roadmap to carbon neutrality of the maldives (2013)

8/10/2019 Roadmap to Carbon Neutrality of the Maldives (2013)

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2013

Detlef Loy

Loy Energy Consulting

May 2013

Roadmap to Carbon Neutrality

of the Maldives

On behalf of


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1

Content

Acronyms and Abbreviations ..............................................................................................................3

1. Preface ........................................................................................................................................4

2. Introduction ................................................................................................................................5

3. Public Electricity generation and supply .......................................................................................6

Electricity supply in the Great Male Region ..................................................................................6

STELCO ........................................................................................................................................6

Interconnection ...........................................................................................................................6

4. Electricity supply on the Outer Islands .........................................................................................7

5. Electricity tariffs and subsidies.....................................................................................................7

6. Renewable Energy ..................................................................................................................... 10

PV in Male ................................................................................................................................. 10

PV on Outer Islands ................................................................................................................... 11

Hybrid wind/solar systems ........................................................................................................ 12

PV on new buildings .................................................................................................................. 13

Waste-to-Energy ....................................................................................................................... 13

7. Transport .................................................................................................................................. 14

Air transport .............................................................................................................................. 14

Land transport ........................................................................................................................... 14

Taxation of vehicles ................................................................................................................... 16

Marine transport ....................................................................................................................... 16

Import of biofuels ...................................................................................................................... 17

8. Tourism and Resorts .................................................................................................................. 17

Energy consumption in the tourism sector ................................................................................ 18

Energy saving potential und use of RE ....................................................................................... 19

Leasing and operation of resorts islands .................................................................................... 19Taxation in the tourism sector ................................................................................................... 20

Awarding Sustainable Tourism................................................................................................... 21

9. Energy Efficiency in the residential, commercial and public sector ............................................. 22

Building Code ............................................................................................................................ 23

Example of Hulhumale............................................................................................................... 24

Standards and Labelling of electrical appliances ........................................................................ 25

GEF Project ................................................................................................................................ 26

Demand-side management activities ......................................................................................... 27


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10. Targets for a low-carbon economy ............................................................................................ 28

11. Institutional strengthening ........................................................................................................ 28

Maldives Energy Authority (MEA) .............................................................................................. 29

Climate Change Advisory Council ............................................................................................... 30

References ........................................................................................................................................ 31

Appendices

Cover photo: Photovoltaic system at the Soneva-Fushi Resort on the island Kunfunadhoo (BELECTRIC GmbH).


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Acronyms and Abbreviations

BMU Bundesministerium fr Umwelt, Naturschutz und Reaktorsicherheit (German

Federal Ministry for the Environment, Nature Conservation and Nuclear Safety)

CCAC Climate Change Advisory Council

CCD Climate Change Department (in the Ministry of Environment and Energy of the

Maldives)

EE Energy Efficiency

FENAKA FENAKA Corporation Limited

FIT Feed-in Tariff

GDP Gross Domestic Product

GEF Global Environment Facility

GHG Greenhouse Gas

GIZ Deutsche Gesellschaft fr Internationale Zusammenarbeit

GoM Government of Maldives

GWh Gigawatt-hour

MEA Maldives Energy Authority

MEE Ministry of Environment and Energy of the Maldives

MGF Maldives Green Fund

POISED Preparing Outer Islands for Sustainable Energy Development

PPA Power Purchase Agreement

PV Photovoltaic

RE Renewable Energy

SCNS Support for the Climate Neutrality Strategy of the Maldives

SREP Scaling up Renewable Energy Program in Low Income Countries

STELCO State Electric Company Limited

toe Tonne of oil equivalent

UNOPS United Nations Office for Project Services


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1. Preface

The present report has been elaborated in the context of the project Support for the Climate

Neutrality Strategy of the Maldives (SCNS), executed between 2011 and 2014 by the Deutsche

Gesellschaft fr Internationale Zusammenarbeit GmbH (GIZ) with financial support of the GermanFederal Ministry for the Environment, Nature Conservation and Nuclear Safety (BMU). Primary

objective of this project is to build up capacity and increase expertise of public institutions as well as

the private sector. In doing so, the GIZ project supports the Maldivian Government, the private

sector and local authorities in developing their own comprehensive strategies for minimizing

greenhouse gas emissions harmful to the climate.

One component of the SCNS project is the advisory service and support to the Ministry of

Environment and Energy (MEE) of the Maldives on the development and implementation of essential

elements for a coherent climate neutrality strategy. The main policy objective is to contribute to the

advancement of adequate framework conditions as well as administrative and decision making

structures on the national level.

The Government of the Maldives had announced in 2010 its ambition to become a carbon neutral

country, setting a signal for carbon intense countries to strengthen their efforts in lowering

greenhouse gas (GHG) emissions. The German government with its agency for international

cooperation GIZ supports this objective and agreed with the Climate Change Department (CCD) of

the MEE to formulate a Roadmap to reach Carbon Neutrality of the Maldives(see Terms of Reference

in Annex A). For this purpose the consultant and climate change expert Detlef Loy has been

contracted who went on a mission to the Maldives between April 6 and 18, 2013. During this mission,

discussions were held with a number of relevant stakeholders in Male and Hulhumale (see Annex D).

Preliminary findings and recommendations were presented during a stakeholder meeting on April 16,

2013 (see Annex E). Furthermore, the consultant attended a preparation workshop for a Global

Environment Facility (GEF) project on energy-efficient buildings and appliances1 and a national

investors conference in the frame of the Scaling-up Renewable Energy Program (SREP)2. Relevant

figures on which this report has been based on are compiled in Annex B.

The roadmap outlined in this report is primarily based on previous energy and climate change

reports and studies for the Maldives, on statistical, legal and economic publications, on results of

discussions with stakeholders from the public and private sector, on best practice cases in other

countries and on observations and conclusions of the consultant. The roadmap can be considered as

a follow-up or update to the energy policy strategies as outlined in the Strategic Action Plan 2009-

2013 (GoM, 2009). It is obvious that not all aspects of a future roadmap for carbon neutrality couldbe targeted in detail and with precision during the relatively short mission in the country. A number

of open questions remain and need to be further examined at a later stage. The present report is

therefore considered to initiate a dialogue within the Government and the civil society of Maldives

how the objective of carbon neutrality could be achieved, by proposing a number of steps and

initiatives that may not have been under consideration before.

The author would like to thank all those who contributed with their knowledge and ideas to this

report and spent time and efforts to provide valuable input. In particular, he is most grateful for the

assistance provided by the Climate Change Department of the MEE and the local team of the GIZ.

1

Stakeholder Validation Workshop on Strengthening Low-Carbon Energy Island Strategies on April 15,20132 National Dialogue on Renewable Energy Investments on April 17, 2013


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2. Introduction

In March 2009, a first paper on carbon neutrality of the Maldives had been published by the British

author Chris Goodall. The then President of the Maldives took up this message and pledged that the

country would strive for carbon neutrality by 2020. This pledge was announced during the UNGeneral Assembly in 2009 and repeated at the Climate Conference in Copenhagen in the same year.

In 2010, a first energy policy strategy was elaborated by the Maldivian Government (Ministry of

Housing and Environment, 2010).

From the current point of knowledge, both the paper and the public announcement appear

somewhat overambitious and unrealistic. The trend for an ever-growing energy demand and

subsequent increased consumption of fossil fuels cannot immediately be revoked, as can fossil fuels

not be replaced from one day to the other by renewable energy sources. All this needs time, in

particular in a more than difficult environment like the Maldives with a dispersed geographical

landscape of about 300 inhabited and tourist islands, a growing economy and a particular strong

dependence on just one economic sector tourism- that by itself is one of the major energyconsumers.

