Marshalls Energy Co., Inc
P.O. Box
Majuro, MH 96960

STATEMENT BY MATTLAN ZACKHRAS

CHAIRMAN, MARSHALLS ENERGY COMPANY

E7 GROUP AND PPA WORKSHOP ON RENEWABLE ENERGY

Members of the e7 Group of Power Utility Representatives, Mr. Tony Neil, Executive Director-PPA, participating PPA members including the respective CEO’s/GM’s who are here with us, Distinguished Guests, Ladies and Gentlemen; 

First of all, on behalf of the RMI Government, I would like to once again welcome you all to the first e7 Group and Pacific Power Association Workshop on Renewable Energy in the Pacific region.   As stated earlier by Makoto Suto San in our welcoming reception, it took almost 2 years of discussions and planning for such a workshop to take place in the region, and this is the more reason why the Marshall Islands is very honored to be your host during this historical two-week workshop on renewable energy. 

Secondly, I would like to reiterate our utmost appreciation to our partners who have made this workshop a reality through their kind support namely, PPA, US-DOI, and e7 Group.  I would like to also thank MEC staff and management for handling all the logistical arrangements for our participants, including the infamous map of where not to go on island that has already been circulated around to members. 

I cannot emphasize enough how fortunate we are to have our visiting experts from the e7 group of utilities here with us, which is comprise of the 8 major electrical power companies of the G7, or the 7 largest industrial nations in the world, to help our participants as they develop their skills and formulate the best plan of action to improve the living standard of their respective communities in a self-supporting manner.    As we all know, these companies are dedicated to protecting the global environment, promoting the efficient generation and use of electricity, and helping to support the growing economies of developing nations.   They have developed more than 30 projects throughout the world and we are pleased to see that they have started this process in our region. 

I understand this particular e7 group traveled many miles and the fact they are here with us today is a true testament of their commitment to sharing their ideas and experiences about the best strategies and concepts for us to produce the most appropriate, affordable, sustainable, and reliable supply of electricity to our respective communities. 

In particular, I would like to commend our PPA utility members for traveling across the Pacific to attend this important workshop.  For instance, while it may have taken less than an hour for some of us to travel to Majuro, I just learned that the CEO and GM for Cook Islands Utility Company traveled 48 hours to be here with us, this feat in itself speaks louder than words. 

This workshop should be used as a building block in our mutual goals of building a better and safer future for our people and the region.  Our respective countries are on the same boat as we continue to be threaten by the affects of global warming and sea level rise due to climate change so it is not only critical that we begin by taking serious steps in promoting alternative means of producing clean energy to protect our environment but we continue to remain strong in our combined efforts to promote international awareness of the predicament some of us are already facing today whether its through regional forums or the recently implemented Kyoto Protocol process.   In fact, the Kyoto Protocol  contains the necessary mechanisms that would enable us to build electricity capacity with the least environmental impact, rather than following in the footsteps of the larger nations, which now have to undertake a radical review of their own energy policies and generation capacity to fulfill their Kyoto commitments. 

As we all know, renewable energy is one of the few means by which significant cuts in greenhouse emissions can be made, utilizing existing proven technology.  Renewable energy currently accounts for a relatively small amount of energy supply with technologies such as wind and solar only beginning to emerge.  Renewable energy has also the ability to deliver a number of social objectives - particularly for developing economies like ours where it can play an important role in alleviating poverty and improving livelihoods for the countless people in the region that do not presently have access to electricity – for us here in the Marshall Islands many of them live in our widely scattered outer islands. 

The Marshall Islands is pleased to be among the few island communities in our region that are taking lead in the area of renewable energy and we are more than willing to share our successes and failures with our colleagues here today.  We hope to continue to learn through these forums and by sharing our experiences with you all. 

I hope that from this workshop, we can all continue to work through the PPA and the e7 group in implementing concrete targets towards establishing potential sustainable renewable energy projects throughout the region. 

Once again, I encourage each of our participants to use this wonderful opportunity to share your ideas and learn from each other especially our e7 group of experts and further establish what hopes to be a long-term partnership in an area that is critical to our region. 

