(1985) Rapò Eta sou Evalyasyon Enèji, Out 1985

Joint UNDP/WorId Bank Energy Sector Management Assistance Prograrn 'N~~~~~~~~~~~~~. Activity Comipletion Report No. 041/85 v. ~~~~. 9 3 ' Country: HAITI Activity: ENERGY ASSESSMENT STATUS REPORT AUUST 1985 R*,,port of the lovnt UNDP/?Mr1d Bank Energy Sector Management Assistance Program This document ks a re5tricted distribution. Its contents may not be disclosed without authorization from the Covernment, the UNDP or the Worid Bank. Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized -N RGY S1CTOR NMAGEMNT ASSISTANCE PROGRAi The Jo3it UNDP/World Bank Enérgy Sector Management Assistance Program (ESMAP), started in April 1983, assists countries in,implementing the=-main investment and policî' recommendatiQns of the Energy Sector Assessment Report's --poduced under another Joint UNDP/World Bank Program. ESMAP provides staff and consultant assistance in formulating and justifying priority pre-invest;ient and invè^stment projects and in .-S providing managemept, institutional and policy support. The report9 produced under this Program provide governments, donors and potential investors îith the information needed to speed up project preparation aiid implementation. ESMAP activities can be classified broadly into three groups: -~ -Energy Assessment Status Reports: these evaluate achieve- ments in the year following issuance of the original - assessment report and point out where urgent ectjon is still needed; -Project Formulation and Justification: work designed to acceletate, he preparation and implementation of investment projects; and -Institutional and Polîcy Support: thîs work also frequently leads to the identification of technical assistance packages. The Program aims to supplement, advance and strengthen the impact of bilateral and multilateral resources already avàilable for techilcal assistance in the energy sector. -Funding of the Prograa r ffThe Program is a major international effort and, while the core finance has been provided by the UNDP and the World Bank, important financial contributions to the Program have also been made by a number of bilateral agencies. Countries which have now made or pledged initial contributions to the programs through the UNDP Energy Account, or through other cost-sharing arrangements with UNDP> are the Netherlands, Sweden, Australia, Switzerland, Finland, UnitedlKingdom, Denmark, Norway, and New Zealand. Further Information For further information on the Program or to obtain co-pies of completed ESMAP reports, which are ligted at the end of this document, please contacti Division for Global and 'OR Energy Assessments Division Interregional Projects Eîiergy Department United Nations Development J rld Bank - Program - 1818 H Street, N.W. ' One United Nations Plaza Wasaington, D,C. 20433 New York, N.Y, 10017 } .\3~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ 14 en Co AnON AUD ABBVATIOI AFME Agence Française pour la Maitrise de l'Energie (France) CIDA Canadian International Development Agency DER Directorate of Energy Resources Edh Electeicité d'Haiti SEC &uropean Economie Community FAC Fonds d'Aide et de Coopération (France) FRC Federal RepuUlic of Cermany CTZ Cesellachaft f r Technische Zusammenarbeit (Federal Republic of Cermany) IDA International Development Association IDB Inter-American Development Bank IDRC International Development Research Center MARNDR Ministry of Agriculture, Matural Resources and Rural Development 101ER Ministry of Mines and 8nergy Resources ODBPA Organisation for the Development of the Artibonite River Basin o01 Operat' n Double Harvest ODNO Offio- £or the Development of the Northwest OLADE Latin-American Energy Organization Petro-Canada Petro-Canada Interational Assistance Corporation USAID United States Agency for International Development WMO World Meteorological Organization bbl barrel CNh gigawatt hour kW kilowatt kWh kilowatt hour Nu megawatt MWh megawatt hour toe ton of oil equivalent RNKIC COIVHRSION VACTORS 1 Kilocalorie (Kcal) 3 3.968 Britiob thermal units (Stu) 1 toe a 10.0 million kcal Hnergy Source Unit toc/unit wood (air dried) solid m3 245 bagasse (5OX 7umidity) tonne ai 0.225 electricity b GWh 257 LPG barrel 0.093 sasoline barrel 0.123 kerosene/jet fuel barrel 0.1.6 diesel oil barrel 0.139 fuel oil barrel 0.146 coal tonne 0.610 a/ i.e., metric tonme bi Converted on the basis of thermal replacement value. Courde (G) 1 * US$0.20 F rITI FISCAL Yl October 1 -8éptember 30 TABLE 0P COUTETS I. INTRODUCTION ANDS8UMARY................................. 1 Developing Indigenous Energy Resourcese... .. .** *,,,. 2 Forestry 2................... ... ..................... 2 Fossil Energy Resources..................... . 2 Renewable Sources of Energy Other than Wood.......... 3 Energy Demand Management ..................... , ....... 3 The Electricity Industry............................. 3 4 Households and <ommerce.,............................ 4 Institutional Development.............................. 5 Priorities for Further Pre-Investment Work and Institutional and Policy Support ................. 5 II. MAJOR DEVELOPMENTS IN TUE ENERCY SECTOR OCTOBER 1980 -MARCd 1985................................ 7 Recent Economic Developments ......................... 7 Energy Supply and 8........................e....... 8 Developments in the Energy Subsectors ................ 8 Fossil Fes........... .................. s.........*.,,o, 8 10 Alternative Sources of Eneriy........................ il Energy Piigs**********4*@*ee 12 institutional Development.. ........ *0Oe............. 13 III. STATUS OF ENERGY ASSESSMENT RfCOMMBUDATIONS ............. 14 A. Projects vith Immediate Impact....................... 14 Institutional Development............................ 