Project Document - Deliverable Description

United Nations Development Programme

Country: Sudan

PROJECT DOCUMENT*

Project Title: Promoting Utility Scale Power Generation from Wind Energy

UNDP Strategic Plan Primary Outcome (3.1): Countries have strengthened institutions to progressively deliver universal access to basic services. Align with latest UNDP Strategic Plan

UNDP Strategic Plan Secondary Outcome (1): Growth and development are inclusive and sustainable,incorporating productive capacities that create employment and livelihoods for the poor and excluded

UNDAF/CPAP Outcome:

Outcome 2.2: Government and stakeholders have evidence-based policies, strategic plans and mechanisms to ensure an enabling environment for improved basic services; and people in Sudan, with special emphasis on populations in need, have access to equitable and sustainable quality basic services.

UNDAF/CPAP Outcome:

Outcome 2: Population vulnerable to environmental risks and climate change become moreresilient and relevant institutions are more effective in the management of natural resources

CPAP Output:

Output 2.2: Investment in green energy and access by needy communities to sustainableenergy improved

Executing Entity/Implementing Partner: Ministry of Water Resources & Electricity

Implementing Entity/Responsible Partners:

Ministry of Environment, Forestry & Natural Resources

General Directorate of Energy Affairs - Ministry of Petroleum

Higher Council for Environment & Natural Resources

National Energy Research Centre Ministry of Sciences and Communications

* For UNDP-supported, GEF-financed projects as this includes GEF-specific requirements

Brief Description

The project aims to support removal of barriers to the adoption of utility-scale wind energy tied to the national grid in Sudan. Wind energy has been identified as a priority mitigation technology by the Government of Sudan, and, although it is a mature technology globally, it has not yet been adopted in Sudan. A systems approach is proposed to integrate energy policy analysis within the broader developmental objectives of Sudan. The project will also establish regulatory frameworks for encouraging private investments in grid-connected wind energy. Sudan currently has plans to develop utility-scale wind farms in four regions: Dongola in the North, Nyala in the South, the Red Sea coastal region and Khartoum.

The project includes four components: the implementation of an initial wind farm; support to policy and regulatory development, particularly to encourage private sector participation; strengthening the support for wind technology in the country; and support an adaptive learning and replication plan. Support to the implementation of the first wind farm in Sudan, Dongola, will align the wind farm with international best practices. It will also create a case study for replication in later wind farms. The Dongola wind farm will be implemented in five phases over the lifetime of the UNDP-implemented, GEF-financed project. This phasing will allow lessons-learned in it to be applied in the later phases and, perhaps more importantly, will provide five years of continuous wind farm construction-commissioning-operation that will serve as a laboratory for training personnel and developing associated tools and guidelines. The opportunity to have such continuous exposure is very rare and will assist in transferring knowledge and experience to neighbouring countries.

The project aims to help diversify Sudan's power sources and reduce its reliance on fossil fuels, particularly for future expansion and to reduce greenhouse gas (G H G). The project will therefore help increase Sudan's energy security and support its development. The project has been designed to play a catalytic role in this transformational scaling-up of wind energy, and renewable energies more broadly.

The project implementing partner is the Ministry of Water Resources and Electricity. The project is expected to last 60 months.

Total resources required US$ 217,486,364

Total allocated resources:

GEFUS$ 3,536,364

Government (cash) US$ 213,250,000

Government (in-kind)US$ 450,000

UNDPUS$ 250,000

Programme Period: 2014-2019__

Atlas Award ID:00080570______

Project ID:00090222_

PIMS #4726__________

Start date: Nov. 1, 2014__

End Date Nove. 1, 2019_

Management ArrangementsNIM

PAC Meeting Date Sept. 2, 2014

Agreed by (Government):

Date/Month/Year

Agreed by (Executing Entity/Implementing Partner):

Date/Month/Year

Agreed by (UNDP):

Date/Month/Year

Table of Contents

List of Abbreviation & Acronyms4

List of Annexes5

1.Situation analysis6

1.1. Context and Global Significance6

1.2. Baseline, barriers and current government policy to address the root causes and threats11

1.3. Institutional framework and stakeholder analysis15

2. Strategy21

2.1. Project Objectives, Outcomes, and Outputs21

2.2. Key indicators, risks and assumptions34

2.3. Expected benefits, design principles and strategic considerations37

2.4. Project rationale and policy conformity37

2.5. Country ownership: country eligibility and country drivenness38

2.6. Cost-effectiveness39

2.7. Sustainability40

2.8. Replicability40

3. Project Results Framework42

4. Total budget and workplan45

5. Management Arrangements51

6. Monitoring Framework and Evaluation53

7. Legal Context59

8. Annexes60

8.1 Risk Analysis60

8.2 Stakeholder involvement plan64

8.3 Terms of Reference for Project Personnel65

8.4 GHG Reduction Calculations69

8.5 Consideration of Bird Migration and Ecological Impacts70

8.6 Environmental and Social Safeguards73

8.7 Letters of Co-financing77

List of Abbreviations & Acronyms

COUNDP Country Office

CO2Carbon dioxide

CSPConcentrating Solar Power

EEEnergy Efficiency

EENSExpected Energy Not Supplied

GDPGross Domestic Product

GEFGlobal Environment Facility

GHGGreenhouse Gas

GTGas Turbine

HCENRHigher Council for Environment and Natural Resources

IEAInternational Energy Agency

IPPIndependent Power Producer

M&EMonitoring and Evaluation

MEMMinistry of Energy and Mining

MEFPDMinistry of Environment, Forestry and Physical Development

MoMMinistry of Mining

MoPMinistry of Petroleum

MoSCMinistry of Science and Communications

MWREMinistry of Water Resources and Electricity

MRVMonitoring, Reporting and Verification

MWMegawatt

NAMANationally Appropriate Mitigation Action

NECNational Electricity Corporation

NERCNational Energy Research Centre

NGONon-Governmental Organisation

O&MOperations & Maintenance

PIRProject Implementation Review

PMUProject Management Unit

PPGProject Preparation Grant

PPPPublic Private Partnership

PBProject Board

PVPhotovoltaic

QPRQuarterly Progress Report

RCUUNDP Regional Coordination Unit

RERenewable Energy

RTAUNDP Region-Based Technical Advisor

SWHSolar water heater

TPRTripartite Review

TTRTerminal Tripartite Review

TWhTerawatt-hour

WBWorld Bank

UNDAFUnited Nations Development Assistance Framework

UNDPUnited Nations Development Programme

UNEPUnited Nations Environment Programme

UNFCCCUnited Nations Framework Convention on Climate Change

List of Annexes

8.1 Off-line Risk Log

8.2 GHG Calculations

8.3 Terms of Reference for Project Personnel

8.4 GHG Reductions Calculation

8.5 Consideration of Bird Migration and Ecological Impacts

8.6 Environmental and Social Safeguards

8.7 Letters of Co-financing

1. Situation analysis

1.1. Context and Global Significance

1. Like many developing countries, Sudan has a shortage of electricity. Approximately 35% of the population has access to electricity (MWRE-Renewable Energy Master Plan 2013). Even then, it is not reliable and experiences regular power outages. Hydro-power has the largest share of energy generation. The potential to expand hydro-power to meet future needs is limited. Sudan does not have significant oil or gas production and as a result will have to turn to importation of fossil fuels to meet future energy needs. Climate change threatens to affect rainfall patterns on which Sudan relies for the water that generates its hydro-power. This further emphasises the need for Sudan to diversify its energy sources. The project seeks to address these problems by promoting the use of wind energy in Sudan.

2. Sudan currently has a generation capacity of 2,723 MW of power (ibid), has no wind generation capacity and no grid-connected solar capacity. Publicly-owned utilities own all of the power generation facilities, transmission and distribution lines in Sudan. The Government owns 5,984 km of 220 kV transmission lines and 965 km of 500 kV transmission lines. Approximately 35% of Sudan's population has access to electricity[footnoteRef:1]. In 2012, the power consumption per capita was 233 kWh/ year.[footnoteRef:2] There are no independent power producers (IPPs) in the country, though initiatives are underway to promote private investment in power generation. This project seeks to support those initiatives where they relate to wind power.[footnoteRef:3] [1: UNESCO (2009), Electricity Access Rates.] [2: Arab Union of Electricity (2012), Statistical Bulletin.] [3: RCREEE (2013), Arab Future Energy Index.]

3. Electricity generation, consumption and losses for the period between 2000 and 2010 are shown in Figure 1.

Figure 1: Electricity generated, consumed and distribution losses 2000-2010[footnoteRef:4], Sudan [4: US EIA (2013), Sudan and South Sudan Country Profile.]

