DOE/CP-0005/1

DE83·005492

1111111111111111111111111111111111111

Territorial Energy Assessment

Final Report

December 1982

FlEPRODUCED BY

U.S. DEPARTMENT OF COMMERCE

NATIONAL TECHNICAL

INFORMATION SERVICE

SPRINGFIELD, VA 22161

Prepared by:

U.S. Department of Energy

San Francisco Operations Office

Savannah River Operations Office

Prepared for:

U.S. Department of Energy

Washington, D.C. 20585

TABLE OF CONTENTS

PREFACE ...........•................•.•........••...•.. '" ......................•..................... ii

PART I PACIFIC TERRITORIES ENERGY ASSESS~ENT

Table of Contents............................................................................... iv

Pacific Territories Executive Summary........................................................... v

Chapter 1 Overview of Pacific Island Energy Issues.............................................. 1

Chapter 2 Potential Energy Sources for the Pacific ............•................................. 13

Chapter 3 Energy Planning for Guam 38

Chapter 4 Energy Planning for the Republic of Palau ..•......................•......•............ 55

Chapter 5 Energy Planning for the Commonwealth of The ~orthern Mariana Islands 72

Chapter 6 Energy Planning for The Federated States of Micronesia 89

Chapter 7 Energy Planning for The Republic of The Marshall Islands 127

Chapter 8 Energy Planning for American Samoa ....•...........•....•.............................. 146

Chapter 9 Findings and Conclusions.............•................................................ 162

PART II THB CARIBBEk, REGIOX

Table of Contents................................................... . . . . . . .• . . . . . . . . . . . . . . . . . • . . 3

Caribbean Energy Assessment Executive Summary................................................... 5

Part I: Analysis of Energy in Puerto Rico and The United States Virgin Islands 9

Government of Puerto Rico Energy Assessment. 11

Governnent of the U.S. Virgin Islands Energy Assessment 55

Part II: Supplemental Analysis of Energy in Puerto Rico and The United States

Virgin Islands.............................•.................................................... 75

Commonwealth of Puerto Rico 80

United States Virgin Islands.............•...................................................... 151

i
PREFACE

The Caribbean and Pacific insular areas of the United States are dependent on imported petroleum products to supply their energy needs. This dependence, coupled with the increasing cost and the uncertain

availability and supply of sources of energy, places an increasingly severe financial burden on the local

governments, leading to rising balance of paynent deficits. Without a secure power and water supply there

can be no real economic development on the islands. Until the energy problem in the territories is satisfactorily addressed, the cost to the Federal Government of maintaining their economic viability will continue to rise and contribute to overall inflation.

Since 1973, the economic impact of rapidly rising world oil prices has been particularly severe on the

L.S. territories, the Trust Territory of the Pacific Islands and the Commonwealth of Puerto Rico. Though

these localities vary greatly in the size and complexity of their economies, their political status, and

their social and cultural backgrounds, they all share certain traits: they are geographically isolated

island groups with an almost total dependence on imported products as an energy source. Dramatically rising oil prices, coupled with the uncertainty of supply over the near as well as long-term, are resulting in

severe strains on local economies and capital that is badly needed for economic development.

In order to address the critical needs of these insular areas, Congress included Section 604 in P.L.

96-597, the Omnibus Territories Act (December 1980) which requires the development of comprehensive energy

plans with the goal of reducing the reliance on imported oil through making maximum use of indigenous energy

resources:

!~~ATED OBJECTIVES (Highlights of Section 604 of P.L. 96-597)

"(c) The Secretary of Energy ... shall prepare a comprehensive energy plan with emphasis on indigenous

renewable sources of energy for Puerto Rico, the Virgin Islands, Guam, &~erican Samoa, the Northern Mariana Islands, the Federated States of Micronesia, the Marshall Islands and Palau. The

plan shall be prepared with the approval of the Secretary of the Interior and in cooperation with

the chief executive officer of each insular area by:

(1) surveying existing sources and uses of energy;

(2) estimating future energy needs to the year 2020, giving due consideration to a range of

economic developQent possibilities;

(3) assessing, in depth, the availability and potential for develo?~ent of indigenous energy

sources;

(4) assessing the mix of energy sources (including fossil fuels) and identifying those technologies that are needed to meet the projected demands for energy; and

(5) drafting long-term energy plans for such insular areas with the objective of mlnlmlzlng

their reliance on energy imports and making maximum use of their indigenous energy resources.

(d) The Secretary of Energy ... with the approval of the Secretary of the Interior, as ?art of the comprehensive energy planning may demonstrate those indigenous renewable energy technologies which

are determined to be most cost effective through the use of existing programs.

(e) \lithin two years from the date of enactment of this Act, the Secretary of Energy ...shall submit

the comprehensive energy plan for each insular area to the Congress.

(f) There are hereby authorized to be appropriated such sums as may be necessary to carry out the

purposes of this section."

This section of P.L. 96-597 was authorized but no funds were appropriated. Recognizing the serious

nature of the situation, however, the Acting Under Secretary of DOE directed, in April 1981, that a threephased approach to meeting the intent of the legislation be defined. The first step was to characterize

the current e~ergy situation in each territorial entity and to provide an estimate of the cost connected

with developing comprehensive territorial energy plans. The Savannah River Operations Office (SR) was

assigned responsibility for the Caribbean region (Puerto Rico, Virgin Islands), and the San Francisco Operaii
tions Office (SAN) for the Pacific entities (Guam, American Samoa, Northern Marianas, Palau, Federated

States of Micronesia, Marshall Islands). The Office of Intergovernmental Affairs, Territorial Affairs

Branch (HQ/IR), was assigned DOE Headquarters responsibility for overall coordination.

Consistent with the Acting [nder Secretary's direction, a strategy for the conduct of this effort was

\~itten and approved in ~ay 1981 which defined a three-phase approach:

Phase I was intended to provide a current perspective on territorial energy problems; to identify

existing energy supply and demand data; and to identify energy resources that might be developed and appropriate technology options. Based on these findings, Phase I defined and estimated the cost of the technical

assessment and economic analysis activities required to support the development of specific energy plans.

Phase II would have involved the conduct of the technical assessments defined under Phase I. Successful completion of these tasks would have provided the information necessary to understand and compare alternate energy development options in each territorial entity.

Phase III would have completed the process with the preparation of energy plans for each territorial

entity. This would have involved an integrated analysis comparing alternative energy options, the coordinated selection of proposed energy projects, the subsequent drafting of energy plans, and territorial/DOE/

DOl coordination and concurrence before the plans are submitted to Congress.

The Phase II and III efforts were combined into one final effort focusing on the objectives outlined in

the legislation. Emphasis was given to near-term conmercially feasible technologies for the Pacific and

Caribbean entities. This report will consist of two distinct sections, each having its ow~ executive summary.

A key factor in the DOE approach is the recognition that success in this effort depends heavily on

developing a close, continuing working relationship with the DOl and the territorial energy offices. This

point is clearly reflected in the initial strategy paper and in the conduct of the project activities and

reflected in the Phase I and Final Reports.

The purpose of the Phase I Report was to serve as a preliminary assessment of technical and economic

analysis activities required to allow DOE to meet the intent of Congress under P.L. 96-597. In January

1982, DOE's Under Secretary directed that $300,000 be located from within the Department's appropriation to

complete the Project.

These funds were divided between the Pacific and Caribbean regions to address the diverse socio-economic and geographic factors. These factors were then balanced against renewable technology alternatives to

imported petroleum primarily for generating electricity. Both the Energy Offices of the Comnonwealth of

Puerto Rico and the [.S. Virgin Islands participated directly in the formulation of their respective sections of the project. The Savannah River Operations Office awarded grants to both these offices to produce

energy planning documents that reflected their governments' needs and policies. Supplemental information to

those reports was provided by the Savannah River Operations Office. The Energy Offices of the Pacific entities participated extensively, as a part of the SAN team.

The legislation called for the energy plans to be submitted to the Congress within two years of its

enactment. Some energy data collection will continue as a by-product of this report and will be made

available to the territorial Energy Offices to enhance the information provided in this report.

iii
TABLE OF CONTENTS

PACIFIC TERRITORIES ENERGY ASSESSMENT

Pacific Territories Executive Sununary................................................................ v

Chapter 1 Overview of Pacific Island Energy Issues '" 1

Chapter 2 Potential Energy Sources for the Pacific 13

Chapter 3 Energy Planning for Guam ...................................•............................•.. 38

Chapter 4 Energy Planning for The Republic of Palau 55

Chapter 5 Energy Planning for The Commonwealth of The t:orthern IMariana Islands....................•.. 72

Chapter 6 Energy Planning for The Federated States of Hicronesia 89

Chapter 7 Energy Planning for The Republic of The Marshall Islands 127

Chapter 8 Energy Planning for American Samoa 146

Chapter 9 Findings and Conclusions 162

iv
PACIFIC TERRITORIES ENERGY ASSESSMENT

EXECUTIVE SUMMARY

This assessment is concerned with energy planning for the governments of the American territories of

Guam and American Samoa, and of the four nations that are now emerging from the United Nations Trust

Territory of the Pacific Islands: the Commonwealth of the Northern Mariana Islands, the Republic of the

Marshall Islands, the Republic of Palau, and the Federated States of Micronesia. This study was directed

by the United States Congress under Public Law 96-597, and carried out by the United States Department of

Energy in cooperation with the respective island governments. This report addresses the current and

future energy needs of the island governments and considers the feasibility of employing alternate

sources of energy, especially indigenous renewable energy resources, to reduce dependence on

petroleum-based fuels.

The past decade of rising oil prices has had a severe economic effect on the Pacific territories,

which depend almost totally on imported petroleum products for energy. In the mainland United States, a

diversified energy supply mix has mitigated the full impact of escalating oil prices. The territories,

however, have no indigenous fossil fuels, and their near-complete reliance on a single, increasingly

expensive energy source has created fiscal burdens that have hampered economic development.

Generating costs on the mainland range from two cents per kilowatt-hours (kWh) to fifteen cents per

KWh, with a national average of 7.2 cents per kWh in late 1982. The island governments are responsible

for electricity generation and bear the entire cost burden for fuels used to generate electricity, often

at the expense of other public services. It is not unusual for local governments to pay as much as

$2.00/gal for diesel fuel used in power plants, which results in electricity cost as high as 40-50c/kWh

when equipment amortization costs are included. These costs are usually not recovered when the power is

sold.

In virtually all cases, consumers are subsidized by their governments and

cost of service. In some instances, users are not metered or pay a flat rate.

are charged well below even the cost of fuel alone.

pay less than the full

In most cases, consumers

Politically, Guam and American Samoa have been territories of the United States since the end of the

19th century and are referred to as United States flag territories. The Trust Territory of the Pacific

Islands was assigned to the United States under a United Nations Security Council Trusteeship in 1947 for

the purpose of promoting the Islands' economic, social, educational and political advancement.

Negotiations between the United States and each of the four emerging governments have now been completed

for the installation of elected constitutional governments and the termination of trusteeship status.

When these agreements are approved by plebiscite and are ratified by the United States Congress and the

United Nations Security Council, the Trust Territories stand to receive substantial amounts of financial

assistance from the United States over periods ranging from 15 to 50 years. These funds are expected to

be used to facilitate economic development. The United States commitment to Guam and American Samoa is

ongoing.

Since World War II, all of the islands have made noteworthy progress in health care, education, and

political development. Economic growth, however, has been slow, particularly since energy costs soared

in the 1970s. None of the islands has developed a self-sustaining local economy, and all depend heavily

on appropriations from the United States Congress and, in some cases, on the presence of the United

States military for the strength of their economies. Federal assistance to the islands in 1980 accounted

for 46% to 95% of total island government revenues.

All of the territories have a very narrow, fragile economic base. Characteristically, island

imports, including food, far exceed exports, and there are few industries other than tourism and

fishing. Economic growth is severely constrained by limited land, capital, water, skilled labor, and the

lack of an adequate and reliable power supply. The island governments are the single most important

economic sector in almost every case. They employ the largest percentage of the labor force, they are

often the largest energy user, and they receive and disburse the United States transfer payments which

make up the bulk of the cash economy.

v
Guam is exceptional because it has the largest population and highest level of development among the

territories. American Samoa and the fou~ trust territories must plan in the context of a sharp

urban-rural dichotomy, populations dispersed across large expanses of ocean, widely varying energy demand

requirements, and a number of cultural factors, including land use patterns, which will affect energy

decisions. Islanders who live in the urban centers participate in the cash economy, but a large

percentage of people live in rural areas and survive largely by subsistence farming and fishing. Social

services, including electrical service and public water supply, are generally confined to the urbanized

areas. Many rural areas have extremely poor services or none at all. These conditions, combined with

growing populations, have resulted in heavy migration to urban centers, exacerbating social conditions

and making unmet energy demand a matter of growing concern to the affected governments.

Hopes for future economic growth in the territories rest largely on the development of the tourist

and fishing industries. Agriculture and United States military activities are added possibilities in

selected areas. Energy consumption by the commercial sector will certainly increase as the Pacific

Islands move toward their goal of economic self-sufficiency. This goal, however, is unlikely to be

reached in the absence of an adequate supply of energy.

Electricity is produced and distributed as a function of local governments. Frequent breakdowns of

generating equipment, caused primarily by inadequate operation and maintenance, have resulted in

recurrent blackouts and unreliable service throughout the territories outside of Guam. As a result,

major private commercial operations must often provide their own power, and sometimes, water. This is

one reason that new commercial enterprises have been reluctant to locate in the islands. Without some

relief from high petroleum costs, the Pacific Islands cannot hope to maintain, much less improve, their

economic status. Rising fuel prices not only act as a barrier to expanding the economic base, they

threaten the industries that are already established.

Factors other than energy supply problems have limited United States private sector interests in

investing in the Pacific territories. These include a general unfamiliarity with the region, its people

and culture, and a lack of recognition of the investment potential. Japanese enterprises have more

knowledge of the area and have shown more initiative, but all potential private sector investors have

been checked by the small size of the market, the remote location, and difficulties in communications.

Geographically, the Pacific Island territories are spread out over a region far larger than the

continental United States, but the land area, population, and energy demand associated with each

government are relatively small, even in comparison with the State of Hawaii.

Territory Area Population Peak Demand Consumption Per Capita

Guam 590(KM2) 105,000 155.0(MW) 9,178(Mbbls) 1.47

Amer Samoa 215 32,400 13.3 1,276 .41

CNMI 510 16,900 15.4 330 .91

Marshall Is. 182 31,000 5.0 157 .16

Palau 487 12,000 3.1 148 .26

FSM, total 874 74,000 7.0 229

Truk State 328 38,000 3.1 97 .08

Ponape 310 23,000 2.3 86 .10

Yap 119 8,200 1.2 36 .15

Kosrae 5,500 0.4 0.4 10 .07

Hawaii 16,641 974,000 1,500 43,000 1.50

Imported petroleum products constitute virtually all of the commercial fuels now consumed in the

islands. The only other source worth noting is family-gathered firewood which is used for domestic

cooking. Major uses of petroleum are for air, marine and land transportation, electricity production,

and construction equipment. Technologies to convert biomass to liquid fuels are unlikely to displace

petroleum products used for transportation in this century. Additionally, all of the island

territories possess indigenous renewable resources that can be used to generate electricity. Thus, the

energy problems that can be addressed in the Pacific at present involve local government expenditures

for fuels used to generate electricity.

A transition to alternate energy systems will require some years to complete. The critical

problem, however, is immediate, and steps must be taken to improve the efficiency and reliability of

current energy systems while the transition to longer range solutions is in progress. It is

unfortunate that the energy price crisis occurred before renewable resource technologies were mature

enough for application in the Pacific. Many technologies are available to convert renewable resources

into electrical energy, but only a few are good candidates for success in the conditions prevalent in

the islands. The Pacific is not a good location for technological experimentation. Basic

infrastructure taken for granted on the mainland United States is absent. High storm winds and humid,

vi
salt-laden air are extremely hard on equipment of all kinds. Skilled labor 1S often unavailable, and

the islands are far from sources of parts and repair personnel.

Island governments will make energy development decisions in the context of spending and

investment priorities. The approach to solving the energy problem the territories face involves:

(1) reducing or controlling demand through effective energy management programs that include

conservation and electric rate reform, and (2) addressing the supply side of the equation by displacing

current fuels with less costly ones, and if possible, preventing new petroleum dependencies.

Residual fuel oil (RFO) is used to generate electricity on Guam and Saipan. Elsewhere, at lower

demand centers, diesel oil is employed. These two petroleum products represent the largest fuel use by

island governments. The Marshall Islands, Palau, and American Samoa are considering switching from

diesel to the much less expensive RFO or coal. Such a decision could bring immediate relief from

punishing fuel costs, whereas attempting the transition directly to renewable energy sources might

involve an inordinate period of waiting for the new technologies to become established technically and

economically.

On the other hand, both coal and RFO are feasible only in large demand centers, and unless

existing generators can be converted, the decision to use RFO would involve large capital expenditures

for new generating, fuel handling and storage facilities.

Funds would then be unlikely to be available for early investment in renewable resource

technologies, locking the territories into a long-term. commitment to imported fuel.

Because the cost of coal-generated power can be as low as one-third to one-half of the cost of

diesel on a caloric basis, it is another attractive energy source to consider either as a transition

fuel or as a permanent displacement for oil. The principal problems with coal use in the territories

are inadequate port facilities, limited land, and the high initial capital costs associated with

conversion. As with RFO, coal use is subject to economies of scale which limit its application to the

largest demand centers, if at all. In addition, the island governments generally view coal unfavorably

because it would be an imported fuel and as liable to supply interruptions as petroleum fuels.

Energy management, which includes, technical institutional and behavioral measures that can

contribute to more efficient energy use is an effective means of reducing overall present demand as

well as moderating future growth in demand. It is especially appropriate in the territories because

consumers are charged less for electricity than the full cost of generating it.

All of the Pacific Island governments strongly aspire to energy self-sufficiency, which they

believe is possible and, therefore, highly favor use of the indigenous, renewable energy resources.

Three principal direct uses of solar energy are considered in this report; low-temperature solar

thermal for heating; high-temperature solar thermal for process heat; and electrical generation and

photovo1taics. Other technologies with the potential to contribute to island energy supplies include

wind energy conversion, geothermal, hydroelectric, ocean thermal energy conversion (OTEC), ocean

currents and tides, solar ponds, municipal solid waste (MSW) combustion and biomass conversion into

electricity, biogas and liquid fuels.

All of the above technologies differ markedly in their present state of technical readiness and

economic feasibility, and in their suitability for satisfying local requirements. Cost estimates for

each technology are provided mainly to illustrate the wide range of costs, which may be encountered

when considering such factors as system size, storage and characteristic patterns of local energy

demand. An important added factor contributing to the wide range in costs is in the uncertainty

resulting from the fact that most of these technologies are still in various stages of development and

not established commercially in the market place.

While renewable energy technologies have many favorable as well as unfavorable attributes, one in

particular deserves mention. Many renewable energy technologies are not affected greatly by economy of

scale and are effective in small-scale systems without incurring significant economic penalty. Thus,

they can be effective in providing a solution to the problem of highly dispersed and remote energy

requirements where the cost of transporting energy to the point of consumption is prohibitive. An

important social advantage of this characteristic is their potential for promoting development in

previously ignored rural areas, thereby decelerating migration to the urban centers.

Any decision will be determined largely by local conditions. Such factors as resource

availability, economics, demand characteristics, atmospheric conditions, cultural and political

compatibility, and support infrastructure to provide skilled manpower and supplies are all

site-specific. The approach taken by one island government can differ markedly from that chosen by

another. The following are the recommendations for each of the Pacific territories made by the DOE

team of consultants working in collaboration with the territorial energy representatives.

vii
ENERGY PLANNING RECOMMENDATIONS

GUAM

A. Improved Energy Management.

The actual costs of generating electricity should be established.

Consumers should be billed for electricity in accord with their use and the actual costs of

generation. The comprehensive billing and collection program should be continued.

Energy efficiency standards should be established and enforced for all new buildings in

Guam.

Energy education should be extended and encouraged in the community.

B. Investigate Alternate Energy Technologies Where Appropriate.

A comprehensive engineering

plant should be conducted.

costs of each determined.

study of the use of coal at the Cabras electrical generating

Both a retrofit and new plant case should be examined and the

An analysis of the use of municipal solid waste should be carried out, complete with

estimates of capital, and operating and maintenance costs.

A detailed engineering feasibility study should be done on a biomass tree farm electrical

generating system for Guam.

Monitoring should continue on the development of salt-gradient solar pond technology. As

the technology matures and costs decline, the possibility of salt-gradient solar ponds for

Guam should be evaluated.

Developments in photovoltaic technology should continue to be followed. Photovoltaics

should be applied where and when it is appropriate, particularly in remote, stand-alone

applications. As the technology and battery storage develops, re-examine its applicability

to base load power for Guam.

Ocean thermal energy conversion technology developments should continue to be tracked. As

the technology matures, its applicability to Guam should be again evaluated.

Wind resource data should be taken at specific sites with potential for multi-megawatt

installations. If the resource can be confirmed, then manufacturers and investors should

be contacted to develop systems which can survive on Guam.

REPUBLIC OF PALAU

A. Koror and Surrounding Urban Areas.

Rate structure reform should be undertaken to more accurately reflect the costs of

production.

Electricity meters should be installed on all government facilities and then on all points

of connection to the system.

Energy efficiency standards should be developed for all new buildings, beginning with the

government sector.

Implementation of energy conservation measures should be undertaken, again beginning first

in the government sector, including replacing light fixtures and components with more

efficient units, energy efficient appliance and end-use device substitutions, passive

cooling retrofits on existing structures, and the use ~f daylighting where possible.

An energy data system should be developed to monitor and audit energy use in all sectors.

A personnel training program should be established in renewable energy system concepts,

including installation, troubleshooting, and repair, and in the conduct of building energy

audits and energy data management.

viii
A renewable energy curriculum element should be developed at the Micronesian Occupational

Center for long-term manpower training.

There should be a solar hot water retrofit at the Koror hospital.

B. Remote Villages ana vuter Islands.

There should be performance testing of a small-scale hydroelectric system at a favorable

site on Babeldaob.

An engineering design should be conducted of a ynotovoltaic-diesel hybrid system for an

outer island application.

An analysis should be conducted of the infrastructure requirements needed to support

hydroelectric development on Babeldaob.

A wind energy resource assessment should be conducted for selected sites on the east coast

of Babeldaob.

COMMONWEALTH OF THE NORTHERN MARIANA ISLANDS

A. Improved Energy Management.

Electrical rate structure reform should be designed and implemented.

All electricity users should be metered and billed.

Energy efficiency standards should be developed and enforced for all new buildings in the

Commonwealth.

The efficient use of energy should be encouraged through the demonstration of energy

conserving techniques wherever possible.

Energy education should be enhanced within the community, the government, and the school

systems.

B. Application of Renewable Energy Technologies Where Applicable.

A detailed engineering feasibility study should be conducted on a biomass tree farm to be

located on Tinian or Rota. If found feasible, such a system should be implemented. The

applicability of such a system should then be considered for Saipan. The power level to be

studied for Tinian and Rota should be on the order of I MW, with a 5 MW system evaluated

for Saipan.

The salt-gradient solar pond technology should be followed for potential application in the

Commonwealth.

A preliminary survey of geothermal possibilities should be conducted for both Saipan and

Tinian.

Solar hot water and biogas systems should be exploited as much as possible.

Photovoltaic modules should be employed at remote sites in the Commonwealth, particularly

those which are able to accommodate low power and intermittent use. Prime candidates are

the islands of Alamagan and Agrihan.

Technology developments should be followed in ocean thermal energy conversion, solar

thermal energy conversion, and battery storage for potential application in the

Commonwealth.

THE FEDERATED STATES OF MICRONESIA

A. Lelu, Kilonia and Surrounding Area, Moen and the Lagoon Islands, and Colonia and Surrounding

Area.

ix
Install electric meters for. all users, including all government departments and housing.

Bill all users, including government agencies.

Consider reforming the rate structure to allow revenues to cover operating costs.

Consider establishing a local power authority.

Continue performing energy audits and developing a data base for energy planning.

Continue collecting solar insolation data, and start collecting wind data at the

appropriate height for a wind generator in a few selected locations.

Develop training in renewable energy system concepts, including installation, maintenance,

trouble shooting and servicing.

Install a producer gas or palm oil system for performance testing. Test effects of palm

oil used as a substitute for diesel fuel (Kosrae, Yap).

Continue to assess the potential of using biomass for direct combustion in generators

(Ponape, Truk).

Study the feasibility of using solar ponds for baseload power (Yap, Truk, Ponape).

Monitor the new hydroelectric facility being built on the Malem River to see if such

systems can contribute to baseload production (Kosrae).

Assess data from the newly installed pyranometer to determine whether solar photovoltaics

might eventually help meet baseload, or rural, power demands (Kosrae).

Continue to develop hydropower resources, particularly the Nanpil River (Ponape).

Investigate the feasibility of using cables to provide electricity generated on Moen to the

other Lagoon Islands (Truk).

Assess performance data from the Xavier wind electric system and the Faichuk photovoltaic

system to assist in planning for such systems elsewhere in Truk State.

B. Rural Villages and Outer Islands.

Perform audits to determine rural energy needs and develop a plan to fulfill those needs.

Continue to encourage the use of smokeless wood cooking stoves for domestic and school

cooking.

Develop small-scale, community-based energy projects involving hydropower, photovoltaics,

palm oil or producer gas.

Encourage rural training and education in renewable energy system concepts.

Collect solar insolation and wind data at selected sites to determine whether small,

stand-alone wind and photovoltaic systems will be useful (Ponape, Truk, Yap).

Continue to develop sail-assisted fishing vessels and investigate retrofit of field ships

with some form of sail assist.

Based on newly acquired solar insolation data, begin engineering design for a photovoltaic

system for Utwe (Kosrae).

Monitor the Palikir Power hydroelectric project to determine whether similar projects would

be useful in other rural areas (Ponape).

REPUBLIC OF THE MARSHALL ISLANDS

A. Majuro Atoll.

Efforts at rate structure reform should be strengthened.

All electrical connections should be metered and billed.

x
Energy efficiency standards should be developed and enforced for all new buildings.

Energy conservation measures should continue to be implemented, particularly in the

government sector, and should include passive cooling building retrofits, insulation,

daylighting, replar. ~t of inefficient light fixtures and components, and adoption of more

energy efficient appliances and end-use devices.

An energy aata system ~hould be established to monitor and audit energy use in all

buildings.

Personnel training should be established in photovoltaic and wind energy system

installation, troubleshooting, and repair, as well as in the .onduct of building energy

audits.

Efforts should be taken in education curriculum development and teacher training in basic

energy use concepts, as part of an overall effort to enhance public awareness about energy

production and consumption.

A solar hot water retrofit should be considered for the Majuro hospital.

B. Outer Islands.

An analysis should be conducted of infrastructure requirements needed to support specific

levels of wind energy use in the northern atolls.

A wind energy resource assessment effort should be mounted, including data collection,

statistical analyses. and technology performance projections based on these data, for

selected outer islands in the northern atolls.

An engineering design should be performed for a photovoltaic-diesel hybrid system for a

selected atoll application.

Specifications should be developed for design and materials modifications and cost

determinations for effective corrosion protection of commercial wind and photovoltaic

energy systems.

Diagnostic equipment should be installed to measure the performance of planned and existing

photovoltaic energy systems in the outer islands.

Design, performance, and cost assessment of a photovoltaic powered ice making and ice

storage system should be considered for remote island use.

AMERICAN SAMOA

A. Tutuila.

A plan should be developed to begin preliminary investigations of the geothermal resource

of the island.

Efforts should be taken to verify existing municipal solid waste data, develop additional

data, and evaluate various MSW conversion technologies.

The installation of domestic solar hot water systems should continue, and evaluations made

as to the engineering feasibility of solar thermal systems for process heat.

Energy management activities, including conservation, data collection, energy audit work,

and rate structure reform should be continued.

The concept of a strategic petroleum reserve system should be developed in more detail.

There should be an investigation of multi-purpose reservoirs for reservoir hydrolectric

systems on the island.

The use of palm oils or producer gas for electricity production should be investigated, and

a small pilot plant constructed.

Additional site-specific data to support ocean thermal energy conversion should be

collected.

xi
B. Remote Villages and Outer Islands.

A small prototype plant should be constructed to provide electricity via palm oil or

producer gas conversion at a site in the Manu'a islands.

Small photovoltaic systems should continue to be installed where low power demands need to

be met.

The village and building energy audit efforts in the Manu'a islands should be continued.

xii
Figure 1·1

Territorial Energy Assessment Area

"

Pacific Ocean

() Hawaiian Islands

.":....

~Iippines '\l "'Sl J? ~Llj , " ,

,

,

...","-- --

-"

160"E

-- "

,

I

,

I

1

-- ---;

•

Equator

-" American Samoa

,.r;!

C_. _:

160" .-.

0"

10"

20"

.

Bikini Enewet~k

REPUBLIC OF THE MARSHALL ISLANDS • saipan

,---~----------_._-----~ , -.... / "-""-..-.. : --~ ..-..-.... : COMMONWEALTH OF THE ........- ...._.._

: NORTHERN MARIANA ISLANDS - ........_....

: -.._-.. _~ .... I -"-.. I

I

\.' ...._--_.:.. Guam' I

,------------------, " ,,~--------------------------- -------------- -------- ,,' : """ "

, II _ ''''''....._ Kwajalein ,",

,,' : Yap Island " ", "!:',

, I "'. ....,. •... ',",1 "J" -, (' -Moen '''' i'" \ I ...; Ponape I', • ::1: • ", ~.Koror L .. , r ,,""':", Mal-uro

I'

I , • I'"

: " 01·' : " :'~'I : K2srae '.. : I \ YAP STATE I I I I

I REPUBLIC OF PALAU" TRUK STATE : :: ------1 I \ : PONAPE STATE IKOSRAE STATE: "

l·" "'I!:I I II """

1_.. _ " Federated States of Micronesia I I -...... ' \ I I I I ,

............ \:: I ' I,' ............ ,,: : ' :. -~,

......._---------------~-------~-------------~ .._-----------------~---------

a 100 200 300 400 500 KM t

a 100 200 300 MI N

140" 150" 160" 170"

CHAPTER 1: OVERVIEW OF PACIFIC ISLAND ENERGY ISSUES

In the last decade, the economic impacts of rising world oil prices have been felt with special

severity by the inhabitants of the Pacific Island nations and territories. The Pacific Islands depend

on imported petroleum products for almost 100% of their energy needs. Their small, developing

economies are extremely vulnerable to ever-increasing energy prices. However, oil prices are the

product of international forces, and the Pacific Island governments cannot affect them. In addition,

the islands have no known indigenous fossil fuel resources. They do, however, possess a number of

renewable resources that can be used to generate electricity. As a result, the island governments have

indicated a strong desire to develop indigenous, renewable energy resources as part of their drive

toward economic independence.

This assessment is concerned with energy planning for the governments of the American territories

of Guam and American Samoa, and of the four nations that are now emerging from the United Nations Trust

Territory of the Pacific Islands (TTPI), which the United States has administered since 1947. The four

emerging nations are the Commonwealth of the Northern Mariana Islands, the Republic of the Marshall

Islands, the Republic of Palau, and the Federated States of Micronesia (see Figure 1-1). All six

governments express an adamant desire for energy self sufficiency coupled with economic independence.

There is a common need for comprehensive energy planning and the development of alternate energy

resources.

THE ECONOMIC IMPACT OF RISING FUEL COSTS

Rising fuel costs affect the Pacific Islands directly and indirectly. Shipping by both air and

sea are of paramount importance because the islands are geographically remote and have extremely

limited industrial and manufacturing bases. Shipping costs rise with fuel costs, driving up the prices

of any goods that are imported or produced with energy. Food and fuel, which all of the islands

import, are such goods.

The narrowness of the economic base in the islands heightens vulnerability to the effects of

increased energy prices and uncertainties of supply. If fuel costs rose so high that tuna canneries in

American Samoa, for example, could not make enough profit to survive, or if supplies became so

uncertain that normal operations were impossible, the local economy would be severely affected because

there are not enough other industries to compensate for the jobs and revenue that would be lost.

This report concentrates on ways of displacing petroleum fuels used to generate electricity,

because it appears that the energy problems that can be addressed most productively in the Pacific at

present involve government expenditures for energy. The island governments now bear a heavy burden of

costs for fuels used to generate electricity. However, all of the locales under consideration possess

various renewable energy resources which, when proven and developed, could substantially relieve the

current dependence on imported petroleum for electric generation.

Liquid fuels are critical to the health of local industries such as tourism or fishing and to the

delivery of the wide range of goods upon which the Pacific Island nations depend. However, methods of

producing fuel alcohol from biomass feedstocks available in the Pacific and other alternate

transportation technologies will have to develop further before they can be regarded as economically

and technically feasible for the Pacific. Thus, unless unexpected technical breakthroughs occur,

resources indigenous to the area are unlikely to meet a significant portion of liquid fuel demand for

aviation, marine transportation, or construction within the forty-year time frame of this assessment.

The island governments, unlike the various levels of government on the United States mainland, are

responsible for electricity generation. Historically, generating equipment has been purchased for the

1
islands by annual appropriations of the United States Congress. These appropriations have in some

cases been supplemented by loans. The local governments pay for fuel, operations and maintenance

costs, and they sell the electricity generated at artificially low rates that heavily subsidize the

consumer. The costs of generating and supplying electricity usually come out of the general operations

budget and represent a significant portion of government expenditures. In fiscal 1980, for example,

the costs of fuel alone for electrical generation represented 30% of the Northern Marianas operations

budget.

Economic development in all of the islands has been slow since World War II, but particularly

since energy costs soared in the 1970s. The fuel price rises of the last decade have pushed island

governments into a self-defeating cycle. As substantial price increases occurred, the governments

needed supplemental funds just to continue operating existing equipment. Extensions and improvements

in electrical service needed to foster economic development were foregone. Delivery of other public

services has also been slowed. Even when supplemental funds were available, the island governments

were sometimes forced to meet monthly fuel bills by borrowing from other budget categories such as

health services or road building.

THE PACIFIC--A SPECIAL CASE

Economic development plans in the Pacific have generally not given in-depth consideration to

future energy requirements. Federal assistance programs have not been geared to indigenous energy

resource assessment and development, and the data needed to evaluate specific technology applications

and define projects for specific sites have not been gathered. In fact, many federal energy programs,

designed to address conditions on the mainland, are concerned with conservation. In the Pacific,

developing new sources of supply is more important. Mainland conservation programs are largely

irrelevant when many households outside of urban centers do not have electrical service, 24-hour a day

service may not be routine even in the population centers, and potential industries, such as fishing,

falter for lack of a power source for refrigeration or other essential operations. The Pacific is a

special area, and it poses some special planning problems.