Nevertheless, the original far-reaching objective has contributed to a number of activities and

initiatives in the past years which combined will all support to move forward on the road to carbon

neutrality. Certainly, this will be a longer way than expected and it will not be concluded by 2020, but

the initial steps have been taken and the willingness to proceed at all fronts is more than visible.

Still there are major obstacles on the road that need to be removed. Potentials for energy efficiency

have to be explored and tapped. Investments in solar electricity need to be made possible by

adequate framework conditions. Moreover, Government decisions need to be streamlined and

coherent in order to achieve the general goal. Interim or medium-term targets can help to evaluatethe success of any policy and should therefore be established to measure the results of the different

instruments and activities put in place. Taking the general public on board and motivating the private

business sector is essential for any climate change and energy policy. It is therefore necessary to

communicate constantly and on all levels about the national objective of striving towards carbon

neutrality and integrate all sectors of the civil society into the dialogue on how this goal can be best

achieved without distorting the economy or negatively affecting individual living conditions.

As has already been noted in (USAID, 2010), a precondition for designing a national action plan for

carbon neutrality is that the GoM undertakes a detailed forecast, analysis and planning of the

technical, economic, financial, and environmental implications for generation and transmission as

well as use and replacement of fossil fuels for the next 20 years. This would enable the government

to develop mechanisms and incentives for promoting elements of the plan, in particular regarding

the tapping of renewable energy sources and the implementation of energy efficiency activities.

This roadmap presents some elements that could be considered when paving the road to carbon

neutrality. First and above all, it would like to introduce a more realistic perspective in terms of the

distance from the starting point towards reaching the final goal. This may help to define future

priorities and concentrate on activities that are effective and relatively easy to implement, always

keeping in mind that the human, financial and institutional resources of the Maldives are limited.


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3. Public Electricity generation and supply

It is forecast that in the business-as-usual scenario the peak load for electricity demand in the public

supply sector (includes utilities, island council power supply and private supply on inhabited islands,

but excludes all tourist resorts) will increase from about 79 MW in 2010 to 146 MW in 2030 (USAID,2010). This increase will primarily occur in the Greater Male region. Taking into account that all

currently existing genset units need to be replaced by 2030, this would mean the installation of 8-10

MW annually from now on.

Electricity supply in the Great Male Region

STELCO

The State Electric Company (STELCO) is currently3 serving 27 islands around Male from an equal

number of power plants, serving about 43% of Maldives population (see Annex G). Each power

system is completely independent with its own power generation and distribution infrastructure. The

system in Male has an installed capacity of 61.4 MW and provides electricity to 33,430 mainly

domestic and commercial customers (August 2012). The installed capacity outside of Male totals 17.8

MW and serves 8,310 customers, mainly centered in Hulhumale. Due to the rapid development of

this island and the continued migration to the Greater Male Region, it can be expected that the

customer base outside of Male will grow significantly in the near future. Most systems, with the

exception of those on Male, Hulhumale and a few other islands are very small with capacities of not

more than 100 kW.

Due to non-operational turbines being in maintenance, Male has a dependable (available) generation

capacity of only about 52.2 MW4, while the peak load in 2012 has been in the range of 45 MW

(estimated). Power demand is increasing in Male at a rate of about 10% annually in the business-as-usual scenario. Currently there is hardly any reserve capacity available in case of failure of the largest

genset so that the risk of blackouts is extremely high. According to STELCO, there is only space

available for another generator of 8 MW capacity. If demand further increases at past growth rates,

STELCO will very soon reach its technical and logistical limits. Demand would then increasingly have

to be covered by self-producers operating own individual diesel gensets for their power needs.

STELCOs generation performance is relatively good with efficiencies of about 38%, most probably

due to the young age of most gensets that in majority have been acquired in the last decade5.

Interconnection

Most important and to be targeted with priority is the interconnection of islands in the region, in

particular between Male and Huhule (International Airport) and further onwards to Hulhumale. The

issue has been in discussion for some time (USAID, 2010). It would also provide additional chances

for feeding a higher share of RE capacity into the extended grid. In (USAID, 2010) it was estimated

that a connection with two 132 kV submarine and land cables between Male and Hulhumale would

cost about US$ 26.4m.

3 After reorganisation of the national electricity system in 2012.

4

85% of the installed capacity according to (ECFA, 2011)5 Only five generation units on Male have been installed before 2002 (ECFA, 2011)


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A feasibility study for interconnecting Male and Hulhumale should be started

as soon as possible. The interconnection should be complete by 2015 at the

latest to avoid shortages of supply on both islands and cope with the

increasing population in the new developments of Hulhumale.

III/2013 - 2015

It should also be examined if connecting Male with Villingili (estimated costs

US$ 16m) and Villingili with Thilafushi (US$ 10.9) at the same time could save

costs and avoid power shortages.

III-IV/2013

4. Electricity supply on the Outer Islands

As outlined in (USAID, 2010), with demand not expected to grow significantly, the existing installed

capacity of diesel gensets is sufficient to cover the peak load on most of the Outer Islands over thenext 20 years, except in the Southern Province, where it needs an additional 1,000 kW to achieve a

satisfactory reserve margin. Some capacity shifting between islands may be needed as population

tend to settle more and more in regional centers, followed by an anticipated higher than average

electric load growth in those new urban developments6. It is also expected that replacement of some

gensets on the islands will be necessary due to reaching the end of their lifetime, while others will

need to be downsized because of a mismatch between generation capacity and average load.

The Outer Islands contribute only marginally to national CO2emissions; therefore, any measures to

curb carbon emissions on those islands through replacing diesel fuel by renewable energy will only

have a minor effect on GHG reduction at country level. All activities in this direction should therefore

be seen primarily from a social, economic and security perspective as renewable energy may help toprevent further increases of electricity generation costs or even lead to a downward trend of costs

compared to a system relying completely on fossil fuels. They may further assist in providing a more

reliable electricity supply with fewer outages, reduce the volume of fuel transports and improve local

environmental conditions by reducing noise and air pollution.

Electricity supply plans for the Outer Island with a 10-15 year forecast period

have to be set up based on future population development, expected capacity

needs, age of existing gensets and potential for RE electricity.

III/2013

II/2014

5. Electricity tariffs and subsidies

The current Maldives Electricity tariff rates have been approved by MEA in 2009 and were not

revised in the meantime. The tariff scheme shows a progressive increase with growing energy

consumption and is based on a fixed energy charge and an additional variable fuel surcharge. The

latter is related directly to fuel prices exceeding a margin of 8.0 (Greater Male Region) to 8.50 Rf (per

6

On most smaller islands the population has been declining between 2000 and 2006, probably due to decreasing jobopportunities in the fishery sector and only limited income generating alternatives.


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Liter of diesel oil, depending on the region of electricity consumption, (Mercados, 2012))7. As can be

seen fromFigure 1,the diesel price was constantly above 8.0 Rf/Litre since the last quarter of 2009,

with prices are currently in the range of Rf 15.5 per Litre (or about Rf 4.0 per produced kWh

electricity in the case of Male8). Accordingly the fuel surcharge increased from 0.08 Rf/kWh (US$-ct

0.5 per kWh) at the end of 2009 to 2.27 Rf/kWh (US$ 0.15 per kWh) in March 2013 (website of

STELCO, retrieved on April 23, 2013, seeFigure 1). The fuel surcharge therefore became an importantcost item of the electricity bill. The energy charge varies significantly between the Greater Male

Region and the outer islands by partly more than 50%. Households in the Greater Male Region with a

consumption of 500 kWh/month had to pay about 4.9 Rf/kWh (US$ 0.33 per kWh) in March 2013.

This price was still well below the generation costs that are estimated at 5.25 Rf/kWh (US$ 0.35 per

kWh), not to forget distribution and metering costs that need to be added.