Thank you and enjoy the workshop and the rest of your stay here in the Marshall Islands.

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INTRODUCTION

PACIFIC POWER ASSOCIATION 

Introduction:

The PPA first evolved in 1989, when Chief Executive Officers and General Managers of a number of the Pacific Island Country Power Utilities together with governments, aid donors, private sector companies met to discuss the difficulties experienced by the Power Utilities to improve their overall performance. Also participating at these meetings were other organisations with interest in the Pacific islands power industry

They recognised that Pacific Island Power Utilities were a major contributor to the economic development of their Pacific Islands, and that good performing power utilities assist with poverty alleviation.

Examples of the difficulties that these utilities experience in their efforts to improve the utility performance were as follows:

1.     Inappropriate and inferior equipment and technology “dumped” on a utility by unscrupulous vendors, or vendors with no appreciation of the harsh environment that the equipment needed to cope with. The utility in most instances had no recourse to achieve suitable resolution of the problems because the utility was not “seen” as a large market. This, together with the geographic isolation, provided no incentive for the vendor to assist the utility to rectify the problem.

2.     The networking that should take place between power utilities, where CEOs and engineers communicate and regularly meet with each other to discuss, share and resolve common issues was unavailable. In addition this inhibited the opportunities for these key people to meet and participate as regional group of utility managers in workshops to address and receive instruction on new technologies, industry development, reforms that are presently being undergone by mainland utilities and the successes and failures of their peers in their attempts to improve their utilities performance

3.     There were clear indications that aid was being miss-directed. There to be no real understanding by the aid and donor countries of the problems faced by utilities in the region that were limiting their ability to improve, and the utilities contribution to the economic development of their islands, and thus financial support was not made available.

4.     A number of regional organisations were involved with energy, but there was no clear hierarchy to allow consultation with a regional representative of the power utilities on proposed developments, nor input to be provided in the formulation of energy policy that affected the utilities.

These senior General Mangers met informally once a year during 1990 and 1991 to address these challenges, and finally resolved with the agreement of their peers in the other Pacific Island Utilities to create what is now known as the Pacific Power Association. The United Nations Pacific Energy Development Programme supported this, which incidentally was itself being closed down in 1991.

The power utility members were named Active Members.

Pacific Power Association Membership:

In establishing the Association, a clear decision was made to include an additional associate membership named Allied Membership and these were private enterprise companies. This decision was based on the fact that exclusion of these companies would be disadvantageous to the Association, in that the PPA would not be able to bring pressure on companies to improve their service to the utilities if found wanting. If they were members of the PPA then it is clear that they show support for the ideals of our Association. In addition, the utility membership constitutes a major market and if companies perform well and provide excellent service and support, then they are assured of continued business. If they do not act responsibly, then the Association is in an ideal position to ensure that their service and support is improved otherwise their opportunities for further business is very limited.

It is to be noted as indicated in the PPA structure further in this introduction that the private enterprise members cannot influence the direction and goals of the PPA.

Since the PPA has been formed the Association has created a number of important relationships with other bodies and institutions, which are of benefit to the operation of the PPA. To acknowledge these organisations, the PPA included them in a third membership named Affiliate Member. This membership excludes any organisation that has a pecuniary interest in seeking business in the Region

These organisations provide valued information and free services that benefit the utilities and the Association. The Electricity Supply Association of Australia (ESAA) is an Affiliate member. As an example, the ESAA conduct annually in Australia a residential school in power systems engineering. For many years the ESAA provide only two free scholarships to approved international participants. As a result of the Affiliate membership, one of these two valuable scholarships is awarded permanently to the PPA for development of utility engineers.

In addition, the PPA has reciprocal membership with the American Public Power Association, where the PPA receives pertinent information and data which is of benefit to the Northern Utilities.

Pacific Power Association Vision and Mission Statement:

Vision: “Pacific Power Association will be the focal point for the management and advocacy of issues, together with cooperative action to assist power utilities in the Pacific Islands Region to protect and promote their common interests.”

Mission Statement: “To improve the quality, minimise the cost and expand the use of electricity in the Pacific islands Region.”