4. In 2012, the power transmission losses were approximately 4%, and distribution losses were approximately 18%, such that, in total, roughly one-fifth to one-quarter of the electricity generated is lost in transmission and distribution.[footnoteRef:5] As a result, Sudan must generate 25% to 33% (MWRE 2013 Long Term Power System Plan) more power than is consumed to overcome the transmission and distribution losses, and, in the process, emit associated greenhouse gases. [5: Arab Union of Electricity (2012), Statistical Bulletin.]

5. Forty-four percent of Sudan's electricity is generated from fossil fuels. The principal fossil fuels currently used for Sudans power generation are heavy and light fuel oils, with shares of 61% and 39% respectively of the fossil fuel used for power generation in Sudan.[footnoteRef:6] Hydro-power plants represent 56% of Sudan's installed power generation capacity, more than any other technology.[footnoteRef:7] Figure 2 shows the installed generation capacity in Sudan by technology. To meet the Government's target of 75-80% electrification by 2031, the Government plans to install 12,000 MW of additional generation capacity by 2031. This is to include 1,582 MW of renewable energy (other than large-scale hydro-power), with approximately 650 MW of wind energy. [footnoteRef:8] [6: Arab Union of Electricity (2012), Statistical Bulletin.] [7: Government of Sudan (2013), Second National Communication to the UNFCCC.] [8: Lahmeyer International (2013), Long and Medium Term Power System Plans of Sudan.]

Figure 2: Installed power capacity in Sudan[footnoteRef:9] [9: Arab Union of Electricity (2012), Statistical Bulletin.]

6. The major hydro-power installations in Sudan are: Roseires, Sinnar, Jebel Aulia, Khashm el-Girba and Merowe. The most recent, Merowe, commissioned in 2009, has a capacity of 1,250 MW and represents 82% of the total hydropower capacity and 46% of the country's overall generation capacity.[footnoteRef:10] The total amount of hydro-power generated in 2012 was 5,365 GWh[footnoteRef:11]. [10: US EIA (2013), Sudan and South Sudan Country Profile.] [11: Arab Union of Electricity (2012), Statistical Bulletin.]

7. The total technically feasible potential for hydro-electric power generation is 4,920 MW (or 24,132GWh/year)[footnoteRef:12], implying that, in the long-term, the bulk of expansion in generation capacity will come from sources other than hydro. Sudan's long-term development plan observes that 8,675MW of additional thermal power plants will be needed by 2030.[footnoteRef:13] The technologies for thermal electricity generation have been identified as combined cycle gas turbines (CCGTs), low-sulphur diesel (LSD) generators, and coal-fired power plants. While these plants will provide much-needed electricity, they will only exacerbate the countrys energy security problems and lead to rising energy-related greenhouse gas emissions. [12: National Electricity Corporation (2004), NEC Medium-Term Development Plan: 2005-2010.] [13: National Electricity Corporation (2006), NEC Long-term Power System Planning Study.]

Figure 3: Cumulative installed renewable energy capacity by type, 2014 - 2031[footnoteRef:14] [14: Lahmeyer International (2013), Long and Medium Term Power System Plans of Sudan.]

8. Sudans medium-term development plan echoes the trend towards thermal power generation. In June 2011, MWRE released its Medium Term (2012-2016) Power System Development Plan. It emphasizes least-cost energy solutions towards achieving the Government of Sudan's electricity access targets. These targets and objectives include, among others: (i) an increase in the available generation capacity from 2,232 MW in 2011 (with 2,532 MW installed capacity) to 4,161 MW (with 5,180 MW installed capacity), (ii) increasing the electrification rate from 27% to 45% by 2016 (rising to 75-80% by 2031), (iii) raising per capita consumption from 233 kWh to 572 kWh, and (iv) extension of the national grid from 6,246 km to 9,100 km. The Medium Term Power System Development Plan also targets the addition of 551 MW of renewable electricity to the national mix over the medium-to-long term.

9. The Government of Sudan has made considerable steps towards opening up major public service sectors to private investment, including the power sector, to help serve its population of 37 million.[footnoteRef:15] It has already put in place incentives to encourage the participation of Independent Power Producers (IPPs) in the power sector. Sudan's Investment Encouragement Act, first passed in 1999 and later updated in 2003, 2007 and 2013 identifies the power sector as a major target for investment. It specifies power projects, and especially renewable energy power projects, as having strategic importance. As such, they are eligible for incentives such as exemption from import duties and customs. Their profits are also exempt from corporate income taxes for a decade.[footnoteRef:16] Sudan's power sector remains Government-owned but has been restructured to reflect a private-sector structure. Independent companies have been established with responsibilities for power generation, transmission and distribution, including a single company that owns and operates the Merowe Dam. This structure serves to further establish the framework for private sector participation. [15: Central Bureau of Statistics, Sudan (2014)] [16: RCREEE (2013), Arab Future Energy Index.]

10. The electricity tariffs to consumers in Sudan, residential and industrial, are approximately 8.2-8.3 US cents/kWh[footnoteRef:17], whereas the cost of generation from wind is expected to be in the range of 9.5-13 UScents/kWh, based on a discount rate of 10%.[footnoteRef:18] Sudan's weighted average fuel cost for thermal power is approximately 11 US cents/kWh[footnoteRef:19]. At a discount rate of 10%, the cost of generation from fossil fuels in Sudan is 11-14 US cents/kWh, depending on the source of fuel (LNG, NG).[footnoteRef:20] Thus, the generation cost of wind energy from the best locations in Sudan is competitive with the fuel saving cost from fossil fuel, meaning that the Government realizes savings by operating a wind power plant compared with the average fossil fuel plant (other than coal). Wind energy presents other advantages, such as diversifying Sudan's energy sources and reducing the countrys reliance on imported fossil fuels. Wind also offers the advantage of not being subject to fluctuations in the global price of gas and oil. [17: RCREEE (2013), Arab Future Energy Index. ] [18: Lahmayer International (2011), Feasibility Study for 100 MW Dongola Wind Farm.] [19: Lahmayer International (2011), Feasibility Study for 100 MW Dongola Wind Farm, p.141.] [20: Lahmeyer International (2013), Long and Medium Term Power System Plans of Sudan, pp 17.]

11. The following figure shows power consumption in residential, commercial and industrial sectors. The residential sector is the largest consumer, responsible for 52% of consumption, with commercial, industrial and others splitting the remaining 48% roughly equally.

Figure 4: Power consumption in Sudan[footnoteRef:21] [21: Arab Union of Electricity (2012), Statistical Bulletin.]

12. With the secession of South Sudan in July 2011, Sudan lost 75% of its oil resources. This has further increased the urgency of the implementation of Sudans Renewable Energy Master Plan (REMP), to reduce Sudans dependence on fossil fuel. Sudan has abundant wind and solar resources, as shown in the resource maps below, but currently lacks the capacity to utilise these resources for power generation.

13. A wind measurement campaign was started in Northern Sudan in 2002 in order to identify areas of high wind energy potential and investigate the feasibility of electrical power generation by wind energy. Subsequent wind measurements have focused on other areas of high potential. A number of studies confirm that Sudan has considerable wind energy resources, with annual average wind speeds in selected locations in the range of 7-8 m/s, particularly in North State, north of latitude 12 N and along the Nile valley.[footnoteRef:22] In total, there is a potential of 5,000 MW of utility-scale wind energy generation in Sudan.[footnoteRef:23] The principal sites for wind energy have been identified as: (1) the central northern part of Sudan with Dongola at its centre; and (2) the Red Sea region, with Port Sudan as its major city. [22: Government of Sudan (2011) Renewable Energy Sector Related Policies, in Draft Second National Communication to the UNFCCC. (courtesy of Secretary General, Higher Council for Environment and Natural Resources). Please revisit the location of this text ] [23: KEMA (2009), Strategic Options for Renewable Energy in North and South Sudan.]

Figure 5 Calculated annual average wind speed at 50 m height in Sudan (Red ovals show areas with the highest potential.[footnoteRef:24] At 60 m height, the winds speeds in Dongola, Nyala and the Red Sea region are 7.2, 7.9, and 7.0 m/s, respectively.[footnoteRef:25] ) [24: Lahmeyer International (2013), Long and Medium Term Power System Plans of Sudan.] [25: Altaif, Ahmed, Renewable Energy Director, Ministry of Water Resources & Electricity (2013), Renewable Energy Projects in Sudan presentation:http://www.slideshare.net/rcreee/rcreee-ener-menasudan-renewable-energy-projects21082013.]

