling-up shall also include the use of solar energy via photovoltaic and/or solar thermal systems and energy efficiency improvements in both social facilities and private dwellings. EE improvements will include enhancements to cooking stoves and, where applicable, improvements made to the insulation of dwellings.

The choice of locations for the scaling-up will be done in accordance to the completed assessments and based on the needs of the communities and the potential for sHPPs and solar energy.

From now until the end of 2011, projects requiring approximately 5000kW installed capacities should be done in standalone sHPPs and an additional (approximate). 40000kW of grid connected capacity.

During this same period, at least 1000 households and 10 social institutions should be retrofitted with EE improvements, the latter of which should be also equipped with photovoltaic and solar thermal systems (3 jamoats)

In the selected jamoats, improvements to the water and sanitation systems should be completed in collaboration with the training for O&M.

PHASE 4: SCALING UP 2

In the fourth phase of the pilot project, scaling-up should continue with the aim to reach at least 20.000 households and with an additional instalment of about 50.000kW sHPP capacity. Other activities (EE improvements, PV and STC systems installations) should continue and aim to reach the targeted households together with 60 additional social facilities.

PHASE 5: SCALING UP 3


Page | 22

In the final phase of scaling-up, all 100.000 vulnerable households should be targeted with sufficient sHPP capacity installed to provide them with approximately 2kW of renewable electricity per household.

At the end of the scaling-up period, a total of 150 social facilities should be retrofitted with EE improvements and equipped with photovoltaic and solar thermal systems.

National programme for renewable energy sources based integrated rural development

Documents

economic development

lack of energy

energy law

energy undp tajikistan

rural tajikistan

reliable energy sources

reliable energy supply

poverty issues