In this context the PPA will:

·       Be the Regional voice for the Pacific island Country (PIC) utilities

·       Provide a forum for PIC utilities to address their needs.

·       Influence development of policies and programmes that affect member’s interests.

·       Provide strategic information and institutional strengthening to assist members.

·       Enhance understanding of the energy supply business in the Region.

Pacific Power Association Structure:

The Pacific Power Association is registered with the Government of the Fiji Islands as a non-profit company. The operations of the PPA are directed by the Pacific Power Association’s Memorandum and Articles of Association, which is also registered with the Fiji Government.

The Association consists of the following members:

1.     Active Members: Comprise the Pacific Island Country Power Utilities. (Refer Appendix 1 for member list)

2.     Allied Members: Comprise the private enterprise companies that provide equipment and services to the power utilities. (Refer Appendix 2 for member list)

3.     Affiliate Members: Comprise those institutions and associations that share information and have no pecuniary interest in doing business with the utilities. (Refer to Appendix 3 for member list)

Pacific Power Association Board:

The Board consists of twenty seven (27) Directors and is made up as follows:

·       Twenty-five directors who are the General Managers of the twenty-five power utilities in the Region. (Active Members)

·       The Executive Director of the Pacific Power Association

·       One representative elected from the Allied Members

From the Active Member Directors there is elected a Chairman, Secretary and Treasurer of the PPA for a three-year term.

Executive Committee:

The Board meets annually, and at times outside the Annual meeting, there is a need to seek Board decisions. Because of the difficulties with geographic isolation, it is not possible to organise all the Board Members to meet. As a consequence there is an Executive Committee, which consists of five (5) Directors namely the Chairman, Secretary, Treasurer Executive Director and the Allied Members representative. The Executive Committee has the authority outside Board meetings to make Board decisions. The Board at its Annual Meeting will later ratify these decisions.

Pacific Power Association Secretariat:

The day-to-day affairs of the Association is managed through a Secretariat, based in Suva and headed by the Executive Director with a total staff of five (5). The remaining four (4) staff comprises the Deputy Director, Executive Assistant, Accounts Officer and Administrative Assistant. With the exception of the Executive Director, the staff are Fijian Citizens.

Pacific Power Association Services:

The PPA’s principal activities and services to its members are:

Regional Training Programme. The Association administers a programme of technical and non-technical training activities for the power utilities in cooperation with its members, associate training institutions. Co-sponsoring funding institutions such as the Asian Development Bank, European Union, United States Department of the Interior, Government of France, United Nations Development Programme, and Forum Secretariat have participated in various degrees in the past and at present.

Performance Benchmarking of Power utilities. With funding from the Asian Development Bank, the process of benchmarking of the utilities commenced in the year 2000 and is now an ongoing process. This is critical to improving the performance of the utilities and contributes to increased networking between the utilities.

Energy Efficiency (Supply Side Management). An important focus for the utilities is the need to reduce energy losses in the operations of the utilities in production, transmission and distribution. Improvement in power utility energy efficiency, will reduce fuel consumption, thus reducing greenhouse gas emissions and utility operating costs. This ongoing project received funding from the Government of France.

Phase 2 of this project for the Northern utilities has received approval from the U.S. DOI, OIA to carry out this project for 1 year.

The EU was presented with the project to fund the utilities South of the Pacific.  There have been formal indications from the EU Suva office that this project will be approved.  The delay in the project approval is that the EU Brussels office will have to receive from the other two regions in the African Caribbean Pacific Member Countries, i.e., Africa and the Caribbean, project proposals before the approval is formally granted for our project. 

E7 Renewable Energy Project. Pacific Island Country Power Utilities to acquire technical capacity to design, procure, construct, operate and maintain renewable energy systems in their countries. To hold one two (2) weeks workshop for the utilities located in the Northern Pacific region and American Samoa Power Authority (ASPA).  The Northern Utilities workshop will be held in March 2005 in the Republic of the Marshall Islands, and hosted by the Marshalls Energy Company.  The workshop for the South of the Pacific region will be held in June 2005.  A donor country has been approached to fund this project.
 