14 Indigenous Resource Development...................... 15 Forest Resources............................* ... 15 Expansion of Pover Cenerating Capacity.............e 17 Hydrocarbon Exploration ............................ 19 Energy Demand Management . .. ... .. ...e 20 Pricing and Fiscal Policies........................ 20 PetroLeum ...... 4 ~~~~~20 Electroieym.. .......... ................................. 20 Demand Management Actions .......................... 23 Reduction of Power Losses...................... 23 Energy Audits in Industry........................ 23 Transportacion ........................................ 24 Improving the Energy Efficiency of Fuelwood and Charcoal Use............................... 24 B Other Projects .............. ............ .......... 26 Indigenous Resource Development 26 Agricultural Waste Procs... 26 Solar Vater Heating..... ...... ........ ........ 29 30 Other Applications of Renevable Energy Resources... 31 Solar enry....31 oindr ......... ................ 32 Energy Demand Ma nagement ............ 33 Conservation in the Commercial and Residential Stetors and in Housing Dsg ..... 33 Charcoal Production ............ 33 IV. ONGOING TECHNICAL A8ISTANCE............ 34 V. PRIORITY AREAS FOR FURTBRI PRE-INVESTNENT WORK AND INSTITUTIONAL AND POLICY SUPPORT ...................... 37 Energy C osrain 37 Bnergy Conservation in Industry and Commerce.........* 37 Energy Conservation in Tr ansport 38 Lignite ...... .............. ....... ...... ..... ....... .. 39 Prefeasibility Study of the Use of the Maissade Lignite as a Woodfuels Substitute in Artisanal Industries and Co _ rce 39 Forestry...... .... ............... ~ 41 Inventory of Forestry Resources and Planning of Their Use.... 41 Agricultural Iastes ...... 42 Snergy Analysis of Industrial Sugar Cane Refineries...... ............. .......... ............ 42 Energy Analysis of Artisanal Sugar Cane Processing U sits 42 Bagasse Market 8tudy...... 43 Testing the Technical and Economic Feasibility of Bagasse Use 43 Development of Mn-drpwr............. 44 Prefeaiibility Studies of Selected 8ites 44 Solar Rnergy ......... , 44 Feasibility Study for the Introductiou of Solar later Heaters ...... 44 Prefeasibility Study for Solar Crop-dry inng.......... 45 I. ITRODIUCTION AND SUKARY. 1.1 In October 1980, a UNDP/World Bank energy assesument mission 1/ visited Haiti to analyse major issues and options in the sector. Haiti T s energy situation vas found to be characterized byS (a) the country's weak energy resource base; (b) the groving intensity of energy use of the modern sector of the economy; (c) the subcritical site of Haiti's energy sy:tems, which constrains the choice of least-cost solutions; and (d) the weakness of the country's institutional structure and the lack of tech- nical and economic capability to handle the problems. Prepared under the Joint UNDP/World Bank Energy Sector Management Assistance Program, this statua report 2/ briefly outlines the major developments in the energy sector since 1980 (Section II). It then revieva in particular the current situation with respect to the specific recommendations made in the assessment report (Section III), and summarizes ongoing technical assistance to the sector by the international donor community (Section IV). Finally, priority areas for further pre-investment, institutional support, and policy development vork in the sector, for which the covernment of Haiti is currently seeking fundot are listed in Section V. 1.2 The structure of Haiti't energy supply remains very much the same as at the time of the energy assessment, except for the use, as of 1982, of imported coal in the cement industry. In 1982, woodfuels accounted for about 74Z and imported petroleum products 142 of the total supply, vith bagasse (5%), hydropower (5%) and imported coal (2Z) making up the remainôer. In spite of considerable efforts, the two nost criti- cal issues in &aiti's energy sector continue to be the depletion of forest resources, with ensuing soil erosion and reduction of agricultural productivity, and the increasing burden of costly oil imports which use up scarce foreign exchange. The oil import bill amounted to 24% of mer- chandise exports f.o.b. in FY82. Realizing a more sustainable energy position over the longer term requiress (a) developing of indigenous energy resources to the extent consistent vith efficient allocation of the country's financial and human resources, and (b) appropriate demand management and stimulation of higher efficiency in energy use to curtail increases in energy consumption vithout impairing economic growth. Implementing thih strategy demands, in turn, a strengthening of decision- making and program implementation in energy sector institutions. 1/ Haiti: Issues and Options in the 8nergy Sector, June 1982. Report No. 3672-HA of the Joint UNDP/Vorld Bank Energy Assesament Program. 