Infrastructure

The Pacific Island nations and territories are a mixture of cultures and societies that have

undergone repeated buffeting since the first European contact. In Micronesia, four major

powers--Spain, Germany, Japan and the United States--and a major war have done much in the last hundred

years to submerge fragile traditional societies. Now, the emerging nations of Micronesia are in the

midst of significant political changes that are leading to a degree of independence unknown for

centuries. Samoa, caught among the conflicting interests of Germany, Great Britain, and the United

States, was divided into Western Samoa and American Samoa and also experienced great changes as a

result of world War II.

None of the islands has developed a self-sustaining local economy, and all depend heavily on

federal support. Few island workers receive the education and training needed in developing modern

economies, and in any case, private sector jobs are not available. Local governments are by far the

largest employers in the islands. In some areas it is possible to thrive outside the cash economy by

subsistence fishing and farming, but by any measure, unemployment rates are high.

Many technologies are available to convert renewable resources into electrical energy, but only a

few are good candidates for success in the conditions prevalent in the islands. The Pacific is not a

good location for technological experimentation. Infrastructure taken for granted on the mainland

United States is absent. Paved roads are few, most population centers have "water hours" despite heavy

rainfall, and power outages are frequent. The climate is extremely hard on equipment of all kinds. In

the typhoon belt, for example, wind generators may be blown down, and all kinds of generators are

subject to damage by wind-driven debris. Throughout the islands the corrosive effects of humid,

salt-laden air shorten equipment life and exacerbate maintenance problems. Islanders are anxious to

acquire modern technologies, yet they generally lack the technical background necessary to select,

install, and maintain such systems. The islands are far from sources of parts and repair personnel,

and manufacturers of alternate energy generating equipment have not always compensated with increased

field support.

Planners must struggle with these and a number of other problems peculiar to the Pacific. Often,

the solutions that are most cost-effective or technically appropriate in the Pacific Islands are very

different from those that would work best in other areas.

2
Geography

The Federated States of Micronesia (FSM), the Republic of Palau, the Commonwealth of the Northern

Mariana Islands (CNMI) , and the Republic of the Marshall Islands are emerging from the Trust Territory

of the Pacific Islands, which covers some 7.8 million square kilometers (3 million square miles) of the

western Pacific Ocean just above the equator. The entire area, including Guam, is part of Micronesia.

It embraces some 2140 small islands and islets, fewer than 100 of which are inhabited. The population

totals just over 270,000. Some remote islands are only sporadically inhabited, and others have

permanent populations of less than 25 people. The islands lie in the three major archipelagoes of the

Carolines, the Marshalls and the Marianas. They range from large volcanic upthrusts to tiny coral

islets. Elevations can be as low as two meters (6 feet) on a coral atoll to 965 meters (3166 feet) on

Agrihan Island, Marianas•. Guam, where almost half of the people in the area live, is located in the

Marianas, but it was never part of the Trust Territory; it is an unincorporated. organized territory of

the United States (see Table 1-1).

Table l-l--TERRITORIAL DEFINITIONS AND STATUS

Territory/Posession

Guam

American Samoa

Trust Territory of the Pacific

Islands

Commonwealth of the Northern

Mariana Islands

Federated States of

Micronesia

Republic of the Marshall

Islands

Republic of Palau

Key to Table 1-1:

Status

Unincorporated, organized territory

Unincorporated, unorganized territory

United Nations "strategic" Trusteeship

Commonwealth in Political Union with the

United States

Proposed Compact of Free Association

with United States

Proposed Compact of Free Association

with United States

Proposed Compact of Free Association

with United States

Territory refers to any area over which the United States exercises sovereignty, and includes insular

possessions such as Wake and Midway Islands.

An organized territory is one for which the Congress has provided an organic act, or statute, which

establishes the machinery and powers of government.

An unorganized territory is one for which Congress has not provided an organic act but for which the

basic machinery of government may be provided by a locally framed constitution (i.e., Samoan

Consititution of 1960).

Incorporated territory is an area to which the United States Congress has fully extended the prOV1Slons

of the United States Constitution and is clearly on the road to statehood, territorial incorporation

being part of that process. The obverse would be true for an unincorporated territory.

Trust territory refers to an area that has been placed under the international trusteeship of the

United Nations and entrusted to an "Administering Authority" which does not exercise or claim

sovereignty. A "strategic" trusteeship places United Nations responsibility with the Security Council

rather than General Assembly.

Commonwealth is a term of elusive meaning that can be illuminated only by a subjective examination of

the relationship between the entity and the United States. Consider, for example, the British

Commonwealth of Nations, the Commonwealth of Pennsylvania, th~ Commonwealth of the Northern Mariana

Islands, and the Commonwealth of Puerto Rico, which in Spanish is rendered "Estado Libre Asociado".

3
Free Association is an internationally defined term which refers to formerly dependent territories that

have achieved self-government in association wirh another state, on the basis of the inhabitants' free

will and of relative equality.

"Source: Ruth Van Cleve, The Office of ferritorial Affairs, New York, Praeger, 1974.

The unincorporated, unorganized territory of American Samoa is also part of the United States

Pacific territories. American Samoa is the only United States territory south of the equator. It is

about 3200 kilometers (2000 miles) from the closest Trust Territory Islands. It consists of seven

rugged, mountainous islands of volcanic origin some 3700 kilometers (2300 miles) southwest of Hawaii.

The population is just over 32,000 people, 93% of whom live on the main island of Tutuila.

Urban and Rural Differences

Clearly, even if energy costs were not a factor, the central system, grid-connected power systems

found on the United States mainland are not possible in many of the Pacific Island groups. Only Guam,

being a single island, is in a position to address its energy planning from such a perspective. The

four island nations and American Samoa must deal with a sharp urban-rural dichotomy, populations

dispersed across large expanses of ocean;:widely varying load requirements, and a host of "Iltural,

institutional and economic factors which affect planning.

In some areas where the channels between islands are shallow enough to permit the use of cables,

grid extension from a central generating facility may be possible. Such a project is now underway

between Koror and Babeldaob in Palau, and may at some time be feasible among the islands of Truk Lagoon

in the FSM. In other areas, planners must devise two types of systems to meet tW( very different

needs. Urban centers, where population and economic development are concentrated, demand baseload

generating capacity in the megawatt range. The diesel generators now used to meet these demands, with

varying success, will be difficult to replace entirely with renewable resource technologies. Renewable

resource generating capacity is therefore most likely to be used in a fuel-saver capacity and to

prevent new petroleum dependencies in rural areas.

The Pacific Island governments are attempting to slow migration to the population centers by

providing services and encouraging economic development in the rural areas. At present, not all of the

island inhabitants have the same quality of life, as measured by income and access to energy sources.

This has led to a migration of people seeking the services and jobs available in the urban centers, and

this, coupled with a birth rate as high as 3.5% in some areas, is overloading social services and

funneling people out of the subsistence economy and into the cash economy faster than they can be

absorbed. The efforts of governments to stop or even reverse this population flow will affect energy

planning.

Small villages have needs and lifestyles very different from those in the urban centers and may

require only a few kilowatts of intermittent capacity to power communications or a refrigerator. A

number of small-scale generating technologies are technically mature and commercially available to meet

such small, dispersed demands. The Pacific Islands are in the forefront as users of these

technologies, especially photovoltaics.

Because the demands to be met in the urban and rural areas are so different, electrical generating

systems in the Pacific must be planned with great attention to matching power source end use. Other

factors to be considered include the availability of workers with the technical skills to maintain and

operate generating equipment and any potential cultural barriers to the use of the technology.

POLITICAL HISTORY AND STATUS

The United States has a long history of involvement and responsibility in the Pacific Islands.

Despite their slightly differing pOlitical status, both Guam and American Samoa are frequently referred

to by the term United States flag territories since the end of the 19th century and as such have

undergone a slightly different political evolution from the four nations emerging from the Trust

Territory.

Except for two and one-half years of Japanese occupation during World War II, Guam has been a

United States territory since Spain ceded it to the United States in 1898 at the end of the Spanish

American War. Elections for governor and lieutenant governor have been held since 1970. Guam elects

4
its legislature and a delegate to the United States Congress, who serves as a non-voting member.

Guamanians are United States citizens, and when they reside in the mainland United States, they may

register and vote in national elections without restriction. They do not vote in national elections

while living on Guam.

The United States annexed Eastern Samoa under the Deeds of Cession agreed to with the ruling

chiefs in 1900, but the act was not completely ratified by the United States Congress until 1929.

American Samoa, as the islands became known, has had an elected legislature, the Fono, since 1949. Its

constitution became effective in 1964. The first governor and lieutenant governo;-;;re elected in

1977. In 1981, American Samoa's elected delegate to the United States Congress was made a non-voting

member. American Samoans are United States nationals who vote only in their own elections, not in

national elections.

At the end of World War II, the United States, under the aegis of the United Nations, took

administrative responsibility for a group of widely scattered islands in the western Pacific: the

Marianas, the Marshall Islands, Palau, Ponape, Truk, Yap and Kosrae. These islands, most of which had

been taken from the Japanese during World War II, became known as the Trust Territory of the Pacific

Islands.

In accepting the United Nations Security Council's Trusteeship Agreement in 1947, the United

States took responsibility to promote the economic, social, educational and political advancement of

the islands with the goal of helping them become self-determining, self-governing states.

The Commonwealth of the Northern Mariana Islands was administratively separated from the Trust

Territory government in 1976. Negotiations regarding termination of the Trusteeship Agreement and

definition of the post-Trusteeship political status of Palau, the Marshall Islands and the Federated

States of Micronesia have continued for more than a dozen years. All three governments now have

constitutions and elected governments. The Compact of Free Association, which sets forth for the

post-Trusteeship period the international political status of each government and its relationship with

the United States, has been initialed by the United States and the three other governments. Under the

Compact agreement, the Republic of Palau will receive $1 billion from the United States over the next

SO years. These monies are intended to underwrite government operations, public works, and health and

education programs. The Marshall Islands will receive $800 million over the next IS years, and the FSM

$1.4 billion over IS years.

The steps required to formalize the Compact agreements are 1) approval by the island groups

through popular vote, 2) United States Congressional approval, and 3) United Nations approval.

Congressional and United Nations action regarding the Commonwealth of the Northern Marianas has been

delayed pending completion of negotiations with the other three governments. Congress and the United

Nations are expected to vote on the Compact agreements of all four governments at the same time.

Table 1-1 summarizes the political territorial definitions and status for the Pacific Island

governments included in this analysis.

FUEL COSTS AND ISLAND GOVERNMENTS

The Pacific Island governments are the single most important economic sector in almost every

case. They employ the largest percentage of the labor force, they are often the largest energy user as

well as the sale electricity supplier, and they channel the federal funds which make up the bulk of the

cash economy.

All of the island governments depend heavily on appropriations from the United States Congress

and, in some cases, on the presence of the United States military for the strength of their economies.

Federal assistance to the islands in 1980 accounted for 46% to 95% of total island government revenues

(see Table 1-2).

Guam is the only island government which funds even its operating budget from self-generated

income, and it is far from self-supporting. Except for its scenic beauty and excellent harbor, Guam

has limited commercial resources. Large United States Navy and Air Force installations and tourism

provide its economic underpinning. There is very little agriculture on Guam. American Samoa, on the

other hand, has traditionally been an agrarian culture, with family owned and worked subsistence

plantations growing mainly bananas and taro. The principal commercial activities in American Samoa are

tuna fishing and canning.

The four nations emerging from the TTPI have depended even more than the unincorporated

territories on United States transfer payments for services and capital improvements. The area's gross

product is otherwise derived from tourism, copra, subsistence farming, small scale and mid-size

commercial fishing, and from sales of handicrafts. While the semi-urbanized residents of the

5
Table 1-2.--Total Pacific Island Government Revenues

(in millions of dollars)

Guam(a)

American

Samoa(a)

Republic of

Palau(b)

Republic of

the Marshall

Islands(b)

Total Govt.

Revenues

$184.9

54.2

10.3

49.0

35.2

8.6

u.s. Federal

Assistance

$85.2

34.2

9.1

39.8

33.4

7.7

Federal Assistance

as a % of Total

Revenues

46%

63%

88%

81%

95%

90%

a) Fiscal year 1980

b) Fiscal year 1981

administrative centers participate in the wage economy, those who live on the outer islands engage

largely in subsistence agriculture and fishing, augmented by small amounts of cash from the sale of

copra and handicrafts.

Because the Pacific Island economies are so small, the cost of fuel used to generate electricity

makes up a major portion of the government budgets. In fiscal year 1980, the cost of fuel for

electricity generation represented 17% of the TTPI operations budget and 30% of the CNMI operations

budget. Fuel costs for generating electricity as a percentage of total revenues ran from 5% for the

TTPI to 29% for Guam (see Table 1-3). The importance of fuel costs to the TTPI budget was masked by

the temporary presence of monies intended for large construction projects. Without them, fuel costs as

a fraction of total government revenues would increase to 10%.

Table 1-3.--Revenue Spent on Energy, FY 80

(in millions of dollars)

Guam American Samoa CNMI TTPI

Fuel Costs to Govt. for

Electricity(a) 53.4% 4.6 4.7 7.8

Fuel Costs of Electricity as %

of Total Government Revenues 29%(b) 9% 10% 5%

(a) Costs based on 001 FY 82 projections deflated to FY 80 using an annual deflator of 20%

(assumed 10% inflation plus 10% price increase).

(b) The civilian and military share the electric power system; the military consumes slightly

less than half of the power generated.

In an effort to help the Pacific Island governments develop ways of meeting the fuel price crisis,

the Department of Energy has earmarked $8.6 million for energy projects in the Pacific in the last five

years. American Samoa received $3.8 million, Guam $2.3 million, CNMI $1.3 million and the Trust

Territory $1.2 million. These funds enabled each government to establish a territorial energy office

and to initiate conservation and data collection programs, install some renewable resource generating

systems, and begin to develop energy plans.

6
Despite the DOE funds and the proportion of government revenues spent to generate electricity,

there are still frequent blackouts on many islands and unmet demand throughout the Pacific. Oil price

rises have slowed in the recent past, giving island governments some much needed economic relief and

allowing time for energy planning. The urgency of the energy problem remains. It is probable that

petroleum fuel costs will continue to increase more rapidly than revenues from the United States or

local sources. Even if electrical consumption remains approximately constant, fuel costs for

electrical generation can be expected to continue to consume an unacceptably high fraction of

government operating funds unless there is a shift away from imported fuels to indigenous renewables.

Without some relief from high energy costs, the Pacific Islands cannot hope to maintain, much less

improve their economic status. Reductions in general industrial maintenance, including maintenance of

conventional electrical generating equipment, have already occurred as a result of operating funds

being diverted to pay fuel bills. This threatens the economic development plans of all of the island

governments, which have hoped to expand their economic bases in order to generate more local revenue.

New commercial enterprises that could provide wages to workers and taxes to the governments need

assurance of ample, reliable electric power. Such assurance would require not only sufficient

operating funds for existing generating equipment, but also additional capital investment on the part

of island governments.

Rising fuel prices not only act as a barrier to expanding the economic base in the Pacific, they

threaten the industries that are already established. Fuel price increases raise business expenses and

lower profit margins. If the margin becomes slim or nonexistent, businesses will leave the area. The

fishing fleet in American Samoa is now facing just this sort of fuel price pressure on profits.

CONVENTIONAL ENERGY SOURCES

Diesel fuel and residual fuel oil (RFO) used to generate electricity represent the largest fuel

use for the Pacific Island governments (see Table 1-4). Electricity is used by residences, commercial

enterprises, and the governments themselves. Gasoline, aviation fuel and diesel oil are used

extensively for aviation, fishing, and sea and land transportation; their substitution with other

energy forms is not anticipated to any significant extent in the foreseeable future. These fuels are

shipped to the islands from refiners elsewhere and stored for use in tank farms that are often provided

by the supplier.

Table 1-4--Fuels for Electrical Generation (1980)

29

38%

12

55

34

23

34

56

41

Thousand barrels

Diesel RFO-6 Total

Guam 42 1818 1860

American Samoa 126 126

CNMI 35 145 180

Marshall Islands 36 36

Palau 44 44

FSM - Truk 20 20

- Ponape 22 22

- Yap 17 17

- Kosrae 4.5 4.5

Fuel for

electrical generation

as a percentage of

total fuel use*

* Exclusive of commercial and military jet fuel; computation done on volume

basis.

In the past,' the use of residual oil for power generation h9s been limited to Guam and Saipan.

Elsewhere, diesel oil has been the fuel of choice for electricity production. The large difference in

cost between diesel and residual oils has encouraged consideration of the latter at other locations.

7
In the Marshall Islands, for example, construction of a new power plant and an expanded fuel tank farm

to accommodate use of residual fuel is nearly completed. The Republic of Palau now has a similar plan

under consideration. While these developments will reduce overall fuel costs in the near term, they

indicate a long-term commitment to the use of imported petroleum for electricity generation, and they

may tie up large enough amounts of capital to preclude investment in renewable energy resources for

some time.

The governments provide fuel for the field ships which deliver foodstuffs and other essential

Jpplies to the outer islands of the Marshall Islands, the Northern Marianas, FSM, Palau, and American

~amoa. In many areas, the level of service the ships supply is close to the level required for

survival. Even though these ships consume a fraction of the diesel fuel used to generate electricity,

further fuel price rises could force the island governments to cut back further on field ship trips.

Major commercial operations often provide their own electric power and, sometimes water, because

the local governments are unable to meet their needs or the central system is unreliable. This has

been cited as one reason that new commercial enterprises have been reluctant to locate in the islands.

Even though the fuel is not provided by the government in such cases, private commercial and military

energy use is extremely important to the overall energy picture of the Pacific Islands. The presence

of these military facilities and major commercial enterprises generally represents the critical

underpinning of the host economy.

Residential consumers use electricity principally for lighting.

water heating, television, labor saving appliances, and other devices

necessities on the mainland are present, but not in large quantities.

Amenities such as refrigeration,

that have come to be considered

The principal use of electricity in the commercial sector is probably for refrigeration. It is

used for food storage and in the fish trans-shipment or processing industries. Air conditioning in

hotels and other commercial buildings is another major use. In the government sector, electricity is

used for lighting, office equipment and air conditioning. Local government services consume

electricity to pump water, operate sewage treatment plants, light streets, operate hospitals and so

on. The data available suggest that the Pacific Island governments commonly use about half the power

generated (see Table 1-5). Local governments have initiated conservation measures, but their absolute

consumption will probably remain near current levels. This means that they will use a smaller

percentage of the total power available, if electricity is extended to nonelectrified areas and outer

islands in the future.

Guam

Am. Samoa

CNMI

Marshall Islands

Palau

FSM - Truk

- Ponape

- Yap

- Kosrae

Table 1-5.--Electric Power Use

(million kWh/y)

End-Use

Government Pvt. Military Total

89 441 401 105l(a)

21 45 66

n.a. n.a. 101

9(b) 8(b) 17

8 15 23

6.6 4.8 11.4

9.4 5.4 14.8

3.9 4.1 8.0

1.3 0.8 2.1

(a) Includes line losses of 120 million kWh/y

(b) Based on Majuro data

n.a. - data not available

Electric Generation

In all instances, operating and maintaining generating equipment, as well as distributing power,

are the responsibilities of the Pacific Island governments. In a few instances governments are dealing

with the political dimensions of setting rates by forming public utility commissions made up of

representatives of industry and the general public. The hope is that the commissions will be able to

make recommendations and set policy without necessarily reflecting upon elected government officials.

8
There are no privately owned utilities, but in some areas, government officials have begun to express

some willingness to explore the possibility of privately held utilities. However, at present, the

basic responsibility for providing electricity remains with the governments, and they are uniformly

determined to find a source of electricity that is not associated with unpredictable cost escalations

and precarious fuel supplies.

Generating costs per kWh are made up of the costs of fuel, personnel, maintenance, and other

operations. The total cost of generating electricity in the Pacific Islands is not known, but

estimates place it between l7t/kWh and 25t/kWh. If capital costs are included, the range is SOt/kWh to

$l.OO/kWh. These high costs are a product of the tropical climate, which results in a high equipment

derating factor; often inadequate operation and maintenance practices; the complete absence of power

sources that are not fueled by oil; and the high cost of fuel, particularly diesel, in the Pacific.

Some indication of the current costs of fuel alone are given in Table 1-6. For the calculation,

unifying assumptions were made concerning costs (see footnote a, Table 1-6). In fact, the costs of

fuel varied somewhat depending on the supplier.

Table l-6.--Relation Between Fuel Costs and Electric Rates

Electric Power Cost for Fuel cost/ Residential

generated 1980 fuel(a) kWh(b) Utility Rate(c)

(kWh/y) (thousands $) (cents/kWh) (cents/kWh)

Guam 1051 64,080 6.1 14

Am. Samoa 66 6,804 10.3 10-14(d)

CNMI 101 6,798 6.7 6(e)

Marshall lsI. 17 1,944 11.4 8

Palau 22 2,376 10.8 6

FSM - Truk 11.4 1,101 9.7 6

- Po nape 15 1,193 8.0 3

- Yap 8 907 11. 3 5

- Kosrae 2.1 243 11.6 3

(a) Diesel at $54/bbl and RFO-6 at $34/bbl as of Spring 1981. Guam prices were somewhat

lower due to location of refinery on island. Consumption data are for 1980.

(b) Cost of lubricating oils, maintenance, parts and capital not included.

(c) Use less than 1000 kWh/month.

(d) Range reflects tiered rate structure.

(e) Rate in 1982.

Table 1-6 also shows the electricity rates the Pacific Island governments charge. In most cases,

they are well below even the cost of fuel alone. There is an even greater discrepancy between the

amount of power distributed and the amount of electricity billed to customers. Many users are not

metered, especially within the government sector, and many are charged flat rates. In addition,

revenues collected from billings have been as low as 20% of the total amount billed. Customers who do

not pay their bills rarely lose service. Under these circumstances, raising rates in order to raise

revenues is not generally effective.

The decisions involved in setting rates that reflect the full cost of electricity generation

versus continuing to subsidize consumers raise a cloud of complex economic issues, and because the

governments are the suppliers, political issues as well. When fuel price increases are reflected in

electric rates, the residential sector is directly affected, and decreased usage usually results. Most

residents of the islands, with the possible exception of Guamanians, have incomes significantly lower

than the U.S average. Many people practice subsistence fishing or farming and participate in the cash

economy only partially. The ability to pay for even modest amounts of power irrespective of cost is

not widespread. On the other hand, if the governments absorb the increased costs, fuel costs take up a

larger percentage of the budget and the public is affected by reductions in other public services.

Programs to attract industry are also caught in the rate structure dilemma. Rates which cover the

true costs of generation are less attractive to new commercial enterprises, especially because

commercial consumers have been and still are subsidized. On the other hand, the governments need the

increased revenue in order to meet the needs of commercial users by expanding generating capacity and

making it more reliable.

9
The governments of Guam and American Samoa subsidizes electrical rates to a lesser degree than any

other Pacific Island government. Electric rates are almost high enough to cover the cost of

electricity generation. The standard of living, as measured by income and access to electricity, is

closer to United States standards than it is in the other islands. Ironically, as fuel prices have

pushed rates up, economically driven conservation in Guam is eroding the financial base of the Guam

Power Administration. Meanwhile, the other Micronesian islands, which subsidize electric rates

heavily, are also financially pressed and face difficulties in extending service to the significant

portion of the population that does not have electricity.

Electrical demand on the various islands is modest. Except for Guam, with its large military

bases, peak demand is less than 15 MW. Total operating capacity exceeds peak demand, but in some

places, such as American Samoa and Ponape, peak demand is too close to operating capacity to be

considered prudent operating practice. In most of the islands there is standby capacity at hospitals,

airports, communications centers and water pumping stations; however, the amount of fuel consumed for

these standby uses is small. Table 1-7 shows electrical generating capacity owned by the governments.

There is additional privately owned generating capacity in most of the islands.

Table l-7.--Electrical Generating Capacity

Operatin

Base Peak Elec tric Capacityfa)

Load Load Operating per person

Territory (MW) (MW) Capacity (MW) Population (kWh/person)

Guam 120 155 173 105,800 1.64

Am. Samoa(b) 12.6 13.3 13.3 32,395 0.41

CffiiI (c) 10.5 14.5 21.6 16,862 1. 28

Marshall Isl.(d) 3.1 4.3 4.9(e) 31,045 0.16

Palau 2.2 3.1 6.75 12,173 0.55

FSM - Truk 1.1 3.1 6.0 37,383 0.16

- Ponape 1.8 2.3 2.5 22,367 0.11

- Yap 1.0 1.2 3.3 8,172 0.40

- Kosrae 0.2 0.3 0.52 5,522 0.094

(a) Typical figures for California (March 1981) were on the order of 1 kW/person, cf Energy

Watch, Calif. Energy Commission, June 1981.

(b) Includes Tutuila, Ofa and Tau

(c) Saipan only; Tinian and Rota, etc., are less than 1 MW.

(d) Majuro, Ebeye, Jaluit

(e) A new 3 MW unit will be on line soon. Three more 3 MW units are under construction.

In general, rated capacity is larger than the operating capacity shown in Table 1-7. This

reflects deratings caused by extreme climatic conditions; limitations set by sub-stations (Palau);

deadlined units that are under repair; voluntary cutbacks to minimize fuel consumption (FSM); and other

island-specific circumstances. Maintenance problems are common throughout the Pacific Islands, and

equipment failures were resulting in under-use of generating facilities even before fuel prices rose

enough to be an inducement to reduce electrical power output.

At the same time, generating equipment is not always put to optimum use in the Pacific. For

example, breakdowns of equipment designed to handle base load have forced the use of low efficiency,

high-speed generators designed for peaking loads. These problems, combined with generally small total

power requirements, suggest numerous opportunities for introducing new electrical generating

equipment. Even if all existing equipment that could be repaired were operational, distribution

10
problems in the scattered islands make it unlikely that the population could be served adequately

without the use of dispersed generating facilities powered by renewables.

The last column in Table 1-7 contains a measure of the electrification within the various island

nations and territories. As of 1982, 1.6 kW per person was a crude estimate of the electrification in

California. This figure includes power for commerce, government and industry as well as residential

use. By comparison, only Guam and the CNMI are close to 1.6 kW per person. To a certain extent, a

lower capacity per person reflects the dispersed and isolated nature of populations in the FSM, Palau

and the Marshalls that are not served by a central, gridded generating facility. However, populations

in outlying areas tend to be small and are growing smaller as people migrate to the population

centers. Thus, the very small kW/person numbers in Table 1-7 are not badly distorted by a lack of

electrical service in isolated areas. If all rated capacity were on line in the islands, the kW/person

figure would be larger, but not by a factor of two. Even if all units were repaired and operating at

their maximum efficiency, one would have to conclude that even by the standards of developing

economies, the present population was not adequately served by the existing generating system.

FUTURE ECONOMIC DEVELOPMENT AND ENERGY DEMAND

Energy consumption is a consequence of the social and economic development of a society. All

indications are that energy demand in the Pacific Islands will increase rapidly in the near future as a

result of high birth rates, and the desire for an improved standard of living and a wider industrial

base. The overall population of the islands is expected to grow at a rate of 3% to 4% a year,

quadrupling by 2020. In addition, there is a high, but unquantified, unmet demand in the Pacific now,

and this will add to rising demand as new generating facilities come on line.

PL 96-597 specifies that one of the activities to be undertaken in this assessment be "estimating

future energy needs to the year 2020, giving due consideration to the range of economic

possibilities." It should be noted that the range of economic possibilities must be considered within

the relatively strict limits on available land, water, skilled labor, and various natural resources

that obtain in the Pacific Islands. It must also be recognized that the longer the time frame a

project attempts to encompass, the more speculative it becomes. The actions of known factors become

harder to predict with increasing length of time, and the potential for the introduction of unforeseen

factors increases.

Little of the information available bears on estimating energy needs in the Pacific through the

year 2020. Indeed, at the opening project meeting held in Guam ~ay 18, 1981, representatives of the

island energy offices strongly asserted that they were concerned with immediate energy problems, and

requested that the primary emphasis of this report be directed to these areas. This document attempts

to respond to that setting of priorities.

Energy consumption by the commercial sector will certainly increase if the Pacific Islands move

toward their goal of economic self-sufficiency. The growth of private enterprise will depend to a

large extent upon an adequate supply of electricity. Projections of future electricity consumption

should take into account future economic growth scenarios that the individual island nations and

territories consider likely. The energy plans in Chapters 3 through 8 attempt to factor in the

economic development plans of the governments in question.

Energy consumption by the public sector will, of course, be determined by the extent of government

services and activities. However, because fuel costs will probably continue to rise, and the time

horizon for the introduction of renewables is not known, the effects of rising fuel prices on future

government energy consumption should be examined with a number of possible development scenarios in

mind.

There are reasons to believe that petroleum use will accelerate in the years to come. Extensions

of electrical services to areas not presently served, increased per capita ownership of automobiles,

increased travel as a result of improved roads, and rapid development of economies as a result of

financially rewarding compact settlements, will all add pressures for increased energy consumption.

Island governments will necessarily make energy development decisions in the context of many

spending and investment priorities. If other island governments are to follow the lead of the Marshall

Islands and make near-term decisions to meet their generating needs with new oil-fired power plants, it

will affect the time required to make a transition to different energy sources. Funds are very

limited, and the one-time costs of alternate generating equipment can be high. Planners may decide to

buy the less expensive conventional equipment and accept perpetual fuel costs. It is not yet clear

that all of the governments support reduced electricity use from new or planned oil-fired power plants,

although all do support the use of renewables for dispersed use and remote locations. The success of

11
renewables in the islands will depend partly on"the success of life cycle economic concepts under which

the economic merit of alternate energy systems becomes more apparent.

It must be recognized that a transition to alternate energy systems will require some years to

complete. The critical problem, however, is immediate, and steps must be taken to improve the

efficiency and reliability of current energy systems while this transition to longer range solutions is

in progress. In the cases of Guam and American Samoa, coal might serve as a transition fuel for

baseload generation. Like oil, coal would be an imported fossil fuel, but world supplies are plentiful

and its price is more stable.

With or without coal, federal or private investment in alternate energy sources must be made as

soon as possible. Existing electricity supply systems are now inadequate, and the United States has an

ongoing commitment to Guam and American Samoa and 15 to 50-year commitments to the four nations

emerging from the Trust Territory. This is a critical and opportune time to invest in energy supply

systems that will strengthen the economies of the Pacific Islands and lead to their self-sufficiency.

Such an investment would eventually lower costs to the United States government as well as to the

island governments.

The Pacific Islands are fortunate in that they possess valuable solar, wind, biomass and other

alternate energy sources that can be used to reduce dependence on oil. The next chapter discusses a

number of these technologies and the technical, cultural, environmental, institutional, and economic

aspects that must be considered in choosing among them to make the best energy system for each island

group.

12
CHAPTER 2: POTENTIAL ENERGY SOURCES FOR THE PACIFIC

The selection of appropriate alternate energy systems must first proceed from an identification of

the energy needs of the end-user as well as a realistic understanding of the state of readiness of the

respective energy technologies under consideration. A third set of factors are those locational

characteristics such as land availability that, depending on their magnitude, can either favor or

preclude certain technologies from further consideration in a given area. Lastly, it must be possible

to assign some measure of cost-effectiveness to candidate energy technologies at the locations for

which needs have been established.

Within the Pacific Islands, a wide mix of locational factors influence technology acceptability

and appropriateness. Resource availability, geography, climate, infrastructure, culture, and local

energy demand all vary to some extent in the region. Technology readiness will not be widely divergent

among the island groups, if at all. Cost-effectiveness in one location may mean cost-effectiveness for

a technology at other sites, since most island energy economies are characterized by similarly high

priced liquid fuels. However, a technology such as hydropower conversion may have widely divergent

cost characteristics at two locations due to factors such as differences in resource quantity and site

attractiveness. Or, a known solar resource and a proven solar pond technology acceptable on one island

may be unsuitable on a second island with a smaller population and more limited electricity demand

because of the relatively large amount of power (20 kW) produced by even a small solar pond system.

In considering various technological means of reducing the Pacific Islands' present dependence on

imported oil, the application of energy management as an approach to reducing consumption and

increasing efficiency of energy use must be considered. A variety of energy management measures

discussed later in this chapter could be used to allow the islands to enjoy a larger measure of energy

independence. Furthermore, this approach is perhaps the only available option which can be readily

undertaken in the immediate future to reduce the consumption of liquid petroleum fuels used for

transportation and construction equipment.

For the purpose of general energy technology comparison, it 1S helpful to list selection criteria

in a matrix format. Table 2-1 presents such a matrix. Final selection of an energy technology for a

given location is likely to require a site-specific engineering feasibility study incorporating current

economic and technology performance data. Before such decisions can be made, however, the wide variety

of potentially available technology options should be narrowed. The results of a screening format are

generally qualitative in nature, although some measure of hard data may underlie several of the

conclusions that can be drawn. This will be the case in Chapters 3 through 8, where the selection

criteria listed in Table 2-1 are applied to the rang p of alternate technologies for each government

being evaluated.

The range of alternate energy technologies examined for Pacific Island locations was drawn from

both legislative requirements (P.L. 96-597) and from the professional judgment of Department of Energy

and island government energy planning staffs about the likelihood of technology success in the insular

environment. Three principal direct uses of solar energy are considered: low-temperature solar

thermal for water heating, high-temperature solar thermal for process heat and electricity, and

photovoltaics. Other technologies include wind energy conversion, geothermal, hydroelectric, ocean

thermal energy conversion (OTEC), ocean currents and tides, salt-gradient solar ponds, and municipal

solid waste (MSW) combustion. Three biomass fuel options -- tree farm harvesting and combustion to

produce electricity, biogas, and liquid fuels -- are also examined.

Perhaps the most fundamental criterion necessary for technology success is the availability of the

natural resource used in the energy conversion process. The absence of fossil fuel resources

throughout these islands has long necessitated the importation of liquid, petroleum-based fuels. In

the search for alternatives to this costly and continuing dependence, attention has focused on those

renewable energy resources found in many areas of the Pacific for which energy conversion processes

have been or are being developed. It should be noted that renewable energy resource assessment efforts

have not been conducted uniformly across the island groups. A promising, though uneven, picture of the

region's indigenous energy potential is all that is now possible.