Renewable Energy Advisor. Through a renewable energy advisor, utilities will have improved understanding and technical competence in the renewable energy field, with an appreciation of the advantages and problems of integrating a renewable energy component in to their services and the supply of these services to remote and to poor areas. Action and investment plans for renewable energy in the PIC utility context will have been developed. To further improve the performance of the Pacific Island Countries Power Utilities to be able to develop and maintain sustainable renewable energy projects in their Countries. 

Managerial, Technical and Financial Cooperation Programmes for Sharing Utility Expertise. The Association identifies qualified personnel in member utilities to contribute expertise in specialised areas in which other member utilities request assistance, and supports the travel and subsistence expenses of such personnel visiting member utilities on short-term secondment. As circumstances warrant, the Association arranges for PPA professional staff and/or outside consultants to assist with assignments.

A Regional Power Sector Database. The Association is developing a database of power sector information including operating and financial statistics of member utilities, lists of utility assets and personnel, spares and fuels inventories and values, and will eventually include rosters of consultants, equipment suppliers, and similar information. The database is designed to be flexible to members’ changing requirements. A considerable undertaking, the database is expected to be available by 2007.

A Quarterly Magazine. The Association publishes Pacific Power, a professional quality quarterly magazine featuring technical articles, technology reviews, and utility “profiles” in addition to Association and regional power sector news articles and utility notices. The magazine is also utilised by members of the CROP EWG for dissemination of all aspects of energy to the region.

The magazine is circulated to members and also to non-member government organisations, private companies, regional and international bodies and institutions.

One of the challenges that the PPA does address is the inability at times of smaller utilities and in one particular example with the Solomon Islands Electricity Authority, because of economic hardship, outside their control is not able to meet their yearly subscriptions. The Board continues to provide the services to all power utilities, based on an acceptance by the PPA that it is the responsibility to assist utilities when they are undergoing hardship. While recognising this responsibility it can result in the lack of funding to address lower priority programmes and services.

PPA Annual Directory. The Association publishes annually, for its members, a directory, which contains the contact details of all members including detailed information on Allied members’ equipment and services and utility systems.

Interaction With Regional and International Organisations:

Forum Secretariat. The PPA is a core member of the Energy Working Group of the Council of Regional Organisations of the Pacific, in all areas of regional energy. The PPA has been instrumental in providing a major contribution to the creation of the Regional Energy Policy in the areas of power and renewable energy.

Representatives of the Forum Secretariat attend and make presentations on energy issues including petroleum at the Annual Conference.

South Pacific Applied Geoscience Commission (SOPAC). The PPA has provided information on utility data, including tariffs for their energy database, and facilitated working groups of Pacific Island Energy Planners at their Regional Energy Meetings in the creation of an energy business plan. The SOPAC representative attends the Annual Conference.

Secretariat of the Pacific Community (SPC). The PPA was part of the yearly review of the progress of the SPC PREFACE project, at the invitation of SPC, and both the French and Australian Governments. The PREFACE project was funded equally between the French and Australian Governments for AUD3 Million to produce four different renewable energy demonstrations projects in the Pacific Islands. Representatives of the SPC and PPA attend each other’s Annual Conferences.

University of the South Pacific. Provision of lecture on power and energy to final year Physics students and participation in the CROP EWG.

United States Department of the Interior (USDOI), Office of Insular Affairs. The USDOI provides funding for the Northern Utilities in major human resource development projects; energy efficiency (Supply Side Management); utility Board Members’ training; travel and per diems for Northern Utility engineers to attend the bi-annual PPA Engineering Workshop; and provision of key presenters at the PPA’s Annual Conference. In addition a representative from the USDOI, Office of Insular Affairs in Washington attends the PPA’s Annual Conference and advises the Association on the United States Government’s aid strategy in the Region with a focus on Energy.

Government of France. Funding support has been received from the French Government through their Pacific Development Fund to support the major human resource development project carried out by the PPA. In addition the French Government provided an engineer from the Engineering University in Grenoble in France to assist the PPA in a study of the energy efficiency in six (6) Pacific Island Power Utilities. The outcomes of this study and a proposal for a major project in improving power utility energy efficiency has been requested by the UN, EU, French Government and the USDOI for funding support.