2/ This report vas prepared by Ms. U. Veimper and Mr. C.N. King, based on a mission to Haiti in February 1984. It vas subsequently updated to reflect the main developments in the energy sector as of March 1985. Developing Indigenous Energy Resources Forestry Resources 1.3 Progress is being made in demonstrating the management of national forests, in formulating plantation prograus, and in generating interest in vood production on the part of individual farmers. More specifically, a reinforced Forestry Bureau has initiated fuelvood species trialst with fuelwood demonstration plantations slated for 1985. The Forestry Bureau has also started a program te manage an existing forest, which vill serve to demonstrate management techniques that can eventually be applied to promote fuelwood production in other areas. At the same time, a major project to stimulate tree-cropping by individual farmers is being implemented by non-governmental agencies. It has become apparent from these efforts that a better understanding of current agroforestry practices le required to formulate an effective reforestation strategy. In addition, there is a need to gain an overviev of the rate snd geo- graphic distribution of deforestation, and to analyse woodfuel supply and demand on a regional batis in order to determine the relative importance of varicus causes of deforestation, and how to address them. As a further step in bringing about increased vood production, it is necessary to reviev the existing forest legislation, and the manner in which it is being applied. In particular, the atumpage fees and the fees for fuelvood/charcoal transport permits have to be revised. Their level has ta be adjusted to reflect the economic coat of depletion of forest resources, and to provide the necessary incentive for the development of these resources through forest management and plantation. In addition, the question of distinguishing between vood from the public and the private domain must be addressed, in order to promote refcerestation on private land. Fossil Energy Resources 3/ 1.4 There is currently no production of fossil fuels in Haiti. The Ministry of Mines and 2nergy Resources (MMER) is, however, receiving assistance .n formulating a atrategy to promote petroleum exploration. Further exploration of thé country's largest lignite deposit (Maissade) bas shown that under present economic and technical conditions it is not economic to encourage large scale mining and use of that resource in a pover plant. Therefore, the Covernment has decided to investigate the feasibility of exploiting the mine in a more labor intensive manner and use the lignite for producing briquettes, vhich could substitute for fuelwood. 3/ In general terms, these include oil and gas, coal, lignite and peat. To date, only lignite has been discovered in Haiti. -3- Renewable Sources of Hnergy Other than Wood 1.5 Èyxrogpoer, Electricite d'Haiti (HdH> has completed feasi- bility studies for the development of four of the larger sites (120.7 MW total installed capacity) in the Artibonite-Cuayamouc basin. Two of these sites (Guayamouc and La Chapelle) have been included in the power expansion program to 1995 for the Port-au-Prince interconnected network. It is likv y that this program :uill change as a result of an ongoing re'iev of aIl studies prepared for sites in the Artibonite basin, including the other two referred to above (Artibonite 3 and 4). EdH, which is benefitting from a high degree of coordination with donors, has also made considerable progress in evaluating and developing small hydro sites (100-2,500 kW installed capacity) to furnish pover to isdlated centers. 1.6 Bagasse. Recent evaluations confirm that bagasse is the agri- culture vaste with the greatest energy potential in Haiti. This la conditional on sugar cane's being an economic crop in Haiti, where the opportunity cost of land is rapidly increasing. Bagasse could substitute for either petroleum products or woodfuels. A variety of further studies, ome of vhich are already underway, are nov required as part of a systematic program to develop bagasse as a source of energy, both in the industrial refineries and among the artisanal sugar cane processors. These studies are listed at the end of this Section and described in Section V. Energr Demand Management 1.7 In 1982, modern industry and transport used about 802 of the total oil supply, another 12% of vhich vas consumed in pover generation. While no precise figures on woodfuels consumption are available, it is estimated to be about evenly divided between industry and commerce on the one hand, and households on the other. As described beloav various energy demand management measures in the different consuming sectors could contribute significantly to curtailing growth in energy consumption vithout limiting economic development. The Hlectricity Industry 1.8 Economic stagnation, the theft of electricity and an increase in pover tariffs contributed to a significant decrease in the grovth rate of electricity sales in the Port-au-Prince interconnected network in 1980-83. The present tariff shaould leave EdH in a good financial posi- tion through FY88. EdH reduced pover systea losses in the isolated sys- teus to 15X in 1983, and steps to reduce losses are nov being taken in the Port-au-Prince network. Losses there reached 32X in 1983, about equally attributable to technical causes and to theft and incomplete invoicing. -4 - Transport 1.9 By increasing the tax on diesel, the Coveroment bas gradually brought the domestic relative prices for diesel and gasoline into lino vith wvrrld-market ratios. It has also recognized the problem of under- collection of revenues (e.g., import duties on cars, vehicle registration fees). Evidence from recent years points to the groving, sub-optimal use of private diesel cars. Indicators of petroleum consumption vill have to be monitored to determine to what extent the latest price increases and any împroved enforcement of existing fiscal measures has dampened this type of demand for petroleum products in transport. This issue should be approached in the context of a strategy to improve the efficiency ot energy use in transport. Specifically, an effort needs to be mtade to evaluate the overall potential for cost-effec'ive energy savinga in transport, and to identify priority measures to achieve it. Since up to an estimated 80X of all vehicle-kilometers are driven in Port-au-Prince, eaergy conservation in transport should focus on that metropolitan area. lndustry 1.10 The Ciment d'Haiti cement plant