13
Table 2-1

Technology Selection Criteria

SOLAR

Solar Photo- TSolar_

Hot vottaics herm

Water al

BIOMASS

WIND GEO- HYDRO- Tree. Liquid

ENERGY THERMAL ELECTRIC Farms BlOgas Fuels MSW OTEC

OCEAN

CURRENTS

AND SOLAR

WAVES PONDS

ENERGY

MANAGECOAL MENT

RESOURCE

proven

suspected

unknown

none

TECHNOLOGY READINESS

IN PACIFIC

high

medium

low

RELIABILITY PROBLEMS

IN PACIFIC

high

medium

low

DURABILITY PROBLEMS I I

I

IN PACIFIC

high

medium

low

APPLICATION I

centralized

decentralized

POTENTIAL CONSTRAINTS

cultural impact ,

land availability

environmental impact

human resources I I

infrastructure

CAPITAL COSTS

high

(over $10.OOOtkW)

intermediate

(S3,000 - $10,OOOikW)

low

I (up to $3,000tkW) I

O&M COSTS I

high I--- 1-'-

intermediate I i

low

COST EFFECTIVENESS I

near term (0-5 yrs) I

mid term (6-15 yrs)

long term (16-40 yrs)

EXPECTED OIL

SAVINGS OR AVOIDANCE

high

intermediate

low

14
For example, the availability of the direct solar resource seems readily apparent, but

quantification has only recently begun. Technologies are available to convert both direct and diffuse

sunlight into either electricity or thermal energy, but continued instrumentation will be needed to

define future solar technology design and performance limits for the Pacific.

Several other renewable energy resources are suspected in the Pacific region, though the precise,

site-specific resource assessments needed for technology investment have generally not been done. For

other technologies, no resource is known to be present, but little or no resource characterization has

been performed to prove or deny such a finding conclusively. For such resources, additional

"prospecting" may be required before a technology implementation can proceed. Lastly, there are

resources which are clearly not present in some areas, such as hydropower on atolls. While this

analysis focuses on renewable energy, consideration has also been given to coal as a possible

replacement for oil in central electric generating systems on some of the larger islands. There is no

known coal resource anywhere in the region, but the potential to import it is strong enough in some

island groups to merit discussion.

A second, and equally important, selection criterion is the readiness of a technology for the

assured production of energy. Medium to high levels of readiness reflect the successful operation of

the technology at several different locations, in a variety of size configurations, and for a time

period sufficient to prove performance over a range of operating conditions (climate, use patterns,

environmental degradation, etc.) Judgments between medium and high levels of technology readiness are

less likely to be quantitative than to reflect analytical confidence built up over defined periods of

time. One other possible measure between the two levels might be the size of the popular commercial

market developed to serve the technology, particularly in settings similar to those under consideration

~n the Pacific Islands.

Systems for which only isolated demonstrations have been conducted must be considered to be at a

low level of technology readiness. In this category might be those technologies for which government

demonstrations or pilot plants exist, but around which only a small commercial industry has evolved.

Low-readiness systems also include those which have been tested and proven elsewhere but which have not

yet been successfully implemented in a remote Pacific Island environment. Finally some technologies

have been developed conceptually, and perhaps even tried experimentally, but have not been made

operational, either in whole or in part, due to as yet unsolved or even undefined technical problems.

Even when a technology has reached an acceptable level of readiness, the interplay of technology

and location may create performance issues of reliability and durability where none previously existed

or were considered negligible. For example, the corrosive effects of salt spray on metals routinely

used in mainland United States applications of several energy technologies must be acknowledged and

addressed. Otherwise, the loss of durability could easily negate the investments in, and intended

benefits of, many renewable energy systems.

The interaction between location and technology is also critical in selecting the appropriate

system size to meet a defined energy requirement. In most Pacific Island locations, limited energy

demand centers can be served most efficiently by energy technologies capable of small and intermediate

scale applications. Technologies selected for application in the Pacific should feature a close match

with likely levels of demand on the islands so that the economic penalties of overinvestment and

underutilization of capacity are not incurred. Many renewable energy technologies are inherently

modular, with relatively fixed conversion efficiencies per unit, so that increments of capacity can be

added as they are needed rather than overbuilding capacity to meet some predetermined economy of scale

that may never be used fully.

Some renewable resource energy technologies. such as biomass combustion, can provide continuous

base load power without storage and are suitable for meeting electricity demand in urban centers. Other

technologies, including those that depend directly on sunlight or wind, provide intermittent power and

are best used in central generating systems in a fuel-saver capacity. The intermittent nature of some

power sources is not a serious drawback in some rural areas. Current battery storage technology can

often meet small, remote village demand, and in many cases, 24-hour service is not absolutely necessary.

Other categories of more directly locational criteria include environmental, land use, and

cultural factors unique to particular island or villages. Soil depletion from too-rapid biomass

harvesting could limit the acceptability of that technology, while the alre~dy constrained availability

of land on small atolls precludes most land-intensive energy conversion technologies. Remote island

areas may also feature cultural patterns of communal decision-making and life style which rule out

technologies village inhabitants judge to be intrusive. The presence and staying power of such

potential constraints to technology adoption will not be fully understood until site-specific system

siting proposals are put forward. Nevertheless, some of the field work performed to date under

alternate energy grant programs in the islands has identified a few of the more apparent environmental

and cultural limitations. These are reflected later in the assessment of technology options for each

island government.

15
Add1t10nal criteria that must be met for certain technologies to succeed include an adequate base

of trained experts in energy system installation, operation, and most important, maintenance. Without

a local support capability, interest in and commitment to a technology will be insufficient.

Similarly, there must be a physical infrastructure in place, or capable of being easily developed, to

insure that the trained workers can carry out their support responsibilities. Wind generator

maintenance, for example, requires both a capable work crew and the necessary spare parts, repair

equipment, and service facilities. Some technologies will h~ clearly more elaborate and expensive

requirements than other. However, the basic infrastructure and human resource criteria will need to be

satisfied for any energy system.

One further set of criteria which cannot be neglected in the selection of alternate energy systems

for the Pacific Islands are the economic parameters which govern the purchase, operation, and long-term

productive value of competing technology options. Three commonly used criteria include: system

capital cost, system operating and maintenance cost, and overall system cost-effectiveness as measured

against the next most likely energy technology choices. Table 2-2 presents some characteristics of the

technologies included in this report, including rough estimates of some of the costs associated with

each.

Capital and operation and maintenance costs will vary according to both technology and site. For

example, because Guam experiences higher insolation levels, fewer solar photovoltaic modules would be

needed to meet an identical electrical demand than in, say, Kosrae. Because the system cost of

photovoltaics is sensitive to even a small change in module cost, insolation (location) will be a major

determinant in the capital cost of this technology throughout the Pacific. Technology complexity,

durability, remoteness, and infrastructure support will determine the nature of continuing operation

and maintenance costs for most energy systems. For nonrenewable resource energy systems, the greatest

component in this category is the constant escalation of fuel charges over time.

High capital cost, per se, need not be an explicit negative in energy technology selection.

Analyses have shown that when they are evaluated on a life-cycle basis, many systems with high-firstcosts have a lower cost of delivered energy than systems with lower-first-costs. This type of analysis

should be identified and explained by island decisionmakers so that financial planning can better

accommodate the impact of high-first-cost technologies on local budgets.

Given the constraints now posed by insufficiently developed infrastructure and human resources

throughout the islands, there is likely to be a high premium placed on energy technologies with limited

operational costs. Those systems chosen for remote areas which do not further strain the existing

skill and physical support gaps already apparent on many islands are also likely to be highly valued.

The common denominator in determining the cost-competitiveness of alternate energy systems will be

the uniformly high price of imported petroleum now used throughout the region. Conventional energy

system costs are relatively well understood; thus, it will be the characteristics of alternate energy

systems (technology readiness, resource attractiveness, load match, etc. that will determine the

cost-effectiveness of various options. For general planning purposes, costs-effectiveness can be

described in terms of the time periods in which each technology is expected to be used in each island

group. Technical and economic analyses support some of these determinations; others are more

judgmental, based on developments outside the Pacific region.

In examining renewable energy system potential for given island groups, it is important to note

that the full implementation of any technology--no matter how favorable the resource base--will not

occur as rapidly as the resource opportunity may suggest. The remoteness of the islands, the

limitations on the rate at which existing generating equipment can be replaced, the limits posed by an

undeveloped physical infrastructure, and general institutional inertia, will all temper the pace of

transition to even the most vividly cost-effective technology options. Yet it is important that early

experience be gained in using the most promising technologies so that as anticipated cost-effectiveness

targets are reached, fullest use of the technologies can occur.

The following sections of this chapter present brief discussions on the state-of-the art of a

range of alternative energy technologies. Included are general observations as to the appropriateness

or inappropriateness of the technologies to the Pacific region as a whole. These are based on resource

similarities, generic technology readiness, cultural factors, and other influencing criteria.

PHOTOVOLTAICS

o

Photovoltaic technology, first developed for space satellfte power systems in the late 1950s, has

experienced a rapid growth in terrestrial applications over the past ten years. The technology is

based on the conversion of sunlight to electricity by photovoltaic cells. The cells are discs or

16
Table 2-2. Characteristics of Technologies for Production of Electricity

Under Consideration for Pacific Territories

Technology

Wind

Wind

Photovoltaic

energy

Photovoltaic

energy

Solar

Thermal

energy conv.

Hydropower

Geothermal

energy

Size/Description

of System

Few to tens of kW,

not grid connected

Few to tens of MW.

grid connected

fuel-saver mode

Several kW range,

not grid connected

Few to tens of MW,

grid connected

fuel-saver mode

Several kW to tens of

MW, stand alone or

grid connected

Few MW, grid connected

Tens of MW, grid

connected

Current(a)

Capital Cost

Estimate

K$/kW

3-6

1-2.5

10-15

10-20

5-20

0.8-1.3

1.5-2

Current(a)

Cost/kWh

$ .50-1.00

$ .25-.50

$1.00-2.00

$1.00-2.00

$ .50-2.00

$ .10-.50

$ .10-.50

Capacity

Factor(b)

Range (%)

10-30

10-30

15-25

15-25

15-25

50-70

70-90

Area

Required

Little

20 ha/MW

2 ha/MWp

3 ha/MWp

15 ha/MW

Little

As

required

Temporal

Characteristics

Intermittent, needs

storage

Intermittent, fuel

storage mode with

no storage

Intermittent, needs

storage

Daily cycle, intermittent, fuel-saver,

no storage

Intermittent. needs

storage; or fuelsaver. no storage

Water availability

dictates limitations

Baseload power

Ocean tidal!

current

Harness ocean currents Unknown

or tidal flow

Unknown

OTECshore based

Solar pond

Wood

5 MW

40 MW

5 MW salt gradient

excavating/diking

Few MW and up. boiler,

gasifier

8-10

5

2-20

1-2

$ .20-.40

$ .50-.40

$ .25-.50

$ .12-.15

70-90

70-90

70-90

Little Baseload power

20 ha/MW Baseload power with

peaking possibilities

800 ha/MW Baseload power

Coal Few MW and up

Diesel Fractional to several

MW engine generator

Residual oil Several of tens of MW

boiler

$ .10-.15

$ .40-.50

$ .15-.20

70-90

70-90

70-90

1 ha/MW

Little

Little

Baseload power

Baseload power

Baseload power

(a) "Hawaii Integrated Energy Assessment," LBL 12061, January 1981; "Cost of Energy from Some Renewable

and Conventional Technologies," SERI/SP-741-1022, April 1981; other sources.

(b) Fraction of time source can produce energy, averaged over a year of operation.

(c) Environmental protection equipment will increase cost.

squares of specially-treated material (such as silicon) that generate a voltage when exposed to light.

The conversion process requires no mechanical or thermal energy conversion steps. The process is

silent, non-polluting, without fuel costs and except for large, complex applications, relatively free

of maintenance expense.

17
Photovo1taic cells are the building blocks of a photovo1taic power system. The cells are commonly

placed in larger supporting structures ca11ed.modu1es. Depending on system size, modules can then be

mounted in photovo1taic arrays and combined with other sub-system components, to form a photovo1taic

power system. A complete system generally includes power monitoring, control and regulation equipment

and storage batteries if necessary. The electrical current generated by a photovo1taic system is

dependent on the ,amount of light striking the solar cells and on the total area of sunlight intercepted.

At noon on a clear day, the maximum solar insolation available is about 1 kW/m2• With a 15% efficient

photovo1taic system under this condition, about 150 W/m2 or 15 W/ft 2 is available. In the Pacific

Islands, an average monthly insolation range of 2.9 kWh/m2-day (Ponape) to 5.8 kWh/m2-day (American

Samoa) has been derived. Those island groups with an insolation resource at the higher end of this

range will be ideal locations for photovo1taic applications. Data collection is now underway to

characterize the insolation resources of the islands so that optimal system designs can be achieved.

The market maturity of photovo1taics is reflected in the range of power uses now being met with the

technology. These uses include; street and highway lighting; communications systems; cathodic

protection; water pumping; and in remote areas, village power and medical refrigerators. Depending on

system size and configuration, virtually all stand-alone electrical power needs can be met with

photovo1taic energy.

In the Pacific Islands, photovo1taics systems have already been employed in radio communication,

lighting and the powering of small medical refrigerators. An engineering design for an 8 kW village

power system is presently underway for a remote atoll in the Marshall Islands. The low power needs of

most outer islands match well with the one to 10 kW size range and output of photovo1taic systems. A

growing number of small appliances, light tools and other electrical end-use devices of potential

application in remote areas have been designed to operate directly off photovo1taic systems. More

end-use appliances are expected to become available for integration with photovo1taic systems as the

technology achieves greater worldwide use.

Photovo1taic systems costs are based on a combination of sub-system costs (i.e. module support,

power conditioning, batteries), not all of which may be present in each system design. In mid-1982,

the price of photovo1taic modules ranged from $7 to $20 per peak watt, depending on manufacturer,

specifications and quantity. Complete system costs may be double the module cost per peak watt

depending on complexity of design and storage requirements. Engineering design and overall

photovo1taic system costs are expected to rise as the size of system installations increases.

Conversely, small photovo1taic applications (in the several hundred watt range) require little in the

way of systems or engineering costs. In such instances, module costs alone comprise the bulk of total

system expense. Total system costs in the $10 to $25 per peak watt range translates roughly to a

delivered electricity cost of $l/kWh for intermittent power. A base10ad photovo1taic system which

would generate the same total energy as a 10 MW diesel or oil-fired generator would be a 40 MW (peak)

photovo1taic system and at 15% efficiency, would occupy about 80 hectares (almost a square kilometer or

198 acres). The storage capacity required to use photovo1taics for 24-hour base10ad operation would

add to the land area required and put to total system costs per kilowatt hour at least double the

figure for an intermittent system.

The relative cost-effectiveness of photovo1taics will depend on site-specific-design complexities

and on the economics of competing energy sources. Even at the low end of the above cost estimates,

photovo1taics are not yet cost-competitive with grid-supplied electricity in the United States.

However, the costs are favorable when compared to conventional electric alternatives in remote,

non-electrified are;S-of the world, such as the Pacific Islands. An analysis of photovo1taic

applications for remote Pacific Islands was performed for DOE during Phase II of this project. Several

village level uses of photovo1taics for intermittent power were found to be cost competitive with

diesel generation at current prices.

Estimates of annual photovo1taic cell production in the United States vary; however, 1981 sales are

believed to have been in the 4 to 5 MWp range. Industry production capacity is thought to be about 10

MWp annually, with several new blocks of capacity additions announced but not yet operational. Over

one-half of United States photovo1taic sales were in the export market in 1980. Market projections

suggest that this trend will continue through the early 1980s.

Owing to site-specific economics, as well as to the variability of the solar resource, it is

difficult to generalize about the variability of the solar resource, and it is difficult to generalize

about the size range of application currently open to photovo1taics. Still, it is generally believed

that photovo1taic systems now conpete favorably with diesel or gasoline generator costs in sizes up to

about 10 kW, taking into account, the world price of petroleum, remote system-servicing and fuel

delivery costs.

The modularity of photovo1taics makes it an attractive technology for consideration in the

Pacific. It allows the initial installation of small systems throughout the many dispersed, low energy

18
demand centers while permitting new increments of capacity to be added easily as the power needs of the

users grow. Modularity also preserves the initial investment in system hardware since new increments

can simply build upon existing modules. Many land-intensive energy technologies are inappropriate for

the land-constrained islands. Photovoltaic systems can be roof-mounted, often directly on the buildings

they are intended to serve. Seventy-two square meters can yield 4 kWp. Most remote Pacific Islands

have municipal or other government buildings sturdy enough for such applications. Finally, the low

maintenance requirements of photovoltaics, adds value to the technology as technical expertise and

energy system support infrastructure are in short supply throughout much of the Pacific region.

Additional Reading:

P. Hersch and K. Zweibel. Basic Photovoltaic Principles and Methods. SERI/SP-290-l448, February 1982

(Solar Energy Research Institute, Golden, CO).

P.D. Maycock and E.N. Stirewalt, Photovoltaics: Sunlight to Electricity in One Step. 1981 (Brick

House Publishing House, Andover, MA).

D. Dorn. "Photovoltaics--Current Status and Future Projections." October 19, 1981. Lawrence

Livermore Laboratory, UCID-19222.

D.A. Schaller and R. Larson. "Photovoltaic Applications for Remote Island Needs." December, 1982

(Black Hawk Associates, Denver, CO).

R.L. Watts, S.A. Smith and R.P. Mazzucchi. Photovoltaic Product Directory and Buyers Guide. June

1981. (Pacific Northwest Laboratory, Richland, WA).

SOLAR HOT WATER

Solar water heating is a principle application of low temperature solar thermal energy systems.

Flat plate collectors absorb the sun's rays, convert them into thermal (heat) energy, and keep the

energy from being re-radiated, or lost, back to the environment. Captured heat energy is transported

away from the collector plant by means of a heat transfer fluid (liquid or air) for either immediate or

later use. In many cases, no moving parts are required in this transport, as natural convection and

conduction forces may be used. These systems are considered "passive," while systems using motors and

pumps to move the transfer fluid are classified as "active."

Passive thermosiphon systems operate entirely by natural convection and gravity. Income water

heats in the collector, warms, and rises to a storage tank where it displaces cooler water at the

bottom of the tank. This cooler water returns to the collector, heats and convects back to the storage

tank, getting progressively warmer in each pass through the collector. Passive systems are ideal for

water heating in environments such as the Pacific Islands where there is no danger of freezing

temperatures.

Active systems feature collector panels on the exterior of buildings or mounted on the ground.

Their transfer fluid is moved from the collector to storage via pumps, valves and temperature control

systems. Because freeze protection is not a design concern in the Pacific, potable water may be used

as the transfer fluid.

The design of low-temperature systems depends most strongly on the quantity of isolation received

on the collector. Other important variables affecting the design are humidity, wind, hourly, daily and

seasonal temperature differences; and the performance of a system. Insolation ranges in the Pacific

are more than adequate for the operation of solar hot water systems.

Low-temperature solar thermal systems for heating water, are a market-ready technology. More than

200 United States companies now manufacture low-temperture active solar systems for heating water and

space. Some 7000 companies are involved in the installation of these systems nationwide. Over $45

million in solar hot water system sales were recorded in 1980. Annual sales growth has averaged more

than 40% over the past five years.

Within the United States. manufacture and sales of passive solar hot water systems is more

difficult to gauge. Many systems have been user-built and installed, thus falling outside the sales

accounting system established for active system manufacture and distribution.

19
The performance required of a solar water heating system is a function of the" number of systems

users, the amount of hot water required on a daily basis, the time of use, and the temperature of water

needed. Where there is little need for hot water, the attractiveness of solar or any other water

heating option may be limited. In the tropics, bathing with cool water may actually be preferred.

There are other less discretionary uses in hospitals or in food handling, for example, where solar hot

water systems could be easily applied.

In most Pacific Islands villages, there will be neither the demand nor the infrastructure to

support solar water heating technology. Insufficient roof supports and the absence of distributed or

pressurized water systems, combine to limit opportunities for solar hot water production. In urban

areas, many consumers have significantly reduced their hot water use or even eliminated it as

conventional energy costs have risen. It is expected. therefore, that solar water heating will find

its principal use as a fuel-saver in urbanized areas where the use of electricity energy. in lieu of

less-valuable thermal energy, can be avoided. Urban areas in the Pacific will also have the necessary

water distribution systems and a more structurally sound housing stock available to support

roof-mounted systems.

Additional Reading:

United States Department of Energy. New and Renewable Energy in the United States. June, 1981.

TREE FARMING FOR ENERGY

Burning biomass in the form of wood is the oldest form of energy conversion. Over sixty countries

rely on wood for more than 25% of their total energy needs. Extensive studies of plantation tree

farming for gasifiers and dendrothermal power plants are underway in Southeast Asia.

Ninety percent of the tree harvest in the tropics is for fuel. Natural tropical forests can be

highly productive under management, although they commonly stabilize at much lower levels in the

absence of regular harvest. Annual yields of 35 to 55 tonnes of fresh wood per hectare (15 to 25 tons

per acre) are achieved where moisture is not limiting. These yields are equivalent in heating value to

60 to 90 barrels of oil. Large area management on marginal soils, however, can be expected to yield

about half these amounts.

Tree farms are an attractive option for Pacific Islands, but many issues must be considered. Once

established, tree farms carry a minimal maintenance cost, stabilize soil, and protect the environment.

Nitrogen-fixing species can be chosen, leading to soil enrichment. High protein, leafy co-products of

the wood from the trees can be marketed as animal feed.

Pacific Basin geography includes two types of islands. The "high islands" are tree covered and

often irregular, with steep slopes. The low coralline atolls are flat and support little tree

vegetation, often restricted to coconuts whose husks and shells constitute a major energy source.

Ecologically, the United States Pacific Islands are of two major types. Those generally north of

10 N latitude are dryer (less than 250 centimeters or 100 inches of rain annually), more prone to

typhoon damage and more susceptible to weedy grass cover and fire damage. The more equatorial islands

are much wetter (300-450 em or 120-180 inches annually); not so subject to typhoons and more commonly

covered with rich tropical forest. The choice of fuelwood species would be quite different for these

two ecological systems.

Ecological effects associated with tree farming in the western Pacific are complex. Planting and

harvesting of tree farms must be carefully managed to assure continued productivity. Single species

stands of energy crops present unique problems since they tend to be ecologically fragile, that is they

may be subject to massive damage caused by stress, pests or diseases. Monocultural stands of trees may

be sensitive to fire and will probably also be sensitive to the high winds accompanying tropical storms

and typhoons. A stand of giant leucaena (koa haole) on Saipan was damaged recently by a typhoon. The

trees are continuing to grow normally.

The issues of land use, nutrient provision, water availability, pest and disease control and soil

quality maintenance all must be addressed. Land availability is a major issue for many Pacific

Islands. Some islands are divided into small family-owned tracts~ allowing only the option of

cooperative tree farming. Other islands are largely in public ownership.

20
.The whole photosynthetic process is of low efficiency; typically much less than 1% of the solar

energy falling on a plot is conver~ed into usable product. For equivalent electrical energy

production, the area required to be dedicated for a tree plantation (8000 ha for 10 MW) would have to

be forty times as much as might be required for.a salt-gradient solar pond. Large scale farming has

not been a cultural tradition of the Pacific Islanders. Relatively small numbers of people have the

motivation or experience to develop and manage large farm enterprises. Those that have existed have

been based almost entirely on expatriat labor.

While the use of tree farms to generate electricity has not been studied in detail for the Pacific

Islands, it has been for several sites in the State of Hawaii. As early as 1979, C. Brewer and Company

were leading a study of eucalyptus trees, involving planting of 325 ha (800 acres) of test plots on the

island of Hawaii. The Hawaii Natural Energy Institute led another study on the use of the giant

leucaena as a cultivated energy source for the island of Molokai. Under tropical conditions, this

fast-growing tree can be harvested every three to four years to yield about 30 dry tonnes of wood chips

per hectare. The HNEI study came to the conclusion that a tree farm on Molokai might be able to

provide wood chips as a fuel for an electrical generation plant at a capital cost of about $l,200/kW.

If the cost of boilers and generating equipment (about $l,300/kW on Guam) is added to this, a total

capital cost of about $2,500/kW might be a reasonable estimate. Alternatively, the wood could be

gasified and the resultant low BTU gas used to fuel internal combustion engines. Use of existing

engines and generators would lower the initial capital cost.

Biomass yield per hectare per year is ultimately the single most important factor governing the

suitability of tree farming. Yield values are not available for pertinent tree species in the United

States territories and such data must be obtained before reaching conclusions on possible use as a

means of generating electricity.

Additional Reading:

Ramsey, W.J., "Energy for Biomass: An Introduction and Technical Overview," Lawrence Livermore

National Laboratory, UCIR-143l, February 5, 1981.

Brewbaker, J.L., "Giant Leucanea (Koa Haole) Energy Tree Farm, An Economic Feasability Analysis for the

Island of Molokai, Hawaii," Hawaii Natural Energy Institute, HNEI-80-06, September 1980.

WIND ENERGY CONVERSION

Wind energy is the kinetic energy associated with the movement of large masses of air resulting

from uneven heating for the atmosphere by the sun. Wind energy conversion systems transfer this

kinetic energy into both mechanical and electrical energy. Wind energy systems have been used in

mechanical water pumping applications for centuries. Since 1900 they have been used to generate

electric power.

There are two principal wind machine designs; horizontal-axis systems with blades mounted on

towers and yawed to face into the wind; and vertical-axis systems with vertical rotors that operate

with the wind coming from any direction. The vertical-axis wind turbine design has the potential to

save on construction and maintenance costs because the expense and upkeep of a tower could be avoided.

Both horizontal and vertical-axis wind generators are being sold commercially in the United States;

however, horizontal-axis systems dominate the market. Modern wind turbine systems have been designed

to convert as much as 40 to 50% of the kinetic energy flowing through the swept-area of the rotor

blades into rotary power.

Wind turbines are rated according to their electrical output at a specified wind speed. For

example, a hypothetical 2 kW wind turbine will not attain its 2 kW output (per unit of time) unless it

is operating at or above its rated wind speed (e.g. 9 meters per second). The economic value of the

technology cannot be forecast for a given site, then, without a good understanding of the wind

characteristics at the site. Preferably, wind speed data should be recorded and statistically analyzed

over hourly, daily and seasonal increments for periods of one or more years. At a minimum, data should

include both wind speed and direction, and should be recorded at or very near, sites intended for

machine installation.

Most small, commercially available wind machines require wind speeds of from 2.7 to 5 meters per

second (5.6 to 11 mph) for system start-up and speeds of 10 to 15 m/s (22 to 33 mph) before full rated

output is achieved. According to this criteria, data for many recording stations in the Pacific are

not sufficient for 'system start-up, much less operation at rated capacity. It must be emphasized

21
however, that some electricity will still be produced at speeds below rated machine velocity.

exact amount and value of this increment of maximum achievable power can not be known for any

the Pacific without more thorough data collection.

The

site in

Siting is a critical consideration in planning a wind generator application. Performance and

economics of the system are closely related to the wind speed at an intended site. An average annual

wind speed of 6.6 meters per second compared to 5.3 meters per second would reduce power costs of

similarly rated machines at different sites by about one-half. Because the wind resource varies from

one site to another, resource assessment data are usually not valid beyond the immediate area in which

they are collected. Furthermore, the extractable power in the wind varies as the cube of the wind

speed. A small change in wind speed can therefore result in a large change in the amount of power

available to the user. Gusting, prolonged calms, and other variances in wind flow can significantly

affect the economics of wind energy conversion at a given site.

Wind turbines do not operate at full capacity all the time. At extremely windy sites, they may

reach 40-50% of rated capacity. At more typical sites, an operating capacity of 25-35% is more

common. Capital cost is by far the greatest determinant of the cost of energy obtained from a wind

turbine. As a result, the greater the longevity of a system, the more favorable its cost of energy

will be on a life-cycle basis. Information about wind system reliability and lifetime is scarce,

particularly, for the newer generation of turbines. Additional operating experience from these

machines will be needed to establish and verify the true economics of system operation. At favorable

United States mainland sites, wind systems have cost about $600 per installed kilowatt, and have been

projected to produce energy at 3t to 4t per kilowatt-hour by the mid-1980s. In the Pacific, costs will

be higher.

Wind energy

energy is already

to be favorable.

capital costs and

is being developed and commercialized in both the public and private sectors. Wind

cost-competititive in many specialized applications where the wind resource is known

Mass production, technology advances, and larger machines will help drive down

contribute to greater system reliability.

In the United States, about thirty-five companies are engaged in the manufacture and sale of

small-scale wind generators. Four other companies are producing mechanical wind energy machines,

largely for water pumping. Sales remain small, although they are growing rapidly. In 1980 there were

about $10-15 million in sales of large and small machines totaling about 5 MW of capacity.

Water pumping and other mechanical applications are practical uses of wind power, though electric

power generation is probably the principal application of the technology in the United States today.

Small electrical systems (1-100 kW) are being employed on-site for residential and farm uses;

intermediate scale systems (100 kW-l MW) are being considered for large farms, irrigation systems and

small utilities; systems larger than 1 MW are expected to be used in electric utility and industrial

applications. Simple mechanical wind systems, used to pump fresh water from shallow lens wells, may be

one of the most likely applications on many Pacific atolls.

Wind energy is intermittent. If continous power is required, some provision must be made for

energy storage and back-up for wind energy systems. One option is to combine wind systems with pumped

water storage or with solar, or conventional, electrical generating capacity in a hybrid system that

would provide continuous electric power. At present, there are only a few years of information

available on the performance of wind systems interconnected to conventional electric grids. As the

wind turbine industry matures, this unknown is expected to be more completely understood.

In areas where intermittent power sources are acceptable, wind generators can provide a good match

with small end uses. Wind systems are modular and can be expanded incrementally as demand grows with

no loss of the capital investment in the original machines. While wind machines must be situated where

the resource is available, wind systems have minimal land requirements. At some sites, land use, or

cultural or environmental constraints might arise.

Concerns about wind energy conversion also include the reliability of generators installed and

left to operate in remote areas. Regular maintenance i.e., oiling, is necessary to insure continued

reliable operation of wind turbines. Servicing and repair of generators in the field will require both

expertise in labor and repair equipment such as cranes and shop facilities. In remote, rural

environments, such needed equipment may be either non-existent or in extremely limited supply.

Likewise, trained personnel may also be unavailable for more than the most elementary of servicing

needs. These constraints strongly suggest that a minimum level of industrial infrastructure should be

in place before widespread introduction of wind energy conversion technology in remote areas can be

expected to be successful.

Within the Pacific, concern remains that the continual operation and maintenance of the technology

will prove unachievable given the limited infrastructure and lack of skilled labor throughout the

22
region, particularly on outer islands. In addition, the frequency of tropical storms throughout the

entire equatorial Pacific will require special system designs (site hardening, tilting towers, etc.)

which may still leave the machines vulnerable to damage or destruction in the event of worst-case

storms. Most wind turbines will suffer damage at wind speeds twice their rated capacity. For this

reason, turbines have a cut-off mechanism to disengage the rotors at a certain velocity. With or

without a cut-off mechanism, most machines will be damaged by typhoon winds above 25 m/s (50 mph) and

there is always the danger of damage from wind-driven debris. Even in mild weather, corrosion will

affect the metal components of wind machines and towers on the islands, and known metal protection

methods and isolation of parts may be insufficient to prevent structural decay.

More fundamentally, the wind resource of all the island groups is poorly understood. Data have

been recorded only at airfields on many islands, often in poorly designed locations. Observations have

been for climatic rather than energy conversion analyses, and are therefore of limited use. Also, some

upward adjustment of wind speed at existing data collection stations should be done to account for

greater wind speeds above the near-ground-surface (i.e. 25-foot evaluation towers now in place). Given

the sensitivity of wind system economics to fluctuations in wind speed over time, not enough

information has been gathered to support even theoretical forecasts of the potential of the resource at

any given site.

Wind machines already installed in selected Pacific locations have suffered a variety of start-up

problems due principally to their not being designed for remote island use. The installation and

repair of systems on even the most industrialized islands has been hindered due to the absence of

available cranes. Some corrosion and structural flaws were found on one machine; another was taken out

of service due to uncertainty over its ability to survive a passing typhoon Finally one machine was

destroyed when a crew lost control of the tower pole during machine tilt-up. The systems were designed

for mainland application and initial problems should perhaps have been expected. However, the

experience to date illustrates the range of technical and human barriers to be overcome before wind

energy conversion in the Pacific can succeed.

Additional Reading:

A.S. Mikhail, Wind Power for Developing Nations, SERI/TR-762-966. July 1981.

B. Green, et al., A Guidebook to Renewable Energy Technologies, ERI/SP-744-1126. December 1981.

MUNICIPAL SOLID WASTE

Municipal solid waste (MSW) refers to garbage, trash and other types of urban waste which

traditionally has been buried in sanitary landfills or incinerated. Because MSW contains organic,

combustible materials in concentrated form, it can also be used as a source of energy for the

production of electricity or methane gas.

Several basic technologies are used to recover energy from urban wastes. The first and simplest

of these is direct incineration, which involves burning the matter in waterwall combustors to produce

steam. The second approach involves mechanical processing in which the waste is separated and shredded

to produce a refuse-derived solid fuel (RDF) suitable for combustion. A third method, called

pyrolysis, consists of heating the garabage in the absence of air to convert it into liquid, gaseous,

or solid fuels. Another process, bioconversion, uses biological means to decompose the wastes into

methane-rich gases.

Burning MSW to produce steam is a proven and commercially available technology which has been in

use throughout the world for over twenty years. A waterwal1 combustor is a furnace with water tubes in

which the heat generated by combustion converts water to steam. It is equipped with special grates to

burn the waste just as it is received or after it has been mechanically separated. The steam is then

used to generate electricity for industrial processes or for heating and cooling buildings. Metal and

glass may be recovered from the ashes following combustion.

Mechanical recovery processes generally involve separation of the waste into combustible and

noncombustible components either at the source or by mixed-waste processing at a central site. In the

latter method, the material is shredded to near uniform particle size (a maximum of 10 to 15 em) which

then goes through a separation process to segregate the combustible organic fraction from the inorganic

part which will not burn. The fuel derived (RDF) can then either be burned by itself or used as a

supplemental fuel.

23
RDF has

transported.

requirements

stage.

several clear advantages. It is in a form which can be conveniently stored and

It can be produced to a constant, specified standard to meet the handling and burning

of a boiler. Its disavantage is that significant costs are entailed in the processing

Pyrolysis is a process that causes chemical change by heat. It can produce or recover gas with

low to medium energy content, oil-like liquids or solid residue with a high heating value. Pyrolysis

systems are not generally available, are classified as advanced technology, and must be considered very

long-range or unsuitable options for the Pacific.

Bioconversion uses living organisms to convert organic matter into useful energy forms. Anerobic

digestion breaks down the waste in a digester to produce methane-rich gas under controlled conditions.

