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Developing and Sustaining Hydro Integrated Renewable Energy Power System (Hydro,Solar and Wind) for Rural Areas of Papua New Guinea

Rebecca Ogann Kiage*1, Sammy Samun Aiau#2

*1Natural Resources-Policy ConsultantSuapi Management Consultancy

P. O. Box 1885, Lae 411, Morobe Province, Papua New Guinea1r_kiage@yahoo.com.au

#2Lecturer

Department of Electrical and Communication Engineering

Papua New Guinea University of TechnologyPrivate Mail Bag, Lae 411, Morobe Province, Papua New Guinea

2saiau@ee.unitech.ac.pg

ABSTRACT

Hydro integrated renewable energy power system (hydro, solar and wind) technologies have the potential toprovide long-lasting solutions to the problems compounded by the economic, social and environment sectorsin Papua New Guinea (PNG) for isolated pockets of masses in rural areas secluded by the tough terrains.The use of hydro integrated renewable energy technologies in rural electrification in PNG will also play acrucial role in raising the living standards of rural people through jump start connectivity for informationtechnology for education and telemedicine services. To implement hydro integrated renewable energy powersystems in PNG, it is important to have appropriate energy policy framework for the PNG energy sector.The authors present economically viable, detailed, off-the-shelf technology for a hydro integrated renewableenergy (hydro, solar and wind) micro-grid power system for sustainable living in the rural areas of PNGwith a case study.

Keywords— Renewable energy technologies, environment, regulatory, social impact

I. INTRODUCTION

Energy is one of the most fundamental elements of our universe. Energy plays a significant role in theeconomic and technological advancement of modern society. It promotes education, health care,transportation and infrastructure and improves the standard of living in human life. Renewable energy isnatural energy which does not have a limited supply. Renewable energy harnesses naturally occurring non-depletable sources of energy, such as hydro, solar, wind, geothermal, wave, tidal, ocean current and biomass,to produce electricity, gases and liquid fuels, heat or a combination of these energy types. Some of theserenewable energies such as wind, biomass etc have been used for thousands of years. Biomass is burning ofwood in cooking and wind was used for sailing. However with the developments of renewable energytechnologies, these renewable energy sources can be used to generate electricity. Taking into account thesustainable character of the majority of renewable energy technologies, they are able to preserve resourcesand to provide security, diversity of energy supply and services, virtually without environmental impact1 2.The technical potential for renewable energy sources in PNG is enormous and the majority are in the ruralareas, and are exploitable with the use of new clean energy efficient technologies to benefit approximately90% of the population of PNG who do not have access to electricity services [1].

1 See http://www.renewable-solarenergy.com2 See http://www.sieraclub.org/renewables

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The main objectives of this paper are: to understand PNG ‘s electricity industry structure and policy andregulatory framework, to present the three potential indigenous renewable energy sources (hydro, solar andwind) and available energy efficient technologies and finally employ the best off-the-shelf hydro integratedrenewable energy efficient technology to develop and sustain electrical power generation, managed by aprivate-public joint venture enterprise, in the rural areas of Papua New Guinea.

II. BACKGROUND OF PAPUA NEW GUINEA

Papua New Guinea (PNG) is an island nation located south of the equator in the Oceania region. Oncecontrolled by Australia, PNG comprises both the mainland and some 600 offshore islands with a total landarea of 462,800 square kilometres. Fig. 1 shows the political map of PNG.

PNG gained independence in 1975 and is a parliamentary democracy with nearly 7 million (PNG NationalCensus 2011) people speaking over 860 different languages, and 90 % of this population (approximately 6million people) live a traditional rural subsistence lifestyle that is supported by the biological richness anddiversity of the forests, inland waters and coastal seas.

Fig. 1 Papua New Guinea’s political mapSource: Google maps

The National Government consists of three independent branches - the executive, the legislature and thejudiciary. Executive power is vested in the National Executive Council (NEC) or Cabinet, which comprisesthe Prime Minister and usually about 27 Ministers. There are 21 provinces in PNG as well as the NationalCapital District (NCD). The provincial governments have a similar constitutional arrangement to theNational Government and have concurrent power with the latter in areas such as agriculture, businessdevelopment, town planning, forestry and natural resources. PNG is an active member of theCommonwealth. The ceremonial Head of State is the Governor-General who, while elected by Parliament,represents the British monarch.