has recently been converted to imported coal, which has replaced the more bxpensive residual oil as the plant's main energy source. There is an urgent need to systematically evaluate other opportunities for foreign exchange savings through energy conservation measures and substitution towards cheaper fuels in Raiti's main industrial consumera of oil, pover, and coal. This effort should be extended to include industries using voodfuels. Sfiidies suggest that these artisanal industries consume scarce wood in large quantities, and sou. of them, such as the essential oils industry, have unused by- products which could serve as fuel. A tax on woodfuels vould stimulate action in this area. Householda and Commerce 1.11 A program, launched in 1983, bas the objective of developing more energy-efficient cooking stoves for charc"al and wood in urban and rural areas. This program should receive high priority in the activities of the MMER. Progress on this key issue should be accelerated by concentrating first on introducing an improved charcoal stove in selected areas of Port-au-Prince. Stove design ohould be based on a thorough understanding of consumer preferences, and field testing and modification of the stove modela chosen should be miniuized to the extent possible. In addition, more attention should be paid to formulating a stove production and dissemination strategy. Increasing the tax on charcoal, as proposed in para. 1.3, vill require selective subuidies to ensure that the energy needs of lover income householda are met. 1.12 A 1983 prefeasibility study on the residential use of solar water heating systems concluded that they are competitive vith electric or LPG heaters. A feasibility study is nov required to !atermine hov to overcome the institutional, financial, and promotional constraints to a more extensive use of solar vater heaters. This study ohould address the potential market for these he& ers in the commercial and industrial sec- tors as vell as in residences. Institutiokial Development 1.13 The Directorate of Energy Resources (DER) is receiving tech- nical assistance, including the services of a resident adviser in energy policy, to stre.then its energy planning capability. Planning the developuent of the energy sector as a whole vill help the Government focus scarce resources on the issues which need to be addressed most urgently in order to solve Haiti's tvo main energy problems, the high oil import bill and the shortage of wood. In vie, of the severe financial and manpower constraints in Haiti, the-technical, economic, and financial expertise required for this planning should be concentrated in a small administrative unit. Its specific purpose should be to formulate clear- cut programa, esttblishing priorities in sector investments, and monitor their implementation. In pursuing these goals, the DER shoulit help coordinate external assistance to the sector. To be effective in this role, the DER should continue building up strong working relationships vith other energy sector agencies (e.g., the Forestry Bureau and EtH). Priorities for Further Pre-Investment Work and Institutional and Policy Support 1.14 To reinforce ongoing efforts to alleviate the country's key energy problemas, the Oovernment of Haiti is currently seeking funds for the following pre-investment, institutional support, and policy development activitiesu, listed in order of prioritys (a) energy audits in about 20 industries, both modern and artisanal, vhich are the largest consumers of oil, electricity, coal or wood, and formulation of an implementation program for energy conservation and substitution (e.g., vith imported coal) in these industries (para. 5.2); (b) definition of an energy demand management strategy for the transport eaccor (para. 5.3); (c) a prefeasibility study to evaluate the technical and economic viability of using the Maissade lignite as a substitute for voodfuels in artisanal industries, commerce, and households (para. 5.7); (d) rapid evaluat ion of the yearly rate of forest cover degradat ion through interpretation of aerial photographs and LAND8AT images (para. 5.11); -6- (e) a study of the feasibility of using bagasse from industrial sugar cane refineries (para. 5.15), a bagasse market study (para. 5.17), and the setting up of pilot projects to test the technical and economic feasibility of bagasse use (para. 5.18); (f) a feasibility study for the use of bagasse from artisanal sugar cane processing units (para. 5.16); (g) detailed regional surveys of forestry resources and their use, building on the work undertaken in (d) above (para. 5.12); (h) prefeasibility studies of selected mini-hydopover sites (para. 5.19); (i) a feasibility study for the introduction of solar vater heaters in the residential, commercial and industrial sectors (para. 5.20); and (j) a prefeasibility srudy for solar drying of crops, particularly coffee (para. 5.21). -7- Il. MAJOR DBVSLOPNHNTS Il TaS HNERCY SECTO, 0CTOB1 1980 -MARCS 1985 Recent Economic Developments 2.1 In recent years, underlying structural changes in the Haitian economy have continued to favor a shif t towards urban activity, i.e. manufacturing (172 of CDP in FY83) 4/ and services (41% of CDP), as opposed to agriculture (32%). 5/ Industry's share in total merchandise exporte has doubled in the last twenty years while agricultural exporte declined in relative terms. For FY82-84, agriculture accounted for 43% of merchandise exports, and industry 57%. Per capita income in Haiti (US$320) is one of the lowest in the Western Hemisphere. Since most gaitians already live near subsistence levels, the world recession in the earl7 1980s affected Haiti's amall, open economy particularly severely. Falling international prices for agricultural commodities and a sluggish demand in foreign markets for products of the light assembly industry contributed to a reduction in export earnings. This situation was exacerbated by a domestic financial disequilibrium due to expanded Covernment expenditures. 