Only about 50% of the original volume of organic solids is changed to gas, leaving a significant amount

of material which must be disposed of. This technology is still in the development stage and is not

commercially available.

Another bioconversion process which appears promising is the recovery of methane from old or

active landfills. In this method, wells are drilled into the landfills to extract bacterially

generated gas.

An important factor in determining the technical and econimic feasibility of an MSW-to-energy

conversion system is an adequate description of the quantity and composition of the waste material

produced. As part of the assessment activities undertaken in this project, a study has been

commissioned to assess the quantity and quality of wastes produced on Guam and Tutuila and to evaluate

the technical and economic viability of an MSW conversion system at those two locations.

The energy content of the wastes is quite variable, depending on the composition and moisture

content of the material collected. The heating value of the waste on Oahu received in dry weather has

been estimated at 2500 cal/gm (4500 Btu/lb) while the rainy weather value can be as low as 1600 cal/gm

(2900 Btu/lb) with a moisture content of 55%. For separated, dried and shredded refuse, the heating

value expected is 3770 cal/gm (6800 Btu/lb) and for moisture and inert-free material (e.g., RDF) the

figure is given as 4500 cal/gm (8100 Btu/lb). A barrel of oil in comparison, yields about 1.46 K cal

(5.8 million Btu).

The feasibility of MSW use in producing power is highly site-specific and depends on a number of

factors such as the availability of an adequate supply of MSW within a reasonable distance of a

generating plant; methods used for collection, processing and conversion; and the relative difficulty

and expense of alternative disposal methods with respect to the latter. Conversion of wastes to energy

also has the benefit of relieving land requirements needed for landfill operations. It is applicable

primarily to urban centers of relatively high population density. On most inhabited islands in the

Pacific, with the possible exception of Guam and the island of Tutuila in American Samoa, the

population density is probably too low to support the use of this technology in the foreseeable

future. Where it is applicable, the maximum contribution of MSW for power generation will be limited

by the availability of the resource of 5% or less of total electricity requirements.

Additional Reading:

Patrick, 0.1., Chun, M.J. Young, R.H.F.: "Solid Waste Management Plan for Truk, Ponape and Majuro,"

University of Hawaii, March 1977.

GEOTHER.'1AL

Geothermal energy is obtained from heat within the earth. The technology for producing

electricity from geothermal resources is at a high state of readiness for the Pacific Islands.

Commercial exploitation of geothermal energy has led to its use in electric power generation, space

heating and cooling and industrial processing. About one-third of geothermal applications around the

world are for power production; the worldwide installed geothermal electric generating capacity is

about 2500 MW. About 30% of this use is in the United States _Approximately 8300 MW (thermal) of

geothermal energy is used for space conditioning, water heating and agricultural and industrial

applications. Geothermal energy is used for producing electricity in California, Hawaii, New Zealand,

Japan, and Italy.

Resevoirs of geothermal energy are regions within the drillable portion of the earth's crust

(about 3 kilometers) that contain potentially recoverable thermal energy. The three principle types of

24
geothermal systems are hydrothermal, geopressured and hot, dry rock. The hydrothermal system is the

only system of commercial interest now and consists of either a water or vapor-dominated resevoir. The

water-dominated system is the most common and consists of a reservoir of hot water capped by

low-permeability rock or layer of cooler groundwater. Wells drilled into this reservoir produce a

combination of water and steam, depending on the temperature of the reservoir. Vapor-dominated

systems, characterized by high heat flow and low groundwater permeability, occur in only a few places

and consist of nearly 100% steam. Geopressured systems are hot water aquifers containing dissolved

methane trapped under high pressure in deep sedimentary formations. Hot, dry rock systems are

accessible geologic formations with low groundwater permeability. No water is present and energy is

extracted by circulating water through wells connected by manmade fractures in the rock.

Several methods are used to identify geothermal resources. Drilling is the only certain method,

but it is extremely expensive and is usually done after a number of other less expensive and less

certain techniques have been used. These other techniques include geologic mapping of surface

characteristics, geophysical and geochemical methods which rely on measuring unique physical and

chemical characteristics of geothermal systems. Because of difficulties in interpreting data and

because of interferences masking important characteristics, a number of these techniques ar,e used

together. Exploration costs on the United States Pacific Islands would be particularly high because of

the need to bring in equipment and technical help.

Hydrothermal systems are the only systems being used for energy production now and are the only

ones which should be considered for now for exploitation in the Pacific. Electric power can be

produced reliably at competitive costs from hydrothermal reservoirs hotter than about lSO°C.

Geopressured energy is not at that high state of readiness and is best viewed as a mid-term option.

Hot, dry rock is at a lower state of development and systems using this resource will not be on-line

until the 19905.

The general environment in which geothermal resources occur is found throughout the Pacific.

Areas of geologically recent volcanic activity are leading candidates. The presence of hot springs,

geysers, fumaroles and even abnormal geothermal gradients point to a potential resource. Resources on

most small islands in the Pacific are largely unassessed; and because of the costs of exploration and

the absence of clear-cut signs of thermal water, this potential indigenous energy source has been

largely unexplored and unassessed. American Samoa and the Commonwealth of the Northern Mariana Islands

have characteristics that suggest that there may be a substantial untapped geothermal resource.

The most likely application of geothermal energy on the Pacific is for electricity production at a

central facility to meet baseload demand. There does not appear to be surface springs or near-surface

reservoirs that could be easily tapped for small decentralized systems to supply electricity or process

heat. Drilling deep wells for such systems would be prohibitively expensive. Because steam or hot

water cannot be tansported long distances economically, electricity generation must be done at the site

of the well.

There are a number of possible barriers to geothermal energy conversion on the United States

Pacific Islands. Land use and ownership patterns are often an integral part of cultural tradition.

Exploration and development of the resource do not require massive facilities nor extensive land

disruptions, but they can have certain indirect effects, such as land subsisdence or small earthquakes,

after withdrawing toxic fluids. Toxic fluids and toxic or offensive gases, such as hydrogen sulfide,

can be emitted, solid wastes may accumulate and contamination of surface water is possible. As with

other energy technologies on United States Pacific Islands, lack of properly trained personnel is a

large constraint. For geothermal systems, there is the adjed constraint of a need for highly trained

personnel and expensive equipment to assess the resource.

_ Generating power for high-quality hydrothermal steam is economical and electric power from

existing geothermal plants is cost-competitive with power from fossil-fueled facilities. However,

developing geothermal resources usually involves large initial investments for exploration, well

drilling and wellhead equipment. Each installation is unique, requiring specially designed generating

equipment. On the other hand, operating costs for energy conversion are low despite low-conversion

efficiencies. Current geothermal production costs are between I.St and 6t per kWh, with the costs

split about p.qually between field development and construction, and operation of the plant. Costs in

the Pacific would be higher. There is an additional problem concerning uncertainty of how long the

reservoir will last. Once the resource has been identified and the power facility developed,

geothermal systems have the potential to provide significant amounts of Pacific Island base load

electricity production.

Additional Reading:

Solar Energy Research Institute, New and Renewable Energy in the United States of America, Paper

#DOE/S-006, COlorado, 110 p., 1981.

2S
Lawrence Berkeley laboratory and the State of Hawaii J Hawaii Intergrated Energy Assessment J Vol. II J

Alternative Energy Technologies for Hawaii J BerkeleYJ California J 334p., 1981.

HYDROPOWER

Hydropower used to produce mechanical power or to generate electricity is one of the world's oldest and

most widespread renewable energy technologies. Where the resource is present J hydropower can be

readily developed as an economical, environmentally acceptable and renewable source of energy. In the

Pacific J terrain conditions will probably limit the use of this technology to meeting localized

electricity needs with small-scale systems on a few islands. Since hydropower can be considered for

producing mechanical power in only a few rural areas J this section discusses hydropower for generating

electricity only.

By convention, hydroelectric systems are defined by capacity and placed into three categories:

large; capacity greater than 30 MW J small; capacity from 0.1 to 30 MW J and micro; capacity less than

0.1 ~W. Pacific Island aplication include small and micro facilities.

The Physical resources required for developing hydropower are differences in head (elevation)

between the point of water capture and electrical generation J the rate of discharge (water flow), and

the stability of flow over a period of time (reflecting storage capacity and/or high perennial flows).

Essentially, power is directly proportional to head and discharge. The energy produced is proportional

to the power developed over a period of time. When energy is produced over long periods of time J

utilizing the fully-rated capacitYJ the hydropower facility has a high plant factor (exceeds 50%). If

energy is produced intermittently or at less than the rated capacity for long periods J the facility has

a low plant factor (less than 50%).

Man-made resources for developing hydropower include a dam and/or reservoir in the river to

capture the water J a penstock to transport the water J and turbines and generators to convert the flow

of falling water to electricity. The two main types of hydroelectric systems are storage or reservoir

systems and run-of-the-river systems. The storage systems includes a high dam and reservoir to provide

sufficient head combined with water storage to stabilize discharges. The run-of-the river system

includes a small river control structure and has limited or no storage capacity. To develop equivalent

amounts of power for either storage or run-of-the-river types J there are trade-offs between capturing

the potential head and potential discharge. Capturing large flows requires relatively short

penstocks. Developing an equivalent amount of power for low-discharge streams requires a large

elevation difference involving long penstocks and/or large reservoir capacity. Run-of-the-rivee

systems are usually less expensive than reservoir systems because they do not require constructing

large dams and reservoirs.

Special types of reservoir systems include pumped storage facilities and multiple-use reservoirs.

In a pumped storage facility, water is pumped to a reservoir by electrical pumps to take advantage of

excess electrical production. This water is used later to generate electricity. In a multiple-use

reservoir, water from the reservoir can be used for other purposes such as municipal and industrial

water supplYJ transportation J flood control J and waste disposal. Multiple-use reservoirs may make

hydroelectric facilities more cost-effective in the Pacific.

The efficiency of the generating equipment also affects the amount of power produced. Selecting

the proper system includes matching the types of turbine with the available head. Categories of head

and types of turbines include:

Term

High head

Range Turbine Type

Greater than 60 m (197 ft) Impulse J crossflow, Francis

Normal head

Low head

Ultra-low

head

20 - 60 m (66 - 197 ft)

5 - 20 m (16 - 66 ft)

Less than 5 m (16 ft)

Francis, propeller J crossflow

Francis J propeller J crossflow

bulb, tubular

Propeller J open flame, tubular

Small hydroelectric systems use either synchronous or induction generators to convert the power to

AC electricity. Micro systems are often stand-alone systems generating DC electricity and storing this

electricity with a battery system. Because hydropower output can be adjusted to meet changing demands J

26
most systems connected to the central grid can be used to meet peak electrical demands. Where

hydropower is plentiful and where stream flow is high, hydropower can also supply baseload electricity.

The relatively small and masses of the Pacific Islands limit the types of hydropower development

possible. The drainage areas are small, mostly less than 28 square kilometers (10 square miles).

Hence, despite the relatively abundant rainfall, natural streamflows are small and the resulting

hydropower plant application must almost always be small or micro in size. In addition,

run-of-the-river facilities tend to be extremely limited in capacity unless sites with relatively steep

elevation differences are considered. Therefore, economics of scale are normally not possible for

small facilities. Long and costly penstocks may be needed in order to use potential elevation

differences and to achieve significant plant capacities on low-discharge streams. On Pacific Islands,

the best hydro resources are often in undeveloped areas without roads, power lines, or cleared land.

This adds to the expense of developing the resource.

Hydropower is at a high state of readiness for the Pacific Islands. With proper maintenance,

reliability and durability should not be a problem and small plants can run for long periods for low

operating costs. Hydropower could be a catalyst for economic development in remote areas where

installations would be small and relatively simple. Such plants could be built and operated with local

labor because aside from the initial engineering, minimal training is required, and local materials

could be used for most of the construction. Depending on the size and complexity of such a system,

construction time would be on the order of one to two years.

Constraints to development include land availability; access to land; competition for use of the

water with irrigation, municipal and industrial needs; and environmental considerations. As with other

renewable energy technologies the most critical constraints are the lack of technically trained

personnel on the islands and the lack of a reliable parts supply infrastructure.

The costs of developing hydropower systems on the Pacific Islands will vary widely depending on

whether or not a reservoir system is needed, the size of the dam, the length of the penstock, the

remoteness and accessibility of the land, and the type of generating system. The initial capital cost

of the system and the cost of borrowing money are the chief expenses. Once the system is built,

operating costs are low. The installed cost of small-scale hydropower plants ranges from about $800 to

$l300/kW and the cost of electricity produced ranges from about .10t to .SOt/kWh.

Additional Reading:

Solar Energy Research Institute, New and Renewable Energy in the United States of America, Paper

#DOE/S-0006, Golden Colorado, 110p., 1981.

SOLAR THER..'1AL

Solar thermal energy systems concentrate and collect solar energy. They can be built in various

sizes and configurations depending on the temperature demanded by an application. Only direct

isolation can be utilized by concentrating solar thermal systems. Diffuse sunlight cannot be focused

on collector absorbers to achieve the high temperatures required for steam and electricity production.

At least five different teChniques exist for concentrating and collecting solar thermal energy:

1) heliostat-fixed receiver; 2) parabolic dish (point-focus); 3) parabolic trough (line focus); 4)

hemispheric bowl-moving receivers; and S) Fresnel lens. In the first four techniques, the reflector is

most commonly a silver-placte glass mirror. Thr Fresnel lens is molded in plastic and can focus to

either a point or a line. Oil, steam, water, air and other tansfer agents are used to collect thermal

energy in the receiver and carry the heat away for use either in electrical generation or process heat

applications. In each technique, either the receiver or reflector must track the sun at a pace

approximating the earth's rotation (15' per hour). Accurate tracking requires sun sensors, motors and

some type of timing system.

Solar thermal systems can meet a number of energy needs ranging from process heat and electricity

generation to space heating and cooling and water heating. Process heat (steam) up to about 300'C is

readily produced from parabolic trough systems for a variety of industrial uses. Parabolic dishes and

heliostat systems can yield temperatures above 1000'/C for large-scale electricity generation. Heat

engine generators (Stirling, Rankine, Brayton) may be used with point focus systems, while a variety of

internal and external heat exchangers and fluids are being considered in advanced heliostat-fixed

receiver systems.

27
High temperature solar thermal systems have yet to be widely produced. As such, the economics of

their operation remain hypothetical. Early estimates indicate that a cost of $1400/kWe installed

capacity (1979 dollars) may be expected for a large, 100 ~We' system. Few high-temperature solar

thermal systems using tracking collectors have been sold commercially, primarily because of high

costs. Most systems in place nationwide have been constructed in field tests with Federal support.

There are about ten commercial manufacturers of tracking trough concentrator systems. In 1980, sales

reached a value of about $20 million. Nearly half of these systems were sold in the private sector

without government funding. A smaller quantity of point-focus systems have been sold commercially.

Large configurations of high temperature solar thermal systems require significant expanses of

land. A system which is 30% efficient will require approximately 0.7 hectares (1.7 acres) will be

needed to capture 1 MWp of thermal energy. Solar tracking is relatively complex compared to fixed

flat plate systems, and systems may be subject of occasional mechanical or electrical problems.

Skilled labor will likely be required to attend to start-up as well as normal operations. Both process

heat and electricity production applications will require at least some on-site thermal storage

(perhaps with pressurized water or steam) with accompanying costs and land requirements.

Several factors augur against the utility of high temperature solar thermal systems in the

Pacific. Parabolic dish and trough arrays as well as heliostat fields are vulnerable to high winds.

The longevity of such systems could not be assured within typhoon-prone areas of the equatorial

Pacific. The land required for these systems may be unavailable on all but the largest islands. Even

the smallest of systems (1-5 MW), while appropriate for demand levels on Guam and Saipan, may be too

large in capacity by an order of magnitude for most of the small energy demand centers of the Pacific.

Given the early state of technology readiness, the demand for on-site technical expertise to

support a system's operation and maintenance needs will be great. Such expertise is not now found in

the region and would have to be imported for the near to mid-term throughout the Pacific Islands.

The most fundamental obstacle to the future use of solar thermal technology is the lack of a

defined direct solar insolation resouce. Climatic data recorded at weather stations across the

equatorial region for the 1979-81 period indicate a significant percentage of cloud-cover over the

observation stations. Little daily or monthly variance in this cloud intensity is apparent. If

analysis of long term cloud cover and percent sunshine data substantiate these tentative findings, most

of the region will be precluded from using concentrating solar thermal energy systems no matter what

other implementation criteria can be met.

Additional Readings:

LN. Tallerico. Description and Assessment of Large Solar Power Systems Technology, 1979, SERI/SAND

79-8015 (Sandia Laboratories, Livermore, CA).

G.W. Braun. "An Overview Presentation of the United States Solar Thermal Energy Systems Program,"

1980, SERI/SP-733-526 (Solar Energy Research Institute, Golden, CO).

4th Semiannual Conference on Advanced Solar Thermal Technology Programs, 1979, SERI/TP-312-492 (Jet

Propulsion Laboratory, Pasedena, CA).

United States Department of Energy and United States Department of State. New and Renewable Energy in

the United States of America, June 1981, DOE/S-0006 (United States Government Printing Office,

Washington, D.C.).

SALT-GRADIENT SOLAR PONDS

Many western Pacific Islands have solar insolation levels high enough to support the use of saltgradient solar ponds, but high capital costs and other constraints may limit the application of the

technology. Salt-gradient solar ponds are bodies of saline water, three to five meters (10 to 16 ft)

deep, capable of delivering thermal energy on a continuous, 24-hour-a-day basis. In electrical

applications, solar pond power plants can deliver baseload power from 80% to 90% of the time.

The term "solar pond" is commonly used to describe energy c:rnversion systems which use a direct

absorber of solar energy and as a storage medium for the thermal energy collected. The salt gradient

solar pond is usually a pond in which the lower, absorbing depth is stabilized against convective

motion by a salt gradient. The deeper portion has a higher salt concentration and hence a higher

density, while the upper portion of relatively fresh water serves 'as the insulating layer. Energy is

28
extracted from the deeper portion either by an in-pool heat exchanger or by circulating the hot brine

through an external heat exchanger. The energy so obtained can be used for space heating, process hot

water or hot air, desalination, crop drying, power generation or the production of liquid fuels such as

ethanol.

Salt-gradient solar ponds have three distinct zones. The upper convective zone of primarily fresh

or brackish water (sea water can even be used) is from 0.15 to 0.3 meters (.5 to 1 feet) thick. The

middle non-convective zone of increasingly salty water is from 1 to 1.2 meters (3 to 4 feet) in depth.

The bottom or storage zone, which is usually saturated in salt and is convective, is typically 1 to 4

meters (3 to 13 feet) in depth.

The upper zone is not a designed component of the solar pond but forms naturally as a result of

rain, runoff and other natural occurrences. It can be a detriment to pond efficiency because much of

the thermal energy which is absorbed by the layer is lost due to convection and evaporation. It is

also subject to wave action which can stir up the lower layers and destroy the thermal storage

capability of the pond. The middle or non-convective zone is the key energy absorbing component in the

solar pond. This zone performs similar to the glass or plastic cover on a solar flat plate collector

because it is relatively transparent to the short-wavelength incident solar energy but is opaque to

infrared, long-wavelength re-radiation from the warmed water below. This makes the non-convective

layer a good thermal insulator against heat loss from the lower storage layer. The bottom storage

layer has a high density created by the high salt concentration. While it is a convective layer, it is

insulated from the outside world by the non-convective zone and hence it can and does accumulate solar

energy in the form of heat. It i"s this hot saltwater in the storage zone that provides the thermal

energy needed to produce the electricity.

In a high insolation area the solar pond will collect and deliver thermal energy at an efficiency

of 15 to 20%. In lower insolation areas, the efficiency may drop to 12%. Conversion of lowtemperature thermal energy similar to that obtained from a solar pond has been accomplished at an

efficiency of 8%. Combining these two efficiencies, the overall efficiency of conversion of solar

energy to electricity by a solar pond is expected to range between 1% and 1.5%. The implication of

this low efficiency is that in order to be cost effective, the solar ponds and the conversion equipment

must be relatively inexpensive. In practice, this means that the berming required to form the pond

itself must be easily done. The berm and pond bottom must be made of clay or some other material

impervious to the brine solution. Many of the existing experimental solar ponds have used liners of

plastic or some other membrane, but this has added significantly to the capital costs.

Site

should be

potential

location also has a strong influence on the practicality of solar ponds.

flat, should consist of impervious soils, no water should flow beneath or

salt brine leakage form the solar pond should present no danger to nearby

Ideally the site

near the site and

water supplies.

In both the United States and Israel, solar ponds have been built and research is being

conducted. The United States focus has been on solar ponds for thermal use with the bulk of the work

being done in Ohio and New Mexico. Israel, on the other hand, has concentrated on generating

electricity. Research in Israel has been led by a private company, Ormat Turbines Ltd. Ormat has had

extensive experience culminating in a 7500 square meter pond located at Ein Bokek on the Dead Sea. The

solar pond has a steady state capability of 15 kWe, however the power conversion unit it capable of

higher output and the pond has yielded 150 kWe for short periods, thus proving that a solar pond can be

used as a battery. The first quarter section of a one square kilometor pond has just been built and 1S

expected to give a steady state power of 1.25 MW. When completed, the one square kilometer pond is

expected to have a capacity of 5 MW.

Capital costs for such a pond are projected by Ormat at about $lOOO/kWe at the 20 MW size and

$700/kwE at the 40 MW size. However, recent data fram a SETS, INC. of Honolulu, Hawaii study of the

applicability of salt-gradient solar ponds to the Western Pacific Islands indicate that the first

shore-based pond there might have a capital cost in the neighborhood of $20,000/kWe installed. Further

development might lead to capital costs in the range of $2000/kWe installed.

To summarize, most of the western Pacific Islands have sufficient solar insolation to support a

salt-gradient solar pond development. Projected land dedication requirements are relatively modest

with 10 MWe, perhaps, needing two square kilometers of pond. However, not all of the islands have

suitable land that can be dedicated for this purpose. w~ile some study has been devoted to siting a

solar pond in a lagoon or on a reef the additional costs and the uncertainty of the heat flows place

this technology much further into the future. In addition, since many islands obtain their fresh water

from the Herzberg lens underlying a portion of the island, brine leakage from a salt pond could have

serious consequences. The best current estimates available for island installations in the western

Pacific, center about $20,OOO/kWe output, dropping to $2000/kW as experience accumulates.

29
Additional Readings:

French, R.L., "Solar Ponds: Using Saltwater to Produce Power,"

Industrial Research and Development, December, 1981.

Dorn, D.W., "World Activity in Solar Ponds," Lawrence Livermore Laboratory, UCID-18900, January 20,

1981.

Bronicki, Y.L., "Electricity from Solar Ponds," Chem. Tech., August, 1981.

OCEAN THERMAL ELECTRIC CONVERSION

By far the greatest reservoir of renewable ocean energy exists in the tropical areas in the form

of the temperature difference (DT) between solar-heated surface waters and the cold water availablefrom the depths. This DT of 20-25 degrees Celsius, which varies with site and season can be used to

drive a heat engine and produce electricity through application of a process known as ocean thermal

energy conversion (OTEC).

Recent milestones of note in demonstrating this technology are the fielding of the Mini-OTEC barge

mounted system off Keahole Point in Hawaii and the shore-based Japanese designed and installed OTEC

plant on the Republic of Nauru in the western Pacific. The ~ini-OTEC was placed in service on August

2, 1979, becoming the world's first at-sea, closed-cycle OTEC plant to generate net energy. It

operated for three and a half months, generating a gross output of 60 kW with a net output of 15 kW.

The Nauru plant, which began operating on October 14, 1981, achieved a gross output of 120 kW with a

net of 31 kW. Both plants were of unoptimized design and built to operate for a short period of time.

Two basic power cycles have been suggested for the conversion of ocean thermal energy into

electricity. The closed-cycle system pumps warm ocean surface water into a heat exchanger (evaporator)

where a second fluid (such as ammonia or freon) with a low boiling point is vaporized and allowed to

expand through a turbine, which in turn drives an electric generator. Upon leaving the turbine, the

vapor is condensed in a second heat exchanger (condenser) with cold water drawn up from deep in the

ocean through the cold water pipe. The condensed fluid is pumped back into the first heat exchanger

and the cycle begins again. The process is similar to that employed by an ordinary steam power plant.

In an open-cycle system, a portion of the warm surface water is flashed into vapor by drawing a

vacuum over it. This vapor flows through a turbine, generating electricity as in the closed cycle, and

this is condensed back into water by the cold water drawn from the depths. By virtue of its

vaporization and recondensation, this water is now fresh, and can be reclaimed and used as a source of

fresh water. It has been estimated that more than 2.8 million liters (750,000 gallons) per day of

fresh water per megawatt of power capacity can be generated in an open-cycle system.

OTEC plants can be constructed on-shore, offshore on tower mounted platforms, in deep water on

moored platforms, or in the open water as grazing plantships. A number of alternative applications may

also be ultimately possible with OTEC. In addition to the possibility of producing fresh water using

the open-cycle system, the cold water brought to the surface by all OTEC plants is nutrient-rich and

suitable for mareculture. Hydrogen and oxygen can be produced through electrolysis, ammonia can be

synthesized in combining the hydrogen with nitrogen obtained from the air, and synthetic fuels such as

methane and methanol can be produced where carbon resources are available.

The available global resources of ocean thermal energy far exceeds known requirements, and are of

the highest quality in the region between 20 0 N and 20 0 S latitudes, where most United States Pacific

Islands are located. An important point to note is that this energy source is virtually inexhaustible

and available day and night, and is capable of producing baseload quality electricity. For most of the

Pacific Islands, which are characterized by steep offshore profiles, access to the cold water is

relatively close to shore, making possible consideration of land-based or near shore plant sites.

An inherent difficulty in using this resource arises, however, because of its relatively low

thermal quality, especially when compared to conventional forms of energy. With a DT of 22°C, the

maximum theoretical efficiency achievable in a heat engine is only about 7%, with practical

efficiencies attainable on the order of about 2%. In comparison, a fossil-fired plant can reach

efficiencies of 35% or higher. But low efficiency in the case of OTEC is acceptable because the fuel

is limitless and free. The low efficiency simply means that enormous quantities of water, both warm

and cold, must be processed, involving very large pipes, pumps and heat exchangers on a scale which

extends beyond current practice. For instance, for a 20 degree DT, each kWe of generating capacity

requires about 80 square meters, (800 square feet) of heat exchanger surface; and for a 40 MWe OTEC

30
plant, the total flow of water required is on the order of the annual flow of the Potomac River. If

this flow were to be accommodated by a single pipe, it would require a pipe of more than 10 meters in

diameter extending a thousand meters below the surface of the ocean.

Although the technical problems encountered in the design and construction of an OTEC plant are

formidable, this technology does not require any major scientific breakthroughs to be achieved.

However, no commercially sized application has been made to date, and considerable questions remain

regarding the cost of the technology. A review of nine available studies of OTEC costs showed a range

of capital costs in 1980 dollars of $1600 to $4300 per kilowatt capacity, and a range of electricity

costs of 31 to 96 mills per kWh for island applications. These estimates were generally based on plant

sizes on the order of 300-400 MW capacity, far too large for Pacific Island use. The economic size of

OTEC plants tends to restrict their applicability. The larger load centers in the Pacific, Guam,

Saipan and American Samoa, could accommodate small OrEC plants, and cost estimates for plants of a size

suitable for such locations increase significantly. A major factor in reducing cost will be the use of

aluminum heat exchangers to replace the titanium heat exchangers now used.

The environmental effects of OTEC plants are expected to be confined to the shore area where

transmission lines cross the surf line from offshore plants or to the immediate plant area for onshore

plants. If large volumes of cold bottom water were discharged near the surface some localized

environmental effects could occur. No cultural barriers to OTEC are anticipated.

Additional Reading:

Dugger, Gordon L., "Ocean Thermal Energy for the 80's," AIAA Student Journal, Summer, 1979.

Krutzsch, W. C., "A State of Art Look at OTEC Pumping Requirements," 1979 Offshore Technology

Conference "The Ocean Option," SERI/SP-732-334, May 1980.

Gritton, C. G. et a1., "Quantitative Evaluation of Ocean Thermal Energy Conversion (OTEC)," Rand

Corporation, R-264~DOE, August 1980.

"Full Details including Technical Data on Japanese OTEC Demonstration Plant," Solar Ocean Energy

Liaison, Vol. 6, Nos. 4, 5, April 1982, May 1982.

Yuen, Paul C., "Ocean Thermal Energy Conversion: A Review," Hawaii Natural Energy Institute, October

1981.

BIOGAS

Biogas is a generic term used for gaseous fuel products which can be obtained from biomass

material by means of several conversion processes.

One such process uses anaerobic bacteria in a digester containing animal wastes, high-moisture

terrestial materials such as cane trash and sweet sorghum, or acquatic crops such as kelp and algae.

The anaerobic digestion process begins with bacterial action to hydrolyze complex materials such as

cellulose and proteins into sugars. These sugars are then fermented by acid-forming bacteria to

produce simple organic acids, and finally, methane-forming bacteria reduce the acids to methane and

byproduct carbon dioxide. The resulting product, an approximate 50-50 mixture of the two gases, has an

energy value of about 44 kCal/liter (500 Btu/cubic foot). It can either be burned directly or

transported via pipeline after scrubbing to remove the carbon dioxide. A minor but offensive

byproduct, hydrogen sulfide, is usually present, but can be removed in the scrubbing process.

Liquid effluent from the digester is nutrient-rich, and can be used to grow algae for animal

feed. The residue, or sludge, which collects at the bottom of the digester tank is also a useful

byproduct as high quality fertilizer.

Biogas digesters are ideally suited for integrated farming operations in which animal wastes are

converted into fuel, feed and fertilizer. It requires simple construction skills, can be reliably

operated, and is economical in cost. In Saipan, a digester of about 570 liters (200 cubic feet) has

been constructed of reinforced concrete at a contract cost of $4000. Digesters also can be constructed

with plastic, or with clay bricks at a lesser cost.

Biogas digesters are especially suited for rural farms and villages common in the territories of

the Pacific, where the products of the digester can meet a variety of needs. However, farm animal are

31
often unpenned, so wastes are not collected, and many islanders have a strong cultural aversion to

handling wastes.

Thermochemical conversion is another means of obtaining a gaseous fuel from biomass. In its

simplest method, a product commonly known as producer gas is generated by heating wood chips in a kiln

in the presence of a limited quantity of air. Such air gasifiers are simple to construct, reliable in

operation, and can be designed to process a wide variety of feedstock such as forestry products,

agricultural residues, acquatic crops and municipal solid wastes.

The fuel gas can be used directly to fire stationary combustors such as a boiler, kiln, or process

furnace, or it can be cleaned and used as a substitute fuel to operate engines for power generation and

for transportation. The use of producer gas to fuel an engine dates back to 1881, and portable gas

producers were in common use throughout Europe by the 1920s to fuel trucks and tractors.

The chief drawback of producer' gas is its relatively low energy content which makes it

uneconomical to transport it for any distance.

The most obvious application of this technology would be in small, rural areas of the territories

that are not presently grid connected. The gas could be used to displace diesel oil in generating

electricity, in powering transportation vehicles, and in energizing other equipment. It is estimated

that one ton of dry wood can displace approximately 65 gallons of diesel fuel.

LIQUID FUELS

Displacing petroleum-based liqued fuels used for marine and terrestrial transportation with fuels

obtained from renewable resources represents a difficult problem which will not be solved to any

appreciable extent during this century. However, liquid fuels produced on a small scale, using farm

crops as feedstock, may become important in meeting a variety of local fuel needs in the near future.

Biomass ~s the only renewable resource potentially available in the territories that can be used

as feedstock ~n liquid fuels conversion technologies.

Conversion processes available or expected to become available include biological conversion

involving fermentation to produce ethanol, and direct extraction of oils through pyrolysis. Of these,

only fermentation merits serious consideration at this time.

Ethanol is an alcohol product which can be used for lighting, heating and cooking, cooling and for

transportation purposes. It can also be burned to provide peaking power. The forms in which it can be

used as a liquid fuel are as hydrated ethanol, as anhydrous ethanol, and as an additive to gasoline and

diesel oil. The heating value of anhydrous ethanol is 5600 KCal/liter (84,600 Btu/gal) compared to

8250 KCal/liter (124,000 Btu/gal) for gasoline.

The technology to produce ethanol through fermentation has existed for centuries. The alcohol can

be readily produced from such crops as corn, wheat, sugar cane, potatoes, cassava, beets and Jerusalem

artichokes; from agricultural byproducts and wastes; and from cellulose. Hydrated ethanol in

concentration of up to 12% can be produced in about 30 hours at 76°C (lOO·F) through direct

fermentation. Filtration and distillation are then required to raise the concentration up to 95% (190

proof), suitable for use as a fuel. Anhydrous ethanol is used as an additive to gasoline. The entire

process is energy-intensive, and at best, the net gain in the energy balance is small. To maintain the

net gain, the heat energy input to the process should be provided from other nonpetroleum, renewable

sources as much as possible. This process also requires significant amounts of water, on the order of

16 liters for each liter of ethanol produced •.The major potential hazard posed by the manufacture of

ethanol results from stillage discharge. The stillage contains very high biological oxygen demand and

can be harmful if it is directly released into waterways. One solution to this problem involves

extracting the solid contents of the stillage for use as fertilizer or cattle feed.

While the economics of scale for most industrial processes favor large plant capacities, certain

economies of scale are also. present for small scale ethanol production, which make dispersed on-farm

alcohol production a viable alternative. Some of the benefits s~all scale operation, especially in the

outer rural regions, include lower transportation and capital costs; the availability of local,

field-dried feedstocks; and economies of integration with other farm operations such as the use of

stillage to enrich feed, and the use of methane generated from animal wastes in digestors to furnish

energy for the alcohol plant.

The largest uncertainty concerning the production of ethanol in the territories is the

availability of the feedstock required. Suitable crops for this use must be identified, and teChniques

32
for growing and harvesting them need to be established.

highly site-specific, requiring detailed information for

throughout the islands, and particular care is needed to

Expected yields in terms of

candidate sites. Land is a

utilize it for its greatest

energy output are

precious commodity

benefit.

Some of the answers to these and other questions will be provided by the results of a

comprehensive soil classification survey being conducted by the United States Department of

Agriculture, and a biomass feasibility study now in progress at the University of Hawaii College of

Tropical Agriculture.

OCEAN TIDAL AND CURRENTS

Energy production from the ocean's tidal resource has potential in those near-shore areas with a

great daily tidal range. Tides are longer period waves generated by the gravitational interaction

between the earth and its moon. A mean tidal range of more than five meters (16 feet) is considered

necessary for an economically feasible electric power generation system. Impoundment of ocean water in

a river estuary or bay with narrow inlet is the only method that has been practically employed or that

is being substantially developed.