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III. THE PAPUA NEW GUINEA ENERGY SECTOR

The energy sector in PNG mostly depends on three main types of energy: electricity, oil and gas. The energysector accounts for 14% of the country’s GDP3. PNG Power Limited (PPL) (PNG Government owned) is thesole national electricity company responsible for generation, transmission, distribution and retail ofelectricity in PNG. PNG does not operate on a national power grid instead electricity networks are locatedaround the more populated areas and industrial sites. It has major transmission and distribution networks inPort Moresby, Ramu valley and Gazelle Peninsula (Rabaul) that are supplied by major hydro power plants.It also supplies electricity to 19 regional centres by diesel powered thermal generation as shown in Fig. 2.Out of the total 580MW installed generation capacity in PNG, PPL capacity is estimated at 300 MW, whilethe additional 280MW is generated by other entities that consume power for their own use [2]. Table 1shows PPL’s current and proposed hydropower installations in PNG. Because of population distributionwhere the majority of PNG’s population live in rural areas and geographical issues, the electrification rate isonly 7% in PNG.

Fig. 2. PNG Power Limited generation, transmission and distribution networks.Source: PNG Power Limited

3PNG’s GDP is US$ 12.937 billion with a growth rate of 8.9%. see http://www.worldbank.org/en/country/png

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TABLE 1PPL’S CURRENT AND PROPOSED HYDROPOWER INSTALLATIONS IN PNG

CURRENT INSTALLED HYDROPOWERSTATIONS

PROPOSED HYDROPOWERDEVELOPMENTS

NameInstalled/Available

Capacity (MW) NameCapacity

(MW)

Port Moresby (Rauna system) 120/100 Port Moresby (Naoro Brown) 60

Ramu System (Lae-Madang-Mendi) 122/70 Port Moresby (Udava) 70

Gazelle (Rabaul) System 17/12 Ramu II system 240

Gowar 21.6

Mongi 69.7

Burum 43.5

Source: PNG Power Limited

PNG is a country with vast opportunities for the energy industry sector. Oil Search, in which the PNGgovernment holds 17.6% of shares, is the largest oil company. Inter Oil, a vertically integrated companywith petroleum licenses covering about 8.7 million acres of land, is the second largest oil company in PNG.Both companies dominate the gas market in PNG as well. PNG will be setting for major changes in theenergy sector very soon, because of the PNG LNG project which is scheduled for deliveries in 2014. ThePNG LNG project is one of the largest projects undertaken in the country’s history and is a huge priority forthe country. The PNG LNG project is operated by Esso Highlands Limited a subsidiary of ExxonMobilCorporation on behalf of the co-ventures4. This project will allow PNG to attract more foreign investors andwill lead to widespread changes; notably improved technology, more skilled labour and higher GDP.However on the renewable energy sector, it remains severely underexploited for organizational andtechnological reasons [3]. PNG is a net energy exporter with oil and gas being the main indigenous energyexport product that contributes significantly to PNG’s export revenue. Crude oil and refined petroleumproduct export alone account for 18.1% of total merchandise exports in 2010 [4]. Ironically, bulk of theproceeds from this export revenue is used to import petroleum products such as diesel and petrol to supportthe transport, manufacturing and electricity generation sectors in PNG [2].

IV. PNG’s ELECTRICITY SITUATION, POLICY FRAMEWORK, INDUSTRY STRUCTURE ANDREGULATORY FRAMEWORK

In PNG approximately 90 percent of the population of 7 million still lack access to electricity services andthe progress of rural electrification program has lagged over the years. Many factors contribute to this sadstate of affairs however notable amongst all is: the long absence of an overarching energy policy to guide thedevelopment of the energy sector and the high investment cost associated with establishing transmission linesdue to PNG’s rugged topography [2]. The delay in the formulation and implementation of these policies hasdeprived the bulk of the population especially in the rural areas without electricity. Table 2 shows thenumber of people with access to electricity supplied by the PNG Power Limited and without access toelectricity in each province in PNG.

4 Project partners of the PNG LNG includes; Oil Search Limited, NPCP, Santos, JX Nippon Oil & Gas Exploration, MineralResources Development Company and Petromin PNG Holdings Limited.