2.2 A stabilization program adopted in mid-PY82 vas relatively succesaful but too short to return the economy to full equilibrium. The public sector deficit felU from 13.52 of CDP in FY81 to 9.9% in FY83. CDP# which had declined in FY81-82, grev slightly (0.2% in real terme) in FY83. However, financial difficulties racurred at the end of FY83 due to extrabudgetary expenditures and continued in FY84 in spite of a new stabilisation program for FY84-85. Tbas, the overall public sector deficit for FY84 remaine high at 9.02 of GDP. This renewed financial deterioration developed in the face of a relative economic recovery, real CDP groving at 2.6X in FY84, led by a modest expansion in agriculture and a good performance by the export assembly industry. The deficit has been financed principally through money creation, vhich has spilled over into the balance of payments and vorsened Haiti't reserve position. Net international reserves have fallen steadily since FY80, reaching minus US$51 million by end of FY84. Haiti faces formidable constraints to longer-term development, ouch as the public sector's financial and insti- tutional limitations, and a scarcity in foreign exchange and domestic savings. The Covernment's current development strategy le tc increase production and employment through short-term industrialization for export; the development of an integrated industrial base; the far- 4/ Haiti's Fiscal Year begins on October 1. 5/ The rest of GDP (gross domestic product) in that year was accounted for by construction (62) and net import duties (4%). 8- reaching re-organization of agriculture; the mobilization of domestic savings; and attracting foreign investment. Energy Supply and Demand 2.3 The structure of Haiti's energy balance remains essentially unchanged since the assessment report. Although there are no accurate figures on woodfuel consumption, wood remains the single most important source of energy for the country. Petroleum product importe continue to impose on scarce foreign exchange. They amounted to about 242 of merchandise exports f.o.b. in FY82, up from 202 in FY80. This, however, reflecte a decrease in the value of merchandise exports rather than an increase in the oil import bill. In fact, the petroleum import bill actually declined an average of 1.9X per year since PY80, to about US$41.8 million in FY82. Total petroleum product consumption dropped from about 220,000 toe in 1980 to 200,000 toe (1.5 million bbls.) in 1982. 61 Mich of this reduction vas due to Ciment d'Haiti's converting its pover plant from fuel oil to a new source of energy for Haiti, imported coal. The cement plant has its ovn port facilities for handling the coal, of which it consumed 36,800 tonnes (22,450 toe) in FY82. 2.4 Electricity sales in EdH's mixed hydro-thermal system supplying the Port-au-Prince area amounted to 220 Ciih (56,500 toe on a thermal equivalent basis) in 1982, and 225.0 CWh (57,800 toe) in 1983. Their average growtth rate decreased from 11.0% per year in 1978-80 to 4.52 per year in 1980-83. This can be attributed to economic stagnation, an increase in the theft of electricity, and reduced power generation in 1982-83 due to an exceptionally dry year. Sales in the provinces, how- ever, have grown steadily at the high average annual rate of 18.72 in 1978-83, reaching 28.0 Gih (7,200 toe) and 32.0 Gih (8,200 toe) in 1982 and 1983, respectively. With the addition of the Varreux diesel units in Port-au-Prince, and soma small hydro and diesel units in the provinces, MdH's total installed capacity currently ameunts to 146.6 MW. Of this total, 120.4 MW (83.7 MW effective capacity in a dry season) serve the Port-au-Prince area, where the maximum demand reached 61.3 Mi in 1983. Developments in the Energy Subsectors Fossil Fuels 2.5 There are currently no contracts with private companies for hydrocarbon exploration, but the Ministry of Mines and Energy Resources (MMER), in conjunction vith the IDB, is establishing a basis for 61 One tonne of oil equivalent (tee) -10.0 million kcal. -9 - promoting exploration. The largest lignite deposit (Maissade) has been further explored, but mining it for pover generation vas not found to be economic under present technical and economic conditions. The MMER intende to investigate the possibility of expîoiting the Maissade deposit for the use of the lignite as a voodfuels substitute in artisanal industries, in the commmercial sector, and in households. A variety of factors vill have to be considered in order to determine whether this use of lignite is technicall. and economically viable. These include the potential market, lignite combustion characteristics, the processing needed to make the lignite into a usable fuel, the modification required to convert existing woodfuels combustion equipment to lignite, mining methods, and transport. ElectricitY 2.6 Feasibility studies for the Guayamouc and La Chapelle hydro- electric sites having been completed, these projects have been included in FdM's expansion program for the Port-au-Prince area as shown in the folloving table. It is likely that the specific projects chosen for the expansion program shown here as vell as the sequence of the various projects vill change as a result of an ongoing review of all studies prepared for the Antibonite basin. The review includes the teasibility studies of Arzibonite sites 3 (12.6 NU) and 4 (29.5 Mi), vhich vere completed in 1983-1984. Tbh resulting updating of EdH's expansion program