Design and emplacement of a tidal energy system are complicated because tidal fluctuations may, in

part, be a resonant phenomenon. If so, these fluctuations, and hence the available extractable energy,

may be lessened as portions of the tidal energy are converted. Nevertheless, tidal power systems have

already produced ·useful energy on a limited scale. .

Existing tidal power installations include the 240 MW Rance River project in France (mean tides of

8.5 meters, 28 feet) and the Kislaya Bay project in the Soviet Union. Net electrical output of the

French facility has reached 500 GWh/y, with the total cost of operation comparing favorably with

peaking power obtained from conventional hydroelectric plants. South Korea, Canada, and France are

pursuing additional tidal energy development projects. The successful operation of the Rance River

project suggests that where the tidal resource is favorable, a viable future exists for the extraction

of tidal-based energy.

Ocean current conversion uses large, submerged hydroturbines anchored in the path of a strong

current and connected to an electric generator. In one approach, an axial flow turbine configurtion

can be used to convert the ocean currents' kinetic energy into mechanical (and then electrical)

energy. Such systems are in the early stage of development, and convincing projections as to their

costs of operation cannot yet be made. A major factor in the cost of energy from ocean current systems

is likely to be the expense involved in mooring the hydroturbines. Due to the low power density

represented in even the swiftest of ocean currents, turbines used to capture and convert this resource

must be large. The energy output of such systems is likely to exceed the amount of power that could be

used or afforded in most present demand centers in the Pacific.

All properly placed ocean current devices rely on a steadier source of energy than do wave or wind

devices. In general, the swiftest ocean currents are in the equatorial regions, however, detailed

information on the worldwide distribution of ocean current energy is not extensive. There has been no

characterization of either ocean tidal or currents resources for energy conversion purposes in the

Pacific Islands. Only limited tide data are collected near some harbors and anchorages. Application

if and when possible,will need to be close to demand centers (or an electrical grid) to reduce the cost

and energy losses inherent in long distance cables or transmission lines.

Additional Reading:

J. Cotillon, "La Rance: Six Years of Operating a Tidal Power Plant in France," Water Power Hagazine,

October 1974.

J.B. Miles and B. Shelpuk, Ocean Energy--Waves, Currents, and Tides, 1981 (Solar Energy Research

Institute, Golden, CO).

P.R. Ryan, "Harnessing Power From the Tides: State of the Art," Oceanus, 1980, Vo1.22 (No.4).

United States Department of Energy and U.S Department of State, New and Renewable Energy in the United

States of America, June 1981.

33
ENERGY MANAGEMENT

Energy mangement includes all those technical, institutional, and behavioral measures which can

contribute to the more efficient use of existing energy supply capacity. When they are successfully

applied, these measures free increments of existing capacity for use elsewhere, perhaps in expanding

economic activity that was previously energy-constrained. Energy mangement is thus an energy "supply"

option and has been included in the list of technology choices available to Pacific Island

governments.

Among the several measures applicable to Pacific Island energy management are the following:

o Installation and effective monitoring of electricity meters

o Reform of electric rate structure to reflect more accurately the true costs of production

o Passive cooling retrofit of existing buildings to reduce the heat load and air conditioning

requirements

o Design and implementation of energy efficiency standards for all new building construction

o Substitution of energy efficient end-use devices and removal of unneeded energy consuming

devices wherever possible

o Development of energy data base capabilities to support all energy management decisions

Each of these measures has the potential to assist energy demand management significantly on

islands now served by a centralized grid. The measures are ready to be applied throughout the Pacific,

and have been successfully employed elsewhere to a great extent. Perhaps the key factor in achieving

success in energy management in the Pacific will be the individual performance of those responsible for

specific design, monitoring, and data analysis tasks. Compliance with a multitude of decentralized

energy conservation measures could initially tax the human resource capabilities of some island

governments. Training and public awareness efforts should be instituted, therefore, to help insure the

success of energy management in the islands.

All of the above measures have very low or no capital costs associated with them. Implementation

and compliance activities result in "operational" costs that will vary in magnitude with the complexity

of measures attempted and the efficiency with which they are conducted. Barring the complete inability

to institute and sustatin conservation efforts, the above measures should easily pay for themselves in

oil savings to each of the respective island governments.

SMALL-SCALE OR APPROPRIATE TECHNOLOGIES

For Pacific applications, the terms small-scale and appropriate are interchangeable and are

defined in the traditional fashion. Small-scale and appropriate energy technologies are decentralized

and built mostly from local materials. They can be built, maintained, and repaired with local labor

and expertise and are labor rather than capital intensive. They should be village or community owned,

compatible with the environment and culture, and improve local well-being. Social, cultural, and

employment considerations are important elements of such technologies. The terms small-scale and

appropriate are relative and refer to the application, not a generic technology.

Small-scale energy technologies for Pacific Islands are used mostly in rural villages away from

population centers and on outer islands. Despite harsh environments and remoteness, local people are

able to build and service these systems. These technologies will help communities avoid importing fuel

for essential end uses; in a few cases they will reduce the amount of fuel being used. As such, they

will not make a significant impact on the total amount of petroleum products being imported, but they

can offer a significant improvement to rural well-being, particularly in areas that do not now have

electricity.

Examples of small-scale technologies and applications appropriate for Pacific Islands include

efficient wood stoves for domestic or school cooking, mechanical wind machines for pumping water from

shallow lens wells, solar dryers for drying food or copra, solar devices for cooking or desalinating

water, and simple sail systems for fishing boats. Small wind electric machines, solar photovoltaic

systems, and producer gas/palm oil systems are also appropriate for rural energy needs, but such

systems are capital-intensive and usually require parts and technical expertise from elsewhere. They

have been discussed separately in this chapter.

34
Efficient wood stoves have made a large impact during the last decade in countries that rely on

wood or biomass wastes for domestic cooking. On Pacific Islands, cooking in rural areas and on the

outskirts of urban areas is usually done over open fires on the ground, often "in small cooking shacks.

Fuels are usually coconut wastes of wood. Cooks are quite skillful at building efficient fires, but

these fires still require large amounts of fuel, and these fuels are becoming scarce, particularly

around urban areas. Cooking on such fires is time-consuming, hard work, and unhealthy if the shacks

are not well-ventilated.

Cooking stoves that can burn wood or biomass wastes efficiently have some type of firebox which

takes the fire off the ground; an efficient method for combusting the fuel, controlling the air, and

channeling the heat throughout the stove; openings on the top of the stove in which the cooking

utensils fit snugly; and a chimney to ventilate the smoke. Such stoves are built from local materials

such as clay and sand. The most popular stoves worldwide are of the Lorena type.

Building these stoves with local materials on Pacific Islands is often not successful because of

the high salt and coral content of the sand and the lack of fresh water to wash the sand. In such

cases some cement is used, and the stove is cast, sometimes in layers, within a mold. Costs for a

family stove, including cement, molds, and labor are under $50. Most of these stoves are variations of

the smokeless wood stove developed at the University of the South Pacific, Fiji.

Efforts to change something as fundamental to local cultures as cooking encounter a variety of

cultural barriers, including the reluctance to vary daily living patterns. These barriers are the

controlling element for widespread use of these stoves. However, users are pleased with the results of

the stoves, and their use is slowly spreading.

Pumping water by mechanical wind machines is one of the oldest and widespread energy

technologies. Wind-powered water pumps are available commercially, or they can be built from local

materials. Commercial machines are mostly of the standard horizontal design with multiple blades

connected to a hub and rotary power shaft. This shaft is connected to a gear box which converts the

rotary motion to a linear, reciprocating motion of the sucker rod, which in turn is connected to a

piston pump. The hub and blades have a diameter from 1.8 meters (6 feet) to 4.9 meters (16 feet). The

amount of water pumped is a function of wind speed, blade diameter, length of stroke, and depth of

well. Commercial machines usually start operating at wind speeds of over 3.6 m/sec (8 mph). In a 6.7

m/sec (15 mph) wind, a 2.4 meters (8 feet) diameter mill can pump about 1900 liters (500 gal) per

minute from an 18 meters (60 feet) well. A 2.4 meters diameter (8 feet) machine without tower and

sucker rod costs from $1200 to $1500.

There are a variety of designs for home-built machines such as the Cretan sail-wing, the Dutch

type, and vertical axis machines such as the Savonius Rotor.

A good application of wind machines for Pacific Islands is to pump water from the shallow,

freshwater lenses that underlie many of the islands. Pumping rates must be controlled so that the

freshwater layer is not depleted, allowing brackish water to intrude and contaminate the well. These

machines, which have rugged construction and may be specially treated to prevent corrosion, are

susceptible to storm damage. Because of their relatively simple construction, easily understood

mechanical operation, and the manufacturers' familiarity with shipping systems to remote areas, water

pumping machines are free of many of the problems that plague wind electric machines.

Drying copra on United States Pacific Islands is traditionally done either by spreading the copra

out in the sun or by using small drying shacks with fires fueled by coconut wastes. The former is

difficult because of the high rainfall on many of the islands, and the latter is often unsatisfactory

because the smoke may contaminate the copra and affect its quality. Fuel may also be scarce. There is

a similar problem with preserving or drying food in villages without refrigeration. Simple solar

dryers are used successfully throughout the world to dry such commodities. There are a variety of

designs for these dryers, and they are almost always built locally with local materials, except for

glazing. Costs vary from $5 to $250, depending on size and proportion of materials obtained

elsewhere. Design considerations include durability, type of glazing, means of controlling the

temperature and ventilation, and protection of the commodity being dried from the elements and

insects. Experience has shown few cultural barriers with these dryers other than a reluctance to

substitute a new idea for a traditional one.

Solar devices for cooking, desalinating brackish water, or water heating can also be built mostly

with local materials. There are a variety of simple designs, and cost and design considerations are

the same as with solar dryers. Operational problems include storm damage and scaling of pipes from

brackish water. Sometimes simple pipefittings may be hard to find. Cultural barriers to solar cooking

are often more severe than those that affect wood cooking stoves because cooking using the sun is an

entirely different concept. There do not appear to be cultural barriers for the other devices, but

there is not a great demand for hot water except for health dispensaries.

35
Most boats for family transportation and fishing are home-built. The typical boat is built from

plywood for about $700 including labor, is about 6 meters (20 feet) long with narrow beam and shallow

draft, and is powered by a 40 hp outboard motor. Because of poor maintenance and the rough

environment, the average life of a boat is about three years. As the price of fuel increases, the

boats are becoming prohibitively eKpensive to operate.

A return to sail-assisted fishing vessels could partially solve this problem. A few people are

eKperimenting with prototype vessels on the islands and are collecting performance data. These boats

are canoe type with outriggers and no center board. Sails and some fiberglass parts of the hulls are

imported. Secondary power is provided by small (10 hp) outboard motors. The main cultural barrier is

convincing people to give up their high speed motorboats for the slower, less glamorous sail boats.

Additional Reading:

Darrow, K. and R. Pam, Appropriate Technology Sourcebook, Vol I., Volunteers in Asia Publication,

Stanford, California, 318p., 1978.

Darrow, K., Kelley, and R. Pam, Appropriate Technology Sourcebook, Vol II., Volunteers in Asia

Publication, Stanford, California, 496p., 1981.

Eckaus, R. S., Appropriate Technologies for Developing Countries, National Academy of Sciences,

Washington, D.C., 140p., 1977.

National Academy of Sciences, Energy for Rural Development, Washington, D.C., 306p., 1977.

National Academy of Sciences, Supplement - Energy for Rural Development, Washington, D.C., 238p., 1981.

COAL-BURNING TECHNOLOGIES FOR PO~~R PRODUCTION

Currently, conventional combustion of coal usually refers to direct combustion of pulverized coal

in high pressure boilers. Alternately, the combustion mode can be moving-grate-fired coal systems.

The product usually measured is steam. For a 25 MW unit, approKimately 250,000 pounds of steam per

hour must be raised to 950°F and, depending on the system, up to 1300 psig. Without emission control,

the typical emissions will be about 0.83 lb S02, 0.5 lb NOK, and 4.18 lb particulates per 106

Btu. Scrubbers can remove more than 76% of the S02, and electrostatic precipitators can reduce

particulates to very low levels. The final waste consists of bottom and fly ash and scrubber sludge.

These are produced at rates of about 1000 lb (ash) and 1100 lb (sludge with 50% moisture) per hour,

again depending on the system and on the character of the coal. Costs in the continental United States

for a complete coal-fired electrical generating plant are on the order of 51000-1500 (1981 dollars) per

installed kilowatt.

Costs for coal as a fuel are approKimately half those for oil, for the same amount of energy. In

addition, even though coal would still be an imported fuel in the Pacific, there are many suppliers.

Japan is increasingly turning to steam-coal to diversify its energy miK and to insulate itself from

undue dependence on anyone supplier. In 1981, Japan procured the majority of its steam coal from siK

suppliers. Table 2-3 shows the amounts and the prices they paid.

Table 2-3. Japanese Sources and Costs of Steam Coal, 1981

THOUSANDS OF

Country

U.S.A.

Australia

Canada

USSR

China

South Africa

Import Quantity

(lOOOs of tons)

2331

5398

1108

271

1305

1853

Import Price

(U.S. $)

73.8

67.8

64.4

66.~

67.1

58.4

The pattern of purchases has changed recently. In March, 1982, Canada and South Africa each

supplied almost one third of Japan's coal. The United States, Australia, USSR, and China supplied

36
another one third. Several of the Pacific Islands included in this report are conveniently close to

shipping routes between Japan and its coal suppliers.

The use of coal for electrical power generation in the Pacific Islands will depend strongly on the

suitability of docks, harbors and channels for use by the ocean-going dry-bulk carriers. In contrast

to liquid fuels, diesel and residual oil, which can be delivered by pipeline from moorings at a

distance from the docks, coal loading and off-loading must be done at the dockside. Coral reefs near

the shores of many Pacific Islands restrict the access of large bulk-carrier vessels to all but a few

locations. In general, existing facilities can rarely accommodate vessels whose drafts are greater

than 40 feet (50,000 dwt). The common Panamax-size (60,000 dwt) dry-bulk-carrier can be brought

dockside only in a few places such as Guam or Kwajalein in the Marshall Islands.

Coal-fired boilers for a 25 MW power station use 12 to 14 tons per hour of 10,000 Btu/lb coal. In

the United States, it is customary to store 60- to 90-day supply of fuel in case of shortfalls from

suppliers. This amounts to about 15-25% of the annual fuel use. For a 25 MW plant which uses about

12,000 tons of coal per year, the amount in this storage would be 17,000 to 30,000 tons. Dead storage

of this sort would occupy about one hectare (2.5 acres) of land, assuming that the coal pile is built

up to 25 feet, compacted and covered or sodded and seeded. Additional "live" storage is also needed to

accommodate surges in storage requirements brought about by intermittent ship deliveries.

Ash disposal and transport is another area of concern. Four to seven percent is typical of the

ash content of bituminous coals. Thus, a 25 MW plant might generate 5000 to 8000 tons of ash per

year. Local use might be made of the ash, or it might be dumped at sea. Dumping permits must be

approved by the United States Environmental Protection Agency if done from a territory or commonwealth

of the United States.

Additional Reading:

I.Y. Borg, Coal as an Option for Power Generation ~n United States Territories of the Pacific, Lawrence

Livermore National Laboratory, Livermore, Calif., UCRL-53236, November 30, 1981.

N.G. Wilson-Smith, "World Coal Markets," in Proc. Conf. Coal Exports-Meeting World Demand. Arlington,

Virginia, 1981 (Energy Bureau, Incorporated, Arlington, Virginia, 1981).

N. Lovelace, Environmental Protection Agency, San Francisco, California, private communication

(November 6, 1981).

Guam Power Authority, Coal-Conversion, Preliminary Feasibility Study, June 18, 1981.

37
CHAPTER 3: ENERGY PLANNING FOR GU~~

Guam, the westernmost territory of the United States, is the largest island in the ~ariana archipelago (see Figure 3-1). It lies 6200 kilometers (3700 miles) west-southwest of Honolulu, and only

2500 kilometers (1500 miles) south-southeast of Tokyo. The island's strategic location at the edge of

the Asian rim gives it a role of importance for American activities in the Pacific basin.

From an energy planning perspective, Guam is almost unique among the Pacific Islands included in

this assessment. The Government of Guam must plan for only a single island. The population is quite

large for a Pacific Island--l05,000 people on one island compared, for example, to some 17,000 on seven

islands in the nearby Commonwealth of the Northern Mariana Islands--and there is a large United States

military presence. All electricity users, including both military bases, are on the grid, and because

Guam is more prosperous than the other Pacific Islands, a larger proportion of the population has

electrical service. In recent years Guam's electricity demand has been declining as a result of

conservation efforts, and generating capacity is now generally adequate. Peak demand has not changed

significantly in six years, and the Guam Power Administration is more likely to need to replace old

generating units than to expand capacity. Financing current operations and any replacements may pose

problems.

Even though Guam's energy picture may be more similar to that of, say, Maui, Hawaii than that of

Kosrae, FSM, certain Pacific Island constants apply. Guam is almost entirely dependent on petroleum

fuels for both transportation and for electricity generation. Given the state of technology development, however, it is more likely to relieve its reliance on oil for electricity generation than for

liquid fuels used for transportation. This is because Guam possesses several renewable energy resources

that can be used to generate electricity, and the island is well located for coal use if planners decide

to pursue that option. The relatively remote location still poses problems of obtaining repair parts

and servicing for any type of generating system. Land and water are limited; skilled labor, though more

available than it is in some island locations, is also limited. The climate subjects all types of

facilities to corrosive salt air and damaging high winds.

Guam was formed through an uplift of undersea volcanoes and is surrounded by coral reefs near the

shore. The island is relatively large, 50 kilometers (30 miles) long and from 6.7 to 14.2 kilometers

wide (4 to 8.5 miles wide), with a total area of about 590 square kilometers (214 square miles). The

northern part, which contains the main fresh water lens, is a high coraline limestone plateau rising up

to 260 meters (850 feet) above sea level. The southern part is mountainous, of volcanic origin, with

peaks to 400 m (1300 feet). Apra Harbor, one of the largest protected harbors on earth, is located on

the western side of the island.

Guam's climate is tropical, with a mean average temperature of 27°C (81°F). Rainfall, threequarters of which falls between June and December, averages about 215 centimeters (85 inches) a year on

the lowland coast around Apra Harbor and 280 centimeters (110 inches) in the highest mountain locations

of the southern half of the island. Like many Pacific Islands, Guam lies within the typhoon belt and

is periodically struck by tropical storms and typhoons. Each year, a few minor typhoons with winds up

to 150 km/h (l00 mph) hit the islands while every five to six years a "super typhoon," with winds in

excess of 250 km/h (150 mph), strikes. For example, typhoon Pamela struck Guam in 1976, causing $250

million damage. The constant need to prepare for such severe winds affects everything on Guam.

The civilian population is concentrated in the central part of the island. As is the case in much

of the world, considerable population redistribution has taken place since the end of World War II,

predominantly from rural to urban areas. In Guam, this means from the south to the central portion of

the island. Guam's population density is approximately 180 people per square kilometer (490/square

mile) of land area, about eight times the United States average of 22/square kilometers (62/square

miles). Guam has a higher population density than all of the states except Massachusetts, Rhode

Island, Connecticut and New Jersey.

38
Figure 3-1

Guam

1

N

13"30'

Orote Point

Facpi Point

13°20'

Cocos ISI~

144°40'

144'40'

39

144°50'

Ritidian Point

lhwest

~orce Base

\

144°50'

13°30'

13°20'-
HISTORY AND POLITICAL DEVELOPMENT

The modern history of Guam began in 1521, when Ferdinand Magellan landed on the island and found it

inhabited by Chamorros, a Malaysian people believed to have corne originally from Southeast Asia. For

many years Guam was dominated by Spanish governors in the Philippines and was a port of call for Spanish

ships sailing from Acapulco to Manila. Colonization and active Spanish rule began in 1668, but little

economic development occurred during this time.

Following defeat of Spain in the Spanish-American War, Guam was ceded to the United States in the

treaty of Paris in 1899. Administration by the United States Navy began the next year.

United States naval administration was interrupted when the Japanese captured the island in

December, 1941. Japan occupied it for 2 1/2 years. Guam was recaptured by the United States Marines

and Army in July, 1944. The island had suffered much destruction, but after the war it entered a

period of reconstruction and rehabilitation which changed it from a quiet agricultural island to a

center of United States military operations and growing commercial activity.

In 1950, President Truman signed the Organic Act of Guam, giving the island the status of an

unincorporated territory, extending American citizenship to its people, and providing local legislative

autonomy. The Act also transferred administration of Guam's civil affairs to the United States

Department of the Interior and placed the executive, legislative, and judicial branches of local

government in civilian hands. The Organic Act was subsequently amended several times and is now the

island's basic constitutional instrument.

Guamanians enjoy most of the privileges of American citizenship, but they cannot vote in United

States presidential elections unless resident in one of the states. They have an elected representative

in Washington, who serves for a two-year term and who exercises the rights and privileges of a United

States Congressman except for the right to vote on the floor.

Since 1970, the executive branch has been headed by an elected Governor and Lieutenant Governor.

Guam's 21-member unicameral legislature is elected every two years and has full power in territorial

matters, including limited taxation and appropriation authority.

In September, 1982, a referendum was held in Guam on the future status of Guam. The results

indicated that the people want to move toward a commonwealth status.

POPULATION, EMPLOYMENT AND WAGES

The present population, based on 1980 census figures, is 105,800 of which 21,500 are military

personnel and their dependents. About 48% of the population is ethnic Chamorro, 24% is Caucasian

(mostly from the United States), 20% is Filipino, 3% is Korean, 2.7% is Micronesian, and the balance

consists of Japanese, Chinese and other ethnic groups. Between 1920 and 1940, Caucasians and Filipinos

accounted for only 4% and 3% respectively. The growth in the Caucasian fraction is mainly due to

increased military strength on the island while the increase in Filipinos comes largely from

immigration.

If the present rate of growth in population is maintained, Guam's population will double by the

year 2010. Because of the high birth rate, Guam's population is substantially younger than that of the

United States, with 40% of the population being under 15 years of age, compared to the national average

of 23%. The need to provide jobs for the new workers' is expected to exert strong pressures on the

government for economic development and growth. The increased population will also need services and

products of all kinds, thus providing much of their own stimulus for economic development.

Government constitutes the largest economic sector on Guam,

expenditures playing a dominant role in sustaining the economy.

5623 civilian employees. All public employees account for about

17,000 out of the total of 34,000).

with federal and local government

The Department of Defense (DOD) has

one-half of the workforce (about

Guam's job market has shown substantial improvement durrng the recent past. Increased tourism is

providing many new jobs with estimates for 1981 being 4000 direct jobs and 1600 indirect jobs in this

industry. Manufacturing accounts for about 1200 workers. According to the latest available figures,

the jobiess rate declined from 7.6% in September 1978 to 7% in September 1979. According to the same

figures, Guam's total personal income for 1978 was $366 million, an increase of 24% from the $295

million in 1977. The annual per capita income gained 20% during the same period, from $3511 to $4198.

A survey of households showed the 1978 average income of approximately 19,000 households to be $19,309,

40
the same 20% over the previous year noted above. Excluded from this study were active duty military

personnel, their dependents living on posts and· non-immigrant aliens.

PRESENT ECONOMY AND INFRASTRUCTURE

Since the Spanish era, Guam has gone through a succession of administrations, each with an

increasing degree of self-government. The people of Guam now have almost full responsibility for their

own economic development.

The economy of Guam has shown rapid development over the past 10 years, spurred by the growth in

the tourist industry and the reconstruction following the effects of typhoon Pamela in 1976. Gross

business income has increased from $786.4 million in 1978 to $977.8 million in 1979. Corrected for

inflation, this amounted to a 12% growth rate.

The federal government, primarily the military, has played a dominant role in the island's economy,

both as a source of employment and income, and as a major landowner. The economic impact of the

military can be measured by its total expenditures of $671 million in 1981, consisting of military and

civilian pay, military construction, and federal income taxes which are reverted to the Government; the

number of civilians employed by the DOD, 5623; and the land area under its ownership, some 16,000 ha

(40,000 acres). Military exchanges and commissaries account for about 20% of all local retail sales.

Military ownership of 35% of the land has become a major issue which affects economic development,

especially in the area of Apra Harbor, center of Guam's commercial maritime activities. Recently, the

Navy agreed to release 4.5 ha (11 acres) at Cabras Island to the Port Authority for commercial development, and additional land transfers in this area are now under consideration.

A multitude of federal agencies and the local government are involved in improving the existing

infrastructure. Projects involving transportation, port, telephone, power, water and sewer facilities

which are in various stages of completion. Notable among current and future capital improvement

projects are the new air terminal complex, the commercial port expansion, public utilities improvement

and expansion, renovation of University of Guam and public school facilities and expansion and

establishment of an agricultural and industrial park. Improvements to these public facilities are

crucial to future economic development. A major impetus has been the reconstruction program initiated

in response to the massive damage inflicted by typhoon Pamela in 1976.

A Comprehensive Transportation Development Plan was prepared in 1975 and is being implemented in

the following areas: 1) the reconstruction of the existing roadway system; 2) new highway recommendations; and 3) the implementation of a bus system. Funds for highway construction come from the

Territorial Highway Fund, supported by the local fuel tax and vehicle registration fee revenues and

grants from the Federal Highway Administration.

The Guam Telephone Authority (GTA) became an autonomous agency in 1974, inheriting a telephone

system that was under capitalized, inefficient and known for its inadequate service. Current GTA

construction is primarily involved in completing the first phase of a program to extend and improve the

telephone system. The first phase of reconstruction and all subsequent reconstruction plans will be

funded by loans from the Rural Electrification Administration (REA) or by GTA using in-house funds.

The GTA has already received more than $20 million of an REA loan, and has begun repaying the principal

($126,000 to date).

The Guam Power Authority (GPA) became an autonomous agency in 1969 when it was separated from the

Guam Public Utility Agency. This was done to facilitate the financing and implementaeion of an

expansion program to meet the then rapid growth of power demand.

The Public Utility Agency of Guam is responsible for providing adequate water supply and sewer

services throughout the island. In January, 1980, a water Facility Master Plan was completed for Guam.

This included a comprehensive inventory of existing water distribution facilities and a recommendation

for capital improvements to meet the island's needs through the year 2000. Also begun in 1980 was a

study of the fresh water lens underlying Guam. Six additional wells have been constructed and have

increased the average production of water by 5.7 million liters per day (1.5 million gallons per day).

The Inarajan-Merizo water line has been completed. It provides a link between the southern Guam water

users and the main water source in the northern and central deep well system.

The federal government is supporting a major effort to improve the island's wastewater treatment

systems. The next five years will see expenditures of $44 million with one project for $4.5 million

already underway and a total of $5.2 million approved for design and construction for two more projects.

Both of these projects are expected to be funded completely by the Environmental Protection Agency.

41
The Guam Airport Authority was created in 1975 as a public corporation and autonomous instrumentality of the Government of Guam. The new Guam International Air Terminal (GIAT) is essentially

complete. It is the cornerstone of the multimillion dollar tourism industry, and it affects almost

every other segment of the island's economy. In a typical year, the direct dollar impact from the

airlines operating through GIAT is more than $25 million. Of this amount, almost $6 million goes for

wages, employee benefits and goods and services purchased locally.

Apra Harbor is the center of Guam's commercial maritime activities. Cabras Island and the Glass

Breakwater form the harbor's protective northern border, while Orote Penninsula constitutes the southern

boundary. The Port Authority's terminal facilities are located on 13.5 ha (33 acres) of reclaimed land

on Cabras Island. The Commercial Port of Guam is largely restricted to servicing Guam's imports and

exports. Some trans-shipment does take place, and there is minor civilian port-related industry in the

form of ship repair and warehousing.

Port development at Apra Harbor has been constrained because of military land ownership. However,

a recent Department of Defense review resulted in approximately 150 ha (375 acres) of land bordering

the Harbor being declared excess and available for release to the Government of Guam. A co~prehensive

plan for development of this area in support of port operations has been completed, and implementation

of port development facilities responsive to the needs of the growing economy is expected to proceed.

In the private sector, tourism grew rapidly during the 1970s to become second only to the federal

government in expenditures, and as an employer third only to the Government of Guam and the federal

government. Tourism has grown from 6,600 visitors in 1967 to 320,000 in 1981, with approximately 80%

of the visitors arriving from Japan. Overall, it is estimated that tourists spend $190 million a year

on Guam, creating an estimated 4000 direct jobs, 1600 indirect jobs, and generating over $10 million

per year in tax revenues to the local government.

The sustained increase in the number of visitors to Guam has resulted in high occupancy rates at

the 14 major hotels on the island. This sector of the economy is expected to grow. The Guam Hilton

Hotel, currently with 370 rooms, and the Guam Okura Hotel, with 223 rooms, each plan to add 100 rooms

to their inventories; and the government of Nauru has announced plans to build a 400-room hotel on

Tumon Bay. The first phase of a 600-room hotel development by City Hill Development Co. and a $7

million resort on Cocos Island by Cocos Lagoon Development Corp are both already under construction.

In recent years, the construction industry has not fared as well as the tourist sector. As a

result of federal assistance provided for reconstruction in the wake of typhoon Pamela, this industry

experienced a boom until about 1979 when most typhoon related projects were completed. Since then, the

industry has fallen on hard times, aggravated by rising interest rates and the effects of the "adverse

wage rate" imposed by the federal government. Intended to encourage employment of local United States

citizens and to discourage contractors from importing low paid temporary alien workers, the adverse

wage rate doubled construction wages on the island between 1977 and 1979, seriously undermining the

industry. Recently, the Reagan administration abolished the wage rate provision in favor of a lower

"Guam prevailing wage rate" administered locally by the Guam Department of Labor. This development,

along with decreasing interest rates, an upsurge in new government housing and capital improvement

projects, and increasing tourist trade, has markedly improved the outlook for the industry. Total

construction dollar amount for 1983 is expected to reach an estimated $183 million, compared to

$111.2 million five years earlier.

The manufacturing and external trade sector of the private economy on Guam has become the second

major contributor to the island's gross receipts, accounting for over $200 million in 1980. However,

approximately 90% of the receipts are accounted for by Guam's single petroleum refinery, Guam Oil

Refining Company (qORCO), which employs only about 10% of the manufacturing labor force. GORCO was

sold to new owners October I, 1982, but will continue to operate in Guam under the same name. Manufacturing accounts for approximately 1200 workers, or 3.5% of total employment. Principal types of

manufacturing industries include rock and concrete products, printing and publishing, food processing,

and garments and watches.

The impact of agriculture and fisheries on the economy is minimal. Guam has abundant, well-watered

land and good fishing grounds. Traditionally, subsistence agriculture and fishing were major economic

activities on Guam, but they are now the smallest industries on the island, hindered in development by a

number of technical and institutional obstacles. It is estimated that less than one-third of the fresh

fruits and vegetables consumed on the island are locally produced. The best estimate for island-wide

catch of fish represents less than 10% of the five million pounds consumed annually.

42
PROSPECTS FOR ECONOMIC DEVELOPMENT

Guam has enjoyed considerable economic gro~th over the past decade, and the essential elements are

present for continued expansion. However, Guam's present economic base is limited, and substantial

assistance from the United States government will continue to be needed to sustain economic growth.

Government and tourism are the largest sectors, and the economy will remain vulnerable to outside

influences such as changes in military deployments and economic conditions elsewhere. This is

especially true with respect to Japan, as it is a major contributor to Guam's tourist industry.

Fortunately for its economy, Guam is strategically located to assume a role of growing importance

1n United States affairs in the western Pacific region. Given this fact, and the declining United

States military presence in the Far East, the military establishment can be expected to remain on the

isiand in force. ~ilitary spending fluctuates with changes in world political and strategic conditions,

and with changes of policy in Washington. Thus, there is no guarantee that the large military establishment on Guam will remain forever. However, with the current federal defense budget rising, it can be

anticipated that some of the increased spending will be on Guam. Future growth is anticipated in

increased homeporting of Navy ships in Guam as well as expanded ship maintenance and support activities.

The future for the tourist industry looks bright, provided the supporting infrastructure can keep

pace with the expansion. Included in this expansion will be all utilities, the number of hotel rooms,

and development of beaches, parks, and other tourist-oriented facilities.

An analysis of tourist arrivals made in 1979 showed that 75% of all arrivals came from Japan, 12%

from other Asian countries and 14% from North America. Most of the visitors were in the 18-30 age

group. Guam's popularity as an inexpensive vacation or honeymoon destination continues to grow in

Japan, and the potential for growth in the North American vacation market has hardly been touched.

Planned expansion of air service to Guam and additional routes being opened to the South Pacific will

also serve to stimulate the industry.

The Government of Guam recognizes the need for an enlarged and diversified manufacturing base to

balance the present emphasis on tourism. Government policy calls for encouraging the establishment of

new industries in light manufacturing and for initiating an incentive program to accelerate the

expansion of existing manufacturing firms. The Guam Economic Development Authority (GEDA) was formed

in 1965 to encourage and participate in the growth of this sector. GEDA hopes to develop new industries

in light manufacturing, trans-shipment, and regional and professional services such as education, health

care, banking, research and development.

Even though the Government of Guam has established a major goal to make the island less dependent

on agricultural imports, it is not clear that it can be accomplished soon. The main avenue of approach

is to organize better the marketing and support infrastructure. In addition, a detailed soil survey--

consisting of chemical and physical analyses of the soils, classification of soil type, and a detailed

soil map--has been completed.

The economic development plans for Guam call for building on present fisheries capabilities to

develop large scale harvesting, trans-shipment and processing industries. This should help reduce

present dependence on fish imports and increase the number of jobs available to the people of Guam.

PRESENT ENERGY STATUS

Guam's energy situation is significantly affected by the two large military facilities on the

island (Commander Naval Forces, Marianas, and Anderson Air Force Base, 43rd Strategic Wing). The

specific military fuel requirements and the energy used by 21,500 military personnel and dependents on

the island affect the domestic market. Table 3-1 shows that the military accounts directly for almost

half of the electrical energy use and consumes 55% of the petroleum.

The largest single civilian use of conventional fuels (20% of the total) is for electrical power

production. A power pooling agreement was negotiated in 1972 between the Guam Power Authority further

expansion of the Navy's power generating capability ..At that time the United States Navy owned the

Piti Power Plant (approximately 79 MW) and one steam turbine (26.5 MW) at the the Tanguisson plant.

The Navy presently operates the Piti plant (now rated at 67 MW) as well as other backup generators.