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TABLE 2NUMBER OF PNG POWER LTD ELECTRICITY CUSTOMERS

Name of Province Population ofProvince

Populationwith

Electricity

Populationwithout

Electricity

Percentage ofPopulation without

Electricity

Central 183983 3182 180801 98Gulf 106898 411 106487 99Milne Bay 210412 1340 209072 99National Capital Dist. 254158 41766 212392 84Oro 133065 961 132104 99Western 153304 652 152652 99Eastern Highlands 432972 5445 427527 98Enga 295031 1396 293635 99Simbu 259703 1721 257982 99Southern Highlands 546265 1131 545134 99Western Highlands 440025 6175 433850 98East Sepik 343181 2380 340801 99Madang 365106 3297 361809 99Morobe 539404 12136 527268 97Sandaun 185741 1070 184671 99Autonomous Region ofBougainville

175160 570 174590 99

East New Britain 220133 6496 213637 97Manus 43387 3353 40034 92New Ireland 118350 1202 117148 98West New Britain 184508 1982 182526 99

Source: PNG Power Limited

A. Policy FrameworkThe PNG Government has jurisdiction over energy matter. The Energy Division of the Department ofPetroleum and Energy (DPE) is responsibe for energy policies and plans, data collection and analysis andadvices the government on energy sector issues, while PNG Power Limited (PPL), the national electricityutility undertakes the power sector infrastructure planning and developments. Energy developments formspart of the the PNG Government’s Development Strategic Plan 2010 – 2030 with a range of relevant policiesbeing drafted or amended. The PNG Electricity Industry Policy was launched by the Government inDecember 2011 and identifies the importance and versatility of electricity as an input of production and anessential ingredient to sustain economic and social growth of PNG [5]. The strategic objectives of the policyare to improve reliability, accessibility and affordability of electricity services to the majority of itspopulation. This is achieved through the following policy strategies; facilitating competition/contestability inthe sector, up scaling rural electrification through State financing of consumer service obligations, enhancingtechnical regulation, creating certainity to investors in the sector by developing a clearly defined access/codeaccess regime and encouraging private sector participation in the sector.

The other policies that are in draft form includes; National Energy Policy

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Rural Electricity Policy and Strategy Geothermal Energy Policy Renewable Energy Policy

The Draft National Energy Policy and The Draft Rural Electrification Policy are under review by theGovernment Task Force on Policy. The Draft National Energy Policy covers indigenous energy resources inPNG that includes; oil, gas, hydropower and other renewable sources and aims to ensure that ownership ofenergy resources is vested with the resource owners and that their development must be accessible, reliable,affordable, efficient and environmentally friendly for the benefit to communities, industries and trade andother development activities [6]. The Draft Rural Electrification Policy encapsulates the need for up scalingrural electrification through development of renewable energy resources with the vision to enhancelivelihood of rural population through sustainable provision of electricity [7]. The policy acknowledges theavailability of untapped indigineous renewable energy resoursec and stipulates grid extension options and thelinkages of the Renewable Energy Policy with other sectoral development policies of PNG. However, thereis a lot to be done, especially on the Renewable Energy Policy. The PNG Government has also initiated thePNG Vision 2050 which has seven ‘pillars’ of which natural resources, climate change and environmentsustainabliligy are among the areas of focus. In the PNG Government Strategic Development Plan 2010 –2030, there is a high level of strategic support for energy development with a goal that all households haveaccess to a reliable and affordable energy supply and 70% of PNG be electrified by 2030.

B. PNG’s Electricity Industry StructureThe PNG Electricity Industry encompass generation, transmission, distribution and retail activities. Theoverlying policy body of the sector lies with the Department of Petroleum and Energy mandated by theGovernment to formulate policy for the sector. The current players in PNG’s electricity industry include thePNG Power Limited (PPL) plus other Independent Power Producers (IPPs). The PPL is a privateGovernment entity established as a regulatory regime vested with the power to plan, develop, generate,transmit, distribute and sell electricity and is vertically integrated. PPL holds monopoly retail transmissionsector while the generation and distribution are contestable. The PPL holds exclusive rights to retailelectricity in areas in which it supplied power together with a 10 km surrounding zone at the time of issue ofits license [5].

The Independent Power Producers (IPPs) operate under direct power purchasing agreement. However theiractivites are limited and within designated locations as indicated in their respective licence. The powerpurchasing arrangements are negotiated on a party-and-party basis rather than through open and competitiveprocesses. Consequently, it is not clear whether the terms and conditions of supply and the relative risksborne by the contracting parties are optimal for the State [5]. PPL has bilateral power purchasingarrangements with two IPP’s namely Baiune Hydro in Morobe Province and Kanudi Power Plant in PortMoresby through a 15 year build –operate –transfer (BOT) agreement and partners in joint-venture with theHides petroleum development in gas fired generation. Recent players that have entered the electricity marketinclude Western Power in 2007 which was granted a license for electricity generation, distribution andsupply activities in the Western Province of PNG.