14. Based on the wind speeds in Dongola, Nyala, and the Red Sea region of 7-8 m/s, and the expected capital costs of wind power, electricity generation from wind is economic in these areas. As part of the UNDP-implemented, GEF-financed project, a more accurate wind map will be developed to help identify areas of high wind potential. [footnoteRef:26] [26: The present resource map is generated based on extrapolation of satellite data and limited ground data. As part of the project, a wind map with measurements at wind turbine hub-heights, currently about 80 metres, will be developed. The result will be a map better able to predict the usable wind resource. ]

Figure 6 Annual available global horizontal irradiation in Sudan.[footnoteRef:27] [27: Lahmeyer International (2013), Long and Medium Term Power System Plans.]

15. The majority of Sudan receives solar insolation greater than 2,300 kWh/m2/year, which is considered excellent for isolated and grid connected power generation systems. To take advantage of Sudans plentiful solar resources, the Government is planning to develop four solar projects with a total capacity of 20 MW: Khartoum PV plant (10 MW), Nyala PV plant (5 MW), Al Fashir PV plant (3 MW) and Al Geneina (2 MW).[footnoteRef:28] Thus far, these projects have not been initiated. [28: RCREEE (2012), Sudan Renewable Energy Country Profile.]

1.2. Baseline, barriers and current government policy to address the root causes and threats

16. The Ministry of Water Resources and Electricity (MWRE) has succeeded the Ministry of Electricity and Dams (MED) as the body responsible for the electricity sector in Sudan. MWRE is planning the installation and commissioning of four utility-scale wind farms by 2020: Dongola (100 MW), two Red Sea wind farms (Tokar and Port Sudan, 180 MW), Nyala (20 MW) and Khartoum (20 MW).[footnoteRef:29] This time-frame coincides with the implementation of the UNDP-implemented, GEF-financed project. Table 1 summarises the details of the wind farms and their status. [29: Following the guidance of the GEF Secretariat during PIF review, the Dongola and Red Sea wind farms form the baseline project for the purposes of the UNDP-implemented, GEF-financed project. The Nyala wind farm is excluded: it is relatively small, is due to commence after Dongola (and hence lacks Dongolas symbolic importance as Sudans first utility-scale wind farm), and has few additional learning or replication benefits beyond those provided by the Dongola wind farm. Moreover, the Nyala wind farm is connected to a local grid but not the national grid and hence lacks national impact and does not offer potential lessons-learned from integrating wind energy into the national grid. ]

17. For the purposes of the Global Environment Facility, the baseline project consists of the Dongola and Red Sea sites. Hence, the baseline project has a total installed capacity of 280MW that is expected to produce 849,695MWh of renewable electricity annually when all the sites are operational. The cost of these wind farms is approximately US$523 million.

18. To enumerate the added value (incremental reasoning) of the UNDP-implemented, GEF-financed project, it is necessary to establish the rationale and orientation of the project for the market development of wind energy in Sudan. As will be discussed below, the market development for wind energy faces significant barriers in Sudan. The baseline project provides a unique opportunity to start addressing these barriers with a view to favouring private-sector investment in the market development of wind energy in the medium-to-long term. Some of these barriers, namely those related to the transfer of nationally-appropriate wind energy technologies, will be addressed directly in conjunction with the baseline project. In order to generate market acceptance at a time when wind technology does not exist in Sudan, it is crucial to first demonstrate the technological viability of wind energy in the local context. Any technological failure at the early stages in wind energy development will only undermine the acceptance of the technology in Sudan, resulting in an unwanted increase in yet more market barriers. Using the favourable conditions generated by the imminent Dongola wind farm to promote wind energy, other broader barriers will be addressed by the UNDP-implemented, GEF-financed project in order to pave the way for the market development of the Red Sea wind farm and beyond.

Figure 7 Location of the Dongola wind farm indicated by the green arrow

Figure 8: View to the west across the Dongola wind farm site

Figure 9: Wind speed distribution at 30 m for the Dongola site. Average wind speed at 60 m above ground level is 7.2 m/s and higher for 80 m.

19. Although wind energy is mature and technologically viable, there are currently no applications of wind turbines at any scale for the generation of electricity in Sudan. The experience of Sudan with wind turbine technology has thus far been limited to small-scale mechanical water pumping.

20. The key focus of the UNDP-implemented, GEF-financed project is to help Sudan understand the planning and operational requirements of wind power, to gain experience with installation and grid integration issues, and to employ policy options that promote wind energy development within the broader context of low-carbon, climate-resilient development. GEF funding will thereby create the appropriate technological, institutional, policy and capacity environment that will enhance the probability of success of the baseline wind farms and establish the pre-conditions for replication elsewhere in Sudan.

21. The baseline wind farms currently face technological barriers, which have not been taken into consideration in their design. If not addressed decisively, these technological barriers will enhance the risk of failure of these demonstration wind farms, thereby reducing future acceptance of the technology. In particular, the national grid of Sudan is relatively unstable, with variations in both frequency and voltage (during visits to Sudan, power outages were observed as well as dimming of the grid voltage levels)[footnoteRef:30]. The Ministry of Water Resources and Electricity (MWRE) has experience in synchronising power generated from different conventional sources that provide base load. However, MWRE does not have experience in synchronising the grid with power generated from a variable source such as wind. Although the power system has improved in recent years, grid stability to accommodate power generated from a variable source such as wind is still inadequate. [30: Al Jazeera, 11 March 2014, Sudan's bid to combat power outages, http://www.aljazeera.com/video/africa/2014/03/sudan-bid-combat-power-outages-2014311193932109307.html ]

22. Extensive consultations have been held in Sudan with MWRE and the North State Government where the planned Dongola farm is located, through two missions to Sudan as part of the project preparation phase. MWRE confirms that the issue of the interface electronics has not been considered (or budgeted for) for any of the baseline wind farms, and that the now-completed tender process for the Dongola wind farm reflects this omission. Further, MWRE specifically emphasises the need for GEF assistance in this area. In the absence of such interface electronics, it is highly probable that the grid will face islanding problems that will lead to load management problems and further grid instabilities.

Table 1: Baseline wind farms in Sudan

Wind farm project

Installed capacity (MW)

Electricity generated (MWh/yr)

Expected commissioning date

Status of feasibility study

Status of financing

Included as co-financing for the purposes of the UNDP-implemented, GEF-financed project?

Dongola

100

300,917

In phases

2014: 5 MW

2015: 20 MW

2016: 25 MW

2017: 25 MW

2018: 25 MW

(total 100 MW)

Completed, will be updated as part of the UNDP-implemented, GEF-financed project

MWRE will finance in stages

Yes

Nyala

(not part of the baseline project)

20

64,006

2018

Completed

In the process of seeking funding

No

Red Sea (Tokar, Port Sudan)

180

576,054

2018 2020

Pre-feasibility study has been completed

Not yet secured

(US$310 million capital cost anticipated)

No

Khartoum

20

47,000

2016 2019

Land leasing process

Not yet

No

Total

320

960,701

1.3. Institutional framework and stakeholder analysis

23. There are four key stakeholders involved in the development and deployment of power projects in Sudan. These are the Ministry of Water Resources and Electricity (MWRE); the Ministry of Petroleum (MoP); the Higher Council for Environment and Natural Resources (HCENR), under the Ministry of Environment, Forestry and Physical Development (MEFPD), which is responsible for assessing the environmental impacts of projects and issuing the appropriate permits; and the National Energy Research Centre (NERC), which has responsibility for the development of novel energy resources and has a division dedicated to wind energy. Each key stakeholder is discussed further below.

24. The Ministry of Water Resources and Electricity (MWRE) is the Government body responsible for electric power in Sudan, and the National Implementing Partner of this project. MWRE is responsible for implementing the wind farms described in the project, as well as being the main counterpart for the policy and regulatory reforms described. MWRE will also be the host to the central unit (one stop shop) supporting private-sector investors in wind power in Sudan. MWRE will carry out the following in the context of the UNDP-GEF project:

Implementation of wind farms

Support to the policy and regulatory reforms

Use of Dongola implementation as a training facility to support national capacity building

Hosting a central point to support investors in private wind power (a one-stop shop)

Installation and monitoring of wind measuring equipment

Data analysis and reporting

Site selection and preparation

Technical economic and environmental studies

Building the local capacity for wind installation operation and maintenance

Under-Secretary

Electricity Regulatory Authority

Sudanese Electricity Distribution Company

Sudanese Electricity Transmission Company

Merowe Dam Electricity Company

Sudanese Hydro Power Generation Company

Sudanese Thermal Power Generating Company

General Directorate of Policies, Planning and Projects

General Directorate of Investment, Finance and Contracts

General Directorate of International Cooperation

General Directorate of Electricity Generation Using Atomic Energy and Renewable Energy Sources

General Directorate of Financial and Human Resources

The Minister

Figure 10: Organisational chart of Ministry of Water Resources and Electricity, 2014, Sudan. . The unit concerned with the present project is highlighted.