The GPA operates Tanguisson (two 26.5 MW units), and the New Cabras (two 66 ~W units), Dededo (four 2

MW diesel units) and Tamuning (four 2 MW diesel units) plants. It also operates the leased power barge

Inductance (28 MW steam unit), which is owned by the Navy.

43
TABLE 3-1 -- ELECTRIC POWER GENERATION, GUAM 1980

FUEL

(a)

Type Amount Price

Purchased (1000's

of ($/bb 1) bb 1)

OUTPUT

(million kWh/yr)

END USE

(m i 11 ion kWh/yr)

(b)

Res Comm'l/Gov't

Mi Iit Indust

CAPACITY(c)

(MW)

Rated Operat Stby

LOAD

(MW)

Base Peak

Diesel

RFO-6

42

1818

37

32

10Sl(d)

Total 1051 (d)

---441---

---441---

89

89

401

401

314

314

173

173

141

141

120

120

155

155

(a) Retail Prices at Guam Oil Refinery Co., December 1980, exclusive of taxes and local transportation

(b) Includes 20,919 residential customers

(c) Nameplate capacity

(d) Includes line losses of 11%, or approximately 120 million kWh/y

The largest generating units are at the Cabras plant and are considered to be very efficient (9800

Btu/kWh). These units, together with the additional operating capacity on the island, are less than 10

years old. The United States Navy's generators are older (1951, 1964) and are less efficient. Nevertheless, in view of the relation of capacity and demand (Table 3-1), Guam will probably not need

additional generating capacity in the near future. Peak demand has not changed significantly in six

years. Acute problems in the near term will center around financial issues.

The United States Navy now operates the load dispatching center of the Island-Wide Power System

pool. The Navy shares power generating costs with GPA, but GPA buys fuel for all the plants within the

pool. The principal fuel CPA uses for power production is residual oil purchased under contract from

Coastal Petroleum Company. The Navy currently supplies 12% to 20% and consumes 40% of the total power

generated (Table 3-1). In an effort to assist in the payment of GPA's debt obligation, the original

power pool agreement has been amended to require the Navy's current contribution.

High oil prices, accelerating inflation and a net revenue loss have made rate increases necessary

in order to maintain GPA's financial viability. The first portion of this rate increase (10.7%) was

placed in effect Sept. 1, 1979 and the second portion (2.1%) in July, 1980. In recent years GPA has

had difficulty meeting its fuel bills, despite several rate increases. Basic residential rates as of

March, 1981, were 6.6 cents per kWh plus a fuel adjustment charge of 6.73 cents per kWh. Since 1981,

the Government of Guam has rejected two attempts by GPA to increase 'electricity rates. In June, 1981,

GPA submitted a request for a rate increase. However, Guam's governor and the legislature opposed the

increase at that time and GPA withdrew the request. The legislature subsequently provided GPA with a

$4.3 million subsidy to cover its budgeted shortfall for the first half of 1982. In January, 1982, GPA

again filed for a rate increase. On March 19, 1982, the Guam legislature passed a law-blocking the

increase and requiring that GPA "charge customers for electric service at rates which do not exceed

those set in rate schedules and rules which were in effect on January 26, 1982." The law does not say

how long the rate freeze will remain in effect.

Reducing demand by conservation (either forced or voluntary) is not a simple matter. Many

residential consumers have stopped heating their water, reducing consumption and hence GPA revenues.

This has raised the non-fuel costs per kWh, and such increases are not automatically reflected in a new

rate structure. Fuel costs account for an estimated 73% of the per kWh cost. The GPA fuel bill for

electricity for one week is about $1.2 million. There is no provision in the current rate structure to

create a sinking fund to retire the Department of Interior's $36, million ten-year loan due December 31,

1990. GPA is not well situated financially, and may have difficulty raising the capital for

improvements of any kind.

In an effort to seek compliance with the Clean Air Act and its amendments and the Clean Water Act,

GPA has tested the effectiveness of a sea-water scrubber. Some'of the operating power plants cannot be

adapted to that type of pollution equipment, posing potential 'additional financial burdens for GPA if

compliance to existing United States regulations is enforced. Estimated costs for retrofitting the

plants are projected to be about 20% of the costs of a new plant.

44
Gasoline is a major import to Guam and is important to the touri~t industry. Guam Oil Refining

Company (GORCO) does not produce gasoline but does supply fuel to the United States military in the far

East, residual fuel oil to the Saipan Power Plant and bunkering fuels to the fishing fleets of many

nations. Table 3-2 shows Guam's importance as a refueling port.

TABLE 3-2 -- END USES OF ENERGY FUELS, GUAM, 1980

(in 1000's of bbl)

Comm'l/

Amount Price Indust/ Marine Electric

Fuel Purchased ($/bbl) Gov't Private Construction Transportation Generation Military Export

Propane/

Butane(a) 33 37 15 18

Motor

Gasoline 661 64 40 582 (c) 26 13

Aviation

Gasoline 1 137 1

Jet

Fuel-K 1444 67 1300 144

Jet

Fuel-N 2797 40 2797

Kerosene 0

Diesel 1527 37 3 (c) 38(c) 114 (c) 42 1329

RFD-4 2 2

RFD-6/

Bunker C 1931 32 57 1818 12 44

Navy Spl

Oil 781 781

(a) Ratio of .4/.6

(b) Retail prices at Guam Oil Refinery Co., December 1980, exclusive of taxes and local

transportation; gasoline is pump price

(c) Includes fuel for 38,000 automobiles; 12,200 trucks and heavy cargo vehicles; 652 registered boats

and an unspecified number of outboard motors

Population:

Households:

105,816 (Sept. 1980)

28,212 (Sept. 1980)

ENERGY DEVELOPMENT PLANNING

Renewable energy fuel sources are abundant in Guam. Unfortunately, the present island power system

and back-up are both based on oil imported from distant countries. The Government of Guam recognizes

the problems this situation poses and is seeking to diversify the mix through exploitation of alternate

sources of energy, including indigenous renewable ones. Th~ potential new energy sources include coal,

ocean thermal energy conversion, salt-gradient s9lar ponds, energy management and conservation, wind,

bio-mass, municipal solid waste, parabolic mirrGts and other small scale solar focusing devices, solar

water heating, bio-gas and photovoltaics.

While the general infrastructure in Guam for support of the various alternate energy sources is

not well-developed as yet, remedial steps are being taken in both the public and private sectors to

remedy this. To date, there seems to be little private interest in the renewable sources of energy.

45
However, as the technologies become more mature and as the oil option becomes less tenable, this may

change. Table 3-3 presents estimates for the ranges of various parameters which affect each of the

possible technologies. Special note should be taken of the impact of the climatic conditions existing

011 Guam--the high winds associated with typhoons and tropical storms and the corrosive salt air. Both

will strongly affect the success or fa~lure of alternate energies there.

Energy Management

While emphaGis on energy conservation is not new to Guam, it may be that additional efforts will

further reduce demands. In addition, energy management techniques and better bookkeeping may help

consumers to manage their own use more effectively. Such techniques do not contribute any additional

energy, but when they help reduce electrical demand, they can make additional energy available to

support Guam's economic development goals. Some of the most important energy management possibilities

are listed below:

o Establish the true costs of electrical generation, including operation, maintenance and both

capital amortization and set-aside funds for future expansion.

o Determine how much of the cost will be borne by the consumer and how much subsidized by the

Government of Guam. Decide the form of the subsidy.

o Continue to enforce collections.

o Encourage efficient energy use by establishing and enforcing energy efficiency standards for

all new buildings.

o Set up demonstration projects as a part of an ongoing education process in efficient use of

energy. Such projects could include passive techniques of cooling, use of reject heat from

air conditioners to preheat water, co-generation where appropriate, and other specialized

techniques.

o Establish and extend existing energy education and training courses in the community,

government and commercial sectors.

The above list is not complete, but it indicates the kinds of activltles that have proven

successful and effective elsewhere. For Guam, probably the most important points involve learning what

energy costs really are and supporting a comprehensive energy education and training program.

Coal

Although coal would have to be imported, there are a number of reasons why there is good potential

for coal-fired base load electricity production on Guam. Coal is cheaper and much more abundant than

oil. Guam is one of the few Pacific Islands with the port facilities to handle coal freighters, and

the island is located i10ng trade routes that are now used for shipping coal. Coal-fired boiler

technologies are well established and commercial. The technologies for coal moving and preparation are

also mature. Finally, the reliability and durability of coal systems in the Pacific have been well

established over the years, both for fixed, shore-based as well as shipboard plants. Coal systems are

commercially available in sizes from a few through several hundred megawatts, thus making a good match

between the size of the technology and the needs on Guam.

Some of the oil-fired boilers owned by Guam Power Authority (GPA) and the United States Navy are

approaching retirement age and replacements will be needed. In an effort to mitigate the increases in

fuel costs brought on by increasing oil costs, GPA is considering replacing some oil-fired boilers with

coal-fired replacements. The existing steam turbines which are still in workable condition would be

retained. The main GPA power plants, located on Cabras Island, are only 2.5 kilometers (1.5 miles)

from the Commercial Port, the anticipated off-loading port for coal, thus, they would be good

candidates for conversion. The Tanguisson plant is located about 28 kilometers (17 miles) from the

port and is not considered a prime candidate for coal conversion.

Since the coal replacement is envisioned as taking place at the site of an already existing power

plant, few constraints related to siting are expected. There seems to be sufficient land available at

the Cabras site for coal handling and processing. The GPA is already exploring pollution control at

the oil-fired plants to comply with EPA regulations; a change to coal would merely shift the emphasis.

Existing qualifications of the labor force are expected to be adequate for operating and maintaining

the coal-fired plants.

46
Table 3-3

Technology selection Criteria

SOLAR BIOMASS

Solar PIloto- Solar

Hot . Thenn- WIND GEO- HYDRO- Tree, Liquid

Water voltalcs al ENERGY THERMAL ELECTRIC Farms BlOgas Fuels MSW OTEC

OCEAN

CURRENTS

AND SOLAR

WAVES PONDS

ENERGY

COAL MANAGEMENT

RESOURCE

proven • • • 1 • • •

suspected • • • • •

unknown • • • none •

TECHNOLOGY READINESS

IN PACIFIC

high • • • • • • •

medium • • • • •

low • • •

RELIABILITY PROBLEMS

IN PACIFIC

high • •

medium • • • • •

low • • • • • • • •

DURABILITY PROBLEMS

IN PACIFIC

high • • • •

medium • • • • • • low • • • • • APPLICATION

centralized • • • • • • • • • • •

decentralized • • • • • • • • •

POTENTIAL CONSTRAINTS

cultural impact • • • • • • • • land availability • • • • • • • • • •

environmental impact • • • • I • • • • • •

human resources • • • • • • • • • • • • • • •

infrastructure • • • • • • • • • • • • • •

CAPITAL COSTS

high

(over S10,000/kW) • • • •

intermediate

($3,000 - $10,000/kW) • • • • • • •

low I I

(up to $3,000!kW) • • • •

O&M COSTS

high • • • • •

intermediate • • • • • • • low • • • COST EFFECTIVENESS

near term (0-5 yrs) • • •

mid tenn (6-15 yrs) • • • • • • • • •

long term (16-40 yrs) • • •

EXPECTED OIL

SAVINGS OR AVOIDANCE

high • •

intennediate • • •

low • • • • • • • • • •

47
The capital costs for converting the Cabras plants to coal are estimated by GPA to be about

$llOO!kW. This would be the case for purchasing a coal boiler and re-using the existing turbine for

each of the generators. Since the boilers at the Piti plant are old and will need to be replaced, it

may be that the existing oil-fired boilers at Cabras could be used there, thus helping offset the costs

of new coal-fired boilers for Cabras. Capital costs for a complete coal-fired plant on Guam have been

estimated, also by GPA, at about $1300!kW. This cost includes handling, a storage facility and a

conveyer system from the Commercial Port to the plant.

Fuel costs for the new plant are estimated to be about half those for the present oil-fired plant.

Utilizing the fuel savings to payoff the conversion costs and interest would result in an investment

payback of 11 years.

Tree Farms

Bio-mass, including agricultural waste and bio-mass specifically grown as an energy crop, has been

used throughout the w0rld as a fuel for boilers to drive steam turbine electrical generation equipment.

It is possible for a bio-mass generating system to be fueled by agricultural waste, wood chips,

municipal solid waste or coal. Bio-mass-fueled generating technology is mature, and the hardware is

readily available. In fact, direct use of sugar cane residue, bagasse, provides more than half of the

electrical energy used on the island of Hawaii.

Guam, according to a 1977 study, has 6400 hectares (15,000 acres) which could be classified as

very suitable for agriculture, but only 80 to 280 ha (200 to 700 acres) are now seasonally cropped.

Total reclaimable land for agriculture is estimated at over 42,000 ha (96,000 acres). It is estimated

that the fuel from one hectare of giant leucaena (koa haole) can provide 5 kW for a year. If we assume

that a planting of giant leucaena can be harvested every four years, it would take only 8000 ha (9 km

on a side) to furnish fuel for a 10 MW plant (see Chapter 2).

If desired, the harvesting and chipping (or cutting into firebox sized logs) could be laborintensive on Guam, creating new job opportunItIes. On the other hand, if the labor were not available,

the process could also be highly automated as it is in many other parts of the world. This would lead

to higher initial capital costs. Existing boiler systems in Hawaii which use bagasse have been able to

operate adequately in a tropical climate, and there is no reason to think that conditions on Guam would

be so different as to cause undue problems.

Feasibility of a bio-mass electrical generating capability on Guam is not yet established.

Consumptive use of water for the steam and cooling cycles may present problems in view of a limited

supply of water. Preemption of agricultural land for a tree farm could be a problem since it is a goal

of the govenment to become more self-sufficient in agricultural production. However, the United States

military has expressed a willingness to discuss co-use of some of its extensive holdings on Guam for

purposes such as bio-mass plantations.

Municipal Solid Waste

The Guam Environmental Protection Agency (GEPA) released a comprehensive report in July, 1978 which

concluded that 235 tonnes (258 tons) of municipal solid waste (MSW) were being generated daily on Guam.

The GEPA strongly endorsed MSW conversion as a result of its study: "Economic analysis indicates that

material and energy recovery is the cost-effective solution to disposal of Guam's municipal solid waste

from the year 1980 to the year 2000, and is recommended." In the same study, they projected that solid

waste would grow to 330 tonnes (367 tons) per day by 1985. Since the study, MSW generated on Guam seems

to have stabilized at about the 220-240 tonne level. Even so, reclaiming the energy from this amount

will supply a significant portion of the energy needs on Guam as well as alleviating much of the solid

waste disposal problem.

MSW is currently collected island-wide. For use as a fuel, it would be processed on site or at a

nearby collection point to attain fuel uniformity. The reduced waste is an attractive fuel substitute

for electricity generation. If the piti plant were converted to burn MSW, depending on how much was

collected and processed it could produce from 50,000 to 100,000 kWh per day. This uses the best current

estimates of 2 to 4 MW as the power available from MSW. Resource recovery of metals and glass would be

an important element of MSW as would effective use of waste disposal sites. The technology for use of

MSW for generating electricity is mature and there are a number of manufacturers who market modular

units adaptable to a wide variety of MSW resources. The one unknown variable is whether the military

on Guam would participate in MSW utilization. Without them, perhaps 2 MW could be generated while with

their participation the power might reach 4 MW.

48
Solar Hot Water

Solar insolation measurements for Guam indicate that the resource in 1979 averaged 5 kWh/m2-day,

more than adequate for a variety of solar collection applications. The use of solar energy for domestic

and commercial water heating is particularly appropriate for Guam. One of the major residential uses

(about 40%) of electrical energy on Guam in the past was for just this purpose. Since about 30% of the

electrical energy use on Guam is residential, this means that about 15% of the total energy use on Guam

was for residential water heating. More recently, customers have turned off their electric water

heaters except for a few hours a day when they need hot water. If aggressive solar water heating

retrofitting and new construction efforts led to general adoption of solar water heaters instead of

electric water heaters, it could significantly reduce electricity demand on Guam. Investing in a solar

water heating system also sets the costs to the consumer for water heating for the lifetime of the solar

system.

Commercial solar water heaters are readily available from sources in Japan, Australia and throughout the United States The various kinds on the market range from sophisticated, pumped systems with

separate collectors and storage tanks to simple solar water heaters which conbine the solar collector

with the tank storage, the bread-box collectors. In addition, there are a number of designs for simple

thermosiphon systems which can be built by the homeowner for a small fraction of the cost of a

commercial one.

Some solar water heaters are already installed on Guam. There seems to be no problem with acceptability, and, for installation on the roof of a residence or on the property, there is no land availability question. Protection against high winds and wind-driven debris is required. No significant

environmental problems have arisen.

Existing mechanical and electrical capability on Guam should be adequate for routine maintenance

of the solar collector systems. The repair and servicing of solar water heaters is similar to the

repair and servicing of any plumbed system or small electrical appliance. Scaling and corrosion from

the sometimes hard water may present special problems on Guam.

Photovoltaics

Photovoltaics could also capitalize on the solar energy resource available on Guam. A number of

concepts have already been commercialized, ranging from single-crystal silicon photovoltaic cells to

thin-film amorphous cells. The single-crystal cells, after an initial period of development, have

demonstrated good reliability and durability in a wide variety of service. Photovoltaic arrays are

widely used throughout the Pacific in off-grid, low power applications, and such applications would be

the most appropriate use of the technology on Guam. Photovoltaics is not yet suitable for base load

power production in the Pacific.

Photovoltaics operated without batteries can provide electricity during the sunlight hours, saving

oil or diesel. If the hours of operation of the electrical load can be restricted to the sunlight

hours, then PV can supply all the energy needed without the necessity of storage. Operating and maintenance costs with no storage are small. PV is competitive today with high-speed diesel generators in

off-grid locations. Costs need to drop another factor of ten before PV can be seriously considered as

a baseload energy source for larger electrical requirements (e.g. kW to MW).

No adverse impacts are anticipated in the areas of cultural or environmental effects, or land

availability. Land required for a 10 MW peak system might amount to 20 ha. Since photovoltaics is a

relatively new technology, an educational program would be necessary to train personnel to perform

routine O&M. It would also be necessary to develop sources for parts and servicing.

Sunshine on Guam averages about 5 k~~/m2-day. This means that a PV systen Llsed in a fuel-saver

mode to yield energy equivalent to a 10 MW oil-fired electrical generation system would occupy about 80

ha, almost a square kilometer. The storage system to allow continuous 24 hour operation would add to

the cost and land area.

Salt Gradient Solar Ponds

There are a number of experimental solar ponds throughout the world in a wide variety of climates.

While solar ponds have not reached the point of commercialization, indications are that needed developments consist principally of efforts to make the components less expensive and to reduce installed

49
system costs. Solar ponds are especially attractive because they provide baseload, not intermittent

power. The wind and salt air conditions on Guam may pose special problems in adapting the technology

for the Pacific.

The scale of proposed solar ponds is fully compatible with the needs on Guam. A baseload 10 MW

pond might require 2 square kilometers of pond and could either replace present expensive,

fossil-fueled diesel generators or accommodate electrical growth for the next few years. This same 10

MW pond could provide peaking power of up to 100 MW for short periods. Alternatively, a pond of about

one hectare could be used to supply about SO kW base load and up to 500 kW peaking power to a remote

location.

A solar pond would be a low-profile installation which would require land dedication but little

else. It has little or no effluent and the raw materials needed for the pond consist of sunshine and,

from time to time, some additional salt. While salt is not presently reclaimed on Guam, salt evaporation ponds could be constructed. The salt could also be purchased from Taiwan. The land most suitable

for salt gradient solar ponds is in the northern part of the island. Unfortunately, this is also where

the major fresh water lens is. Leakage of the salt brine from the pond could contaminate this sources·

of fresh water if it were not suitably contained.

Skills needed for construction and operation of a solar salt gradient pond consist of general

construction plus machinery operation and maintenance. The heat exchangers are similar to many of those

in widespread use for low-grade heat recovery. An educational program should be carried out to upgrade

and improve existing capabilities. While Guam is more developed than many of the Pacific territories,

it still is remote from a complete support system. This could make maintenance more difficult. Nonetheless, because of its potential to provide base load power, energy planners on Guam should follow the

development of this technology closely.

Wind

Wind power may be able to contribute small amounts of energy to remote locations on Guam; however,

large installations may be incompatible with the fact that Guam is subject to typhoons. In addition,

current information on winds prevalent on the island seems to indicate that they vary around 7 mls (15

mph). Most wind generators do not begin to generate energy until the wind reaches 4.5 mls (10 mph) and

are rated for winds in excess of 9.5 mls (20 mph). Dropping the average wind from 9.5 to 7 mls drops

the generated energy by about a factor of two and a half, thus de-rating the windmill to less than half

its design power and increasing the capital cost by a factor of two and a half.

Existing measurements of winds on Guam carried out by NOAA fall in the range of 3 to 5 m/s. If

locations with consistent winds in excess of 10 mls can be identified, it may become worthwhile to

attempt to design special wind generators which can survive typhoons. The United States DOE, in

conjunction with the Guam Territorial Energy Office, recently placed a small wind driven electrical

generator on Guam. This generator is presently out of commission due to defective equipment design and

inexperience of the operators. There is also a small 500 W water pumper windmill on an aquaculture

farm in the interior of Guam.

Bio-Gas

Anaerobic fermentation of biological waste generates significant quantltles of methane (natural

gas). ~~ere this occurs in a community sewage treatment plant, the gas is often used for process heat

in the plant; any excess can be purified to remove corrosive gasses and sold to a local utility. Guam

does not have an existing gas pipeline system, and installation of such a system would be expensive.

In any case, the total amount of energy supplied by such a system would be small.

Anaerobic digestion can also be done on a small scale, appropriate for a single family or a small

group of families. Adoption of this technology could replace the energy used by individual families

for cooking and thus reduce residential energy use. Small scale bio-gas generation and use may also be

appropriate for small farms where there is both a ready supply of waste and the need for the gas.

Cultural and environmental conditions on Guam make widespread adoption of this technology unlikely. If

it were adopted, the total amount of energy supplied by such a system is likely to be small in

comparison to present use on the island.

SO
Solar Thermal Energy Conversion

Solar thermal energy conversion (STEC), the converting of solar energy into thermal energy and

then into electricity via the steam cycle, has received a great deal of attention recently. While

several experimental STEC systems have been fielded, much development work remains to be done. At the

size of the present configurations appropriate for a small village, the first experimental distributed

collector systems are just beginning to accumulate operating experience. As yet, little information is

available on reliability or durability, especially under the relatively hostile wind and corrosion

environment existing on Guam.

Sizes presently being worked on are probably too small for what Guam seems to need for its urban

centers. However, there may be applications for a single "dish" (10 meters, 30 feet in diameter) which

can supply about 15 kW peak power at a remote site.

The land availability question remains. It is anticipated that about 30 ha would be needed to

generate 10 MW at peak solar incidence. Because the solar resource is about 5 kWh/m2-day, in order

to provide the same energy that a baseload oil or diesel system provides, the size would have to be

more than quadrupled. Land requirements might amount to 150 ha (1.2 kilometers square) for a STEC

system which would generate the same total energy as a 10 MW diesel driven or oil-fired electrical

generation system.

Little in the way of adverse environmental effects are anticipated. Since the technology is new,

an educational program would be necessary to involve local people in installing, operating and ma1ntaining the STEC system.

STEC, like wind and photovoltaics provides an intermittent power source. In order to provide baseload power, an energy storage system is needed. Such storage costs would be over and above the costs

associated with installation of the basic system. Mid- to long-term base load applications might become

more competitive as costs for storage and for STEC fall.

Ocean Thermal Energy Conversion (OTEC)

A temperature difference of at least 24°C (43°F) is found between the surface and waters at depth

throughout the ocean surrounding Guam. In particular, such a temperature difference is found just off

Cabras Island, the proposed site of Guam's OTEC plant. Based on this, and on experimental results for

OTEC worldwide, the Government of Guam has entered into an exclusive agreement with International

Energy Enterprises to design and construct a shore-based OTEC plant on Guam. Present plans involve

attempting to obtain private financing to build one 5 MW OTEG module with a double sized cold water

pipe (GWP), thus allowing expansion to 10 MW later. The site on Cabras Island is thought to provide

close-in access to thermal resources which could eventually allow a total of up to 50 MW capacity at

the plant. As with coal, bio-mass, and solar ponds, OTEG also promises to be a baseload power source.

While information and operational experience is now being accumulated on the performance of cold

water pipes in ocean environments, pipes to date have been much smaller in diameter than those needed

for megawatt sized OTEG plants. The 100 kW OTEC system the Japanese built in the Republic of Nauru

used a 70 centimeters (28 inches) cold water pipe, while those needed for MW sized plants must be 5 to

10 meters (16 to 33 feet) in diameter. The heat exchangers used to date have been titanium, and seem

to have performed well. A scale-up by a factor of 10 to 100, however, may introduce problems unforseen

at the present time. Recent work by the Trane Corporation on aluminum heat exchangers has been

promising. If it is successful, significant cost reductions can be achieved. The pumps and associated

massive flows of both cool and warm water are also on a scale unprecedented in such applications. In

short, while development of the technology is proceeding well, it is not yet commercial at any size.

The ever- present danger from typhoons and the associated high winds will certainly be among the

controlling engineering design factors for such an installation on Guam.

The Guam proposed 5 MW OTEG plant would be of such a size that it could make a significant

contribution to the accumulation of operational data for commercial sized OTEC plants. It would also

contribute to total base load capacity needs on Guam.

The Government of Guam is strongly committed to the concept of an OTEG plant on Guam, thus, there

already is an official acceptance of it. Since the Guam agreement envisions a shore-based plant on

Cabras Island, and there appears to be adequate land there, land availablity should not be a problem.

Negative environmental impacts are expected to be small. The University of Guam has an

outstanding biological oceanography department which could certainly do the detailed studies necessary

to determine the validity of this expectation. On the positive side, it is possible that the cold

water effluent could be used for mariculture, thus combining energy production with food production.

51
The people of Guam are perhaps better prepared than most of the Pacific inhabitants to playa role

in installing and performing routine O&~ on an OTEC plant. However, the sheer magnitude of the

component parts and the nature of the technology will require a major training program and a continuing

need for people well educated in modern technology. These programs should extend into the existing

school systems. Because the technology is so new, an adequate support infrastructure must be

established for repair and replacement parts and/or servicing either on-island or off.

Liguid Fuels Conversion

In addition to the use of bio-mass for generating electricity, sugar cane, cassava and other crops

have been grown and fermented to synthesize alcohol in many parts of the world. However, the technology

for liquid fuels conversion is not yet commercial. In addition, currently realized yields of alcohol

per hectare are relatively low, and the amount of land available for this purpose on Guam may not be

sufficient to have much of an impact on fuel use. The technology might prove useful for a single farm

where sufficient land could be devoted to "energy crops" to make the farm self-sufficient in fuel for

tractors and other farm vehicles. This would also make the by-products like stillage available locally

for use as animal feed without the necessity of drying or transporting. Liquid fuels conversion also

makes sense where there is a waste stream, such as spoiled corn, which can be used in this way instead

of being thrown away. Before this proceedure can be evaluated for use on Guam, more data on specific

crops and procedures need to be gathered.

Ocean Tidal and Currents

Tidal energy converSlon is in comDercial use in some parts of the world. However, the tidal range

at Guam is small. Few ocean current measurements have been taken near Guam. Unfortunately, ocean

currents have such a low energy content and the mechanisms for harnessing the energy are so massive that

utilization of flows likely to be found near Guam would probably have to be on such a large scale and so

expensive as to be impractical.

Hydropower

A number of hydropower resource studies have been conducted on Guam. One of the most recent was

by the Army Corps of Engineers. The general conclusion of these studies is that the resource is not

large enough to have a significant impact on the electricity supply problem for Guam.

FINDINGS AND RECOMMENDATIONS

With the base load and peak electricity demands on Guam running 120 MW and 155 MW, there is good

opportunity to replace a significant fraction of the oil-fired generating capacity with alternate fuels.

Table 3-4 summarizes the most promising technologies which can make a major contribution to the base load

power requirements:

TABLE 3-4

PROMISING BASELOAD ALTERNATE ENERGY TECHNOLOGIES

TECHNOLOGY

CONS/ENER MGMT

COAL (RETROFIT)

COAL

~SW

BIOMASS (TREES)

SOLAR PONDS

PHOTOVOLTAICS

STEC

OTEC

READINESS

Now

Now

Now

Now

Near Term

Mid Term

Long Term

Long Term

Long Term

LAND FOR 10 MW PLANT

Little or none

Existing plant

Existing plant

Existing plant

8000 ha (5000 acres)

200 ha (500 acres)

80 ha (200 acres)

150 ha (370 acres)

Existing area on Cabras

In addition to these base load technologies, solar water heating and bio-gas production have the

potential to reduce energy demands on the central power system. Energy thus released could then be

used for industrial expansion, providing more jobs.

52
Conservation of energy is not new to Guam, but it may be that additional efforts will still be

effective. Energy management techniques and better record keeping may also help consumers in their

efforts to minimize energy costs while accommodating needed expansion of business.

Generating electricity with coal-fired boilers is one of the most promising technologies for Guam.

There are a number of sources worldwide for coal, and coal costs are likely to remain well below those

of oil. Costs for converting the Cabras oil-fired plant to coal are projected to be recovered in about

11 years through lower fuel costs.

Municipal solid waste is presently routinely collected on Guam. Processing it and using the

combustible portion to generate electricity makes very good sense. Projected power available from the

waste amounts to about 2 MW without military participation and about 4 MW with their waste. In

addition, problems of solid waste disposal are mitigated.

Bio-mass is also a very promising electrical generation technology for Guam. There is sufficient

land suitable for agriculture which could be dedicated to a tree farm. It may be that the expressed

desire of the Government of Guam to become self-sufficient in agricultural production will lead it to

dedicate this land for food purposes rather than for tree farms. It is possible, however, that some

land might be made available by the United States military.

Salt-gradient solar ponds present an attractive option for Guam if the environmental problems of

brine leakage can be overcome. Land use requirements for a solar pond are only about 1!40th of those

required for a tree farm to fuel an equivalent sized plant, and solar ponds have the possibility of

functioning not only as base load plants, but also as peaking plants.

Photovoltaics currently finds its best uses in remote, low power applications where the

intermittency of the energy source is not a drawback. However, the fact that it is among the most

efficient technologies in use of land, makes it very attractive for Guam where land is at a premium.

Solar thermal energy conversion is just now beginning to accumulate operational experience. It

too is an intermittent source and would have to have a storage mechanism in order to function as a

baseload system. The components of a solar thermal system, as they are presently designed, are not

likely to survive the wind and weather conditions on Guam. A single "dish" might find application at a

remote site.

The winds on Guam are apparently not strong enough to make a significant contribution to energy

needs. If enhanced wind locations can be located, this source may merit another look.

Ocean thermal energy conversion is being developed principally by the United States and Japan.

While good progress is being made, the technology is not commercial at the present time.

Use of bio-mass for synthesis of alcohol is not yet economical. It may prove useful for farm

self-sufficiency. Harnessing of ocean currents requires large equipment and is not economical for

Guam. Hydropower on Guam, while it could be harnessed for small, isolated applications, is not

abundant enough to have a significant impact on energy needs.

Table 3-5 lists the energy planning recommendations for Guam.

TABLE 3-5

ENERGY PL~~NING RECOMMENDATIONS -- GU~~

o Improved energy management

Establish the actual costs of generating electricity

Bill the consumers in accord with use and actual costs of generation. Continue the

comprehensive billing and collection program.

Establish and enforce energy efficiency standards for all new buildings in Guam

- Extend and encourage energy education in the comm~ity

- Implement solar water heating on government buildings where feasible as a demonstration

project

o Investigate alternate energy technologies where appropriate.

53
Conduct a comprehensive engineering study of the use of coal at the Cabras electrical

generating plant. Both the retrofit case and the new plant case should be studied and the

costs determined.

- Carry out an analysis of use of MSW for generation of electricity, complete with estimates

of capital, and operation and maintenance costs

Do a detailed engineering feasibility study on a bio-mass tree farm electrical generation

system for Guam

- Continue to monitor the development of salt-gradient solar pond technology. As the

technology matures and the costs decline, evaluate the suitability of salt-gradient solar

ponds for Guam.

- Stay abreast of developments in photovoltaic technology. Apply photovoltaics where and

when it is appropriate (remote, stand-alone systems at present). As the technology,

especially the storage technology, develops, restudy its applicability to baseload power

for Guam.

- Continue to follow ocean thermal energy conversion. As the technology matures, evaluate

its applicability to Guam.

Take wind data at specific sites with potential for multi-megawatt installations. If the

resource can be confirmed, then manufacturers and investors should be contacted to develop

systems which can survive on Guam.

54
CHAPTER 4: ENERGY PLfu~NING FOR THE REPUBLIC OF PALAU

The Republic of Palau presently relies entirely on petroleum fuels for energy. It is unusual

among the island nations in that there is a significant amount of generating capacity in the private

sector, but only the government produces power for resale. The Republic is an archipelago of 350

tropical islands and islets located in the westernmost part of the Caroline Islands about 960

kilometers (600 miles) from the Philippines and some 1280 kilometers (800 miles) southwest of Guam (see

Figure 4-1). The main group of Palau Islands is dominated by the 390 square kilometer (150 square

miles) island of Babe1daob, Micronesia's largest land mass. A chain of smaller high and low islands

running 200 kilometers (125 miles) in length, and four small coral atolls some 400 kilometers (250

miles) to the southwest make up the rest of the Republic. The combined total land area of the islands

is about 490 square kilometers (190 square miles).

Just over 12,000 people live in the Republic of Palau. Adjacent to Babe1daob and connected to it

by a single-span bridge is the smaller island of Koror, where about 8000 people live and which has been

the administrative center of the archipelago since the era of Japanese control. Koror and the southern

part of Babe1daob are served by a central power system. Even though there is theoretically sufficient

generating capacity to meet existing needs, the distribution system has been too small and unreliable

to deliver the power generated. That system is now being improved. Pe1e1iu also has a small system

which provides service only intermittently. Major commercial users, such as Van Camp fish processing

and the Continental Hotel have, in the past, found it necessary to supply their own energy needs to

avoid unscheduled shutdowns. The unreliability of the electrical power system has discouraged

commercial development.

The Pa1auan government is nearing completion of financing arrangements to build new oil-fired

generating capacity. If this is done, the urbanized area will have excess capacity available for

economic development and the Republic will be committed to petroleum fuels for the near to mid term for

a major portion of its electrical generating needs.