C. PNG’s Electricity Regulatory FrameworkThe relevant Acts of Parliament that deals with energy issues include; the Electricity Supply Act which dealswith powers of the Minister for Petroleum and Energy for generation, supply and extension of electricityfrom power facilities built with government funds, the Electricity Industry Act 2002 that specifies thefunctions and powers of PPL, the Independent Public Business Corporation Act 2002 that governs thearrangement under which the government holds all shares on PNG Power Ltd., the Independent Consumerand Competition Act 2000 that regulates electricity, petroleum and their pricing, the Environment Act 2000which can require environmental impact assessments for prescribed energy investment and the Organic Law

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on Provincial Government and Local Level Government 1995 which grants authority to 19 provincial and299 local governments to regulate their respective electricity.

The PPL is licensed under the Electricity Industry Act 2002 to generate, transmit and sell electricity and isregulated through the Electricity Regulatory Contract (Regulatory Contract) which binds PPL and theIndependent Consumer and Competion Commission (ICCC) pursuant to the provisions of the ICCC Act 2002and Electricity Industry Act 20025. The PNG Electricity Industry current regulatory framework operates onthe following broad features [5]:

It provides exclusive service (retail) areas for PPL defined as within 10 kilometres of the distributionnetwork operated by PPL (as at the date of commencement of the license) for loads under 10megawatts (MW).

It allows for third party producers to generate and supply PPL for the latter’s sale to consumers. PPLhas entered into contracts with IPP’s with the term and conditions of these contracts not made public.

It allows for free entry to serve large consumers (i.e. with loads of 10MW or more). It provides for regulated third party access to PPL’s wires in circumstances where the supplier can

lawfully supply, e.g. for supply to customers of loads of 10MW or more. It uses a system of postage stamp pricing in the shape of the national single tariff (which charges the

same price for customers within a particular category, regardless of location). The inherent cross-subsidies are necessary to maintain the affordability of electricity access in high cost (largely rural)area. and

An independent regulator of the electricity industry, the ICCC implements a form of revenue capprice regulation in relation to PPL, and sets licence conditions for PPL and other market participants.

PNG’s electricity regulatory framework requires further strengthening with the information asymmetrybetween the regulator and regulated entity and also incorporate a detail explicit and transparent consumerservice obligation (CSO) framework that favours mutual optimum benefit for all players in the sector.

V. PNG’s RENEWABLE ENERGY RESOURCES

Fig.3 shows the renewable energy sources that the world is using as clean energy solutions to the pollutingsources of energy that produce carbon dioxide, the heat-trapping pollutant that cause global warning. Therenewable energy sources includes biomass, hydro, geothermal, ocean current, solar, tidal, wave, wind andwood. PNG virtually has all the above renewable energy resources. In particular, PNG has an enormouscapacity of renewable energy sources, especially hydro and solar energy that can be harnessed to produceelectricity for the bulk of PNG’s population who dwell in the rural areas with no access to electricity. Thereare also high wind spots along the northern coastline and on the isolated islands of PNG. This paperinvestigates and proposes the use of the three renewable energies (hydro, solar and wind) to develop asustainable hydro integrated micro-grid power system for the bulk of population living in the rural areas ofPNG.

5 See http://www.iccc.gov.pg/electricity-industry.php

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Fig. 3 What renewable energy sources the world is usingSource: renewable-solarenergy.com

A. Hydro Energy

Hydro energy is a renewable energy source and involves the use of water. Hydropower uses the movementof water under gravitational force to drive turbines to generate electricity. Hydro is a great source of energyunlike solar and wind, as the rivers, streams and springs can offer a 24/7 supply of renewable energy. Mosthydropower stations use either the natural drop of a river, such as a waterfall or rapids, or a dam is builtacross a river to raise the water level, and provide the drop needed to create a driving force. Currently it isthe most widely used source of renewable energy. PNG has significant hydroelectric potential with vast rivernetworks, numerous creeks, streams and mountain spring water flows throughout the country that can beharnessed to produce hydro electricity power for the rural population of PNG. Fig. 4(a) shows a typical run-off-the-river micro-hydropower system and Fig. 4(b) shows the Yonki dam, the water source for the Ramu’s82 MW hydropower grid connecting the highlands region, Lae and Madang.