In 2010, a fuel surcharge subsidy was introduced, which became the most important part of overall

electricity subsidies due to increasing fuel prices and devaluation of the national currency. Subsidy on

fuel surchage now accounts for about Rf 35m (US$ 2.3m) per month. While in 2009 only several

hundred households benefitted from subsidies, there are now over 50,000 customers that have

appealed for being exempted from paying any fuel surcharge. In 2012, approximately 43,000 meters

received a fuel surcharge subsidy.

In addition to this, many low-income households have applied for support for the energy charge

under the Social Welfare program. Since the subsidy applies to all tariffs below the first 400 kWh

consumption per months, independent from the total amount of consumption, it benefits all

consumers, also those with sufficient financial resources. The so-called usage subsidy on the fixed

energy charge has remained relatively stable at Rf 10-15m per month.

All electricity subsidies increased between 2010 and 2012 from Rf 90m (US$ 6m, 0.33% of GDP) to

an estimated Rf 458m (US$ 30.5m, 1.44% of GDP). (Trimble, 2012). 29% of the subsidies has been

received by the most consuming quintile of households. In Male alone, the state financed about Rf

13.5m per month in 2011, most of this amount (Rf 10.9m) for subsidizing the fuel surcharge portion

of the domestic tariffs (Statistical Yearbook 2012).

7 Fuel surcharge subsidy is Rf 0.03 for each increase of Rf 0.1 per litre diesel above the threshold level of Rf 8-8.5.

8 STELCO has an efficiency of 3.85 kWh/litre). According to (Trimble, 2012), diesel represents around 70-80% of total

generations costs. Therefore, it will exceed Rf 6.0/kWh.


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Figure 1: Diesel price for electricity generation

The cost of electricity generation in Male increased from about Rf 3.0 (US$ 0.20) at the beginning of

2010 to Rf 5.4 (US$ 0.36) per kWh at the end of 2011, while the tariffs remained stable within this

period (Trimble, 2012). When comparing with the current tariff level of about US$ 0.30/kWh on

average (USAID, 2010), it becomes obvious that the tariff rates are far from being cost covering, not

to speak of making any profit. Subsidies in real terms have about doubled between late 2009 and late

2011.

The average monthly electricity consumption per household in Male was just above 500 kWh in

2009, according to HIES estimates9. 68% of households accounted for 85% of electricity consumption

in 2009.

Keeping electricity prices artificially low across different consumption levels, gives the wrong signal

for a responsible electricity use and makes a number of energy efficiency measures non-economic.

If subsidies could be cut by half through abolishing the privileges for consumers with a high level of

electricity consumption would therefore release the amount of US$ 15m per year that could be

dedicated for energy efficiency measures instead.

It is therefore suggested that a national task force under the leadership of

MEA will be established to revise the existing tariff and subsidy scheme. The

tariffs should reflect the cost situation and subsidies only provided for those

in social need. Financial resources released by reducing the current level of

subsidies should be redirected into energy efficiency measures.

III/2013

I/2014

9 It has to be noted that some meters serve several households at a time.


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6. Renewable Energy

The Maldivesrenewable energy sources are limited and consist mainly of solar energy that can be

tapped. Wind speeds are low and sites for larger wind turbines not easily available. Biomass residues

are scarce and consist mainly of organic material in domestic waste. Ocean thermal energy sourcesand wave energy could be an option for the future, but technologies are still under development and

not yet commercially available. Also for solar energy use, the limited land area sets close boundaries.

With 1% of the total land area (300 km) covered with solar PV panels (mainly placed on rooftops),

about 720 GWh could be generated annually. This would be in the range of two thirds of the current

electricity consumption (including resorts).

The Maldives Energy Authority (MEA) has recently published a draft for a Standard Power Purchasing

Agreement (PPA) that forms the basis for contracts between Independent Power Producers using

renewable energy sources and the incumbent utilities (MEA, 2012).

This draft Standard PPA is in first place addressing operators of larger plantsthat supply significant shares of the electricity demand on an island. It is not

appropriate for the supply of excess electricity from small-scale renewable

energy facilities. It is therefore recommended to design standard contracts

also for such systems, which generate only a few kilowatts.

III-IV/2013

The MEA has further published in February 2013 guidelines for the approval process of grid-

connected PV applications and for the technical interconnection provisions of such systems (MEA,

2013b). The proposed administrative procedures can have a significant impact on the so-called soft

costs associated with the realization of PV installations and reduce the competitiveness of such

systems substantially.

For small-scale systems it is highly recommended that fast-track procedures

are put in place which are not creating additional administrative burdens and

are simple and cost-effective to enforce.

III-IV/2013

It is further recommended that MEA acts as a neutral body for solving

conflicts between utilities and independent RE operators and provides staff

for such task.

III/2013 -

PV in Male

The Scaling-up Renewable Energy Program (SREP) intents to install 11 MW of solar PV on the island

of Male (approx. 80,000 m) (MEE, 2012a). As there is hardly any open ground space available, most

of those installations need to be placed on the roofs of existing or newly constructed buildings. This

space is as well limited due to the type of roofs, their use for competing purposes, shading by

neighbouring buildings etc. However, even with 11 MW made available, they will contribute only a

fraction (less than 10%) to the current and expected electricity demand, unless extensive energy

efficiency and conservation measures are carried out.


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Further investigation (mapping) will need to be done to assess the exact

amount and location of available rooftop space for PV installations in Male.

III/2013

I/2014

Apart from this, the problem occurs that building owners may show no

interest in investing in and operating a PV system, in particular in residentialbuildings with multiple apartment owners. That means that rooftops may not

be accessible for PV installations, although they would in theory be suitable

for carrying such systems. This natural building ownerPV investor conflict

needs to be solved, otherwise it is most certain that the space for housing the

above mentioned size of solar panels will not be available.

I-II/2014

It is further proposed that a detailed mapping of all roofs suitable for PV

installations in the Greater Male region takes place. Such mapping should

start with a visual analysis of air-borne or satellite pictures and include

building ownership and details on the roof structure wherever possible.

I-II/2014

Roofs on public, religious and official buildings should be offered to the

extent possible for PV installations financed and operated by the private

sector, under similar conditions that have been negotiated with the company

Renewable Energy Maldives (REM) and its German partner Wirsol.10

Legal

arrangements for the leasing of such roofs to third parties need to be

designed.

II/2014 -

PV on Outer Islands

Also on Outer Islands, the space for PV installations is limited. Open space is restricted due to the

small size of the islands and rooftops may often be shaded by vegetation, essential for bringing down

indoor temperatures through avoiding direct exposure to sunlight. It has also been reported that

operators of public buildings (schools, health centers, police stations) are requesting a lease rate for

using the roofs for PV installations.

It would be helpful to map the potential roof spaces, in particular on public

buildings (schools, health centers, police stations etc.) of regional population

centers and of potential ground spaces on less populated islands.

I-II/2014

A general solution needs to be found how roofs on public buildings can be

made accessible for private investors, possibly through offering a

compensation in terms of reducing energy consumption of the buildings by

adequate investment measures.

I/2014

10

Relatively large roof spaces offer e.g. the Indira Gandhi Memorial Hospital (inaugurated in 1995) and the compound ofthe Ministry of Defense and National Security in Male.


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As part of the SREP investment plan and within its World Bank-led component ASPIRE (Accelerating

Sustainable Private Investments in Renewable Energy Programme), the GoM has called in early 2013

for a pre-qualification of interested parties to design, build, finance, own, operate and transfer grid-

tied solar PV systems for integration with diesel generators on 15 islands in the Upper North, North

and Upper South Region of the Maldives. The GoM has been seeking for investors to install PV

systems with a capacity of up to 30% of the peak load on each island, feeding solar electricity asIndependent Power Producer (IPP) into the existing grid under a Power Purchase Agreement with a

maximum Feed-in-Tariff of US$ 0.25/kWh. Although the specific islands in the three regions have not

yet been selected, it is already certain that none of the existing powerhouses has more than 1 MW

generating capacity. All of those islands are currently served by the recently formed utility FENAKA.