should be available in mid-1985. Table 2.1: EdH's PiOER SYSTEN EXPANSION PROGRAN, AS OF JULY 1984 T=otal Yer of Capaclty Operation MW (8ogUoning of year) Carrefour Power Plant: Diesel Units Nos. 4 & 5, medium speed 15.6 1986 Slow Speed Diesel Plant: Units Nos. 1 & 2 20.0 1988-89 Guayamouc Hydrool.ctric Project 22.0 1990 Coal Ftred Steam Plant: Unit No. 1 20.0 1992 Carrefour Plant: Unit No. 6, medium speed 7.8 1993 La Chapelle Hydro-eloctric Project 56.6 1994 Coal Flred Steam Plant: Unît No. 2 20.0 1995 The Guayamouc dam vill reduce siltation at Peligre by about 40% over a period of thirty years. EdH has also made considerable progreso in evaluating and developing small hydro sites. The company vieve the small hydropover option as the best alternative for reducing the high cost of pover generation in isolated centers. -10-, 2.7 Energy losses continue to present a significant problem in the pover sector. EdH did reduce losses in the isolated systeme from 26X in 1978 to 15% in 1983, mainly by network renovations. In the Port-au- Prince network, however, losses grew from 271 to 32X during the same period. In 1983, EdH initiated a program to reduce losses in iort-au- Prince to 17X in 1987. The program involves both network renovation and improved management practices, and is starting to produce results, Woodfuels 2.8 The Forestry Bureau has started a program under an IDA project (Cr. 1257-HA) to test fuelwood species and plant pilot stands of trees in order to evaluate the technical and economic feasibility of fuelwood plantations. The Bureau is also developing its management of 20,000 ha of pine forest at La Selle, in the southeast. Although the forest is to be managed for the production of timber, the main orientation of the program is to demonstrate forest management techniques to be eventually applied for fuelwood production in other areas. Under USAID's Operation Oiutreach, non-governmental organizations have taken the lead in rural reforestation, promoting tree cropping by individual farmers. 2.9 The rate an geographic distribution of, deforestation remain uncertain, The Ministry of Agriculture, Natural Resources and Rural Development (MARNDR) has suggested that the extent of natural regenera- tion may have been underestimated in past evaluations of deforestation. To properly address the wood s8 ply problem, Haiti's forest resources need to be inventoried so that their evolution can be monitored. As MARNDR has also stressed, current agroforestry practices and the grovth characteristics of and farmner' preferences for native species muet be -ietter understood in order to be able to formulate an effective reforestation strategy. 2.10 An analysis of the fuelwood problem in the Northwest 7/ con- cluded that the existing system of land tenure is a key factor in vwod- fuel supply, as it creates disincentives to tree planting. It vas also fouad that the demand of artisanal industries led to cutting trees for fuel, whereas families cooked for the most part vith deadwood. The study on the Northwest proposed that voodfuel supply and demand be analyzed more closely on a regional basis. This would determine the relative importance of the various causes of deforestation in different areas, and identify actions to be taken regionally to address them. 2.11 As a component of the IDA Forestry Project, the International Development Research Center (IDRC) has been providing assistance for a two-year program to develop improved cooking stoves for charcoal and wood in urban and rural areas. In coordination vith the MARMDR, the DER has 7/ Haiti: Bois de feu et residus vegetaux, Analyse de la situation et projects proposes, published by SEMA-ENERGIE for AINE, January 1983. -il - been undertaking this vork which involves surveys of cooking practices, the design of improved stoves, and cycles of field testing and design modification to identify models which save fuel and meet consumer preferences. The program as designed should be viewed as part of a long- term effort to address both rural and urban needs. ThA urban market for stoves vill be easier to develop than the rural one because: (a) the urban population is already accustomed to using purchased stoves for cooking, (b) there is a monetary incentive to swvtch to models which are more fuel efficient than the traditional ones, and (c) urban areas already have a well-established artisanal production and dissemination structure for stoves. In view of this, progress on the dissemination of more efficient stoves should be accelerated by concentrating first on introducing an improved charcoal stove in selected areas of Port-au- Prince. The number of design testing cycles should be minimized, and more attention should be paid to formulating a stove production and dissemination strategy. To this end, vorking contacts should be in- creased vith artisans who could produce the stoves and vith Iaitian social groups and non-governmental organizations who can assist in dis- seminating them. Alternative Sources of Energy 2.12 Vork carried out since the energy assessment has confirmed that bagasse is the agricultural vaste vith the greatest energy potential ln ati7. Haiti is currently a net importer of sugar. Its sugar industry is beset vith numerous problems, the lack of cane being the main one hampering its industrial sugar refineries (as opposed to the artisanal cane processors). This is largely due to the disincentive effect of an inadequate price structure for cane. Other probleis include the absence of adaptive research on cane and of an extension service to cane farmers, the inefficiency of a marketing system unresponsive to demanA, inadequacies in infrastructure (irrigation, drainage, roads, etc.), and the lack of any organizational structure in the sector (e.g., regional associations of cane farmers). There is therefore a need to rationalise the sugar sector through the definition and application of a consistent set of Government policies. 