(a) (b)

Fig. 4 (a) Micro-hydropower system layout and (b) Yonki dam, Ramu hydro power, PNGSource: energy.ltgovernors.com and PNG Power Ltd respectively

B. Solar Energy

Solar radiation, often called the solar resource, is a general term for the electromagnetic radiation emitted bythe sun. Solar radiation can be captured and turned into useful forms of energy, such as heat and electricity,

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using a variety of technologies. Alternatively, sunlight can be collected and focused with mirrors to create ahigh intensity heat source that can be used to generate electricity by means of turbine or heat engine. Smallsolar energy systems can provide electricity for homes, businesses, and remote power needs. Larger solarenergy systems provide more electricity for contribution to the electric power system. Fig. 5 shows a typicalsolar photovoltaic power system.

Fig. 5 Solar photovoltaic power system layoutSource: allaboutsolarenergy.com

Solar energy is among the largest potential sources in PNG. Average insolation in most parts of PNG is 400-800 W/m2, with 4.5 to 8 sunshine hours per day all year round. Of the 23 locations assessed in PNG, PortMoresby, National Capital District has the largest solar energy resource with 2,478 sunshine hours per yearand the lowest is Tambul, Western Highlands Province, with 1292 hours per year. However to date no solarelectricity grids have been installed for the country.

C. Wind Energy

Winds are caused by the uneven heating of the atmosphere by the sun, the irregularities of the earth's surface,and rotation of the earth. Wind energy technologies produce electricity from the wind flow, or motionenergy, when "harvested" by modern wind turbines. The terms "wind energy" or "wind power" describes theprocess by which the wind is used to generate mechanical power or electricity. Modern wind turbines fallinto two basic groups; the horizontal-axis variety, and the vertical-axis design. Most large modern windturbines are horizontal-axis turbines. Harnessing the wind energy with a wind turbine can provide a sourceof clean and renewable electricity for large or small communities. PNG has some best wind potentials in theCentral, Western, Milne Bay and New Ireland provinces, and in the Port Moresby city area. There are nomajor wind turbine power installations in PNG however small wind turbines are being installed for individualhousehold electricity supplies [8]. Fig. 6 shows a wind power system.

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Fig. 6 Wind power system layoutSource: exploringgreentechnology.com

Electricity generation consists in transforming energy from nature into electrical energy. Table 3 depicts themost common technologies available at the moment: their primary energy source, their renewability and theCO2 emissions rate based on the life cycle of the technology [9], [10].

TABLE 3ELECTRICITY GENERATION TECHNOLOGIES IN RURAL ENVIRONMENT

Technology PrimarySource

Renewable(Yes/No)

C/IContinuousIntermittent

AC / DC Emissions(life cycle mean

gCO2eq/kW)

CombustionOilGasCoal

Biomass

No (C)No (C)No (C)Yes (C)

ACACACAC

780530100070

PV Sun Yes (I) DC 56

HydraulicMechanical energy:

water Yes (C) AC 8

Wind-farmsMechanical energy:

wind Yes (I) AC 14

Source:Olatz Azurza and others, ICREPO, March, 2012

VI. RURAL ELECTRIFICATION WITH RENEWABLE ENERGY SOURCES IN PNG

Development and adoption of reliable renewable energy sources in the rural areas for rural electrification hasbecome a major challenge to most parts of the world. According to the International Energy Agency (IEA),there was in 2008 an estimated 1.5 billion people, or 22% of the world’s population, living without access toelectricity, 85% of whom live in the rural areas and PNG is no exemption. This energy outlook for the ruralpeople is unacceptable as modern renewable energy technologies can play a crucial role in developing ruralelectrification to provide electricity to the people living in the rural areas.

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The role of energy and more specifically electricity is the key player in all aspects of sustainabledevelopment. Sustainable development of the energy sector is a potential factor to maintain economiccompetitiveness and progress. Access to modern energy reduces poverty and hunger and improves access tosafe drinking water through food preservation and pumping system (MDG1). It fosters education byproviding light and communication tools (MDG2), it improves gender equality by relieving women of fueland water collecting tasks (MDG3), and it reduces child and maternal mortality as well as incidences ofdisease by enabling refrigeration for medication as well as access to modern equipment. It also helps to fightpandemics like HIV (MDG4, 5, 6). Finally, if access to electricity is implemented with environmentallysound technologies, it directly contributes to global environmental sustainability (MDG7). Energy alone isnot sufficient to alleviate poverty, but it is certainly necessary and there will be no major developmentprogress without a growing number of people gaining sustainable access [3], [11].