It is obvious that within such small operating environment the presence of two different generating

parties that are in need to closely interact with each other can create heavy turbulence and carries

along the potential for technical and commercial conflicts.

It is suggested that GoM (or in its place FENAKA) enters into agreement with

private parties to take over the whole generation side of electricity supplyon the selected islands, i.e. including the existing diesel gensets. While in

this arrangement the operation of the electricity production would remain

in one hand, the grid operation and distribution of electricity to the final

customer could stay with FENAKA (see also the Mercados study of January

2013 on this subject, (AF-Mercados EMI, 2013a)).

III-IV/2013

Hybrid wind/solar systems

With regard to the intention of SREP to also target wind energy investments (10 islands are thoughtto be fully supplied by a mix of wind and solar electricity with about 200 kW on each island and

battery support for storage),

. a critical technical assessment is required why all wind/solar systems that

were installed in 2007 are currently out of operation (according to MEE).

Recommendations should be elaborated for the selection of adequate small

wind turbines and the provision of appropriate maintenance service.

IV/2013

The proposal to have FENAKA implement those systems should be

reconsidered at least for the pilot projects, as FENAKA currently has neitherthe capacity nor the financial means to carry out such investment.

III/2013

It further needs to be assessed if such systems can be realized at generation

costs lower than about US$ 0.40/kWh or any current generation cost using

diesel fuel.11

III/2013

11 Solar installations for full supply of electricity demand have recently been inaugurated on three islands of Tokelau in the

Pacific with a total population of 1,400 people and a combined land area of 10 km. The systems are backed up bybattery storage. Tokelau is therefore the first nation to become fully independent from fossil fuels.


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PV on new buildings

So far, PV systems have mainly been installed on existing buildings, although the extensive

construction of new private and public buildings offers excellent opportunities for integrating PV

installations into the original architectural design. This will eliminate technical barriers for the

installation of such systems, reduce costs and increase the acceptance for PV systems among thedevelopers and investors.

Instant measures should be taken with regard to new building constructions

in the Greater Male region, in particular on the island Hulhumale, which can

be a showcase for low-carbon urban development (see also chapter9.). The

state-owned Housing Development Corporation (HDC) is engaged in the

urban planning and sets specifications for constructions on plots sold to

private investors. Such specifications could also request to design rooftops in

such a manner that they can carry a maximum amount of solar PV

installations. In addition, the required minimum amount of solar electricity

share (compared to the expected consumption within the building) could bedefined.

III/2013

I/2014

Even more direct influence could HDC play out within their own social housing

projects, which are fully developed by HDC for later sale to individual

apartment owners. In this case, HDC could and should decide right from the

beginning on installing PV systems on all roofs of newly erected buildings. If

HDC is financially not capable of doing the investment, agreements could be

signed with external third parties to invest and operate the systems.

III/2013 -

For new high-rise buildings in the Greater Male region it is proposed that the

entity in charge of issuing the construction license (island council) requests

that suitable space is made available for the installation of PV systems. This

should be seen as a precautionary measure, as later modifications on the

building design will make solar electricity more expensive, even if the

installation of the solar systems will not be done at the initial stage.

III/2013 -

Waste-to-Energy

Great expectations have been raised in past studies with regard to the controlled incineration of

domestic solid waste and the generation of electricity as a welcome by-product. To date, most of the

waste generated in the Greater Male region and on surrounding islands is dumped into the lagoon of

Thilafushi and partly incinerated at open air. Plans exist for constructing a larger incineration plant on

Thilafushi and some small units in regional centres of the Outer Islands. But so far, neither the

composition of the waste nor the implications in terms of technical solutions (in particular with

regard to limiting air pollution and finding adequate disposal sites for ashes and particles from

burners and filters) have been thoroughly investigated. A high organic share in the domestic waste

can significantly reduce the potential for generating excess electricity to be fed into the grid.

It needs investigation if the proposed utilization of waste-to-energy I-II/2014


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technology on outer islands is feasible, taking into account the composition of

the waste, the available waste amounts, the specific costs of relatively small

incinerators, the filtration of the exhaust air and the disposal of the ashes.

7. Transport

Transport is one of the most important energy-consuming sectors in the Maldives, mainly due to the

large extent of the country with a sizable number of dispersed small islands, local and tourism sea

travel, a large fishing fleet of rather small vessels and one of the largest seaplane fleets in the world.

Use of diesel fuel in the transport sector is mainly limited to sea travel, buses, pick-ups and other

larger transport vehicles for goods. Motorcycles and most passenger cars are using petrol (gasoline),

planes are operated by jet kerosene.

Energy consumption in the transport sector currently makes up about 50% of all energy use in the

Maldives. It is expected that the future overall quantity of energy for transport needs will increase

significantly under the business-as-usual scenario.

Air transport

There is currently a strong move towards expanding the network of domestic airports which would

make it attractive for local passengers to take a plane instead of the ferry and transport more goods

by air.

Sea-bound planes are almost exclusively used by foreign tourists. Maldivian Air Taxi has 20 seaplanes

and operates to 40 resort islands, while Trans Maldivian Airways has 25 planes and operates to 23

resorts islands (MOTAC, 2012a). It can be assumed that tourism-related air transport will further

increase due to the expected growth of tourist arrivals and the tendency for expanding tourism on

more remote islands

The effects of a growing domestic air transport on fuel use and

associated CO2emissions need to be further assessed. Mechanisms need

to be established how those emissions can be offset (e.g. through

purchasing of CO2emission certificates in the tourism sector).

I/2014 -

Land transport

Land transport is mainly concentrated on the islands of Male and Hulhumale, both with an area of

about 2 km. In particular in Male, transport is dominated by a high number of motorcycles (about

45,000 registered vehicles in 2010), while public transport has only been introduced recently and is

still scarce and not too comfortable. Even the relatively huge number of family cars with often

significant engine capacity is astonishing, as the longest distance to drive from one location to the

other is about 2-3 km with a total length of paved roads of about 60 km (Male) and there are no ways

to leave the islands by car.


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15

From an external view, it is not easy to understand that transport is not primarily covered by an

efficient and extensive public bus service with an addition of regular or electric bicycles. Such system

would effectively avoid traffic congestions, lower urban pollution and noise, benefit pedestrians and

lead to a substantial decrease of petrol consumption. As distances are short, buses could operate as

hybrid diesel/electric vehicles.12Sophisticated and easy to use bicycle lending systems could support

and stimulate switching from current motorcycle use to more environmental friendly transportmeans.13 A model for a motor-free island is Villingili, where private ownership and use of

motorcycles or cars is not allowed.

Sophisticated rental system for bicycles in Mexico-City

It is suggested that the City Council of Male, the Ministry of Transport, the

entity in charge of public transport - Maldives Transport and Contracting

Company (MTCC) - and the MEE form a joint working group that looks into

options how individual traffic can be minimized or shifted to low- or no-

carbon transport means and the public transport system can be further

improved.

III/2013 -

12 Hybrid diesel-electric buses are manufactured by a number of companies and operate worldwide in urban areas. The

transport company of the city of London has already 368 of such buses in its fleet.13

See the excellent example from Mexico-City with a dense network of autonomous rental stations for bicycles in the citycenter.


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In particular, the island of Hulhumale could demonstrate that the use of

private motorcycles or cars is unnecessary under given conditions of very

limited range of transport. Roads could be clearly marked with separate

bicycle lanes and the use of public transport should be widely promoted

among the inhabitants. This has to be supported by an efficient and modernbus service operating 24 hours and 7 days a week connecting major public

sites (harbor, commercial area, schools etc.) on different routes with the

residential sectors. For transporting larger or heavier goods, a pick-up

leasing or rental services could be established.