25. The Ministry of Petroleum (MoP) was created in 2010 through the split of the Ministry of Energy and Mining into three separate ministries: the Ministry of Water Resources and Electricity, the Ministry of Petroleum, and the Ministry of Mining. Under the MoP's General Directorate of Energy Affairs is the Renewable Energy Directorate. The latter has been active in promoting and developing a wind energy atlas since 2003. Ongoing and planned MoP activities in this regard include:

Installing wind energy masts in the various parts of Sudan (in Toker in Red Sea State, Nyala in Western Darfur State and Dongola in Northern State).

Collecting and analysing wind energy data.

Developing the wind atlas

Figure 11: Organisational chart of Ministry of Petroleum, 2014, Sudan. The unit concerned with the present project is highlighted.

26. Higher Council for Environment and Natural Resources (HCENR) - The Higher Council for Environment and Natural Resources oversees the application of environmental laws and regulations to all development projects in Sudan, and has particular responsibilities in the climate change area. HCENR serves as the Designated National Authority (DNA) for the Clean Development Mechanism (CDM). It is also the focal point for the National Appropriate Mitigation Action (NAMA[footnoteRef:31]) Focal Point and UNFCCC Focal Point for Sudan. With UNDP support, HCENR has been developing standardised baselines for Sudan. HCENR has also developed a Technology Needs Assessment (TNA) for Climate Change Adaption and Mitigation, funded by the GEF. In the context of the UNDP-implemented, GEF-financed project, HCENR will participate in implementation through provision of the following services: [31: The National Appropriate Mitigation Action (NAMA) is an online platform operated by the UNFCCC Secretariat. Its purpose is to increase opportunities for implementation of and recognition for carbon mitigation actions in developing countries. ]

Training and participation in conducting EIAs for wind projects, specifically items of special concern to wind farms such as bird and bat studies.

Awareness-raising and mobilisation to promote wind applications for power generation.

Advocacy for wind energy application as a clean source of energy.

Assistance to the design and implementation of the Nationally Appropriate Mitigation Action (NAMA) elements of the UNDP-implemented, GEF-financed project.

Figure 12: Organisational chart of the Ministry of Environment, Forestry and Physical Development, 2014, Sudan.

27. The National Energy Research Centre (NERC) has been active in promoting and developing wind energy technologies for small-scale applications such as water pumping since its establishment in 1972. NERC has a special department for wind and mini-hydro equipped with instruments and a mechanical workshop. The activities of the Wind Department include:

Research in applications of wind technologies

Resources inventory, assessment and evaluation

Supervising the manufacturing of wind models for research purposes in universities

Training of students and the private sector in wind energy technologies and applications

Teaching wind energy courses to undergraduate and postgraduate students in a number of Sudanese universities

Undersecretary

National Energy Research Centre

Africa City of Technology

Atomic Energy Commission

Technology Development and Dissemination Department

Biomass Department

Wind and Mini-hydro Department

Solar Energy Department

National Centre for Research

General Directorate for Renewable Energy

The Minister

Figure 13: Organisational chart of the Ministry of Science and Communications, 2014, Sudan. . The unit concerned with the present project is highlighted.

Table 2: Stakeholder roles and co-finance amounts for wind project 2014 Sudan

Stakeholder

Role

Co-financing Amount ($)

MWRE

Implementation of wind farms

Support to the policy and regulatory reforms

Use of Dongola implementation as a training facility to support national capacity building

Hosting a central point to support investors in private wind power (a one-stop shop)

Installation and monitoring of wind measuring equipment

Data analysis and reporting

Site selection and preparation

Technical economic and environmental studies

Building the local capacity for wind installation operation and maintenance

213,000,000

MoP

Installing wind energy masts in the various parts of Sudan (in Toker in Red Sea State, Nyala in Western Darfur State and Dongola in Northern State).

Collecting and analysing wind energy data.

Developing the wind atlas

250,000

HCENR

Training and participation in conducting EIAs for wind projects, specifically items of special concern to wind farms such as bird and bat studies.

Awareness-raising and mobilisation to promote wind applications for power generation.

Advocacy for wind energy application as a clean source of energy.

Assistance to the design and implementation of the Nationally Appropriate Mitigation Action (NAMA) elements of the UNDP-implemented, GEF-financed project.

200,000

NERC

Research in applications of wind technologies

Resources inventory, assessment and evaluation

Supervising the manufacturing of wind models for research purposes in universities

Training of students and the private sector in wind energy technologies and applications

Teaching wind energy courses to undergraduate and postgraduate students in a number of Sudanese universities

250,000

UNDP

Project implementing agency

250,000

2. Strategy

2.1. Project Objectives, Outcomes, and Outputs

28. The objective of the project is to reduce greenhouse gas (GHG) emissions by promoting the use of wind energy in Sudan. The project will provide direct technical assistance to the Dongola wind farm and will aid in the replication of experiences from the Dongola wind farm to be applied to the Red Sea wind farms and subsequent wind farms. The project also aims to put in place legislation and a framework to promote private sector involvement in renewable energy in Sudan.

29. The Dongola wind farm will be owned and operated by MWRE. Future wind farms, in particular the planned wind farms on the Red Sea, are intended to be privately owned and operated as IPP projects, provided the appropriate legislation, guidelines, regulations and experience are in place to support their development as such. An outcome of the UNDP-implemented, GEF-financed project is to enable the Government of Sudan to tender future wind farms as IPP projects.

30. The project preparation process involved extensive stakeholder consultation through two missions (five-days each) to Sudan, including consultations in the capital, Khartoum, and in North State capital, Dongola . The consultations included an inclusive workshop held at MWRE with relevant stakeholders as well as consultation with the North State Government and visits to the Dongola site. A site inspection was undertaken by an international ornithological and ecological expert to address items not included in the present Environmental Impact Assessment (EIA) for the Dongola project, notably the issue of the wind farms potential impact on resident and migrating birds. Initial indications are that the site does not pose an ecological threat; nonetheless, appropriate ecological surveying will take place as part of the UNDP-implemented, GEF-financed project, both for the benefit of the Dongola wind farm and also so as to establish protocols and capacities to implement similar surveys at future wind farm sites. As a result of the extensive stakeholder consultations and comments received, which are reflected in the project design, the project has considerable ownership by the relevant entities and stakeholders in Sudan.

31. The UNDP-implemented, GEF-financed project will advance the baseline scenario in Sudan by creating a technical and regulatory basis for the development of wind power specifically and renewable energy in general, as many of the underlying regulations are similar. The project will support existing initiatives, such as the draft Electricity Law, the Investment Law, and the application of lessons-learned in Dongola in the construction of the Nyala and Red Sea wind farms. The experiences gained in Dongola should serve to reduce the risk of investing in wind farms in Sudan and help encourage private-sector investors to participate.

32. The project provides a series of distinct and coordinated initiatives to achieve:

Support for the construction of the Dongola wind farm in a manner that follows international norms and best practices with respect to the wind farm and the electricity grid;

Support for a regulatory framework that paves the way for the implementation of wind farms throughout Sudan to help meet the countrys energy needs for sustainable development through Government and private-sector participation;

Capacity building to establish the technical and regulatory capacities within Sudan to promote the development of wind farms;

A replication plan to both promote the replication of wind farms throughout Sudan and support their replication by providing distilled lessons and tools from the implementation of Dongola.

Outcome 1: Grid-connected power generation from wind farm introduced.

33. This outcome will provide assistance to the development of the Dongola wind farm, specifically in supporting the construction of the wind farm in phases, the grid interconnection aspects of the wind farm, and the development of a set of guidelines for replication of wind farms throughout Sudan. The Government is implementing the wind farm in phases, with 5 MW to be built in 2014, 20 MW in 2015, and 25 MW to be built in each year between 2016-2018, to reach the 100 MW total. The phasing of the Dongola wind farm implementation introduces challenges and opportunities. The UNDP-implemented, GEF-financed project will help to address some of the challenges and take advantage of the opportunities that arise.

34. The principal challenge lies in planning and procurements for a project that will be implemented in stages over five years rather than in a single stage. Wind farms are often designed in conjunction with the selected turbines and laid out in a configuration so as to produce the optimum amount of power for a given site. Considerations will have to be made to design a wind farm that will be implemented in phases, and for which the turbines to be purchased in later phases may not be known in advance as the tendering will not have occurred. A strong design team and project management will be needed to ensure the smooth development of the project. Aside from the technical challenges, there are also procurement challenges with respect to modifying a contract that was initially intended to be 100 MW in a single phase to now be phased over five years, and ensuring that pricing remains competitive.