The Government of France through the French Embassy in Fiji approached the PPA to project manage a survey of sustainable energy sites in the Federated States of Micronesia and Nauru. The results of this survey formed part of the EU’s focus on sustainable energy in these countries under a Cooperative Agreement with the countries. A representative from the Embassy of France in Fiji attends the PPA’s Annual Conference and advises the Association on the French Government’s aid strategy in the Region with a focus on Energy.

Asian Development Bank (ADB). Sought and gained approval from the ADB for PPA to project manage a major performance Benchmarking project involving all the power utilities in the Region. In addition the ADB is funding the PPA’s micro-economic project of the utilities. The ADB representative attends the PPA’s Annual Conference and advises the Association on its aid strategy in the Region with a focus on Energy.

European Union (EU). In conjunction with the United Nations, invited to make a presentation on “Sustainable Energy as it Applies to the Pacific Island Power Utilities” at a major international seminar on sustainable energy held in the Dominican Republic. The EU will shortly announce funding approval for the PPA’s major capacity build project, energy efficiency project for the Southern Utilities in addition to the provision of a renewable energy advisor which be available to all ACP member Country utilities.

The EU representative attends the PPA’s Annual Conference and advises the Association on its aid strategy in the Region with a focus on Energy.

Energy Supply Association of Australia (ESAA). The ESAA is an affiliate member of the PPA. The ESAA provides the PPA one free Scholarship for a utility engineer to attend the Annual Residential School in Power Systems Engineering. In addition the ESAA relevant information on utility practices that will benefit the Region’s utilities.

American Public Power Association (APPA). Reciprocal membership of each other’s Associations. The Chairman of the APPA (The APPA has 2,000 public utilities as members in the USA) attended our 10^th Annual Conference and provided the keynote address. In addition they have provided the services of a small utility in Tennessee to train the Northern Utilities in country, in USA standards, on Budget Planning and implementation of an Occupational Health and Safety Policy

Association of Caribbean Island Utilities (CARILEC). Reciprocal membership of each other’s Associations. In addition representatives of the Associations attend each other’s Annual Conferences. This interaction has provided benefits in the exchange of information pertaining to tariffs, progress with corporatisation, commercialisation and privatisation, training and equipment performance. In particular to be able to jointly address common issues, for example, waste oil disposal in both the Pacific islands and the Caribbean Islands as an international issue to be resolved, and contingency plans that our Associations deal with associated typhoon and hurricane occurrences. 

Annual Conference. The Association conducts an annual conference with the cooperation each year of an Active member host. The Conference incorporates a formal Board Meeting and an Annual General Meeting. The Association uses the conference as a catalyst for networking among utility members. In addition there are presentations on a number of issues. One key session addresses the need to create an awareness of reforms that are occurring in mainland power utilities that member utilities will have to address in their own Pacific islands. Other examples of sessions that have been discussed and are wide in their scope include:
 

1.     The formulation of Electricity Pricing.

2.     Effect of Petroleum Prices on Tariff Determination

3.     Economic Regulation and Pacific Island Power Utilities

4.     GIS – The Necessary Tool for Asset Management.

5.     Renewable Energy options for provision of access to electricity in outer Islands and rural areas.

6.     Improve power utility energy efficiencies through supply side management.

7.     Long and Short Term Changes in the Environment and its Impact on the Utility industry.

8.     Strategies for Improving the Economic Performance of Development Programmes.

9.     Customer Service as the Key to Utility Business Success

Concurrent with the Annual Conference is a Trade Exhibition of private sector products and services, which provide an opportunity for formal and informal face-to-face discussions between utility managers and suppliers. 

I believe that the forgoing provides the Vision and Mission statement and structure of the Pacific Power Association, and that the programmes and interactions carried out in the past eleven (14) years, and planned for the future, by the PPA conform to this vision and mission. There is a clear and unique role performed by the PPA as the major contributor to sustainable energy development in the Region. There are existing and additional PPA programmes continuing in the Region to further develop and improve energy supply and power utility performance.