I/2014 -

Taxation of vehicles

Industrialized countries have experienced a strong correlation between operational costs for

transport and the use of individual transport means, i.e. whenever costs for vehicles taxes or fuelshave increased there is a tendency for purchasing more efficient, less fuel consuming cars and

avoiding car use by giving preference to other transport alternatives. Therefore, taxation of vehicles

as well as fuels can fulfill an important function in influencing the share of different transport modes

and reducing energy consumption and related GHG emissions without negatively affecting the

service for moving people and goods.

It should be analyzed if a (partial) change from taxing engine capacity to CO 2

emission (i.e. fuel consumption per mileage) could support a strategy of

reducing energy consumption in the transport sector.

I/2014 -

Differentiated sales taxes (GST) dependent on engine size or CO2emission

could as well push the market into offering vehicles that are more efficient

and provide a signal of awareness for the purchasing customer.

I/2014 -

Higher taxes on private motor vehicles or on petrol may also reduce the use

of such transport means, as there is a strong correlation between transport

costs and annual mileage.

I/2014 -

Marine transport

The volume of fish catch has considerably decreased over recent years. This will certainly also affect

diesel consumption of fishing vessels, although at a lower rate. Based on (BeCitizen, 2010), diesel

consumption for fishery has been in the range of 308.000 tons in 2009, higher than the consumption

for electricity generation.

Further investigation will be needed to assess options for reducing fuel consumption in the fishery

industry.


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Near distance ferry transport has the potential for being partly supported by solar energy. In

addition, more efficient ship designs (in particular catamarans) offer opportunities for lowering

energy consumption per travelled distance.

Alternative marine transport modes, as well as options to reduce energy

consumption in the existing fleet of fishing vessels and ferries should beassessed.

III/2014

Import of biofuels

Fossil based diesel fuel can be completely substituted by biodiesel derived from various organic

sources, such as palm trees, coconuts, jatropha, rapeseed etc. As such sources are scarce in the

Maldives, biodiesel would need to be fully imported.

In addition, bioethanol can partly replace gasoline, up to about 10% blend without modification of

vehicle engines. Larger shares with up to 100% bioethanol use are possible, but need adapted

engines.

For all biofuels, sustainability criteria in terms of ecological, social, agricultural and other aspects

need to be closely observed and constantly controlled. With regard to GHG mitigation it needs to

ascertain that overall emissions are really reduced compared to fossil fuels and the release is not

simply shifted from the Maldives to the place of fuel origin.

The feasibility and implications of importing biofuels (biodiesel and

bioethanol) preferably from nearby countries for blending with fossil-

based fuels should be assessed. As there are only storage facilities in the

Maldives for diesel and gasoline and no refinery exists, the fuels wouldprobably have to be imported in blended form.

I/2014 -

8. Tourism and Resorts

Tourism has become the most important industry sector of the Maldives, with bringing in more than

30% of GDP (Rf 6.1m out of 20m in 201114

). Revenues from the tourism sector were more than US$

2b in 2012 (US$ 1,868m in 2011). The tourism industry is almost exclusively limited to 105 resort

islands (one resort one islandpolicy), which operate their own individual energy supply systems,

and more recently - to safari boat cruise shipping. Total bed capacity of the resorts numbered

about 22,800 as of September 2012 (MOTAC, 2012b).15In addition, the 19 hotels of the country had

a combined bed capacity of 1,600 and 67 guesthouses offered almost 1,000 beds in September 2012.

The resorts are predominantly concentrated in the administrative divisions of the atolls Kaafu and

Alifu (North and South). Taking tourists from the international airport in Male to their destinations

and back is also an important part of the transport sector.

14

At constant prices of 2003.15 Due to closure of some resorts the operation bed capacity was lower at 21,130 in September 2012.


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The number of tourist arrivals reached 931,000 in 2011 and 958,000 in 2012. Tourist bednights were

6.53m in 2011 and 6.45m in 2012 (resorts and hotels) with an occupancy rate of about 76% in the

resorts segment.

It is planned to develop a further 50 resort islands with about 7,700 beds in the upcoming years.

Leasing of those islands has already taken place and the resorts are at different stages of completion.The bed capacity of existing resorts may also further increase, as the allowed build-up area has

recently been increased from 20 to 30% of the available land space on each island.16

According to projections, tourist arrivals are expected to reach 1.24 million by 2015 (MOTAC, 2012b),

while tourist bednights would increase to 7.7 million, i.e. about 60% more than in 2012. For 2021, it

is even forecast that tourist arrivals could increase to 2.5 million. For the period of the current

Tourism Master Plan 2013-2017 it is envisaged that the bed capacity (resorts and hotels) will increase

from 25,000 beds to 35,500 beds and bednights would grow from 6.5 million to 12 million (MOTAC,

2012a).

Energy consumption in the tourism sector

Tourist resorts are a major consumption sector for energy, in particular diesel and LPG. According to

the Energy Balance of 2009 (BeCitizen, 2010), electricity production and use is larger in all resort

islands combined than in Male. It is therefore extremely important to take the tourist industry on

board in any low-carbon strategy. Estimates calculate that per bed about 4.5 tons of diesel for

electricity generation are being consumed each year (BeCitizen, 2010).17 This leads to a total

consumption of about 99.000 tons of diesel in 2012 18, responsible for the release of 280,000 tons of

CO2. With an assumed electrical efficiency of 28% (BeCitizen, 2010), this will result in an electricity

generation of about 327 GWh or an average of 340 kWh per tourist (about 50 kWh per overnight

stay). According to (BeCitizen, 2010) and based on surveys, most of this consumption is used for air

conditioning (around 40%), while refrigeration, desalination and lighting account for about 10% each.

Air conditioning is certainly an important consumption factor as temperatures rarely drop below 25

C at night and most accommodations are directly exposed to sunlight during the day.

In a business-as-usual scenario, electricity consumption would increase by 2017 to about 600 GWh

with CO2 emissions growing accordingly, although it can be assumed that new resorts will be

somewhat more energy-efficient than the existing ones.

If only the GHG emissions from use of electricity would be offset by purchasing emission certificates

on the international market, it would cost the tourism industry about US$ 1.4m annually at current

prices19and consumption levels. Per tourist visit the extra costs would be in the range of less than

US$ 1.50.

We propose to come to voluntary agreements with resort licensees and/or

resort operators in order to achieve improved energy performance and

increase the share of RE in existing resorts, in particular through use of solar

energy for water heating (at least for central laundry and kitchen services) and

III/2013

I/2014

16 But it has also been reported that already in the past some resorts exceeded the allowed maximum of 20% built area.

17 See also consumption figure in (Ministry of Housing, Transport and Environment, 2010)

18 BeCitizen, page 58: Energy needs from resorts equaled 96,241 toe in 2009 (transport excluded). See also page 63,

where 94,175 toe of diesel are mentioned (difference would then need to be LPG).19

Prices for Certified Emission Reductions (CER) and EU Emission Allowances are currently in the range of US$ 5 per tonneCO2.


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for electricity generation.

GoM should consider purchasing CO2emission certificates on the international

market from tourism tax revenues to offset energy-related GHG emissions in

this sector.

I/2014

Energy saving potential und use of RE

Without knowing the existing situation in detail, it can be assumed - based on experiences from

other tourist accommodations in tropical countries - that the energy saving potential is significant. 20

Appropriate building designs, proper insulation and shading and increased awareness among guests

and staff could reduce the amount of air-conditioning needed. Low-flow water taps can reduce cold

and hot water use with subsequent positive consequences on energy consumption. Guestroom

management systems and energy-efficient refrigeration systems for accommodations and central

food storage can lower electricity needs substantially, even in 5-star hotels and resorts21. In

particular, natural ventilation and fans can assist in reducing electricity demand for air-conditioning.

Modern LED lights in combination with control sensors may reduce electricity needs for lighting and

can be directly fed from solar battery systems. Waste heat from diesel gensets can accommodate hot

water demand, in particular for central services, such as laundries, but also be used for cooling and

desalination purposes.