35. The opportunities arise in learning throughout the implementation process. Whereas typically lessons are learned from one project to be utilised in a future project, in this case lessons learned in the first phase can be immediately applied in subsequent phases. It also allows implementation to begin immediately, with minimal additional studies since the issues associated with the first-phase 5 MW wind farm are quite different from those for a 100 MW wind farm. Some of the studies performed earlier for the Dongola wind farm have overlooked significant aspects, such as evaluation of the effects on bird life in the EIA or grid integration aspects in the feasibility study. The UNDP-implemented, GEF-financed project will support these studies and therefore enhance the operational and environmental robustness of the wind farm.

36. With Sudans relatively small grid capacity, upon completion of the Dongola wind farm the installed wind capacity will be approximately 3% of the total installed capacity. At times of high wind energy output and low overall loads, wind penetration on the grid may reach 10%. On the other hand, Sudan has excellent hydro-power penetration, with approximately 58% of installed capacity and 79% of generated energy coming from hydro-power (MWRE 2013 Long Term Power System Plan). There is thus excellent potential to use the hydro-power to stabilise a grid with a large percentage of variable renewables, whether wind or solar. This will allow Sudan to surpass one of the obstacles to development of significant renewable energy capacity in countries with relatively small grid capacities. This stabilising and facilitating role of hydro-power has hitherto not attracted any attention, but it will be addressed as part of the UNDP-implemented, GEF-financed project.

37. A grid study will be carried out for the Dongola wind farm, with particular attention given to the interconnection equipment and grid interface electronics. Support will also be provided to ensure that the wind farm data is made available to the national load dispatch centre, which manages power plant dispatch throughout Sudan. The load dispatch centre relies on short, medium and long-term forecasts of the load to balance supply and demand on the network. The role of the load dispatch centre, and its reliance on information and the availability of proper equipment at the wind farms, will increase as the amount of wind energy connected to the grid increases. The load dispatch centre will also have a need for forecasting wind generation in the way it does loads, and the ability to maintain spinning reserves (or hydro-power reserves) to compensate for fluctuations. Grid considerations have not been taken into account for the Dongola wind farm and a grid interconnection study has not been undertaken. The work done as part of this output will play a critical role not only in maximising the benefits from the Dongola wind farm, but in laying the groundwork to allow Sudan to connect increasing amounts of wind energy while managing a smoothly operating grid.

38. As part of this outcome, the wind farm implementation specifications will be reviewed in light of the project phasing and grid connection requirements. The specifications will be amended to include equipment and procedures for grid connection and monitoring and evaluation requirements. Appropriate supervision of construction will also be included to ensure that the outcomes are as intended in the specifications.

39. Unlike conventional power plants, where the cost of energy produced is directly related to the fuel burned, renewable energy power plants (including hydropower) are capital-intensive and thereafter fuel is free. It is therefore in the interest of the electricity system to maximise the operation of renewable energy plants. The operation, maintenance and management of renewable energy plants to maximise their outputs therefore plays a significant role in making the electricity they generate cost-effective. To help achieve optimal operation, Outcome 1 includes training for MWRE staff and project staff on project implementation and management, and operational best practices and monitoring, including such local specific items as grid interaction[footnoteRef:32] to maximise the wind energy generated, and maintaining turbine blade efficiency in a dusty climate which can erode efficiency. [32: Wind power plants, like all plants on a network, affect the operation of the network. Because wind power plants depend on the wind rather than operator input they must be regulated to control, for example, power outputs, ramp rates, frequency control and voltage control so as not to inject undesirable dynamics onto the power grid.]

40. To streamline future wind farms, this project outcome will focus on the development of standardised guidelines and procedures for future wind farms. These guidelines will be developed during the implementation of the Dongola wind farm to make sure that the experiences gained from Dongola are well encapsulated for future wind farms. Guidelines will be divided into technical and financial. Technical guidelines will include EIA guidelines, tools for the assessment of identified Red Sea wind farms, and template tender documents and proposal materials for investors. The financial guidelines for renewable energy will include banking proposal preparation; training to support negotiations with investors; and regional development and bottle-neck issues (e.g. logistical/accessibility constraints). In effect, the UNDP-implemented, GEF-financed project will lay the groundwork for a healthy private-sector IPP wind energy market to develop in Sudan.

41. In cooperation with MWRE, a framework policy for a feed-in tariff will be developed; and in conjunction with HCENR, a NAMA will be developed around the feed-in tariff. HCENR has officially notified the UNFCCC that the UNDP-implemented, GEF-financed project will be developing a Feed-in-Tarrif (FiT) as a NAMA, and this information has already been submitted to the NAMA Registry. A set of guidelines will be established for NAMA eligibility and design criteria. HCENR will act as the national coordinating institution and quality assurer for the NAMA. For the purpose of calculating emission reductions in the context of the NAMA, a tool for annually updating the emission factor of the national electricity system, based on the established CDM tool for this purpose, will be developed.

42. The UNDP-implemented, GEF-financed project will significantly advance the state of environmental impact assessment needed for wind farms in Sudan. A significant part of that advancement is with respect to evaluation of the ecological impact of wind farms, particularly on avian species. The UNDP-implemented, GEF-financed Migratory Soaring Birds project[footnoteRef:33] has produced a significant body of work which, prior to this project preparation, had not been utilised in the context of GEF-financed climate change mitigation projects. As part of the project preparation, an international expert from the Migratory Soaring Birds project visited the Dongola wind farm site and utilised tools from the Migratory Soaring Birds project to help evaluate the potential impact on the site. Some of the outputs are shown below. As part of the current project, the EIA already in place will be updated and improved to bring it in line with international best practice and best guidance. Protocols and tools developed by the project in conjunction with the Dongola wind farm will be made available to all future wind farms, most imminently the Red Sea wind farms. [33: PMIS 1028.]

Outcome 1

Outputs

Activities

1. Power generation from wind energy resources increased.

1.1 Wind farm design, installation and operation of interface electronics in Dongola wind farm was completed such that islanding problems are avoided and grid stability is ensured.

1.1.1 Conduct a detailed grid study for Dongola wind farm in conjunction with the Ministry of Water Resources & Electricity and the Engineering, Procurement & Construction (EPC) contractor, including a review of interconnection equipment and interface electronics, and monitoring of the grid. Sudan's large hydro-electricity capacity provides a good opportunity for stabilising the grid with fluctuating renewables.

1.1.2 Review of contract technical specifications, supervision of construction, testing and commissioning of Dongola wind farm.

1.1.3. Training for a) project implementation and project management, and b) operational best practices and monitoring, including such local specific items as grid interaction to maximise the wind energy generated, and maintaining turbine blade efficiency in a dusty climate which can erode efficiency. Training will include the National Control Centre, responsible for dispatching power plants.

1.2 Completed and approved replication and investment plan for the construction of additional wind farms in the Red Sea region prepared with the objective of catalysing new investment:

Technical component for the Red Sea wind farms to address interface electronics and grid stability, minimisation of environmental impacts (e.g. soaring birds) and development of a prioritised list of practicable wind farm sites.

Finance component for the Red Sea wind farms to support implementation as private-sector IPP projects: address business planning; banking proposal preparation; negotiation with investors; regional development and bottle-neck issues (e.g. logistical/accessibility constraints); NAMA development for the Red Sea wind farms to catalyse climate finance.

1.2.1 Assessment of the potential ecological impacts of the development process and post-construction assessment of Dongola wind farm and development of tools, templates and protocols for future projects.

1.2.2 Development of guidelines for wind farm-specific EIA considerations (e.g. migrating birds, noise) and other hazards (e.g. civil and military aviation). These will make use of materials from the UNDP-implemented, GEF-financed Soaring Birds project.

1.2.3 Detailed assessment of identified Red Sea and future wind farms sites using the tools, templates and protocols developed.

1.2.4 Development of the Red Sea wind farm tender and investor proposal documents in conjunction with the Ministry of Water Resources & Electricity.

1.2.5 Development of a feed-in tariff policy NAMA for wind power in Sudan, including: development of a set of guidelines to establish national NAMA eligibility and design criteria; strengthening HCENR as the national coordinating institution and quality assurer for NAMAs; establishment of a baseline for calculating emission reductions from grid-connected renewable energy through development of a tool for annually updating the emission factor of the national electricity system; and development and implementation of an MRV framework for the NAMA.