In PNG, which has no national power grid but has large river systems and abundant sunshine, renewableenergy has tremendous potential to transform remote rural lives with clean and sustainable electricity.Renewable energy projects for power generation not only helps combat climate change but can transformcommunities in rural areas by revitalising local economies and drawing people together. In order for thePNG Government to achieve its Vision 2050 where all households have access to a reliable and affordableenergy supply and 70% of PNG be electrified by 2030, it is vital for the Government to fast trackdevelopment of appropriate rural electrification and renewable energy policies to guide and facilitate thedevelopment of renewable energy in sustaining rural livelihoods. Fig. 7 shows the guidelines for off-gridelectrification project designers [12], [13].

Fig. 7 Elements of a sustainable rural electrification projectSource: Designing sustainable off-grid rural electrification projects

To maximize the chances of sustaining operation of an off-grid electrification project over the long term,fundamental project design principles must be observed, as follows:

The conception and implementation of the off-grid electrification project must be consistent withthe overall rural electrification plan for the region.

A cost-benefit analysis of alternatives must be carried out to determine the least-cost solution.

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In the assessment phase, effort must be made to maximize community awareness, involvement, andsupport, which is vital to project success.

Both the government and implementing agency must take full ownership of the project. One must obtain the government’s upfront commitment to pick up the subsidy slack when external

grant co-financing ends. Competence of the local Project Management Unit (PMU) is critical to project success. For off-grid electrification projects that rely on private-sector participation, the simplest delivery

mechanism or business model should be applied. The government must put in place light-handed regulatory measure that simplify operations for

private-sector participants and limit the cost of doing business. Appropriate training should be provided to participants of off-grid electrification projects at various

levels. One should maximize opportunities for productive and institutional applications that complement

the provision of household service. Opportunities for international co-financing should be explored.

VII. CASE STUDY: WANTUN MICRO-HYDRO AND SOLAR POWER PROJECT

The Department of Electrical and Communication Engineering at the PNG University of Technology has

considered rural electrification has one of its priorities and has been helping rural communities carrying out

feasibility studies of their proposed micro-hydro, solar and wind power sites. PNG has many good rivers,

streams and even mountain springs that can be turned into micro-hydro power systems and even together as

water supply systems for the benefit of the communities in the rural areas. PNG situated along the equator

also has abundance of sun shine all year round and there are high wind spots along the coastlines and the

isolated islands that can be harnessed to produce electricity for the isolated rural communities.

For the past 15 years the department has carried out nine micro-hydro feasibility study projects and a

numbers of solar power feasibility study projects for the rural communities. However none of the past

projects have been implemented due to financial constraints face by the rural communities. The case study

presented in this paper is on the recent feasibility study of a micro-hydro, solar and wind power system for

the Wantun Community Learning and Development Centre (WCLDC) in the Onga Waffa Local Level

Government in the Markham District of Morobe Province as shown in Fig. 8.

Fig. 8 Wantun micro-hydro, solar and wind project siteSource: Google Map

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The WCLDC is an Indigenous Peoples Organization of approximately five thousand (5,000) rural villagers,endeavouring to meaningfully participate in the development process of the nation of PNG. They believethat it is the rural people themselves or project beneficiaries who can make pivotal decisions and play themost important roles in improving their quality of life and standard of living and bring in lasting changes totheir communities through development projects.

A. Micro-Hydropower (MHP) System

Micro-hydropower technologies have a long history of use because of their many benefits, including highavailability and lack of emissions. In light of this project, the application of micro-hydropower appears idealfor the Wantun communities. The provision of electricity is a vital step in developing infrastructure which,in turn, entails vast improvement to quality of life, learning opportunities (education) and alsocompetitiveness of local businesses. Also it is believed that the installation could provide valuablecommunity and educational resources as well as a creditable communication tool for the use of renewableenergy within the Markham District of the Morobe Province of PNG.

Micro-hydro is an ancient source of renewable energy and, in the light of the national government’s CO2

reduction targets and funding incentives, the Wantun micro-hydro scheme in the Markham District of theMorobe Province of PNG was investigated for the installation of micro-hydro power scheme. Fig. 9 shows aphoto of Wantun village. The feasibility study of the site was carried out from 9th to 13th April 2012. Themicro-hydro project included detail site survey of the river and the area, which includes current existing loaddemands, the specifications of the turbine and generator, design of the system, purchase and delivery of allrequired materials to the project site and the final installation and commissioning of the scheme.