Some resorts in the Maldives already use RE at a minor scale, mainly in the form of solar collectors

for heating fresh water, while the integration of solar electricity systems is still rare.22

Leasing and operation of resorts islands

Resort islands are leased by the Government to either local or foreign entities or joint venture

companies23. The resort operator can be the same entity or a different company and requires a

license that will be renewed every five years. About half of the bed capacity is currently under

control of local operators. The Tourism Act states that all resorts and hotels will be leased for 25

year. If the initial investments exceeds US$ 10, then the lease period can be extended for up to 35

years. New regulations since 2010 allow resorts to lease for up to 50 years against the payment of

fees.

Environmental issues in the tourism sector are being covered in the Regulation on the Protectionand Conservation of Environment in the Tourism Industry

24 that came into force in July 2006,

pursuant to the Maldives Tourism Act of 1999. This regulation requests that an Environmental Impact

Assessment is carried out and submitted to the Ministry of Tourism prior to any construction project,

20 See e.g. here: http://www.caribbeanhotelandtourism.com/CASTchenact.php

21 See the example of Hilton Egypt at www.seda-eg.com/sites/default/files/

sustainbility_hilton_egypt_jan_2013.pdf, where audits in 18 hotels have shown savings with an average payback period

of 2.8 years.22

One of the few larger-scale PV installations in the tourism sectorif not the only one of its type in the Maldives can

be found at the Soneva-Fushi Resort on the island Kunfunadhoo. It has a capacity of 70 kW p, serves the spa area and

was realized in 2009 by the German company Belectric.23

Leasing and taxation issues are regulated in the Maldives Tourism Act of 1999 and its amendments.24 To be downloaded from the website of Environmental Protection Agency epa.gov.mv


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in accordance with the Protection and Conservation of Environment Act of 1999. The regulation

targets the areas of waste and sewage treatment and sets requirements for desalination of water on

each resort island, restricting the use of groundwater and setting standards for non-obstructing the

shoreline, among others, but is not specifically mentioning any energy-related subjects.

MOTAC could also consider including energy-related requirements in thelicensing contracts similar to those requested for waste disposal and

environmental protection. But, as most licensing agreements for future

development have already been signed, this proposal may not achieve

adequate results.

IV/2013

Construction permits should include the obligation for installing solar thermal

systems in new resort and hotel developments, as is now the case in Egypt.25

I-II/2014

It should be considered if energy-related aspects could be made subject of afuture amendment of the environment protection regulation. A legal

framework could be established by extending the requirements for passing the

Environmental Impact Assessment procedure26

with standards on energy

efficiency, maximum consumption per overnight stay and minimum shares of

RE contributions.

III-IV/2013

Taxation in the tourism sector

Tourism is being addressed by various taxes and is one of the main income sectors for theGovernment Revenue (total Rf 8,323m in 2011):

A tourism-General Sales Tax (T-GST)27with currently 8%, generating Rf 665m in 2011 and Rf

1,579m in 2012; this tax will increase to 15% from June 2013 on and should then generate an

extra US$ 133m per year (Rf 2,847m expected for 2013).

A bed tax (also referred to as tourism tax) of US$ 8 per accommodation bed and night that

generated Rf 751m in 2011 (16% of total tax revenue) and Rf 813m in 2012.

A land lease tax28that is charging US$ 8 per m of land accumulated to Rf 1,603m in 2011.

The airport service charge generated about Rf 329m in 2011.

A bill to increase airport departure tax, which is currently US$ 18 and usually charged with

the air ticket, failed to pass in parliament in 2009. An airport development tax of US$ 25 has

been proposed, but is still not in place.

25 See http://solarthermalworld.org/content/egypt-starts-green-tourism-initiative-hotel-solar-obligation.

26 The Environmental Impact Assessment Regulation of 2012 is currently only available in Dhivehi language. The EIA

enforcement for any activity that may have an impact on the environment began with the Environmental Protection

and Conservation Act of 1993. First regulations governing the administration of the EIA process were published in 2007

by the Ministry of Environment.27

The GST is practically a Value Added Tax and was initially introduced on tourism in 2011, but was applied to all sectorsof the economy since October 2011. In compensation, most import duty has been eliminated from December 2011 on,

except for a few items. These include goods that would deteriorate the environment.28 Introduced in 2011 (Tourism Act, 2010). Initially it used to be a tax based on the number of tourist beds.


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All taxes together have earned the GoM some Rf 1.6b (more than US$ 100m) in 2011 , out of a total

government revenue from the tourism sector in the order of Rf 3.3b (40% of the total government

budget), and an estimated Rf 4.3b (US$ 290m) in 2012. Over 90% of the total government tax

revenue is from tourism, import duties and transportation related taxes.

Besides those taxes, it is proposed that the majority of revenues for the future Green Fund thatwould finance renewable energy and energy efficiency projects among others will also be earned

from the tourism sector, i.e. through resorts, dive schools, reef fishing and safari boats contributions

(MEE, 2012b). In comparison to the tax revenues from the tourism industry mentioned above, the

proposed budget for the Green Fund of US$ 1.6m is negligible.

Reflecting the importance of the tourism sector for the energy (fossil fuel)

consumption of the Maldives, it should be considered spending larger

amounts of revenues earned from this sector for incentives that promote

RE and EE measures or introducing partial tax waives for the application of

such measures.

IV/2013

Awarding Sustainable Tourism

GoM has since 1997 awarded some resorts for their strategies of complying with sustainable tourism

requirements (President of Maldives Green Resort Award). Some tour operators also honor certain

resorts in a similar manner, thus responding to higher awareness among their tourist clients and

using such awards as marketing tools. It is recommended that the criteria for such awards give more

attention to energy aspects than they have done in the past.29A Green Star (Eco-Label) has recently

29 An example for mainly ignoring the important energy issue is demonstrated by the awards provided by the

international organization Travelife that is dedicated to honor Sustainability in Tourism (www.travelife.org). One of the

recipient of the Travelife Gold Award is the Chaaya Reef resort on the island Ellaidhoo. The resort states as its

environment policy that energy efficiency measures would be taken and that it is seeking for renewable energy sources,but does not specify, which measures have already been implemented.

One of the prominent awards for Sustainable Tourism is the international Green Globe Award(www.greenglobe.com). It has established a number of standards and indicators as criteria in the fields of

Sustainable Management, Social and Economic aspects, Cultural Heritage and Environment.

As for energy, the following criteria have been set up:

Energy consumption should be measured, sources indicated, and measures to decrease overall consumption

should be adopted, while encouraging the use of renewable energy.

Energy use is one of the most damaging activities on the planet with adverse impacts degrading air, water, so

quality, human and ecological health. Energy efficiency through sustainable technology and effective waste

management is a key strategy to reduce the negative impact. The greatest environmental and financial

benefits related to business operations are achieved by frequently monitoring utility bills, effectively trainingand providing incentives for staff to implement energy efficiency programs, and routine preventive

maintenance of mechanical equipment. By applying energy efficient practices to the operations and investing

in renewable energy technologies (e.g., solar, wind, micro-hydro, and bio-mass), the Business can help conser

natural resources, promote energy independence, and reduce greenhouse gas emissions.

It is noticeable that the criteria are formulated in a rather vague manner without really setting indicators that

would need to be fulfilled.
http://www.greenglobe.com/http://www.greenglobe.com/http://www.greenglobe.com/http://www.greenglobe.com/


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been introduced in the Egyptian hotel industry with support by GIZ.30

GoM should start an initiative for awarding specifically resorts and hotels that

comply with minimum energy efficiency standards and use renewable energy

sources.