Figure 14: Integrated Biodiversity Assessment Tool (IBAT) map for Sudan

Figure 15: Soaring bird sensitivity map for Dongola generated as part of the project preparation process

Outcome 2: Policy and institutional regulatory framework adopted

43. Outcome 2 focuses on mobilising increased wind power investment in Sudan through enabling policy and regulatory frameworks. The outcome strengthens the renewable energy component of Sudan's long-term energy plan, explores the costs and benefits of a range of financial incentives, and integrates policies and codes, in particular, to comply with the East African Power Pool members, which are envisaged to trade power with Sudan through a common grid in the future.[footnoteRef:34] [34: http://www.eappool.org/about-eapp/eapp-governance.html ]

44. To help encourage private investments in wind energy, the activities of this outcome are structured around creating a coherent system of policies and standardised tools to streamline the investment process. These include an analysis of the cost-effectiveness of various financial policy instruments (portfolio standards, feed-in-tariffs, carbon finance, carbon taxation, removal of fossil fuel subsidies, reforms of existing tariffs, accelerated depreciation of turbines, tax credits, capital subsidies, time-of-use tariffs, etc.) for reducing GHG emissions and increasing the energy independence of Sudan.

45. Based on certain selected cost-effective policies, standardised agreements will be formulated for power purchase, metering and accounting guidelines. These will allow investors to clearly determine prior to their initial steps the format of the agreements they would enter into, therefore considerably reducing initial risk and encouraging private-sector participation. It will also contribute greatly to the transparency of the sector. The goal of these agreements and guidelines is to provide a single standardised Power Purchase Agreement (PPA) template which can streamline the process of contracting with developers.

46. To help achieve maximum cost-effectiveness, activities under this outcome will make use of wind resource, grid accessibility, ecological impact and terrain data to estimate wind energy costs throughout Sudan. These cost estimates, together with information from the Government of Sudans development plans and strategies, will help support the process of identifying areas to for wind development, and establishing a feed-in tariff that is sensitive to the variations between locations. Such a spatially-differentiated FiT would be strategically planned to account for variations in the wind resource, grid availability/stability and economic development to achieve the greatest overall developmental impact for Sudan. The tariffs will be periodically revised and updated based on changes in market conditions and on the amount of power that has been installed relative to Sudans targets and needs.

47. Outcome 2 also includes the adoption of secondary legislation to promote private-sector investment in wind energy projects, including a Public-Private Partnership Act and an Independent Power Producers Act. This output puts in place general legislation to provide an overall framework for the adoption of renewable energy technologies and their connection to the grid, including a grid code specifying the technical requirements for the interconnection of renewable energy sources; an inter-ministerial National High Committee for Renewable Energy (NHCRE) for providing cross-sectoral perspectives and high-level political support for renewable energy; and a single point of interaction (a so-called one stop shop), housed within MWRE, where wind energy developers can access all required information and obtain necessary permits.

48. A grid code is a central component of allowing power producers to connect to the grid while ensuring that a stable and functional grid is maintained. The grid code specifies the technical aspects of the grid connection to ensure that the power plant can adequately react to fluctuations in the grid and to ensure that the power plant output does not fluctuate in a way that disturbs the grid. A typical grid code specifies parameters such as the voltage-time response required, such that the voltage from the plant ramps up gradually instead of suddenly. Other parameters often specified include frequency fluctuations and requirements that the plant disconnect upon instruction from the grid control centre (dispatch centre). The existence of a grid code standardises these aspects by fixing voltage regulation ranges, response times and other variables. In the presence of a good grid code, taking into account the characteristics of the Sudanese grid, users will be allowed to connect to the grid in a way that maximises their power generation while allowing the grid controller to maintain a well regulated, stable grid. By contrast, without a grid code, the connection of each individual plant becomes a difficult process and maintaining a well regulated grid becomes a matter of ad hoc adaptation. A robust grid code will take advantage of Sudans large hydro-power resources to stabilise the overall grid and allow maximum penetration of variable renewable resources.

49. To help support Sudans development of wind resources, the project will promote the centralisation of several planning and execution facilities. With respect to Government entities and the political process, an inter-ministerial committee, the National High Committee for Renewable Energy (NHCRE), will be established with a mandate and operational guidelines to strengthen and harmonise renewable energy policies and streamline the decision-making process. The Committee will rely on appropriate support from other stakeholders, providing it with the technical resources to efficiently issue sound judgments that will support and enable the development of renewable energies.

50. From the perspective of investors and project developers, a one-stop-shop will be established to consolidate all requirements for permits and permissions within a clear set of documentation that will allow for smooth and transparent interaction with the regulatory process. An office will be established in MWRE to provide a single point of contact for investors with the Government and permitting process. To support this one-stop-shop, a training programme will be enacted to put in place procedures and support for the staff.

Outcome 2

Outputs

Activities

2. Policy, Institutional, and regulatory framework adopted.

2.1 Formulated long-term energy policy and regulations for Sudan, including analysis of the cost-effectiveness of financial policy instruments (portfolio standards, feed-in-tariffs, carbon finance, carbon taxation, removal of fossil fuel subsidies, reforms of existing tariffs, accelerated depreciation of turbines, tax credits, capital subsidies, time-of-use tariffs, etc.) for reducing GHG emissions and increasing the energy independence of Sudan.

2.2 Developed and endorsed standardised Power Purchase Agreement (PPA) for grid-connected renewable energy projects.

2.3 Established and approved dynamic, geographically-zoned feed-in tariff for wind energy in Sudan.

2.4 Adopted and approved secondary legislation relevant to wind energy developed for catalysing private sector investment in wind energy projects, including a Public-Private Partnership Act and an Independent Power Producers Act.

2.5 Formulated and adopted grid code for the interconnection of variable renewable energy sources.

2.6 Established and operational inter-ministerial High Committee for Renewable Energy for providing crosssectoral perspectives and high-level political support for clean energy.

2.7 Established an operational one-stop shop (OSS) for wind energy investors and developers housed jointly between the Investment and Regulatory Departments of the Ministry of Water Resources and Electricity.

2.1.1 Strengthening of the RE component of Sudan's LongTerm Energy Plan.

2.1.2 Development of a structured analytical process using Systems Dynamic Modelling and a stakeholder consultation process to explore cost-benefit profiles of a range of financial policy instruments.

2.1.3 Integration of policies and codes, maintaining compatibility with East African Power Pool members.

2.2.1 Established regulatory framework for renewable energy purchases, including standardised Power Purchase Agreements.

2.2.2 Established guidelines for IPP energy metering and accounting.

2.3.1 Estimation of wind energy production costs in selected regions of Sudan based on geographical conditions and wind speeds, and grid availability/stability.

2.3.2 Design and establishment of a feed-in tariff mechanism for wind energy IPPs based on geographical zones.

2.4.1 Evaluation and development of legislation and regulations for private-sector grid-connected power generation, including a Public-Private Partnership Act, an Independent Power Producer Act and pro-wind energy revisions to the Investment Act.

2.4.2 Establishment of guidelines for the use of the FiT, PPP rules and other mechanisms to support independent power producers, including an arbitration mechanism for IPPs.

2.4.3 Design of a PPP programme for wind farms with the Government.

2.5.1 Bounds and guidelines established for frequency and voltage stability of the national grid to allow the reliable inter-connection of renewable energy sources of variable nature.

2.5.2 Established and approved guidelines for new sub-stations and transmission lines for the interconnection of additional wind farms to the national grid.

2.6.1 Mandate, membership and operational guidelines defined for the Committee.

2.6.2 Institutional strengthening and harmonisation of policy agendas of participant institutions for streamlined Committee decision-making.

2.7.1 Consolidation of requirements for permits and legislation for wind energy projects in a single location with a single set of documentation explaining the process and requirements for investors.

2.7.2 Interface with required institutions to provide representation within MWRE capable of providing the OSS service.

2.7.3 Establishing procedures and training personnel to support integration of the permitting process, site-specific surveying, technical assistance for feasibility studies, and ecological and environmental impact assessments to help support the requirements of financiers and donors.

Outcome 3: The wind technology support and delivery system Strengthened

51. This outcome aims to enhance stakeholders technical and planning know-how and technological capacities for wind power initiatives. To achieve this, a wind atlas for the Republic of Sudan will be developed in a GIS system, with additional layers for geology, geomorphology, land ownership and type (e.g. protected areas / forests), settlements and routes of migratory birds. By overlaying geographical data such as wind speeds, elevations, general soil conditions, distance from the grid, cost of land and other variables, it will be possible to produce an atlas of estimated wind energy production costs at locations throughout Sudan. This atlas will be the basis for establishing spatially-differentiated feed-in tariffs and will provide a valuable tool in evaluating areas in which to invest.

52. A training programme will be implemented such that during the phased construction of the Dongola wind farm local experts, technicians and practitioners will be trained to prepare and conduct site study visits during construction, interconnection, operation and maintenance of the pilot wind farms. This will build a cadre of locally-available skilled knowledge that can contribute to the development and operation of wind farms.