2.13 Energy audits of the Darbonne and Cap Haitien refineries vere carried out in 1984. Preliminary results of this DER-AFME analysis confirm that there is a theoretical energy potential which can not be developed unless the refineries' throughput te significantly increased sad their operations are streamlined. The supply of cane to these refineries must be assured on an economic basis before this source of energy can be exploited. The artisanal processors of sugar cane in the Leogane Plain vere also studied recently by the DER, vith assistance from USAID. It vas found that a few iow-coet measures could improve the operational efficiency of these units, reduce their consuhption of fuelwood, and perhaps result in a surplus of bagasse, available for other energy uses. More vork needs to be done to formulate a general strategy for developing the energy potential of bagasse, as part of an overail effort to rationalize the sugar sector. Such a strategy needs to take -12 - in-o account the current framework of incentives in the sector, and the gains in economic efficiency which could be achieved by reorganizing the processing units. 70r example, two possible courses of action which need to be analysed ares (1) the' integration of guildives vith mills or refineries, and (2) maximising the i.put of cane to the more efficient processing units by phasing out the least efficient ones. The general strategy should also address the need to improve the energy efficiency of individual refineries and artisanal units on the basis of energy audits, and to analyse the alternative uses of the surplus bagasse. 2.14 With respect to solar energy, a prefeasibility study on the residential use of solar vater heaters has shown that the foreign exchange component of a project to install about 1,350 of them over five years would be recovered in tvo to four years. Ixperience in solar vater heating in a few developing countries suggests that this foreign exchange component could be reduced, thereby shortening the payback period. According te measurements taken since the assessment, Haiti has limited vind ener£g but speeds are nevertheless sufficient for pumping vater at selected sites. In 1984, the DER coordinated a study on the use of low and medium enthalpy geothermal energy at some of the more promising geothermal sites. The study concluded that, from au economic point of viev, development of those sites is not varranted at this time. -nerpy Pricing 2.15 With respect to petroleum product prices, retail prices have been adjusted in line with international market product costs. In addition, the Covernment bas increased taxes on diesel oil, so that domestic relative prices for gasoline and diesel have been realigned to world market ratios. An agreement has been reached to exempt 2Ed from this tax on diesel oil. 2.16 The average electricity tariff has increased by 12.5S per year over the last three years. Etd's petroleum product bill grew from US$8.1 to US$15.5 million from 1l82 to 1983 due to reduced hydropover avail- ability. As a result of this, of the failure of thermal generating units at Varreux, and of reduced demaud due to the economic recession, EdH had a rate of return of zero in FY83. The fuel surcharge vhich vas set in FY83 vas incorporated into the basic tariff at the beginning of FY84, raising it to USC14.0/kWhe Assuming annual tariff increases in line vith local inflation (about 0l per year), a gradual increase in the grovth rate of sales from 7% per year in FY84 to 1 in FY88 ms economic conditions improve, and reasonable increases in operating costs, the projected annual average tariffs for FY84-88 vill about equal long-run marginal costs. This would vould leave EdH in a satisfactory financial position for that period. In particular, EdH vould be able to generate internally about 272 of the financing in its construction program and vorking capital needs. -13 - 2.17 vith rOspect to woodfuels, the average price of charctal has increased an average of about 43X in nominal terms from 1980 to early 1984. Hovever, much of this cean be linked to an increase of about 37X in the consumer price index for that same period. The Oovernment proposes to recover the economic cost of depletion of forest resources by increasing the tax on charcoal, i.e., the fees for wood cutting and transport permiti. This vould also provide incentives for forest manage- ment and the establishment of plantations. At the same time, selective subsidies vill be required to ensure that the energy needs of the poorer population are met. Institutional Development 2.18 Significant progress continues to be made in strengthening key energy sector institutions. The Ninistry of Mines and Energy Resources (MME) has been restructured, and the Directorate of Energy Resources (DER) in particular is benefitting from capable new management. DER staff are receiving training in energy planning (USAID project) and are to receive training in geological exploration (IDB project). Steps are being taken to develop an energy planning capability and to improve coordination with other energy sector agencies. 