Fig. 9 Wantun village, Markham District, Morobe Province, PNG

During the feasibility study, three river sources were investigated. The three river sources were Tamur,Yawai and Wara Kalap. From this feasibility study the Yawai mountain stream was determined to be themost viable location for micro-hydro site, with a head of approximately 216 meters. The flow of the Yawaimountain stream is adequately high year round so that the theoretical limit of power production does not limitthe proposed project. A flow of 20 litres per second in the penstock is necessary to develop the 40 kW ofpower that was deemed necessary. HDPVC pipe was concluded to be the optimal penstock material, with adiameter of approximately 0.25 meters. Channel and intake designs and dimensions have also been

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calculated, to ensure that the required flow is maintained. HDPVC pipe of 0.225 meters is recommended forthe intake pipeline.

B. Solar Photovoltaic (SPV) System

No solar power field measurements were carried out on-site for the Wantun village community but it is notedthat solar energy is among the largest potential sources in PNG. The average insolation in most parts of PNGis 400-800 W/m2, with 4.5 to 8 sunshine hours per day all year round. Wantun village in the MorobeProvince is situated closer to the equator and therefore would have a larger solar energy resource with themaximum 8 hours of sunshine per day all year round.

C. Wind Power SystemAlso no wind power field measurements were carried out on-site for the Wantun village community but fromvisual survey of the site it is noted that there is wind potential due to the hilly terrains with the Markhamvalley spreading for kilometers causing the turbalance of air along the ridges near the village where the windturbines can be installed to harness electricity power for the village communities.

D. Micro-hydro/Solar/Wind Micro-grid System

In recent decades rural electrification has been done with renewable energies through individual generation,that is, one user – one installation. Technology now allows evolution towards collective installations throughthe use of hybrid micro-grid power system with generation and distributed accumulation as shown in Fig. 10.From the feasibility study of the Wantun micro-hydro and the site surveys of solar and wind power systems,it is proposed to develop a hydro intergrated micro-grid system using the three renewable energy resourcesfor the supply of electricity to the Wantun village communities. The micro-grid system will be a hydrointegrated renewable energy power system using the micro-hydro, solar and wind energy sources. Hydrointegrated renewable energy power system is one of the most promising applications of renewable energytechnologies in rural areas, where the cost of the grid extension is prohibitive due to the tough terrains andthe price of fossil fuels increase drastically with the remoteness of the location. Applications of hydrointegrated renewable energy power systems range from small power supplies for rural households providingelectricity for lighting or water pumping and water supply to village electrification for the rural communities[14], [15].

A micro-grid is a discrete energy system consisting distributed energy sources (e.g. renewable, conventional,storage) and loads capable of operating in parallel with or independently from the main grid. A micro-gridincludes generation, a distributed system, consumption and storage, and manages them with advancedmonitoring, control and automation systems. A fully-developed micro-grid has the capability ofautomatically disconnecting and operating independently from the main grid.

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Fig.10. Hydro integrated renewable energy micro-grid rural electrification system layoutSource: outbackpower.com

VIII. BUSINESS MODELS FOR RURAL MICROGRIDS

Providing electricity in rural areas entails high capital costs spread over low returns due to rural populationusually dispersed, have low consumption rates and do not have the capacity to pay for electricity services.The key issues to be addressed in developing a sustainable rural electrification market is how to maximiseprivate sector investment and minimise subsidies for rural electrification. It is crucial to design subsidieswith careful attention to the danger of market distortion in order to create a level playing field for allparticipants [16]. In the case of PNG, the Electricity Industry Policy recognises and attempts to up scalerural electrification through State financing for consumer service obligations and encourage private sectorparticipation in the sector. However, in order for PNG to achieve its Vision 2050 where 70 percent of PNGis electrified by 2030, it is important for these critical steps to be considered in order to promote a sustainablebusiness model for rural electrification [17]:

Review and integrate off-grid policy into overall electricity industry policy (regulations, level playingfield).

Design targeted and efficient smart subsidies in a transparent way, secure funding and define exitstrategy.

Adapt public-private partnerships delivery models to local needs and condition; Support policy development and capacity building; Ensure that users pay substantial part of lifecycle cost (payments creates ownership). Involve users and communities in decision and implementation (participation creates ownership). and Design monitoring mechanisms to supervise both firms and users compliance with the contracts –

these are particularly important in remote areas which are more difficult to monitor.