53. One of the impediments to the development of wind energy at present is a lack of local knowledge of wind farms and their implementation, making each step in the process more difficult and slower. The phasing of the Dongola wind farm will in essence support a five-year construction programme that will serve as an extended five-year training site for local personnel. Although the phasing delays somewhat the onset of wind capacity on the grid, it provides a much greater opportunity for learning, training, development of guidelines and immediate implementation of lessons-learned.

54. To further spread local capability for wind technology, renewable energy-related curricula for national universities and the National Energy Research Centre (NERC) will be supported. This activity will help create a generation of young graduates who have a strong theoretical background in wind technology and experience with local conditions.

Outcome 3

Outputs

Activities

3. Strengthed the wind technology support and delivery system.

3.1 Developed and approved wind atlas for Sudan in a GIS system, with additional layers for geology, geomorphology, land ownership and type (e.g. protected areas / forests), settlements and routes of migratory birds.

3.2 Local experts, technicians and practitioners capacitated to prepare and conduct site study visits during construction, interconnection, operation and maintenance of the initial wind farm.

3.3 Approved RE-related curricula of specialised universities and the National Energy Research Centre (NERC).

3.1.1 Compilation and reconciliation of existing wind data and establishment of wind measurement masts where needed.

3.1.2 Compilation of sources of data for geology, geomorphology, land ownership, settlements, electric grid connections, bird migration, cultural heritage, etc.

3.1.3 Integration of wind and other datasets, including the wind cost estimates developed under 2.3.1, into a GIS system capable of Web-based (off-site) interrogation and analysis.

3.1.4 Development of a national map to highlight priority areas for wind development.

3.2.1 Establishment of a structured training programme for national experts, technicians, academics and students throughout the construction of the Dongola wind farm to help build capacity and establish strong linkages with educational and vocational courses.

3.2.2 Establishment of an ongoing O&M training centre at the Dongola wind farm.

3.3.1 Development of training, demonstration and study materials for participating universities and NERC; development or adoption of technical standards.

3.3.2 Establishing collaboration with established RE-related curricula and activities at international universities and institutions.

Outcome 4: Adaptive learning and replication plan supported

55. To help enable conditions for leveraging significant additional investment and knowledge nationally and regionally, this outcome will provide documented lessons-learned, experiences and best practices related to the development of the Dongola wind farm. It will also arrange regional workshops for transferring knowledge and capacity to Sudan from relevant regional countries with established wind energy sectors (e.g. Egypt, Morocco, and Kenya).

56. The outcome will help ensure the continued successful operation of the Dongola wind farm by putting in place a quality assurance process, for example ISO 9001.The documentation of such a process will help codify the operational practices used and serve as a basis for dissemination of lessons-learned and practices from Dongola.

57. To take advantage of regional experience in wind energy, the project will establish study tours to support the networking of Sudanese wind professionals with counterparts in the region. Such tours will form a basis for cooperation with the East African Power Pool, of which Sudan is already a part, to strengthen regional ties and further the exchange of renewable power across the East African grid.

Outcome 4

Outputs

Activities

4. Adaptive learning and replication plan supported.

4.1 Documented lessons-learned, experiences and best practices related to the development of the Dongola wind farm compiled and disseminated for other wind farm projects in Sudan.

4.2 Completed regional workshops for transferring knowledge and capacity to Sudan from relevant regional countries (e.g. Egypt, Morocco, Kenya).

4.1.1 Development of a set of documents, lessons-learned and practices as a case study of the implementation of Dongola wind farm.

4.1.2 Establishment of a quality management certification process (e.g. ISO 9001) at Dongola wind farm to serve as an example to other wind farms in Sudan.

4.1.3 Establishment of methods for ongoing dissemination of lessons-learned and best-practices through online media and other means, such as training sessions, universities, etc.

4.1.4. Specialised local engineering universities, research institutions, professional syndicates, NGOs and consulting companies with enhanced technical capacity to site, design, install, operate and maintain wind turbines at selected project sites.

4.2.1 Establishment of study tours, networking connections and assuring interaction at regional forums on a regular basis.

4.2.2 Establishment of regional cooperation among East African Power Pool countries on the development and integration of renewable energy into the East African grid.

2.2. Key indicators, risks and assumptions

58. In accordance with the GEF-5 Climate Change Focal Area Objective #3, to Promote Investment in Renewable Energy Technologies, the key success indicators of the project are:

The extent to which policies and regulations for RE are adopted and enforced;

The volume of investment mobilised; and

The number of tonnes of CO2-equivalent avoided.

59. The project specifically aims to achieve the following:

Installation of the 100 MW Dongola wind farm, while ensuring a stable grid connection.

Replication of lessons from Dongola for the Nyala, Khartoum and Red Sea wind farms.

Development of a comprehensive set of policies and regulations to encourage investment in wind power in Sudan.

Completion of technical and regulatory standards needed for connection of private-sector power generators to the grid.

Development of a wind resource map for Sudan, coupled with other geographical information, such as bird flights, to determine optimal areas for development.

Development of a NAMA around a spatially-differentiated feed-in tariff.

Development of a one stop shop within the Government to streamline the project development process.

Development of human capacity, through training, workshops and advanced study curricula, to support wind farm projects.

60. For further details about the related targets, see the projects results framework in Section3.

61. The main identified risks to the successful implementation of the project include:

Finance Obtaining finance for the wind farms continues to be a challenging. The Government has committed to developing the Dongola wind farm in phases to overcome this obstacle. The private-sector financial system is not currently well equipped to make major investments in wind energy, largely because domestic financiers lack examples of functioning wind farms against which to appraise new project proposals. Successful implementation of Dongola wind farm will provide just such an example.

Political The Government may fail to marshal the necessary resources or coordination amongst its entities to bring about the desired legislative and regulatory reform. MWRE already faces a significant burden in meeting rising demand for electricity. Implementation of policy reforms requires the involvement of MWRE, MoP, the Cabinet of Ministers and other Government bodies. The necessity to coordinate between these entities represents one of the risks to successful implementation of the project.

Novelty and adoption risk Private-sector entities in Sudan are slow to adopt new technology and take up unfamiliar businesses in part because the overall system does not encourage such behaviour. To date, there has not been any private-sector investment in utility-scale power generation. The capital investment required is large and may not be easily raised locally while foreign investors are wary of perceived investment risks in Sudan.

Technology Technical risk is minimal, especially as wind turbines have been installed in conditions similar to those in Sudan for many years. Early installations in neighbouring Egypt had failures due to the heat and dust. Manufacturers currently offer turbine packages for high-temperature and high-dust locations to allow turbines to function in these environments.

Performance risk The operation of wind farms in Sudan's climate is different from operation in European climates. Performance is sometimes degraded, because of heat, because of maintenance downtime, or because of the accumulation of dust on the turbine blades. These issues can be mitigated with appropriate operations and maintenance, but must be well planned for.

Implementation capacity Inadequate and/or non-capacitated human resources to successfully implement the project and support the mainstreaming of its results. The current capacity to implement and operate wind farms in Sudan is almost non-existent. The proposed project includes elements to develop human capacity. Should these not succeed, they represent a risk to the sustainable development and operation of wind farms in Sudan.

Climate change The climate risk faced by the project is minimal. The greatest climate change risk would be a shift in wind patterns but a shift large enough to have material impact on the baseline wind farms is not expected within their 20 year lifetimes and even thereafter. The National Adaptation Programme of Action (NAPA, 2007) observes that the occurrence of extreme weather events in the form of wind storms is rare. The impact of higher air temperature on changes in air density (leading to power loss) is insignificant. However, climate change will adversely affect hydro-power because of reduced rainfall. Hydro-power is Sudan's main power source. A change in river flows would cause Government and private sector attention to be drawn away from hydro-power and to the potential of other sources, such as wind power.

Ecological risks As part of the project preparation, the Dongola wind farm site was visited by an international ornithologist and ecology expert, who determined that the site posed minimal risks to wildlife and birds. As part of the UNDP-implemented, GEF-financed project, a more detailed site survey will be undertaken to assess bird risks and impacts, and the means of mitigating them, including options such as avian deflectors for transmission lines (see Figure 16 below). Migratory bird routes are likely to be a more significant issue for the Red Sea wind farm; the project will ensure that the appropriate protocols and systems are in place to minimise avian impacts.

Figure 16 Example of a bird risk mitigation measure - avian deflectors for power lines.

62. Further details on these risks, with their probability and impact analysis and related mitigation measures, are presented in the Offline Risk Log in Annex 7-1.

63. For addressing the project management risks, a committed, full-time project manager with adequate outreach and networking skills is absolutely essential for the success of the activities. The project manager should have an ability: i) to engage the key stakeholders in constructive discussion about future renewable energy development needs; ii) to guide and supervise the studies undertaken and effectively co-operate with the international experts who are engaged to support this work; iii) to present their findings and recommendations in a convincing manner to key policy-makers and opinion leaders by taking into account the main macroeconomic and policy drivers for domestic energy sector development; and iv) to identify areas of future work. During project implementation, the project manager also needs to be supported by qualified technical and legal experts.