Anthony E. Neil

Executive Director, Pacific Power Association

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Rising fuel costs spur interest in alternative energy

By Giff Johnson
For Variety

MAJURO — Skyrocketing fuel prices and anticipated rising sea levels are motivating promotion of alternatives to diesel-powered electricity in the Pacific area.
“With the rising cost of oil, there’s even more reason today for utilities to be equipped with the skills and knowledge on alternative energy,” said Pacific Power Association executive director Tony Neil Tuesday at the first alternative energy workshop for the north Pacific being held for the next two weeks in Majuro. Neil said it has taken the association “six years to be recognized as not just a producer of diesel power” and he said this workshop was aimed to help the utilities continue expanding their alternative energy capabilities.
Marshall Islands Public Works Minister Mattlan Zackhras told the group that “it is not only critical that we begin by taking serious steps in promoting alternative means of producing clean energy to protect our environment but we continue to remain strong in our combined efforts to promote international awareness of the (sea level rise) predicament some of us are facing today.
“Renewable energy is one of the few means by which significant cuts in greenhouse emissions can be made, utilizing existing proven technology.”
Zackhras said especially the low-lying coral islands in the Pacific such as the Marshall Islands are threatened by sea level rise that is being caused by global climate change.
The Majuro workshop is jointly sponsored by the Fiji-based Pacific Power Association, the E7 Group of electric companies from G-7 countries, and the U.S. Interior Department with the aim of providing participants with information on all available alternative energy options, including solar, wind and hydro power.
John Benavente, Guam Power Authority’s general manager, said when he first started with the power company there 30 years ago, utility companies were just beginning to talk about alternative energy technology because oil prices had then spiked. But when the prices dropped, making diesel-powered fuel affordable, alternative energy technology was shelved, he said.
The huge jump in fuel costs during the last 18 months has again spurred consideration of alternative technology, he said. “What’s alarming (about the price increase) is that OPEC seems comfortable with keeping the price of fuel around $50 a barrel,” he added.
In addition to the financial incentive to save money, Guam is keen to move ahead on alternative energy programs because these increase the number of jobs on the island, he said. “The technology has risen to the point that it’s made it practical to switch to alternative energy,” Benavente said.
Cook Islands power utility general manager Tereapii Timoti said that alternative energy “is the way forward. It’s not the cheapest, but diesel is getting more expensive every year.”
Makoto Suto, from Kansai Electric Power Co. in Japan who is representing the E-7 group that is providing technical support to the Majuro workshop, said that the power companies involved in E-7 are active in supporting sustainable development of energy production.

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PACIFIC POWER POW-WOW

A regional renewable energy workshop started Monday in Majuro, with some of the world’s heavyweight energy companies participating.

 The two week renewable energy workshop is sponsored by the e7 group of electric utilities – which includes nine of the world’s top power companies from the G-7 nations – and the Fiji-based Pacific Power Association, with funding from the US Interior Department.

Makoto Suto, the international network general manager of the Kansai Electric Power Company in Japan and an e7 steering committee member, said Saturday at a welcome reception in Majuro at the Marshall Islands Resort that the first regional workshop for the north Pacific has been in the planning stage for two years.  A second one is planned for South Pacific power companies scheduled for April.

It ties in with a European Union program that is starting to fund purchase  and installation of solar and alternatives energy systems throughout the Pacific region.

Marshalls Energy Company general manager Billy Roberts said Saturday that this central Pacific nation has the distinctions of having the only island (Namdrik) in the north Pacific that is completely solarized.  Workshop participants will fly to Namdrik this weekend to inspect first hand the atoll where all 115 residences have home solar units.

Most north Pacific nations are gearing up to implement European Union-funded solar projects that are being run by the local power companies who are represented in Majuro at this workshop.

Roberts said that this workshop has brought in technical people from some of the world’s top power companies for the benefit of the island utility companies.

Participating are officials from power companies in Palau, Guam, the Northern Marianas Islands, Federated States of Micronesia, American Samoa and the Marshall Islands.  In addition, officials from Kiribati and the Cook Islands, as well as the Pacific Power Association are here for the executive committee meeting.

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