2.19 In the forestry sector, some progress has been made in staffing the Forestry Bureau in the MAiRf. The Bureau is being further reinforced through the recruitment of both short and long-term forestry consultants. The creation of a tvo-year forestry curriculum at the techuical level is already underway, and vill significaitly improve forestry training. In the electricity %ector, UdR stands out as or* of the better organized energy agencies, reflecting continued and vell coordinated technical assistance in operations, planning, and training. [... middle sections omitted for long document ...] -52 - ces secteurs, en voyant S'il est possible de remplacer les chauffe-eau existants électriques ou à gaz et d'équiper les nouveaux utilisateurs de chauffe-eau. Il conviendrait de dé- montrer la rentabilité du chauffage de l'eau à l'énergie solaire par rapport à d'autres sources d'énergie et d'iden- tifier les candidats prioritaires aux systémes solaires. (b) l'évaluation de l'organisation du système actuel de la pro- duction et de la distribution des chauffe-eau solaires. Il s'agirait aussi de trouver le moyen de renforcer ettou modifier cette organisation pour développer le marché potentiel. Après avoir analysé les aspects techniques de la production, de l'in- stallation et l'exploitation, il faudrait établir des plans pour le financement de l'achat et de l'installation des chauffe-eau, par exemple en faisant payer les clients en plusieurs versements qui seront inclus dans leur facture d'électricité. A condition qu'il se justifie, un progrjmme de démonstration devrait être conçu en vue de développer l'utilisation des chauffe-eau solaires, en particulier dans les secteurs commercial et industriel. (c) la définition du rôle du Gouvernement dans l'introduction des chauffe-eau solaires sur une grande échelle en Eaîti. Il importerait, par exemple, de résoudre les problèmes ayant trait à la politique budgétaire et au contr8le de la qualité. Cette étude de faisabilité pourrait être compléter en 4,5 homme-mois, à un coût de 50.000 dollars L.U. 5.21 Etude de préfaisabilité du séchage des cultures à l'énergie solaire. Etant donné les pertes considérables qui se produisent aprèu les récoltes à cause des problèmes de séchage, d'une part, et le potentiel énergétique important du soleil en Esati, d'autre part, une assistance s'avère nécessaire pour évaluer la faisabilité du séchage des cultures à l'énergie solaire. Après avoir étudié les principales récoltes concernées (café, pois, etc.), on identifierait un produit qui subit des fortes pertes et se prête bien au séchage à l'énergie solaire, du point de vue tant économique que technique. -53 - 5.22 Le système actuel de récolte devrait être étudié sur un site de récolte spécifique de cette culture 15/ à la lumière des conditions climatiques. L'équipement nécessaire au séchage solaire serait identifié sur cette base. Enfin, on formulerait un programme pour l'installation, l'exploitation et l'entretien de ces séchoirs à titre d'essai, et on préciserait les modalités techniques, institutionelles et financièeres requises pour la mise en oeuvre d'un tel programme. Cette étude de pré- faisabilité coûterait environ 45.000 dollars E.U. et prendrait 3,5 homme- mois à terminer. 15/ Comme il a été mentionné à la section 3.5, sous la rubrique de "Autres applications des sources d'énergie renouvelables", des tests ont été effectués sur le séchage des fruits dans la région du Pluteau Central. En outre, les travaux de recherche réalisés par l'ODNO ont, semble-t-il mis en évidence la nécessité d'améliorer les méthodes de séchage des cultures utilisées dans la région nord-ouest d'HaÏti. L'assistance proposée devrait donc mettre à profit les résultats des tests relatifs au séchage des fruits, et en cherchant une culture et un site spécifiques il faudrait tenir compte des besoins identifiés par l'ODNO. D'ASSIST*IVR A LA GESTION DU SECTKIft DE L'KB"ERI Activités Achev6et Rapporte d'activit6 des 6tudes du secteur de l'énergie Papouasie-Nouvelle Guinée Juillet 1983 Maurice COtobre 1983 Sri Lanka Janvier 1984 Nalavi Janvier 1984 Burundi Février 1984 Bangladeeh Avril 1984 Kenya Mai 1984 Ruanda Mai 1984 Zimbabwe AoOt 1984 Ouganda Août 1984 Indonésie Septembre 1984 Sénégal (-tobre 1984 Soudan Novembre 1984 N&pil Janvier 1985 Zamb&e Aottt 1985 Pérou Ao1t 1985 Formulation et justiflcation de proJets Panama -Etude de réduction des pertes d'électricité Juin 1983 Zimbabwe -Etude de réduction des pertes d'électricité Juin 1983 Sri Lanka -Etude de réduction des pertes d'électricité Juillet 1983 Malawi -Assistance technique pour l'amélioration de l'utilisation du bois de feu dans l'industrie du tabac Novembre 1983 Kenya -Etude de réduction des pertes d'électricité Mars 1984 Soudan -Etude de réduction des pertes d'6lectriciti Juin 1984 Seychelles -Etude de réduction des pertes d'électricité Août 1984 Gambie -Projet de conversion au chauffage solaire de l'eau lévrier 1985 Bangladesh -Etude de l'amélioration du rendement du système électrique lévrier 1985 Gamble -Utilisations de la technologie solaire photovoltaique Mars 1985 Sénégal -Projet d'économies d'énergie dans l'industrie Juin 1985 Assistance aux institutions et à la formulation de la politique de l'énergie Soudan -Assistance à la gestion du Ministîre de l'énergie et des mines Mai 1983 Burundi -Etude de l'organisation de l'importation et de la distribution des produits pétroliers D6cembre 1983 Papouasie- - Nouvelle Guinee -Proposition de renforcement du Ministîre des Mines et de l'énergie OCtobre 1984 Papouasie- Nouvelle Guinee -Etude tarifaire pour l'électricité Oztobre 1984 Conta Rica -Programme d'activités d'assistance technique recommandées Nobembre 1984 Ouganda -Renforcement institutionnel du secteur *nergétique Janvier 1985 uainée- Bissau -Programme d'activités d'assistance technique recomuandées pour le secteur de l'électricit Avril 1985 Zimbabwe -Gestion du secteur de l'électricité Avril 1985 Gambie -Gestion de l'approvisionnement en pétrole Avril 1985 Burundi -Presentation des projets inerg tiques pour le IV-jue plan quinquennal Mai 1985 Libéria -Programme d'activités d'assistance technique recommandées Juin 1985