64. A typical risk for the training and capacity building activities is that, after the completion of training, there will be no real demand for the services of the trained experts. The integrated approach adopted by the project is expected to mitigate this risk by providing opportunities for those trained on the Dongola wind farm to participate in the Nyala, Khartoum and Red Sea wind farms, therefore considerably increasing the local human contribution to these wind farms and encouraging further replication.

2.3. Expected benefits, design principles and strategic considerations

65. The calculated global GHGs reduction benefits of the project will consist of a combination of:

Direct GHG emission reduction benefits from the Dongola wind farm.

Indirect GHG reduction benefits resulting from broader market transformation arising from project activities.

66. No post-project GHG emission reduction benefits arising from ongoing operation of financing mechanisms established or supported by the project have been accounted for in this project, as the GEF cash contribution to capital investments represents a one-time capital grant without expected pay-back.

67. Over the lifetime of the UNDP-implemented, GEF-financed project, the direct CO2 emission reductions attributed to the Dongola wind farm are calculated to be 91,780 tCO2/year, or 1,835,600 tCO2 over the 20year life of the wind farm.[footnoteRef:35] With a GEF financial contribution of $3,536,634, this translates as a cost of $GEF 1.93/tCO2 abated directly. This does not include any wind farms installed as an indirect result of the project through the projects market-opening, awareness-raising and supply chain assistance activities, for example. For further details about the assumptions and results of the projects GHG reduction analysis, see Annex 8-4. [35: Lahmeyer International (2013), 100 MW Wind Power Project in Dongola.]

68. The associated national and local benefits include reduced local pollution from the burning of fossil fuels and strengthened national energy security through reduced dependency on imported fuels.

69. These developments will catalyse the adoption of wind technology and provide a foundation that allows the widespread use of wind energy either in response to regulatory stimulus or simply to help realise systems where wind energy may already be advantageous but is not utilised due to a lack of capacity or awareness.

2.4. Project rationale and policy conformity

70. The project contributes to GEF Climate Change Focal Area Objective #3, to Promote Investment in Renewable Energy Technologies, recognising that renewable energy plays an indispensable role not only in combating global climate change but also in addressing energy access, energy security, environmental pollution and sustainable development. In accordance with the adopted strategy, the GEF support under expands beyond the creation of an enabling policy and regulatory environment and also encompasses wind energy investment projects that will lead to a step-change in the deployment of wind energy.

71. The specific outcomes of the GEF-5 climate change strategy that the project will address are the following:

Favourable policy and regulatory environment created for renewable energy investments.

Investment in renewable energy technologies increased.

GHG emissions avoided.

72. The project is consistent with Sudan's national strategies, as evidenced by the already-existing incentives for renewable power in Sudan's Investment Act. The project will help further the goals Sudan's national strategies by putting in place the overall framework that will make them effective. The Technology Needs Assessment (TNA) carried out by HCENR with GEF support points to renewable energy as one of Sudan's key priorities in climate change mitigation. Similarly, Sudan's Second National Communication to the UNFCCC includes renewable energy as a key potential mitigation option. The objective of the project is also consistent with the views and objectives espoused by several stakeholders, especially from MWRE, during the extensive consultation process carried out as part of the project preparation.

73. The project aims to develop and accelerate the adoption of grid-integrated wind power generation by providing a structure around the Dongola wind farm to translate the experience from that project onto a national basis to be replicated by other wind farms, most notably the planned Red Sea wind farms at Toker, Port Sudan, Nyala and Khartoum. Sudans development depends critically on the availability of reliable electric power and independence from fossil fuels as Sudan is currently a fossil fuel-poor nation. The present lack of availability of options, the lack of a framework to allow the sale of power to the grid, the lack of technical know-how in the market, the lack of user experience with the technology, and the lack of hands-on experience amongst Government officials means that adoption of fossil fuel alternatives is slow and limited.

74. The UNDP-implemented, GEF-financed project will achieve its objective by addressing impediments to the development of private-sector wind power projects. Specifically, the project intends to achieve the project objective through the following:

Supporting the establishment of a regulatory framework;

Creating financial incentives in the form a feed-in tariff to complement already-existing incentives under the Investment Act. The project will analyse existing and possible incentives and propose to the Government appropriate incentives for implementation;

Establishing a technical knowledge base and cadre of experienced professionals to support the development of wind power projects.

75. The project will play a critical role in creating a market that does not presently exist and supporting it through a nascent stage to the point where it is self-sustaining and able to respond to the needs of the Government, financiers and IPPs.

2.5. Country ownership: country eligibility and country drivenness

76. According to the Instrument for the Establishment of the Restructured Global Environment Facility, Sudan qualifies for GEF financing on the following grounds:

It has ratified the UN Framework Convention on Climate Change; and

It receives development assistance from UNDPs core resources.

77. The objective of the project is consistent with the strategies of the Sudanese Government, particularly as outlined in the Renewable Energy Master Plan (2005). The project will provide the basis for Sudan to initiate the development of a NAMA to support renewable energy. It will thus provide Sudan with the opportunity to reinforce its engagement with the international climate change architecture and demonstrate its commitment to international efforts to reduce GHG emissions.

78. UNDP has considerable experience in deploying policy instruments to de-risk renewable energy investments in developing countries.[footnoteRef:36] The project will be a direct application of UNDPs work in this area. [36: UNDP (2013), Derisking Renewable Energy Investment.]

79. Sudan has already demonstrated strong country drivenness in implementation of its power projects as recognition of the critical role they play in the development of the country. This has been true in particular of its hydro-power projects. The same can be expected for wind power projects as today they represent not only a renewable source of power but also a source of national security by diversifying energy supply and reducing the reliance on fossil fuels.

80. The GEF Operational Focal Point for Sudan endorsed the project with a letter signed on February 14, 2011.

2.6. Cost-effectiveness

81. The GEF financing for Outcome 1 (US$2,391,864), represents the bulk of the GEF financing for the project and has been allocated to support the development of the Dongola wind farm as Sudans first wind project. The development of Dongola is seen as the most critical step in launching wind energy in Sudan. Success at Dongola will translate to future projects, while a failure at Dongola will setback wind power in Sudan by several years. The current lack of experience and resulting shortcomings in some of the preparatory studies for Dongola indicate that UNDP-GEF support will be critical in bringing the implementation of Dongola up to international best practice.

82. The GEF financing for Outcome 2 (US$377,410), will consist of grants for technical assistance, which will support the further development of regulations, technical requirements for grid connection, a feed-in tariff, and a centralised one-stop-shop to support the development of wind energy in Sudan. Together, these initiatives are expected to foster a regulatory environment for attracting investments for privately-owned, grid-connected renewable energy power generation and for facilitating effective monitoring, quality control and dissemination of the results of the investments made.

83. The GEF financing for Outcome 3 (US$420,000), consists of technical assistance to strengthen the support for wind technology and the delivery of such support. This includes the creation of a wind atlas, overlaid with other geographical information, as well as the development of a well-trained cadre of competent wind professionals in Sudan who are expected to serve as the core of future wind projects.

84. The GEF financing for Outcome 4 (US$180,000), consists of technical assistance to ensure the documentation and dissemination of experience from Dongola, as well as the interaction of professionals from Sudan with others in the region, to further the experience gained and support the integration of wind power in the East African Power Pool, of which Sudan is a member.

85. The proposed project is extremely cost-effective as it will utilise relatively limited GEF funds to leverage almost $214 million of co-financing (a co-financing ratio of over 60). In the absence of the UNDP-implemented, GEF-financed project, the wind farm would be built but not according to best practices and with greatly reduced potential for replicability and efficient performance. If the project were to focus solely on policy issues it would risk being irrelevant without a concrete demonstration and opportunity to use this demonstration as a learning vehicle for future projects. The cost-effectiveness of the project is reflected in its very low GHG abatement cost - less than $2/tCO2.

2.7. Sustainability

86. The savings in fuel from grid-connected thermal electricity plants are comparable to the levelised cost of generation from wind power. Wind power is therefore competitive with Sudans current marginal cost of thermal generation and can be expected to relieve some of the need for fossil fuels. Sudan can, therefore, realise a cost saving by operating a wind power plant in place of a current, average, grid-connected fossil fuel plant.

87. Once the implementation of the initial phases of the Dongola wind farm has been successfully completed and demonstrates outputs as anticipated, it can expected that other planned wind projects (e.g. the Red Sea sites, Khartoum and N