The definition and classification of business models for rural electrification is challenging, especially whatcriteria to use in these classifications. However, it is a very important exercise since a key for success ofmicro-grid systems is the local institutional arrangement determining who invests, develops, owns, andoperates the systems. There are a number of business models for micro-grid management of ruralelectrification. These are community-based model, private-based model, the utility-based model, and hybridbusiness model [17], [18]. The community-based model involves the community to take ownership and

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operate, provide maintenance, tariff collection and management of the system. The private sector-basedmodel involves a private company in the financing, construction and operation of the system. The utility-based model in PNG would involve PNG Power Limited to take full responsibility of the establishment andmanagement of the micro-grid rural electrification system. The hybrid models try to combine differentapproaches to benefit from the advantages of each of the models and to minimize shortcomings. Fig.11shows a hybrid business model which will be adopted for the Wantun integrated micro-hydro, solar and windpower system.

Fig. 11 Hybrid business model, Source: Rural electrification with renewable energy

Under the hybrid business model, PNG Power Limited implements and owns the Wantun micro-grid powersystem, WCLDC manages it on a daily basis and a private company provides the technical back-up andoperation and management advice. The hybrid model is more suitable as it enables ownership and operationand management to be differentiated and allows all previous stakeholders to be involved. A purely privatesector based model may not provide improved access for the rural poor due to market imperfections and lackof incentives. Similarly a purely public sector based model is often ineffiecient, substantial politicalinterference and lack of interest and commitment in the local level. The community based model faces therisk of technical and financial failure overtime.

IX. CONCLUSIONS

This paper discussed the PNG energy sector, the electricity industry structure, policy and regulatoryframework and rural electrification in PNG, together with a case study of a feasibility study of Wantunmicro-hydro, solar and wind power system in the Markham District of Morobe Province, PNG. This paperalso presents a comparative study of the indigenous renewable energy resources (hydro, solar and wind) andoff-the-shelf renewable energy technologies, to develop a sustainable hybrid micro-grid rural electrificationsystem for the bulk of population living in the rural areas of PNG.

Renewable energy projects can serve a critical niche in supplying much-needed electricity to rural, off-gridcommunities in PNG. Connecting the electricity grid to rural and remote areas is very uneconomical to carryout. Therefore it is more economical to electrify the rural areas with a micro-grid by means of existing hydro,solar and wind energy sources available locally. The micro-grid configuration represents energy distributionarchitecture from the producing site to consumers and eventually the interconnection between several sitesand several consumers.

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From the discussions, it is recommended that PNG has abundant hydro, solar and wind energy potentials thatcan be developed under a renewable energy hybrid business model to fast- track the rural electrificationprogram and provide electricity to the people living in the rural areas of PNG. The concept of the micro-gridpower system using hydro, solar and wind energy sources is a cost effective and sustainable system andshould be implemented in the rural electrification program in PNG.

ACKNOWLEDGEMENT

The authors would like to gratefully acknowledge the financial support of the Suapi ManagementConsultancy, the Honourable M.P. for Markham District Paul Isikiel, the JDP&BPC for Markham Districtand the Research Committee of the PNG University of Technology.

BIBLIOGRAPHY`

Ms. Rebecca Ogann Kiage

Ms Kiage is a consultant with Suapi Management Consultancy. Ms Kiage’s area ofresearch interest are in agriculture and renewable energy policy. Ms Kiage hasextensive experience in PNG’s agriculture policy and has serve with the PNGNational Department of Agriculture and Livestock (2001 – 2009). Ms Kiage holds aMaster of Science: Energy & Resources; Policy & Practices from University CollegeLondon, School of Energy & Resources –Australia, (2011), Master of Public Policyand Management from Monash University, Australia (2006) and a BachelorCommerce, Business Economics, PNG University of Technology (2000).

Mr. Sammy Samun AiauMr. Aiau is a faculty at the PNG University of Technology since 1985 in Electricaland Communications Engineering Department. Mr. Aiau’s area of research arecontrol systems engineering, energy management, renewable energy and powersystems control. Mr. Aiau also explored technology education in Australia (1989-1991) and Canada (1994-1995). Mr. Aiau is a senior faculty at PNG University ofTechnology in Electrical and Communications Engineering Department and wasalso an acting head of department (2003-2005). Mr. Aiau is a PNG University of

Technology alumnus with a Master of Philosophy (MPhil, 1993) in Electrical Engineering (Power) and aBachelor of Engineering (B.Eng., 1978) in Electrical Engineering (Communications).

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