The Republic of Palau is one of the governments which has recently emerged from the Trust

Territory of the Pacific Islands. Thirteen years of negotiations ended in August 1982 when Palau and

the United States signed a Compact of Free Association. The Compact, which sets forth agreements

governing relations between the two countries for the next 50 years, must now be ratified by the United

States Congress and approved by the electorate of the Republic. It is likely that economic planning

based on development of Palau's natural resources, including its great natural beauty and its renewable

energy resources, will now be able to proceed with a greater proportion of specifically identified

projects and a better understanding of energy needs than has heretofore been possible.

Palau's waters contain some of the most spectacular and diverse reef systems in the world. It is

a virtual paradise of reefs, lagoons, miniature limestone islands, saltwater lakes, and mangrove

swamps. The ecosystem of these waters is complex and delicate. It harbors the rare marine crocodile

and the even rarer dugong (sea cow). Between Koror and the southern Palau islands of Pe1e1iu and

Anguar are the world-famous Rock Islands, a series of tiny, mushroom-shaped limestone outcroppings.

The Palau Group land mass is volcanic in origin with basaltic structure and limestone formations

predominating. The main islands are reasonably well-watered and thickly vegetated. Babeldaob's

rolling hills reach an elevation of about 210 meters (700 feet) in ~aces. Its forested interior

contains many small streams. Much of the upland area supports only coarse grasses; hardwood trees and

other useful plants occur in certain areas of the interior. Wildlife is scanty and of little economic

value. Most of the other islands are composed of coral limestone, and some are too dry and barren to

invite habitation. Coral reefs fringe the islands and enclose quiet ", shallow lagoons. On the seaward

side of these reefs, the banks drop off sharply to the ocean depths.

The climate is hot and humid most of the year with little variation in daily temperature, which

ranges between 24°C and 29°C (75°F to 85°F). Northeast trade winds blow steadily from December through

55
134'30' 135'

ll" 8'

Figure 4-1

The Republic of Palau

t 7'

N

pAngaUr

0 10 20 30 KM

0 10 15 20 MI

134'30'

56

135'
April. Winds are light from June through November. Typhoons, though infrequent, are likely to occur

between July and September throughout the western Carolines. Rainfall is heavy throughout the year,

though heaviest from July through September. The average annual rainfall is approximately 380

centimeters (150 inches).

HISTORY AND POLITICAL DEVELOPMENT

The early history of Palau is shrouded in legend and myth. Although Palauan legend presents its

world as a relatively closed and complete universe, the archipelago was probably settled by an

Indo-Malay people around 1500 B.C. For thousands of years Palauan culture and matrilineal clan systems

flourished. The world of Palau was divided into two competing, embryonic semi-states: Babeldaob,

centered on Melekiok Village, and Youldaob, roughly present-day Koror. These states were chronically

at war and even today preserve an intense socio-political rivalry. The archaelogical evidence suggests

that Palau once had 30,000 inhabitants.

After western contact began in the sixteenth century, the islands were nominally a Spanish

possession, but that country made little effort to exercise control until 1885. Following the Spanish

American war, Spain sold her interests in the Pacific to Germany. German sovereignty lasted only until

1914, when the Japanese seized Germany's holdings in Micronesia and retained them until their surrender

to the United States at the end of World War II.

Japan had an economic as well as military stake in its Pacific possessions and encouraged their

colonization by Japanese nationals. At one time approximately 24,000 Japanese lived in Palau, far

outnumbering the indigenous population. From 1945 to 1951, the islands were under the jurisdiction of

the United States Navy, at first under military control and later under a civilian government. Until

the establishment of the Republic of Palau in 1981, the islands were administered by the Interior

Department under a trusteeship agreement with the United Nations.

POPULATION AND EMPLOYMENT

In 1980, Palau's resident population was 12,172. This figure was down slightly from that of 1973

(12,673) because more Palauans went abroad to seek education and jobs. Some 1800 Palauans lived abroad

in 1980. With a population growth rate of 2.1% in 1979, down from 3.3% in 1973, Palau's population is

growing more slowly than that of the rest of Micronesia. In 1973, 59% of the population was under 19

years of age. Current projections for resident population are:

1985

1990

1995

2020

14,050

16,050

18,400

26,000

About 8100 people or 65% of Palau's resident population, live in Koror where 70% of jobs in the

wage sector are located. A major development goal now that the K-B bridge links Koror to Babeldaob and

a road system is being extended along the big island's shores, is to reverse the drift of population

into overcrowded Koror and to foster commercial agricultural growth in the rich lands of Babeldaob.

There are some encouraging signs that as amenities and roads are extended to the big island, families

are returning to live in their horne villages within commuting distance of the capital. It is expected,

however, that Koror's resident population will reach 13,000 in 1995, despite major efforts to open up

economic opportunity elsewhere in the Republic.

At present there are about 3200 jobs in the wage sector; 46% of these are in government.

Unemployment is a high 28% of the labor force. As of June 1981, Palau had 622 alien workers; 388 were

nonresident fishermen, and the rest worked in trades and administration. The level of income in Palau

is substantially in excess of the international poverty level and higher than that of any other

Micronesian Island group. There is no significant malnutrition or poverty. If economic development

does not keep pace with population growth, however, this situation could change.

The plan target is to reduce unemployment to 22% in 1985, 18% in 1990, and 14% by 1995, taking

some subsistence agricultural and fishing activities into account. This means the present number of

jobs must double by 1995, primarily through additions in the private sector. The government has plans

for an educational system which offers children an opportunity to prepare realistically for the future

and which diminishes the attractiveness of bureaucratic careers in comparison to other endeavors that

are important for Palau's economic development.

57
The economy is heavily dependent on United States payments to finance the cost of government.

Government, in turn, is the principal employer in Palau with 46% of the total work force on its

payroll. Under the pending Compact of Free Assoc~ation, United States Government support payments and

economic assistance will continue at substantial levels over the next SO years.

ECONOMY AND INFRASTRUCTURE

Palau's Gross Domestic Product rose from $14 million in 1975 to about $20 million through 1979.

Of this 1979 amount, the United States contributed about $9 million in public sector support payments.

Locally-generated tax and other revenues produced about $3.3 million.

One key economic indicator is the dollar value of the total amount of goods and services generated

in Palau, the Gross Domestic Product, and its present value compared with those of recent years. The

1977 Indicative Development Plan for Palau drew upon FY 1975 data to develop estimates of GDP. The

most recent data available from Trust Territory sources cover FY 1977. These data are presented in

Table 4-1.

Table 4-1. Preliminary estimates of the Gross National Product of Palau

FY 1975 (July 1974 - June 1975). FY 1977

(October 1976 - September 1977) and FY 1979

(Millions of 1981 $)

YEAR

1975 1977 1979

Compensation of Employees

Taxable wages ... salaries 7.5 9.2 10.3

public 5.1 5.8 6.5

private 2.4 3.4 3.8

Imputed rental value of free

employer-furnished accommodation 0.2 0.1 0.1

Personnel benefits and other income 0.2 0.5 0.6

Subtotal 7.9 9:8 11.0

Operating Surplus

Private business enterprises 3.1 3.4 4.3

Copra production

Value of nonmarketed production 2.0 2.2 2.5

Imputed rental value of owneroccupied housing 0.4 0.5 0.6

Imputed rental of free government

accommodations 0.1 0.1

Subtotal 5:6 6:l TI

Consumption of fixed capital 0.5 0.5 0.5

Indirect taxes less subsidies 0.6 1.0 1.0

GROSS DOMESTIC PRODUCT 14.6 17.4 20.0

Sources: Data for FY 1975 and FY 1977 taken from 30th Annual Report by the United States to the

United Nations on administration of Trust Territory, FY 1977. Data for 1979 are

extrapolations prepared by Rivkin Associates.

Palau's principal economic sectors--fisheries, agriculture and tourism--are producing well below

their potential as a result of a multiplicity of constraints. The infrastructure of the main islands

impedes all development because it is either insufficient or in generally poor condition. Roads,

water, sewers and electric power systems are unreliable and poorly maintained. All electric power is

generated with costly, imported diesel fuel, and this total dependence requires heavy United States

subsidies. The private sector lacks a means of credit to finance new enterprise and is prevented from

expansion by the infrastructure deficiencies.

58
POTENTIAL FOR ECONOMIC DEVELOPMENT

The basic economic development goals of the government of the Republic are to increase economic

self-sufficiency, to reduce or eliminate financial dependence on the United States, and to improve the

overall standard of living in the urbanized area and throughout the sixteen states.

Palau, along with the other Pacific Island nations, must pursue its economic development under

constraints of limited land, water and skilled "labor. However, Palau is in a particularly favorable

situation now that the final details of the 50-year Compact agreement are being worked out. Both the

present Capital Improvement Project (CIP) and the program to be implemented under Section 212 of the

Compact address the need to improve infrastructure and provide a support base for economic

development. Air and sea traffic facilities that could enable Palauan products to reach other East

Asian markets have a high priority under these programs.

Past concerns about imbalances in the economy, particularly with respect to consumption and

savings and to the balance of international trade seem to have lost their relevance in the light of

this capital works commitment. The trade gap is not a pressing problem at this time, and it is

expected to resolve itself as the CIP programs are completed, allowing exportable surpluses to be

produced.

Palau imports food, and the copra mill depends on imported copra. Local agricultural production

in both food and coconut is well below its potential. Small-scale subsistence agriculture is practiced

1n the outer islands and around Koror. However, much of the available agricultural land is not now

cultivated, reflecting inadequate incentives for villagers to increase production above subsistence

needs.

Government policy is to improve small-scale agriculture by giving villagers incentives to plant

crops for the Koror market and to stimulate large-scale production of coconut and other crops for which

Palau has processing and export potential. However, the rural populations are characterized by elderly

individuals and couples living alone with small grandchildren. Those who are old enough to join the

labor force have migrated to Koror seeking jobs. Any labor-intensive economic scheme proposed for the

outlying areas must take these sociological factors into account.

It is anticipated that once the land use needs of the United States Government under the Compact

are identified and the recently undertaken soil survey by the United States Soil Conservation Service

is complete, Palau will be in a position to prepare a land use plan as the basis for fostering

increased agricultural production.

While fishing now provides amply for local needs, there is every indication that the Republic

could earn significant amounts from seafood exports. The tuna and reef fishing industries could be

greatly expanded, and the potential of other varieties of seafood (clams, trochus, shrimp, lobster)

remains to be exploited. Infrastructure improvements. especially for refrigeration and storage, would

be needed. The present fishing service industry is run down and needs to be repaired and expanded.

All ship repair facilities at Malakal and Peleliu are presently idle but could be revived.

Sustained, reliable sources of water and electric power will be needed for an expanded fishery and

processing operation. Van Camp, under the terms of the Compact, will receive considerable United

States tax and customs duties incentives. Its operations could be expanded considerably depending on

the scale of the catch and the services available. The company now provides its own power for the tuna

processing facility. Much of the needed improvement in power facilities and port expansion is planned

under the United States support commitments. The Republic will, however, need to supplement this with

direct investments in preservation facilities and refrigeration vessels to transfer catches from

outlying areas to Koror.

It is expected that tourism could become a major contributor to the economy by the mid 1990s. At

present there are four hotels with a total of 91 rooms. Expanded hotel capacity is needed, as are

diving, boating, rental car and other support facilities. The government concern is to develop tourism

without threatening the environment or damaging the Palauan culture.

Minerals represent another potential resource that may have economic significance for Palau.

Residents of Angaur have recently signed a 10-year agreement with a Japanese group for the extraction

of over 900,000 tonnes (one million short tons) of phosphatz. No other extraction activity is in

progress, but the remaining bauxite deposits on Babeldaob merit re-examination, as do studies to

identify potential seabed mineral resources beyond the reefs.

59
Present Capital Improvement Program

Project commitments under the Trust Territory Capital Improvement Program are expected to be

completed within the next two years. The estimated total value of the present CIP is approximately $36

million (1980 $). The basic thrust of the CIP is to provide the urbanized area of Koror and its

satellites of Arakebesan, Malakal and Airai with improved services and facilities to sustain population

growth and economic development. Projects are also scheduled for the secondary centers of Peleliu and

Angaur.

Under the CIP program, some 17 kilometers (10.7 miles) of primary and secondary roads are being

upgraded to all weather standards in Koror, Arakebesan, Airai and Malakal. This is in addition to Navy

road building on Babeldaob. The container storage area at Malakal dock is being upgraded and expanded,

and several projects are being undertaken in the urbanized area to provide sustained, reliable water

sources and distribution systems which meet United States clean water standards. At Peleliu, the

present CIP includes building water catchment facilities, storage pumps and a distribution system. At

Angaur, storage pumps and a distribution system are planned.

Sewer systems are being completed in Koror under the CIP (23 satellite pumping stations). A major

extension and upgrading of the main Airai airport near Koror is nearing completion. Lighting,

generators and electrical connection to the main Koror power system will be provided.

Generator improvements (with a projected 20-25 year life) have recently been installed to upgrade

the Koror power plant. Upgrading of power lines in Koror is also intended. The existing lines to the

water treatment plant will be replaced. All of this work is predicated on continued reliance on

petroleum based power generation.

Compact Capital Commitments

The provisions of Section 212 of the Compact of Free Association commit the United States to

construct major physical facilities necessary to support economic growth in Palau. Details are spelled

out in a supplementary agreement to the Compact. While some of the Compact activities will be in the

urbanized area, the major significance of this program will be to open up Babeldaob for economic growth

and to provide basic infrastructure necessary to growth in other remote areas. The United States will

have the first fifteen years under the Compact to complete construction projects identified for the

post-trusteeship CIP. A timetable for the CIP projects has not yet been decided, although it is

expected to be completed before the plebescite is held on the overall Compact. The present array of

projects anticipated under this program are as follows:

1. Roads: Perhaps the most significant Compact project will be building a 85 kilometers (53

miles), all-weather road network on Babeldaob.

Spurs will be completed to several villages, providing farm-to-market opportunities in support of

agricultural development.

In addition, 13.6 kilometers (8.5 miles) of secondary roads in the urbanized area and 16.2

kilometers (10 miles) of roads on Peleliu will be improved.

2. Ports, Docks and Channels: Ports, dock and channel facilities will be upgraded in the

urbanized area, and certain outlying communities will be provided with adequate docks and

channels to support fishing and inter-island transportation. At Malakal, 137 meters (450 feet)

of the existing wharf area will be improved. Dock and channel improvements will be undertaken

at Peleliu, Anguar, six villages on Babeldaob, and Kayangel. New docks will be installed at

the outer islands of Tobi and Sonsoral.

3. Airfield: The Peleliu airfield will be upgraded.

4. Water Systems: Water systems will be installed for six villages on Babeldaob and four outer

islands. A 2745 meter (9000 foot) long, 15 centimeter (6-inch) water pipeline will be

installed to Airai village.

5. Wastewater Disposal: The existing Koror waste water disposal system will be extended to

Arakebesan.

6. Intervillage Communication: Transceivers are to be established for 30 remote locations,

although all or part of this effort may be subsumed under present Trust Territory

communications improvement programs and the Comsat operation.

60
7. Educational Facilities: A total of 72 classrooms are planned for various locations, and a

gymnasium will be provided for the Koror High School.

8. Health Facilities: Two new dispensaries will be built outside the urbanized area and two

existing dispensaries will be upgraded.

9. Administration: The existing public works facility at M-Dock will be razed and relocated to a

52 square meter (6000 square foot) covered space on Malakal. This will free a key location

near the center of Koror for new development.

Other high priority capital requirements are being considered for funding under the Compact

capital improvement provisions. These are:

1. An all-weather airport terminal at Airai to provide services for passengers and cargo to handle

an expected major increase in air service.

2. A public transportation system for Koror. to reduce automobile use and to improve public safety.

3. Some form of regular boat service for passengers and goods between Babeldaob and Koror.

4. Improved solid waste disposal practices for the urbanized area, involving major upgrading or

relocation of the Koror dump.

5. An improved and expanded administrative-legislative-judicial center jn Koror.

6. Improved communications systems throughout the Republic. Palau has signed a contract with

Comsat for a United States-financed ground station and related facilities. Comsat will

institute services permitting long-range telephone. satellite television. radio. and other

communications. Operation of the Comsat station is scheduled to begin by December 1982.

Finally two provisions of the Compact have direct implications for future energy development

activity in Palau. The first is found in Section 214. where the United States has agreed to provide,

on a grant basis. for fifteen years commencing on the first anniversary date of the effective date of

the Compact, the sum of $2 million annually as a contribution "to efforts aimed at increased

self-sufficiency in energy production •••• " In addition, Section 221(c) pledges the United States to

make available to Palau (as well as to the Marshall Islands and the Federated States of Micronesia)

such alternate energy development projects. studies and conservation measures as are applicable to the

Trust Territory of the Pacific Islands. for the purposes and duration provided in the United States

laws. Each of these commitments indicates the importance of self-sufficiency to the economic

development prospects of the Republic and provides United States financial assistance in achieving this

goal.

PRESENT ENERGY SYSTEM STATUS

Palau currently has 4.95 MW of diesel-fired electrical generating capacity at the Malakal (Koror)

Power Plant available to serve the urban center of Koror and its immediate surroundings. There is

another 2.9 MW of nameplate generating capacity at the plant. but it is currently out of service for

repairs. In a practical sense. however, only a little more than 3 MW of this total 7.85 MW installed

diesel generator capacity can be made available at any given time. Substation limitations prevent full

utilization of the system's diesel capacity. Substation improvements have been considered in Palau for

some time, however the agreement about and timing for construction of a new main station plus line and

substation upgrading have not been made final.

To help meet electrical demand in the Republic, a 3.2 MW gas turbine generator was installed in

Koror in 1982. The generator is on loan from a British firm pending completion of an agreement with

the Palau government for a new residual oil-fired power plant to be supplied by the firm. Electrical

output from the gas turbine is delivered directly to the grid, bypassing the substation and its

limitations. thus allowing a peak demand of around 6 MW to be met occasionally. Generator performance

problems, both at the main" station and with the gas turbine. pr~ent a steady 6 MW load from being

served at all times. A total of 20.2 million kWh of output was produced at the Malakal Power Plant in

1980 (see Table 4-2).

A listing of the installed diesel generating units in Koror~ including rated capacity and status

of each. follows:

61
750 kW White Superior

750 kW White Superior

1000 kW White Superior

800 kW Caterpillar

800 kW Caterpillar

1250 kW ALCO

1250 kW ALCO

1250 kW ALCO

Can only generate 400 kW due to radiato~ and engine

problems

Down; awaiting parts on order

Down; awaiting parts on order

Down, switchgear/electrical problems

Operational

Operational

Operational

Operational (Because of radiator cooling problems,

only two of the three ALCO units can be operated at

this time.)

A combined total of approximately 1 MW of other electric generating capacity exists ~n small

diesel units serving outer islands and villages. The high cost of fuel restricts the operating time of

most of these units to four to six hours per day. About 2.2 million kWh/year were generated at these

sites in 1980, with a total peak load of .1 MW being served.

Table 4-2

GOVERNMENT ELECTRIC POWER GENERATION, PALAU 1980

FUEL

Type Amount Price(a)

Purchased

(1000's of ($/bbl)

bbls)

LOCALITY OUTPUT

(million kWh/y)

END USE

(million kWh/y)

Res Comm'l/ Milit Rated

Gov't

Indust

CAPACITY

(MW)

Operating

Standby

LOAD

(MW)

Base Peak

Diesel 44.0 53.76 Koror 20.2 3.0(b) 3.0

Other ---14.8--- 7.6 7.75(c)

islands 2.2 1. 0 (b) 0.1

TOTAL 22.4 ---14.8--- 7.6 7.75(c) 4.0(b) 3.1

(a) Diesel price at the Mobil Bulk Plant, February 1981, exclusive of taxes and local transportation

(b) Reflects derating due to climatic conditions

(c) Nameplate capacity including deadlined units

As of 1980, there were almost 1500 connection to the main Palau electric distribution system, 455

of which are unmetered. The policy in Palau has been to honor new requests for hook-ups, provided

system reliability will not be impaired. However, the outdated distribution system has effectively

limited the peak demand which can be met, and therefore the number of end-users that can be served.

Electricity users throughout Palau are currently charged only 6i of an estimated 21t/kWh cost of

production; that estimated cost is based on fuel cost only and does not include operation and

maintenance. Generation costs for each of the four newest units (three ALCO and one gas turbine) are

roughly identical. The current rate structure necessarily results in government budget deficits that

will continue to grow as power demand increases. The bulk of unmetered users are government agencies,

consuming some 35% of all power generated in Palau.

Due to reliability problems with the Koror system, many large industrial users have been obliged

to install their own generators. The large fish processing plant in Palau has generators with 500 kW

62
total operating capacity, the United States Army has a 350 kW plant for communication services, and the

largest hotel on the island of Koror has a 350 kW unit. At least 2 MW of generating capacity is now

privately owned.

In the residential/commercial end-use sector, the principal uses of electric power are cooking,

refrigerating and lighting. There are few electric hot water heaters, and air conditioning tends to be

in government rather than private buildings. Typical electrical consumption in the residential sector

(expatriate-occupied dwelling units excluded) is estimated at about 70 kWh/month.

About 30% of the 148,000 barrels of petroleum products consumed in 1980 were used to generate

electricity. The principal users of oil products, however, are the fishing and fish processing

industries. Transportation fuels represent the third major category of petroleum use in Palau. Over

1300 automobiles (private and government), 100 registered and many more unregistered boats, plus

commercial aviation, comprise the specific uses of fuel within the transportation sector. The

government of the Republic operates a very limited field ship system, so fuel used for interisland

transportation of people and goods is included in the marine transportation sector.

Economic development goals in Palau center on enhancing three major activities: tourism,

fisheries, and agriculture. Sufficient and reliable public power will be required to attract potential

investors, otherwise the government of the Republic will have to offer tax compensations to industries

that have to develop their own power sources. The government of Palau prefers the first option and is

now in the planning stages of an effort to increase its central electric generating capacity

significantly.

In 1982, the Republic reached a preliminary agreement with the IPSECO company of Great Britain

that will, when concluded, result in construction of a 16 MW residual oil-fired generator and

transmission system for Palau. The proposed $27 million system would replace existing capacity now in

place in Koror and supply power to Babeldaob Island. Plans are being considered to bring the electical

grid to all of Babeldaob's coastal villages, although the cost is expected to be extremely high. One

estimate cites a cost of $5 million for such a grid extension.

As a result of the preliminary agreement with IPSECO, Palau has been provided with the portable 3

MW generating turbine now in use at the Malakal station. It is being used to augment power, as needed,

at that facility. The proposed 16 MW plant to be provided Palau would be privately financed by a

British bank. Negotiations for financing and site of the new power plant are still pending. A major

concern of the Palau government has been to structure the project so that it can eventually be

self-financing. The proposed generators would burn Bunker C grade fuel, available through Singapore at

much less expense than the diesel fuel now used at the existing plant. A proposed quasi-governmental

Public Utilities Agency would sell fuel from a proposed tank farm that would be built in conjunction

with the power plant. Revenue from sales to local consumers and fishing vessels would provide

additional funds with which to pay back the loan.

This large project is being planned with the objective of providing electrical power to supply

economic development in Palau for the forseeable future. Only with the guarantee that adequate

capacity and reliable distribution systems exist, will outside investment be attracted to Palau.

Revenue from power sales to these potential investors can then contribute to the retirement of the debt

incurred to build and operate the new plant.

PLANNING FOR THE FUTURE

Outside the urban area of Koror and the areas of Babeldaob that are to be electrified, energy

options other than petroleum fuel based power plants must be considered. Should the 16 MW plant be

constructed on Koror, the present generators on that island (the three ALCO units) may be dispersed to

the outer islands (i.e. Peleliu). Villages in the interior of Babeldaob and elsewhere in Palau where

electric grid extension will not soon be available are potential sites for the application of one or

more renewable energy resources. Investigation has gone forward as to the most feasible candidates for

early adoption in such areas. These technologies will be addressed in more detail below.

Those alternate energy systems of most potential significance in Palau can be identified by

applying to all candidate technologies the selection criteria presented in Chapter 2. An examination

of the technical, economic, and social factors represented in these criteria, when based on

circumstances unique to Palau, can indicate the relative appropriateness of each option. These

alternate technologies and their possible role in meeting Palau's current and future energy needs are

outlined in Table 4-3 and discussed below.

63
Table 4-3

Technology selection Criteria

SOLAR BIOMASS

Solar Photo- Solar

Hot . Therm- WIND GEO· HYDRO- Tree. Liquid

Water voltalcs al ENERGY THERMAL ELECTRIC Farms BlOgas Fuels MSW OTEC

OCEAN

CURRENTS

AND SOLAR

WAVES PONDS

ENERGY

COAL M~~~ERESOURCE

proven • • • •

suspected • • • • •

unknown • • • • none • •

TECHNOLOGY READINESS

IN PACIFIC

high • • • • !

• •

medium • • • • •

low • • • •

RELIABILITY PROBLEMS

IN PACIFIC

high • • • • • • • • •

medium • •

low • • • •

DURABILITY PROBLEMS

IN PACIFIC

high • • • • •

medium • • • • • •

low • • • •

APPLICATION

centralized • • • • • • • • • • • •

decentralized • • • • • • • • •

POTENTIAL CONSTRAINTS

cultural impact • • • • • • • • • •

land availability • • • • • • • • • environmental impact • • • • • • • • • • •

human resources • • • • • • • • • • • • • • •

infrastructure • • • • • • • • • • • • • •

CAPITAL COSTS

high

(over $1 0,OOO/kW) • • • • •

intermediate

($3,000 - $10,000/kW) • • • • • •

low I

(up to $3.000/kW) • I • • •

i

O&M COSTS I

high • • • • •

intermediate I

• • • I • • • •

low • • •

COST EFFECTIVENESS

near term (0·5 yrs) • I • • • • • •

mid term (6-15 yrs) • • • • •

long term (16·40 yrs) • • • •

EXPECTED OIL

SAVINGS OR AVOIDANCE

high •

intermediate • • • •

low • • • • • • • • • •

64
Energy Management

Energy management practices offer potential savings in oil costs in the grid-served areas of

Palau. The opportunities for savings through conservation are the greatest in the government sector,

where little electricity use is metered. Rate structure reform, gradually imposed, could increase

government revenue and help in the financing of planned capacity additions. Once the Koror generation

and distribution network is improved, more reliable service should be available, thus, encouraging new

investment in Palau. For there to be a maximum amount of power available to support this expected

growth, efficiencies of energy use should be instituted.

A range of simple energy management actions, from elimination of unneeded end-users to an en~rgy

audit and monitoring capability in the government should be pursued. Building energy performance

standards, passive cooling retrofit (particularly of government buildings), metering, rate structure

adjustment, and installation of more energy efficient appliances and lights all promise immediate oil

savings potential.

For areas now outside the Palau grid, energy use and needs surveys could be conducted so that a

better match between demand and energy supply can be made once these areas are developed. The

appropriateness of many renewable energy technologies can be understood only after accurate measures pf

energy load in candidate areas have been identified.

The cost of most energy management activities is small relative to the oil savings return that is

received. Focusing on the government sector first would provide an example to commercial and

residential users and illustrate that there is a social benefit tied to the efficient use of energy.

Training and public awareness programs should accompany all energy management activities.

Hydroelectric

Small scale hydroelectric power production looks promising for Palau. The technology is fully

mature and plant components are readily available. The potential for hydroelectric power production in

Palau is centered on the island of Babeldaob. An analysis of the major drainage basins on Babeldaob

concludes that small scale applications of hydroelectric power appear promising for many of the

island's river basins. In general terms, the five major streams of Babeldaob for which long-term flow

data have been obtained by the United States Geological Survey are characterized by low heads and large

seasonal flow variations. The prime locations for further investigation appear to be the Kumer/Gaden

Basin, the Tabecheding Basin, and in the Ngertebechel Basin at the confluence of the right and left

branches of the Ngertebechel River.

Each of these sites has physical characteristics which would minimize site development costs,

while their locations in relationship to existing infrastructure and demand centers are favorable.

According to the 1981 technical analysis conducted for Palau, the Kumer/Gaden site shows a drop of more

than 18 meters (60 feet) within 90 to 120 meters (300 to 400 feet) of run, with an excellent

impoundment site above. Located within 1600 meters (one mile) of the existing highway past the Airai

Airfield, it could provide peaking power to the Koror grid. The Tabecheding sites, near Aimelik, were

found potentially feasible. Their location near areas of potential agricultural growth could provide a

ready use of both power and water. Overall, a potential of over 1.2 MW of hydroelectric power exists

on Babeldaob, according to this most recent hydrographic analysis. Additional investigation and

site-specific feasibility studies will be required before any site can be developed.

Given the size and location of potential hydroelectric resources in Palau, the applications of the

technology are expected to match well with the small demand centers in the remote areas of Babeldaob.

However, as the grid is eventually extended across Babeldaob, the hydroelectric plants could be

integrated into the network to contribute peaking power to all of Koror-Babeldaob area. The only major

performance issue related to the technology is whether the annual flows of candidate rivers will be

sufficient to provide reliable power, either in a base or peaking capacity. Impoundment design will

have to account for the intermittency of stream flows wherever they occur.

There are a number of potential constraints on hydroelectric development in Palau. Sufficient

land may not be available, and the environmental impacts pften associated with hydroelectric proposals

will need to be addressed. The more remote the development site, the more capital intensive will be

the construction and installation effort. Though some potential sites are close to the Koror urban

area, many require access by boat at this time, pending further extension of the coastal road around

Babeldaob.

65
Despite the absence of detailed feasibility studies, and the potential land and environmental

constraints, it is possible to say that there is a limited near-term potential and possibly more

significant mid-term potential for hydroelectric power in Palau. Once the designation of competing

land uses in Babeldaob is better understood. the most favorable hydroelectric sites should be given a

more detailed examination. In the interim, additional site characterization and economic feasibility

analyses should be conducted.

Solar

Characterization of the solar insolation resource of Palau has begun only recently. Monthly

average daily insolation values from 4.2 to 5.3 kWh/m2-day have been derived from the available

sunshine data for Koror. This is a sufficient, though imprecise, initial indication of the

attractiveness of the solar resource in Palau. A pyranometer installed on Koror in 1982 is expected to

yield hourly increments of total sky (direct and diffuse) radiation on a daily basis.

Photovoltaics and Solar Water Heating

Despite the lack of firm solar resource data, photovoltaic energy systems have been installed and

are used at some remote sites in Palau for lighting, radio communication, and medical refrigerators.

These and other low-power end uses appear best suited for photovoltaics, particularly in the remote,

off-grid areas '6f Palau. Some of the small, photovoltaic-powered refrigerators have worked poorly in

Palau and in the Marshall Islands and Truk State of the FSM. The problem appears to lie not with the

energy technology but with the design of the appliance expected to operate from the photovoltaic power

source. There is a need to make better matches between end use devices and photovoltaic arrays.

There are no solar hot water or other solar thermal applications in Palau at present. However,

there is a demand for hot water at major commercial installations and government facilities, such as

the Koror hospital where a solar hot water system will be added during pending renovations. The

derived insolation values and general climate of Koror favor the operation of efficient thermosiphon

hot water systems throughout Palau.

Solar hot water and photovoltaic systems are modular in design and lend themselves well to any

number of load sizes. The lack of adequately trained personnel, long a problem in energy system

operation and maintenance (O&M) in the Pacific Islands. will not hamper solar utilization to any great

extent in Palau. Thermosiphon and photovoltaic conversion processes have no moving parts. and the

simplicity of their operation makes each an important energy alternative for the Republic.

As in most other island Pacific Island groups. solar system reliability and durability remain

unknowns in Palau. Long (15-20 year) lifetimes are forecast for solar hot water and photovoltaic

systems in more temperate. nonmarine climates. However. expected lifetimes of the same systems. and

indeed of any energy systems. in the Pacific, may be abbreviated by corrosion, high winds, and other

environmental stresses.

Capital costs for photovoltaics remain high. though cost reductions by a factor of two to three

are possible by the middle of the decade. Low O&M costs over the lifetime of both solar hot water and

photovoltaic technologies help make small to intermediate sized systems attractive now and in the near

term in comparison to conventional diesel generators with their high fuel and O&M costs. Developing

the necessary human resources and infrastructure support (warehousing of spare parts, repair

facilities) would be rewarded even though current capital costs for the technology are high.

Solar Ponds

The insolation resource of Palau, while not quantified in terms relative to solar pond design and

performance. does appear favorable for the technology. The second critical resource required for

development of the technology is sufficient land (or perhaps lagoon) area for construction of a pond.

An examination of the feasibility of salt-gradient solar ponds in Palau has suggested the technology is

ready where acceptable sites are available. •

The smallest practical size for a salt-gradient pond has been identified as one hectare (about 2.5

acres). For many' land-constrained areas of Palau. this requirement might preclude development of the

technology, but sufficient undedicated flat land may be availabl~ for pond construction in some

places. Given the low efficiency of energy conversion associated with the process, ponds larger than

66
one hectare may be required for economical system design. The generating capacity of a one hectare

pond ranges from 15 to 25 kW, depending on factors such as conversion efficiencies, system losses, and

peak versus base load use.

The attractiveness of the solar salt pond concept is in its ability to produce base and peaking

power as needed. The technology is also modular, in that new ponds could be built to accommodate

increments of growth with little lead time. At some point, however, even in the largest of the Pacific

Islands, land constraints due to competing uses will limit the use of the technology. Solar pond

durability in the Pacific environment is not well understood. If a system were unable to operate over

the long term (15-20 years) its cost effectiveness would be seriously affected.

Physical infrastructure and support services would be required for construction and operation of

salt-gradient solar pond power plants introduced to a location such as Palau. Until local skills could

be developed, outside labor would be needed to oversee the construction and O&M needs of the plants.

The uncertainty of actual system performance in a remote area would add to the O&M costs and thus

affect the economic competitiveness of the technology.

Solar ponds sited on reef shelf areas would be likely to pose environmental impacts of some

magnitude. Dredging and impoundment would adversely affect the biological productivity of the offshore

areas. A major breach of pond lining, on-land or offshore, could present water pollution problems of

unacceptable dimension. The proper design of pond lining might at least be able to rule out

catastrophic on-land contamination potential. Slight leaking will be inevitable.

The capital costs of initial solar pond construction in Palau, as outlined in a recent analysis of

the technology, are estimated to be about $20,000 per installed kilowatt. Subsequent plants would

experience cost reductions on the order of 30% to 50%. If such plants could be constructed within this

cost range, and if land use and environmental constraints can be mitigated, the life cycle power cost

would be attractive compared to the alternative of diesel-generated power.

Biomass

The significant land mass and heavy vegetative cover of Babeldaob Island suggest the potential for

certain biomass energy applications in Palau. Forest resource and agricultural census studies have

been completed for Palau, though analysis of findings has not been performed from an energy

perspective. The soils classification survey for Palau completed at the end of 1982 will contribute to

a better understanding of the biomass production potential of the Republic.

