Marshall Islands : Majuro Power Network Strengthening Project

Energy / Electricity transmission and distribution

1. Sector Policy and Renewable Energy Targets. The RMI Government has adopted a target of 20% renewable generation for electricity by 2020, and has committed to a 35% reduction of GHG emissions under its UNFCCC Paris Agreement nationally determined contributions (NDCs), as compared to its 2010 baseline. RMI has long-term target of net-zero emissions for its entire economy by 2050 under its NDCs. 54% of RMI's emissions are from power generation. 90% of RMI's total primary energy supply derives from imported petroleum products.

2. Concentration of Power Generation and Consumption on Majuro. MEC, RMI's largest power utility, is responsible for electricity service throughout RMI, except for Ebeye in Kwajalein Atoll. MEC's main system on Majuro Atoll provides universal service to a population of 28,000 persons, and delivers approximately 72% of electric power consumed in RMI (with Ebeye accounting for 24%, and outer islands representing the balance).

3. High Reliance on Imported Petroleum Fuel. Diesel generation accounts for approximately 98% of the Majuro system's annual power generation of approximately 53.7 GWh. While Majuro enjoys an abundant solar resource, and may have an economically viable wind resource, development of additional intermittent renewable generation beyond its current 900 kWp installed solar generation is technically infeasible without investment in network, generation, and control hardware to ensure network stability.

4. High Network Losses and Network Operation Data Gaps. Beyond the constraint on installation of additional solar generation, Majuro exhibits very high technical and non-technical losses, estimated in 2010 approximately 20% of electricity introduced into the distribution network. Reducing Majuro's network losses will significantly contribute to a reduction in diesel consumption and improve MEC's revenue generation by reducing unbilled consumption. The installation of an advanced metering infrastructure will facilitate this, and will also provide required data on the Majuro network's operation to inform further network loss reduction investments, the siting of distributed renewable energy generation, and distribution network upgrades to enable the same without jeopardizing stable system operation.

5. Rapid Loss-Reduction Measures Possible. The project will support the reduction of Majuro's dependence on imported diesel fuel by reducing its distribution network losses, which constitute around 20% of total generated energy in Majuro. The project will (i) install advanced metering infrastructure (AMI) on all distribution transformers on the network, and (ii) install centralized control and metering distribution network center, which will automatically collect and compile metered data from all distribution transformers. The AMI will provide data to MEC to identify network areas suffering high technical or non-technical losses, which will enable MEC to reduce these losses. It is estimated that simple measures requiring little resource investments, such as re-configuration of customer supply connections to distribution transformers and repair of malfunctioning customer meters will enable MEC to rapidly reduce network losses by up to 4% of generated power.

6. MEC Business Process and Organizational Inefficiencies. Deficiencies in MEC's business processes, including budget formulation, asset management and maintenance, cost accounting and reporting, and capital project planning and execution, among others, are cause for concern for the ability of MEC's sustainability as a going concern. To maximize value for investments under this project, and future projects financed by ADB or other donors, a far-reaching capacity-building and institutional strengthening program is essential.

7. Project Preparation and Project Readiness. Consultants under TA-9225 RMI have prepared the Project as a discrete intervention to capitalize on the opportunity to reduce system technical and commercial losses while informing future investments under a renewable energy investment road-map that these consultants are preparing. Consultants have prepared ICB bid documents for a turn-key AMI contract and implementation consultant support. ADB will provide support to MEC during tendering for ICB procurements through TA-9086 REG (Building Project Implementation Capacity in the Pacific), and through SDCC smart-grid experts for technical input in bid evaluation. The RMI Government have agreed to re-delegate to ADB (PARD) procurement of consulting services to assess MEC's business processes and develop business-process reengineering recommendations and action plan.

8. Alignment with development plans. The project is included in ADB's Country Operations Business Plan 2017-2019 and supports RMI's national energy policy and energy action plan to reduce dependence on imported fossil fuels and reduce supply-side losses.

The impacts will be (i) reduced dependence on imported fossil fuels, (ii) supply-side losses reduced, (iii) renewable electricity generation increased.

MEC's consumption of diesel fuel for power generation reduced.

Advanced Metering Infrastructure on Majuro distribution network

MEC business process reengineering and management improvement action plans