I/2014 -

Tour operators should be made aware of the concerns associated with energy

supply on resorts islands and should from their side urge resort operators

and/or leasing companies to fulfill certain requirements in terms of EE and

use of RE. Such requirements should include minimum shares of RE supply,

installation of an adequate energy management system to avoid excessive

diesel fuel consumption during low load periods, the obligation to use only

solar collectors or waste heat from the gensets for hot water production, the

proper insulation of buildings if air-conditioners are used and the purchase of

appliances with the highest energy efficiency standard available on themarket.

I/2014

It is further recommended that MOTAC in alliance with other relevant

ministries forms a Green Unit to plan and monitor all activities for the

sustainable transformation of the tourism industry.

I/2014 -

A further operational unit should be established in collaboration with the

tourism association to ensure proper implementation of the different

measures and sharing of experiences between the stakeholders.

II/2014 -

9. Energy Efficiency in the residential, commercial and public sector

Electricity consumption in the residential and commercial sector absorbs a high share of total energy

consumption in the Maldives. In the domestic sector, the most important areas are refrigeration of

food, air-conditioning and lighting. In the commercial and public sector it is mainly air-conditioning

and lighting.

30 See www.greenstarhotel.net


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Due to low levels of climate-adapted

construction, high outdoor temperatures and

increasing demand for comfort, air-conditioning

is becoming more and more popular, despite

relatively high electricity rates. The penetration

of refrigerators and freezers (or theircombinations) in private households is high.

With regard to lighting, the use of energy-

efficient light bulbs (CFLs) or fluorescent tubes is

already widespread and has practically replaced

inefficient incandescent light bulbs in recent

years. But still there is significant potential for

reducing lighting energy by using more daylight

without allowing direct solar radiation to enter

the building.

Most existing buildings have no wall or roof

insulation against transfer of heat from the

outside to the indoor environment. New roof

constructions are sometimes insulated, but

there are no specific legal or technical

requirements to do so.

(Picture: Office Building with individual room air conditioners in Male)

Building Code

The Ministry of Housing has started some time ago with drafting a Building Act and a Building Code

(Ministry of Housing, Transport and Environment, 2010). While the first is mainly regulating the

construction permission and execution process and the licensing of building practitioners, the second

is thought to prescribe functional requirements for buildings and the performance criteria with which

buildings have to comply in their intended use. So far, the draft of the building code is mainly looking

at structural, functional (e.g. sanitary) and safety issues, but has not incorporated any specific

energy-related requirements.

From our point of view, a building code can be beneficial on the background of a well functioning and

sufficiently equipped public administration that is capable of supervising the construction process

and can enforce sanctions in case of non-compliance. Such administrative structures can certainly beestablished in the Greater Male region (using the existing island councils or the Housing

Development Corporation, see below), but it is doubtful that such control can effectively be set up on

the smaller Outer Islands.

It is therefore proposed that other instruments will be developed for making

constructions on the smaller islands become more energy-efficient, in

particular for such houses that are being constructed informally by the

owners themselves. This could be done by providing adequate information

about building designs, construction material etc. and making such material

(e.g. for insulation of roofs and walls) available on the local market.

III/2014


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For all local public or Government buildings, the Ministry of Housing should

establish guidelines for minimum energy performance standards and the

purchasing of energy-efficient appliances and devices (in particular for air-

conditioning and lighting).

II/2014

Example of Hulhumale

The most extensive development in building construction is currently taking place on the island of

Hulhumale. It is planned that housing is provided for up to 60,000 residents by 2020 on this

reclaimed land area. All of the residential and commercial buildings have been erected in the past

nine years (since 2004), either by private investors or state-owned institutions. The government

owned Housing Development Corporation (HDC)31has taken over the central role for overseeing the

urban planning and developing own projects.

In the case of the development of Hulhumale, HDC occupies three different roles: acting as masterdeveloper, engaging as builder of infrastructure and social housing projects and serving as regulator

with oversight of planning, architectural guidelines and building regulations. In this regard, HDC plays

a central role in determining criteria for constructions of the private sector as well as for own

developments, in particular in the social housing sector for low-income families.

So far, energy efficiency and use of renewable energy has not been a focal issue that HDC has dealt

with. Despite of the enormous construction volume, none of the already existing buildings carries

solar installations or has been specifically designed to cope with tropical climate conditions in an

energy-efficient way. In particular, the practice of window shading and wall insulation is not very

common.

Social housing development on Hulhumale with financial

assistance of ChinaPrivate housing investment on Hulhumale

Hulhumale could serve as a showcase model for energy-efficient building

construction and a low-carbon urban development for the whole country

and beyond. Since HDC can directly guide the process of architectural

designs and use of energy-efficiency and renewable energy technologies, it

IV/2013 - ..

31

Formerly Hulhumale Development Corporation. The name was changed in 2009 with the extended mandate to developgovernment housing projects not only in Hulhumale but also elsewhere in the Maldives.


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should take over a leading role in this regard. Properties should be sold

with the obligation to reduce the need for air-conditioning to the lowest

level possible through passive measures, such as insulation of the building

envelope and use of natural ventilation, and construct roofs in such a

manner that sufficient space for solar panels is made available. Social

housing projects

32

should be designed in a climate-friendly and adaptedway and carry PV installations that are either operated and maintained by

HDC or an external third party selected out of a bidding process. Most

probably, HDC will initially need to be assisted in drafting regulations and

specifications dealing with energy-related aspects, including legal and

contractual issues. Furthermore, architects have to be made aware of

options for climate-adapted designs and building-integrated use of solar

energy.

Standards and Labelling of electrical appliances

MEA has started to work on the introduction of Standards and Labels for electrical appliances.

Examples from other countries have demonstrated that the introduction of Minimum Energy

Performance Standards (MEPS, i.e. setting upper limits for the specific energy consumption of a

certain appliance) and the use of labels which indicate energy consumption or cost saving in

comparison with other similar types of equipment on the market, can have a considerable impact on

saving energy, in particular with regard to larger domestic appliances, such as refrigerators, freezers,

TV sets, air-conditioners etc.

MEPS prevent that less energy-efficient appliances will enter the market, while labels can be an

additional purchasing criteria by selecting a more energy-efficient appliance out of the range ofproducts which are available on the market. Both MEPS and labels refer to testing procedures which

are still not globally harmonized. Therefore, indications for a certain energy consumption might

differ, even for the same product, as the criteria for executing consumption measurements can differ

from country to country.

The Maldives have a rather limited purchasing capacity and are getting products from different

countries of origin. Often those products will carry with them a label for a certain country of

destination. As those labels are different from country to country in style, information and the way

data have been retrieved, they are hardly comparable and of very limited value for uninformed

consumers.

Therefore, the idea was born to introduce an own Standards and Labelling scheme for the Maldives.

As this approach is in principle right and understandable, it bears a number of problems and

challenges. The market size of the Maldives is rather small; therefore, the amount of pressure that

Maldives can use in the direction of manufacturers is limited. Even if there is a legal requirement for

attaching labels on certain products, the correctness of such labels needs to be verified from time to

time. This requires the existence of certified laboratories, which can execute the test routines

32 A social housing program is currently under implementation with financial assistance from China. Between 2012 and

2014, 3,000 housing units will be built, including row houses, semi-detached houses and multi-story flats (the latter for

5,000 residents have already been completed on Hulhumale). Following will be another 4,000 housing units, this timewith assistance from China and India (GEF, 2011).


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established by the country rules or within internationally accepted testing standards. It is evident

that the Maldives do not have the capacity to do such testing for the moment. Even it tests are done

on a random basis (as by far not all products on the domestic appliances market can be covered),

they still need sufficiently equipped laboratories and trained personnel to conduct such tests. Critical

is also the control of imports, in particular if MEPS should prohibit the sale of less efficient products.

Therefore, other solutions need to be found that look more into a regional approach, e.g. in

cooperation with the much larger markets of India33 or Sri Lanka34. While India has a relatively

advanced mechanism for standards and labels in place, Sri Lanka has so far only established a

labelling scheme for Compact Fluorescent Light bulbs, while the ruling for refrigerators and freezers

is still in discussion. But even in India, labels are to date only mandatory for frost-free refrigerators,

tubular fluorescent lamps, room air conditioners and distribution transformers, while they are

voluntary for appliances such as TV sets, washing machines, ceiling fans, among others. Voluntary

arrangements are often ignored by manufacturers, as more energy-efficient appliances are often

regarded as luxury items.

Even below requirements for standards and labels, the GoM could arrangewith retailers to purchase more energy efficient appliances on the

wholesale market and provide adequate information on energy

consumption of appliances in their outlets. It is therefore recommendable

to investigate the origin of major appliances on the Maldivian market and

collect information on the energy consumption of appliances within

different product categories. Wherever products are being imported with

labels, those labels should be displayed in the stores, unless their message

is completely dysfunctional for the consumer (e.g. labels written in

Chinese). Such requirement could e.g. be incorporated in consumer

protection acts.

I-II/2014

As the awareness for energy-efficient products is relatively low among the

general public, information campaigns with support of the electric utilities

should be arranged, e.g. within a regular annual energy week, by providing

information with or on electricity bills or by setting up showrooms for

demonstrating the difference of energy consumption of common domestic

appliances on a permanent basis.

IV/2013 -

GEF Project

Under the project title Strengthening Low-Carbon Energy Island Strategies a funding proposal for

the Global Environment Facility (GEF) that is thought to run from 2013 until 2018 is currently in

preparation with support from the UN Office for Project Services (UNOPS) (GEF, 2011). The proposal

is specifically addressing energy efficiency in the building and appliance sector. It is targeted at all

types of new and existing buildings and wants to promote the replacement of inefficient appliances

and the market introduction of energy-efficient products through setting of standards and use of

labels as well as awareness rising among retailers, customers and users.

33 See Bureau of Energy Efficiency, www.beeindia.in

34

See www.gic.gov.lk/gic/index.php?option=com_info&id=1700&task=info&lang=en, and the homepage of the Sri LankaStandards Institution: www.slsi.lk


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The project consists basically of six components, combining technical assistance and investment

measures:

1. Establish an assessment and monitoring system for the Energy Efficiency Road Maps for the

building sector (focused on small island tropical environment)

2.

Selection and recommendation of new design parameters for EE & LCE buildings3. Developing local technical expertise

4. Technology transfer and commercial-scale demonstration of EE & LCE technologies

5. Policy for Transformation of Markets for EE & LCE technologies

6. Financing for EE and LCE Building Technologies.

Investment activities are primarily focused on the social housing sector, targeting the soft loans

provided by China and India for such new constructions (see above) as the major source of co-

financing. It is therefore essential that agreements are established with the donor countries on how

energy-efficiency and RE aspects can be incorporated in the future housing projects. Furthermore,

the project wants to address the subject of EE standards and labelling for diverse electrical

appliances (see previous chapter).

Below the level of introducing officially voluntary or mandatory labels, HDC

could provide advice for new apartment owners on the purchasing of

energy-efficient equipment (air conditioners, fans, washing machines,

refrigerator/freezers, lighting etc.) or equip social housing projects with

adequate appliances.

I/2014 -

As the GEF project will not start before 2014, it should be considered if the

GIZ project could lay the foundation, on which the GEF project could further

proceed in the future. Assistance could be provided e.g. in setting guidelinesfor the use of energy-efficiency technologies and designs in the (social and

private) housing sector.

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Demand-side management activities

With support of the GoM, several energy audits in public buildings have been executed in the past in

order to identify energy saving potentials. The private sector has also mandated energy audits, in

particular within the hotel sector. Experiences from other countries show that energy audits are

better accepted if their execution is financially supported by the Government and technicalguidelines determine the performance of the audit.

Continuous awareness raising on energy saving issues among the general public is essential for the

success of any energy policy. One way of spreading the message is by sending out specific

information, e.g. on purchase and use of energy-efficient equipment, with or on the consumer bills.

Energy audits will be financially supported by the GoM for all major energy

consumers and guidelines for the performance of such audits will be

established.

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STELCO and FENAKA (as well as other utilities) with support of the MEE and

MEA will inform their customers about energy-efficiency related issues, e.g. in

combination with sending out consumer bills.

I/2014 -

10. Targets for a low-carbon economy

Setting long-term goals and objectives is fundamental for any political process. Government

decisions should be instrumental in achieving those objectives through various measures. In order to

judge if the correct road is taken or political decisions need to be adjusted, a constant monitoring

and evaluation process is necessary, preferably measuring the impact of the decisions in comparison

with intermediate and short-term targets.

In 2009, former President Nasheed announced the objective for Maldives to become carbon neutral

by 2020. This was mainly a political move giving the world a signal that the Maldives would takeclimate change as a serious threat for its own survival and would react consequently, although its

contribution to climate change is minimal.

The third National Environment Action Plan of 2009 established a number of goals and specific

targets, among those the target to submit a bill to Parliament by 2010 on reaching carbon neutrality

until 2020 and the target to cover 50% of the electricity supply from renewable energy sources by

2015. Neither has such a bill been submitted to Parliament nor is it realistic that the RE goal will be

achieved in the remaining time span.

In order not to loose credibility among the international community it is recommended to set new

and most likely achievable targets for the next 10 to 15 years. As it is unlikely that carbon neutrality

can be achieved by indigenous renewable energy sources covering all energy demands, such targets

will also have to consider offsetting part of the GHG emissions (e.g. in the tourism sector) through

the purchase of carbon emission certificates on the international market.

The GoM will define new short and medium targets for achieving carbon

neutrality or for the Maldives to become a low-carbon economy.

III-IV/2013

The GoM will further set up a monitoring and evaluation system for

measuring the progress in achieving the targets and proposing political

corrections where necessary.

I/2014 -

11. Institutional strengthening

It is the general observation of the consultant that coordination of political activities between the

Ministries as well as between the ministerial level and state-dependent entities needs to be

improved. Clear guidance on political intentions and a defined sharing of responsibilities within the

Government seems to be lacking to a certain extent. It was not possible to analyze the competence

and strength of each institution visited during the mission. We will therefore concentrate on the


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important Maldives Energy Authority (as the regulating entity) and the role of the Climate Change

Advisory Council in the following.

Maldives Energy Authority (MEA)

The MEA was established in April 2006 following the abolishment of the former Maldives ElectricityBureau. The MEA is an independent regulatory body affiliated to the Ministry of Environment and

Energy and operates under the guidance of a governing board. Its mandate is determined by a

presidential decree and includes the following subjects:

1. Providing advice to relevant government organizations regarding energy, and assisting in

decision-making in this sector.

2. Setting the standards and operating the regulations for the administration and monitoring of

this sector according to government policy on energy.

3. Developing the regulatory code and standards on the production and use of energy in the

Maldivian context, and developing and administering the regulations for the provision of

energy in the Maldives.

4. Setting the standards for the sources of energy that are imported into or sold in the

Maldives.

5. Issuing permits to parties that wish to provide electricity services, setting up the system of

fees for the services provided by such parties, issuing permits to parties that wish to produce

electricity for their own use, and monitoring such parties to ensure adherence to relevant

regulations.

6. Issuing permits to electric technicians and setting the standards for consultants.

7. Investigating issues between parties arising from non-compliance to the terms of

agreements between providers and users of electricity.

8.

Monitoring the statistics on the production and usage of energy in the Maldives, ascertainingthe energy requirements of the nation, and gathering data, researching and disseminating

information on this issue.

The MEA is in charge of regulating the utility sector as well as the non-utility sector (e.g. operators of

gensets on the resorts islands or electri

roadmap to carbon neutrality of the maldives (2013)

Documents