Apart from these basic resource assessment efforts, there has been no examination of the potential

for existing or introduced plant, tree, or crop species to provide energy via applicable conversion

processes. Comparisons can be made between Palau and other islands in the Pacific where tree species

favorable to plantation farming and combustion exist. A preliminary conclusion is that there is

sufficient land mass and favorable climatic conditions in Palau, particularly on Babeldaob, to support

tree farming biomass conversion.

The agricultural crop base in Palau is presently limited to subsistence production, with only a

small commercial agricultural sector. Food self-sufficiency is a stated goal of the government and

would appear to preclude redirection of food crops to biomass liquid fuels conversion. Biogas

feedstocks, however, may be recoverable from copra and fisheries industries and could represent an

energy resource for Palau. No assessment of this potential has yet been conducted.

While land may be available in a theoretical sense for intensive tree farming or other biomass

crop production, constraints may be imposed by local land tenure practices, terrain configuration, and

competing agricultural uses. Too-rapid harvesting of any biomass crop can damage soil productivity,

particularly where heavy tropical rains such as those Palau often receives ca'n cause erosion. In

addition, local labor cannot be presumed to be available for biomass plantation establishment and

upkeep. Where labor cannot be assured, the alternative to biomass harvesting is often more

energy-intensive mechanical weeding and collecting practices. The costs added by this approach would

clearly affect the economic competitiveness of biomass energy conversion in Palau negatively.

Perhaps the most limiting constraint to biomass energy development is the lack of infrastructure

on Babeldaob to support resource harvesting, transport and combustion. Until a road network and link

to the urban areas of Palau is is in place, the exploitation of Palau's apparent biomass resource will

not readily proceed. The biomass conversion technologies with some potential in Palau--tree farms and

biogas conversion--are therefore considered mid-term options at the earliest.

67
Wind Energy

The wind resources of Palau have not been characterized with regard to their potential in wind

energy conversion systems. Data exist for only one primary observation station in the Republic, that

of the Palau weather station in Koror. Average wind speeds recorded at this station in 1980 ranged

from 2.4 mls (5.5 mph) in November to 4.1 mls (9.3 mph) in February. Peak wind speeds recorded each

month in 1980 were between 8 mls (18 mph) and 14.3 mls (32 mph).

A wind energy assessment for the western Pacific has been conducted by the University of Hawaii,

based on ship reports of open ocean wind speed. Data were analyzed over a thirty year period

(1950-1979). Based on these data, average annual open ocean wind speed for the area surrounding Palau

was registered as 5.7 mls (13 mph). Average annual power represented by this wind resource is 250

Watts/m2 • Seasonal averages of both measures are presented below.

LOCATION SEASON WIND SPEED (m/s) POWER (W/m2 )

Palau; Winter 6.2 300

Spring 5.5 240

70 N, 134 0E Summer 4.6 ' 175

Autumn 4.9 190

These data are of course representative averages. Highly site-specific wind resource data are

required to justify investment decisions in wind energy systems. Nevertheless, the open ocean wind

speed data from the area around Palau strongly suggest that the wind energy resource available on land

in Palau will be highly variable with respect to seasonal power output of wind energy conversion

systems. Moreover, the trade wind inversion which often enhances the wind resource over high islands

weakens to the west and south of the north Pacific anti-cyclone. As a consequence, high island

enhancement of open ocean wind speeds in Palau is expected to be less significant than it is in Hawaii,

for example.

It is also expected that atolls in Palau will likely experience a slight reduction in open ocean

wind speed due to friction from both land and vegetation. Despite the absence of valid on-land wind

resource data applicable to wind energy system performance in Palau, open ocean wind speed data provide

a valuable indicator of both the promise and limitations of the resource in the area.

The value of site-specific accurate wind speed data cannot be overstated, because the cost

effectiveness of any system depends on its performance in a highly variable resource regime. The

extractable energy could vary so much with changes in wind speed at a given site that, unless this were

known prior to system purchase and installation, system economics could never be adequately anticipated.

Small wind energy conversion systems are presently at a fairly well established state of

technology readiness, however their potential 'application in Palau has yet to be verified by even a

single machine. The end uses which might be served by small wind energy systems would depend much on

the location of the resource. A favorable wind regime near a small village would open up many more

opportunities for the technology than a resource located at some distant or inaccessible site.

Generally, though, wind machines combined with some electrical storage capacity can be used to provide

for a number of low power electrical applications such as a village energy system and battery

charging. Should a wind resource be confirmed at sites near existing electrical transmission lines,

there ,may be the potential for grid-connected fuel saver uses for wind energy conversion systems.

Water pumping applications are also possible with wind systems, because no energy storage is

usually necessary.

The routine maintenance and repair of wind energy conversion systems will be difficult to

guarantee in the near term because parts and repair personnel are not now available in Palau. Without

trained personnel to facilitate O&M as it is necessary, costly imported labor and periods of wind

machine inoperation reduce the economic benefits that might otherwise flow from the technology.

Perhaps the Micronesian Occupational Center in Koror could develop a training program that would begin

preparing Palauans and other Pacific Islanders for wind and renewable energy conversion system O&M.

Depending on the location of the wind resources most favorable to energy conversion, land

availability may be an issue if a large number of machines are considered at a single location. The

identification and mitigation of technical, environmental, or cultural impacts cannot be done without

first knowing where the resource sites are located.

The capital costs of wind systems will be high in Palau, given the long distance transport

required from the mainland United States (assuming United States turbines are the ones eventually

68
purchased). Until adequate service and repair facilities are available in Palau, the O&M costs of the

first wind energy systems will be higher than those in more developed areas of the world.

Given the tremendous uncertainty over the value of Palau's wind resource for energy conversion,

data collection must preceed any widespread commitment to wind energy conversion technology. For this

reason, assuming the resource is present, the technology is no closer than a mid-term option for Palau

Solar Thermal Systems

Diffuse solar insolation can be used in photovoltaic and low temperature solar thermal systems,

but only direct insolation can be focused or concentrated to achieve the high temperatures needed for

steam and electricity production. No measure of direct insolation has yet been taken in the Republic

of Palau, and such a measure is needed before concentrating solar thermal systems could be designed or

their potential performance evaluated. Solar thermal systems, however, are expected to be most

cost-effective in capacities of several hundred kW and up and would not be appropriate for meeting the

many small electric power demands in remote areas throughout Palau. Connection to a central grid would

offer the most likely future application for high temperature thermal-electric systems, while process

heat systems could serve small to intermediate size industrial uses such as fish processing.

Depending on the size of the proposed systems, and the constraints imposed by other siting

requirements, land availability could be a drawback to large solar systems. Performance might be

hampered by the Palauan environment. Solar thermal systems are particularly vulnerable to high winds

and other hazards where glass breakage may occur. In addition, the technology of high temperature

solar thermal energy conversion has not reached as high a state of maturity as photovoltaics or solar

hot water systems have reached. Given the special design considerations and complex maintenance

procedures which may be needed for high temperature systems on remote islands, solar thermal

applications may not be a potential near-term option for Palau.

MSW

There are no data on actual tonnages of MSW generated in Palau, and only the population center of

Koror has the population density that would suggest even a minimal MSW resource in the Republic. On

the assumption that .7 kg (1.6 lb.) of MSW is produced per person and that Koror's current population

is approximately 8000, some 2.04 million kg/year would be available for combustion and energy

conversion. This relatively small amount of MSW, even if verified by empirical data as being perhaps

50% greater and of the proper energy content (i.e. Btu/ton), may not be able to fuel even the smallest

practical MSW facility. In addition, the conversion of MSW may be further limited by the inability to

actually get all of the available MSW from Koror into one central spot for combustion. Collection

services may not be sufficient to guarantee a reliable supply of MSW at a cost that would make the

technology competitive with other energy generation options.

In sum, the expected addition of new oil-fired generating capacity in Koror and the relatively

unknown quantity of the resource combine to limit the near to mid-term potential of MSW conversion in

Palau.

Coal

The near to mid-term electricity requirements of the Republic are expected to be met by the

planned addition of residual oil-fired generating capacity. Aside from the fact that the coal resource

is nonexistent in Palau and coal would have to be imported from foreign sources, there are no remote

demand centers of sufficient size to justify economically even the smallest coal-fired generator.

There is no interest in the Republic of Palau at this time for any proposals to import coal for

electric power production.

OTEC

General oceanographic maps of the north and west Pacific indicate a favorable ocean thermal energy

resource in the waters surrounding Palau. However, no temperature gradient or other physical or

chemical analyses of offshore waters have been conducted to verify that the conditions necessary for

DTEC development are present in Palau. Worldwide operational experience with DTEC is so limited, even

69
on a test basis, that the state of technology readiness is insufficiently established for either near

or mid-term application in Palau.

Ocean Tidal and Currents

No resource assessments have been performed to date to characterize either the tidal or ocean

current resources of Palau. Observations suggest that there may be some channel locations surrounding

Roror where ocean currents are routinely quite strong. However, given the low energy density

represented in ocean currents, it is not known whether the quantity and velocity of these currents are

sufficient for energy conversion. Due to the absence of major estuaries in Palau, the tidal resources

are not expected to be of a magnitude to support tidal energy conversion. The technology for

exploiting this resource is not well developed, and would represent a long-term option, at best, for

application in Palau even if there were a proven resource.

Geothermal

There are no known geothermal resources in Palau. Though the use of geothermal energy is well

established worldwide, there is nothing to suggest that the resource is present in Palau or that an

extensive geothermal prospecting effort should be mounted in the near term.

FINDINGS AND RECOMMENDATIONS

Energy planning in Palau is being conducted at two levels: urban and rural. The urgency attached

to achieving reliable electric power in the urban area has led to a major effort to upgrade the

existing oil-fired generating facilities and distribution network. When fully implemented, these

projects will provide Palau with reliable generating capacity for the near to mid term, as long as good

maintenance practices are followed. With firm power assured, the next objective will be to foster

economic growth to make use of the expanded generating capacity and to provide revenue to help finance

the new system.

Though the Republic of Palau has apparently chosen its main energy technology for the near to mid

term, interest in using the several renewable energy resources which the area posesses remains. The

first locations where these resources will be applied are the more remote villages on Babeldaob, where

grid extension from Roror may not reach for some time, or at all. Then there are the few outer islands

(Rayangel, Peleliu, Angaur, Sonsorol and Tobi) where grid extension will never reach. Renewable energy

resources are likely to be exploited to meet the relatively small demands which now exist in those

places. Until the more promising renewable energy systems can be developed. diesel units now in use on

Roror, but surplus once the proposed 16 MW addition is installed, may be used.

With this as the general strategy governing energy planning in Palau, several near-term steps

could be taken to reduce the costs and improve the efficiency of energy use over the next five to ten

years. These activities can again be distinguished on a urban/rural basis, and the near-term benefits

are different in each setting. The benefits to be achieved in the Roror area will be the saving of

fuels used in electricity production, freeing more capacity for the support of economic development

activities in the Republic. The benefits of near-term actions in the remote villages and islands will

be to avoid new dependencies on oil in these areas by introducing cost-effective renewable energy

options as rapidly as possible. A secondary benefit of this activity will be to gain valuable

experience in the use of renewable energy technologies that may offer a long-term benefit to all of

Palau as their costs decrease over time.

In more specific terms, the actions of greatest potential benefit in the Roror area include: the

institution of sound energy management practices, in particular rate structure reform; metering of

government buildings; energy audit and data management capability; energy performance standards for new

buildings; and end-use energy conservation practices such as replacement and/or removal of inefficient

appliances, lights, etc. Also in the Roror area, currently co~-effective technologies such as solar

water heating should be used at government facilities.

For the more remote areas, attention should be focused on the two or three technology options for

which Palau's resources appear most favorable. These include small scale hydroelectric power on

Babeldaob, photovoltaic powered village energy systems, and a more extensive characterization of the

Palau wind regime where observation now suggests a possible resource. Concurrent with these

activities, village energy use and needs surveys should be conducted so that potential loads to be met

with renewable energy systems can be defined as accurately as possible.

70
The above findings have been reached as a result of the technology reviews conducted earlier in

this chapter and summarized in Table 4-3. Each of these recommendations is detailed in Table 4-4 which

follows.

Table 4-4

Energy Planning Recommendations

Republic of Palau

Koror and Surrounding Area

o Improved energy management

- rate structure reform

- installation of electric meters on all government facilities

- development of energy efficiency standards for all new buildings, beginning with the

government sector

implementation of energy conservation measures, again first in the government sector,

including passive cooling retrofits on existing structures, replacing light fixtures and other

energy efficient appliance substitutions

- development of an energy data system to monitor and audit energy use in all sector

o Infrastructure development to support remote village renewable energy technology O&M and Koror

energy management activities

- personnel training in renewable energy system concepts, including installation,

troubleshooting, and repair, plus the conduct of building energy audits and energy data

management

renewable energy curriculum development for long-term manpower training at the Micronesian

Occupational Center

o Implementation of renewable energy technologies to help reduce government sector energy use

Remote Villages and Outer Islands

o Performance testing of a small-scale hydroelectric system at a favorable site on Babeldaob

o Wind energy resource assessment, including data collection, statistical analyses, and technology

performance projections based on such data, for selected sites on the east coast of Babeldaob

o Extension of village energy needs surveys and energy use audits to all remote villages of Palau

for use in subsequent technology selections

o Addition of performance diagnostics to existing photovoltaic systems now in use in Palau

o Engineering design of a photovoltaic-diesel hybrid system for an outer island application

o Analysis of infrastructure requirements needed to support hydroelectric development on Babeldaob

71
CHAPTER 5: ENERGY PLANNING FOR THE COMMONWEALTH OF NORTHERN MARIANA ISLANDS

The Commonwealth of the Northern Mariana Islands (CNMI) is composed of 16 islands which have a

combined total land area of 510 square kilometers (184 square miles). The chain extends 730 kilometers

(440 mil from Farallon de Pajaros (Uracas) in the north to Rota in the south (see Figure 5-1). The

United States Territory of Guam is only 205 kilometers to the south of Saipan. Only six of the islands

in CNMI--Saipan, Tinian, Rota, Alamagan, Anatahan, and Agrihan--are regularly inhabited. Saipan,

'Tin ian and Rota account for 65% of the land area of the Commonwealth, 99% of the population and almost

'all of the economic activity and energy supply and demand.

The three major islands presently enjoy electrical generating capacity adequate to meet current

demand and to support economic development. However, the electrical distribution system on Saipan is

unreliable and needs to be improved. The Commonwealth depends totally upon imported petroleum for both

transportation and electrical power generation. World oil prices and supplies have been relatively

stable in recent years, but the CNMI government recognizes that if market perturbations similar to

those occurring in the mid-1970s were to occur again, the resultant uncertainty of supply and

difficulties in meeting oil prices could cause severe economic stresses. As a result, the CNMI is

concerned with developing indigenous energy resources both to reduce oil demand in the population

centers and to provide new, non-petroleum energy sources for the outer islands.

Geologically, the Northern Mariana Islands are mountainous "high islands" of volcanic or1g1n. The

Marianas are part of the Palau-Yap-Mariana-Japan trench system which forms the boundary between the

Asiatic structural blocks and the true Pacific Basin. The island chain is aligned along the crest of

the gulf that is associated with the great Mariana trough that reaches a depth of nearly 10 kilometers

(6 miles). In the southern islands, coraline limestone caps the volcanic formation. Saipan is the

only island with a sizable lagoon. It extends almost the entire length of the western side of the

island.

The climate of the CNMI is tropical, uniformly warm and humid. This climate, coupled with the

salt-laden air, severely limits the lifetime of mechanical equipment. Saipan is reputed to have one of

the world's most equable climates with an average year-round temperature of 27·C (8l·F). Wind and

rainfall are the most variable elements. There are distinct dry and rainy seasons in the Marianas,

which would affect efforts to exploit hydroelectric resources. Average yearly rainfall is 130 cm (50

in); over half of it between July and November.

From July through November, typhoons with winds in excess of 300 km/h (180 mph) periodically sweep

through the islands. Flooding and wind damaged vegetation are a common result of storms with winds

above 100 km/h. Storms of this sort are very destructive, and are particularly hard on structures of

all kinds. The effects of these high winds and the associated wind-driven debris on alternate energy

systems must be considered when reaching decisions on which types of alternate energy are most

appropriate for the CNMI.

HISTORY AND POLITICAL DEVELOPMENT

Present day inhabitants of the Northern Marianas are the decendants of the original Chamorro

settlers of the islands, Carolinians, and a growing number of Asian settlers, including many Filipinos

who are engaged in the construction and service industries. The Chamorros who settled the islands,

probably in the third or fourth century A.D., were reputed to be tall, warlike and fearsome. The first

European visitor to what is now the CNMI may have been Ferdinand Magellan, who landed in Guam in 1521.

Subsequent to Magellan's departure, the islands in the CNMI were virtually ignored until the arrival of

72
I

145'

Figure 5·1

Commonwealth of the Northern Mariana Islands

t a 50 100 150 KM

N a 25 50 75 lOaMI

• Uracas

145'

................ "Rota ............ .. "Guam ..........

'cocos ........,

............

20"

15'

• Maug

•Asuncion

.Agrihan

IPagan

• Alamagan

'Guguan

'Sariguan

-Anatahan

Farallon De Medinilla

"". saipan Tinian",---

Naftan Roc(Aguijan

15'

20"

Saipan

.Garapan

.1 Liyang

·Oleai

pusupe san Vicente oLake Susupe .

Chalan Kanoa

145'45'

73

t

N

0!-_i;;;;;;i¥=~!!!!!!!!!!!!!3~iiiii_~5 KM

a 2 3 MI

15"15'

15'10'
Spanish Jesuits in 1668. The priests christened the archipelago "Marianas" in honor of Queen Maria

Anna, widow of Philip of Spain and patroness of the first missionaries. In 1565 a Spaniard, Don

Legazpi, formally proclaimed the Mariana Islands to be Spanish territory. However, for a century after

Don Legazpi's visit, Spain made no effort to colonize the islands, using them mainly as a watering and

provisioning stop on the sailing route from Acapulco to Manila. During this time, persecution, famine

and disease so depopulated the islands that, by 1698, all of the remaining inhabitants had been removed

to Guam. By 1780 the number of Chamorros even on Guam had fallen to only 1639.

Saipan was repopulated in the nineteenth century, initially by Carolinian sailors from the Eastern

Caroline islands who received permission from the Spanish Governor on Guam to settle there in 1815.

Later, it also became home to people of partial Chamorro decent whose parents had been forcibly

evacuated from the Northern Marianas by the Spaniards earlier. They were also attracted by the

possibility of engaging in copra production and of having greater freedom from Spanish control than

they had on Guam.

In 1899, after its defeat in the Spanish-American War, Spain ceded Guam to the United States and

sold the Northern Marianas, along with the rest of Micronesia, to Germany for $4.5 million.

The Marianas proved to be an economic liability to Germany. Because of scarce resources and

distance from Europe, commerce never took off as expected. At the beginning of World War I, the

islands were taken by Japan without struggle. In 1920, the League of Nations formalized this wartime

seizure by placing the Northern Marianas, as well as the Carolines and the Marshalls under a League of

Nations Mandate to Japan.

During the Japanese period (1914-1944), the islands acquired new significance. They lay along

routes of Japanese economic expansion and were considered strategically vital to Japan. Japanese

commercial enterprises and colonization brought development to the Marianas. Much of the still

existing and utilized infrastructure such as roads, docks and water system are from this era. Sugar

and starch (sugar cane, taro and cassava) production dominated economic life. Fishing also contributed

to the economy. By 1937, there were 47,000 residents in the Marianas, most of whom were Japanese

citizens or nationals, Okinawans and Koreans. "Natives" numbered only 4,000. Garapan, in Saipan,

became a thriving commercial town of 15,000 by 1941.

World War II, however, radically transformed the Marianas. Ninety percent of the local population

survived but agriculture lay in ruins. Withdrawal of troops left a landscape cluttered with airstrips,

abandoned installations, piles of waste, live ammunition of all kinds (artillery shells, mortar shells,

hand grenades) and a completely altered indigenous society. At first, the islands were placed under

naval administration. Then, on July 18, 1947 the Security Council of the United Nations and the United

States entered into a Trusteeship Agreement, covering all of the former Japanese mandated islands,

including the Northern Marianas, the Eastern and Western Carolines and the Marshall Islands.

In March, 1976, both the people of the Northern Marianas and the United States Congress approved a

Covenant to establish a Commonwealth of the Northern Mariana Islands. Then, on April I, 1976, the

Northern Marianas separated from the rest of the Trust Territory and became "separately administered,"

moving toward an eventual Commonwealth status. By popular referendum, the people of the Northern

Marianas adopted the Northern Marianas Constitution, subsequently approved by the United States

Government. The Constitution of the Northern Marianas became effective on January 9, 1978 and the

people witnessed the inauguration of their first elected governor, legislators and other elected

officials. Establishment of the CNMI government meant that Saipan was now the site of the headquarters

for both the Trust Territory of the Pacific Islands (TTPI) government and the new CNMI government.

This marked the first time in more than 400 years that the people of the Northern Marianas had had a

part in choosing their own government.

POPULATION, EMPLOYMENT AND WAGES

According to the 1980 census, 16,862 people live in the CNMI. Saipan (125 square kilometers, 45

square miles) is home for 14,585 people, Rota (90 square kilometers, 32 square miles) 1300 and Tinian

(110 square kilometers, 40 square miles) 899. The population of Alamagan (12 square kilometers, 4

square miles) is only 57 people, Agrihan (50 square kilometers, 18 square miles) an estimated 25, and

Anatahan (35 square kilometers, 13 square miles) is only sporadically populated. The same is true of

Pagan which has not been populated since it erupted in 1981-1982.

The Micronesian population of the CNMI

in the CNMI were under the age of 15 years.

relatively low infant mortality rate, and a

through the year 2000.

is relatively young. In 1980, over 45% of all Micronesians

This age structure results from a high birth rate, a

low death rate. Table 5-1 presents population projections

74
TABLE 5-1 -- NORTHERN MARIANAS POPULATION PROJECTION

Sex Age Group 1980 1981 1982 1983 1984 1985 1990 2000

Both Total 16,758 17 ,596 18,575 19.598 20,576 22,165 23,320 32,630

0-14 7.613 7,991 8,456 8,884 9,339 10,111 10,890 15,210

15-64 8,622 9,052 9.513 10,082 10,483 11 ,335 11,673 17,060

65-over 523 553 606 632 671 721 757 860

Male Total 8,457 8,886 9.378 9,875 10,362 11,161 11,780 16,260

0-14 3,885 4,080 4,320 4,534 4,774 5,130 5,566 7,770

15-64 4,326 4,547 4,778 5,047 5,269 5,687 5,853 8,580

65-over 246 259 280 294 319 344 361 410

Female Total 8,301 8,710 9,197 9,723 10,205 11.006 11,540 16,370

0-14 3,728 3,911 4,136 4,350 4,565 4,981 5,324 7,440

15-64 4,296 4,505 4,735 5,035 5,214 5,648 5,820 8,480

65-over 277 294 326 338 352 377 396 450

Estimates are based on the 1980 Population Census Preliminary Data. The cohort-component

method of population projection is used to obtain the estimates.

The present Micronesian labor force in CNMI probably numbers about 5000, or about 64% of the total

Micronesian population over the age of 15 years. Measured in terms of employment and wage and salary

payments, it appears that the private sector has undergone real expansion since the advent of

Commonwealth status. Tax returns indicate that between l.977 and 1980, total wage and salary payments

doubled in the private sector and the number of persons employed rose by 25%. In contrast, the

government sector expanded only 32% in wage and salary payments and actually declined in the total

number of employees. Overall, money wage and salary income appears to be steadily increasing. In

1975, the total was $21.5 million while in 1980 it was $41.9 million ($29.5 million in 1975 dollars).

Per person, the annual wage went from $3491 to $5494 ($3869 in i975 dollars), an 11% increase.

Although the growth has been extraordinary for a Pacific Island nation, the CNMI does not enjoy

the standard of living and the benefits of a typical mainland community or the closest neighboring

United States Government possession, Guam.

PRESENT ECONOMY AND INFRASTRUCTURE

In the years prior to World War I, the economy of the Marianas was mainly a subsistence economy

based on fishing and gathering. In the Japanese years, those between World Wars I and II, agriculture

became the mainstay of the Northern Marianas' economy. Since World War II, this agricultural pattern

has changed dramatically with only 240 ha (600 acres) now under cultivation and 9100 ha (22,500 acres)

in grazing. There are probably fewer than 75 full-time commercial farmers or ranchers throughout the

CNMI. Fishing in the Commonwealth consists largely of subsistence activity supplemented by three to

four small-scale commercial operations. Most families in the CNMI engage in casual or subsistence

fishing from time to time, but persons engaged in serious full-time fishing probably number no more

than 25 to 35.

Growth of the V1s1tor industry has been dramatic since the direct air service to and from Japan

was established in 1977. Total visitors to the Commonwealth numbered 119,370 in 1980, an increase of

134% over the 51,110 visitors to the CNMI during 1976. Tourism is now the leading private sector

activity in the Commonwealth.

Construction, retailing and a range of service enterprises account for most private sector

activ1t1es. As of mid-1980, 598 different businesses were active in the CNMI. General merchandising,

retailing, wholesaling and importing make up about 26%, while miscellaneous services (for example. car

rentals, auto and appliance repair, tailoring, tour services and printing) account for 35% of the

businesses. Construction and construction supply are 11%, while hotels, bars and restaurants also make

up about 11%.

Facilities and infrastructure throughout the CNMI are in need of substantial expansion and

rebuilding if economic development is to continue. Until very recently, the Saipan water system could

not meet the demands of consumers and was turned off during the evening hours to permit recharging of

the storage tanks. Apparently, much of the productive water capacity was being lost to leaks in the

75
systems.

mains and

reservoir

Recently, Covenant

distribution lines

and booster pump.

Capital Improvement Project (CIP) funds have been used to build new water

in four areas of Saipan, and a new 760 kiloliter (200,000 gallons)

As a result, most areas now have 24-hour water service.

Electric power service is provided by the Public Works Department. The power supply and

distribution system on Saipan have grown less and less reliable over the years as a result of increases

in demand coupled with inadequate maintenance ·of the equipment. Although the power source for Saipan

has been upgraded recently with a new oil-fired plant of 21 MW capacity, additional investment will be

required to improve the power distribution system which has deteriorated and causes power failures.

Only a small percentage of the island residences have solid waste pick-up service. The waste that

is collected is disposed of in land fill. Suitable solid waste disposal sites are limited.

The Commonwealth Government maintains and operates a short wave radio for communications with the

northern islands and ships within the territorial waters of the Marianas. A commercial cable TV

station with 6 to 8 channels operates on Saipan. The islands of Saipan and Tinian are served by

Micronesian Telecommunications Inc. (MTC), a subsidiary of Hawaiian Telephone. The telephone service

is limited and will require major improvements to meet the demands of the future.

Health care services in the Commonwealth are provided by the Department of Public Health and

Environmental Services, which is publicly funded. No private physicians practice in the CNMI.

Dr. Torres Hospital, an 84-bed former United States Army field hospital constructed in 1962, is the

major health care facility in the Commonwealth. Both its in-patient and out-patient facilities are

heavily used. The hospital has been unable to meet the requirements for the accreditation required to

obtain reimbursement under Medicaid. Other health care facilities include a Public Health Center in

Chalan Kanoa, and a dispensary on Agrihan. Sub-hospital facilities with full-time physicians and

nursing staff are operated on Tinian and Rota.

PROSPECTS FOR ECONOMIC DEVELOPMENT

The Commonwealth, along with the other Pacific island governments, must plan for economic

development under constraints of limited land, water, natural resources and capital. Three promising

areas for further development are tourism, agriculture and fisheries. Attainment of long-range

development objectives depends both on planning and on available resources and infrastructure. One of

the most important resources is the human resource. The population projections in Table 5-1 show a

population of almost 33,000 by the year 2000, and, as it is now 45% of that population will be under

the age of 15. Providing the jobs and education that will prepare residents of the CNMI to take those

jobs that will contribute to the growth of the economy is a major task now facing the government.

The present policies respecting importation of alien labor attempt to strike a balance between

strictness and responsiveness to the needs of the labor market. The regulations allow alien labor to

be imported to meet demonstrated needs, but only after it has been determined that qualified local

labor is not available.

According to recent estimates, about 8600 ha (21,140 acres), or 18% of the total Commonwealth land

area, are in private hands. All other lands in the CNMI, roughly 39,000 ha (96,300 acres), are public

lands and belong collectively to the people of the Co~onwealth who are of Northern Marianas descent.

Much of the island of Tinian has been set aside for possible use for United States Military use.

However, if this option is not exercised soon, the land will revert back to the government of the

CNMI. The relatively large proportion of public land results from the Japanese and German

administrative policy to take lands not enclosed and cultivated, thus preventing the accumulation of

large private land holdings such as one sees, for example, in Hawaii. The magnitude of public land

holdings gives the government of the CNMI an unusually broad latitude in developing land use plans.

One special institutional factor related to the use of land resources may influence development of

the Commonwealth. Ownership of land is limited constitutionally and in the Covenant to persons of

Northern Marianas descent. Persons of Northern Marianas descent are defined as either individuals of

at least one-quarter Northern Marianas Chamorro or Carolinian blood, or corporations whose

directorships and voting are held 51% by such individuals. It is important to note, however, that the

restrictions do not appear to have discouraged investment in the visitor industry, the Commonwealth's

leading private sector economic activity.

Relative to its population size and economic base, the Commonwealth possesses impressive public

sector financial resources for development. These resources derive primarily from the financial

relationships established between the Commonwealth and the United States under the Covenant. However,

the Commonwealth does not have sufficient financial resources to implement all the long range

76
infrastructural projects necessary to meet the federal water and health standards and local

socio-economic development needs. The CNMI government is attempting to make the most effective use of

local funds, including Covenant funds, to maximize the impact upon the economy and to encourage private

sector growth.

To assist the CNMI in becoming more self supporting and to achieve progressively higher standards

of living for its people, the Covenant commits the United States Government to provide direct budgetary

support payments to the CNMI. These payments are earmarked for government operations, capital

improvements, and economic development loans. Table 5-2 gives a general listing of anticipated

expenditures for the period FY 1981 through FY 1987.

TABLE 5-2 -- GOVERNMENT OF CNMI: PROJECTED CIP PLAN BY ACTIVITIES

FY 1981 - FY 1987

SECTOR

Health

Education

Natural Resources

Public Safety

Community Affairs

Housing

Public Works (Power)

Public Works (Water)

Public Works (Sewer & San)

Public Works (Roads)

Ports and Harbors

Public Buildings

Administration

Total

AMOUNT (millions of 1980 $)

1.0

6.2

3.2

0.5

0.8

1.0

9.4

12.1

1.7

6.0

3.9

3.0

2.7

$51.5 million

Covenant grants are set at $14 million annually in FY 1975" dollars and adjusted to compensate for

inflation. Covenant direct grants represented approximately 62% of the resources available to CNMI in

FY 1981, excluding unobligated prior year balances.

The Covenant stipulates that the direct grants to the CNMI will be provided for a period of seven

full fiscal years from the establishment of the Commonwealth. This means that the direct grants will

continue through FY 1985. After FY 1985, the CNMI will continue to receive the grants at the same

annual level plus inflation adjustments until Congress appropriates different amounts.

The Commonwealth also raises revenues from internal sources. Total CNMI internal revenues were

estimated at about $9.7 million for fiscal year 1980. Major sources of internal revenue are excise

taxes levied on petroleum and other products imported into the Commonwealth for sale, lease, or rental

($2.4 million in FY 1980), graduated taxes on individual wage and salary earnings

($994,000 in FY 1980) and gross receipts of businesses ($1.8 million in FY 1980).

The Commonwealth's principal advantages are those of location and site. A tropical climate and

great natural beauty, hardly further from Japan than Miami is from New York, make the CNMI an ideal

tourist destination for the populous and affluent Japanese market. The growing demand for new tourism

experiences in the United States may also enhance the tourist industry in the CNMI.

77
In a remarkably short time, the "visitor" industry has become the leading source of export

earnings and the source of about one-fourth of CNMI private employment. The strategic issues for the

next few years are, first, how to keep the flow of tourists increasing in the face of increased

competition, and second, how to increase the net do~estic income per tourist-day. It is expected that

the visitor industry will continue to be the leading private industrial sector in the Commonwealth.

The major flow of tourists has been created by the air service between Saipan and Japan and will,

in the future, depend on the number of seats in that service as well as on the availability of hotel

rooms on Saipan. Personnel in the Marianas Visitor Bureau (MVB) think that the world petroleum

situation, and the resulting increases in air fares may combine to enhance the competitive position of

tourism in the CNMI.

The location has other advantages. The strategic importance of the Northern ~arianas in the

Western Pacific is recognized in the Covenant between the United States and the CNMI. The United

States has an option to use much of Tinian for a military base, and, while this seems unlikely at

present,- either the exercise of the option or the surrendering of it will have a significant economic

impact. The proximity to marine resources presents the possibilities of increased fishing, fish

processing and the development of other marine related activities. In addition, its location, so close

to the East Asia markets, may prove attractive to United States firms desiring a forward office based

in a Commonwealth with United States ties.

PRESENT ENERGY STATUS

The principal energy sources in the Commonwealth of the Northern Mariana Islands are various

petroleum products. About 20% of the imported fuel is gasoline, used primarily for transportation,

while more than half is diesel or RF0-6 used for electrical generation. As Table 5-3 shows, there is

21.6 MW operating capacity (in addition to 3 MW of standby equipment) in Saipan, 1.4 MW on Tinian and

2.3 MW on Rota (all as of fall 1982). A 25 kW unit was ordered for Pagan. Its future use, however, is

now in question because of the recent volcanic eruption on Pagan. These new units replaced some 12.7

W~ of old-units, which are in stand-by state, and the power barge "Impedance" (33 MW), which was

returned to the United States Army Corps of Engineers. The new units are considered to be more fuel

efficient and reliable than the replaced units which had been acquired from 1968 to 1971. The large

system on Saipan operates on residual oil but uses diesel for start-up. Other island generators in use

burn diesel, except for two 35 kW gasoline generators on Agrihan and Alamagan which are used to power

communications systems.

Although it is expensive to fuel, the electrical generating equipment in the Commonwealth of the

Northern ~ariana Islands is new, and, with standby capacity, can meet current demands (Table 5-3).

~aximum peak and base load demands for 1981 were 15.4 MW and 11.6 MW (Saipan), 480 kW and 400 kW

(Tinian), and 740 kW and 630 kW (Rota). In anticipation of growth, Saipan Permanent Power Plant has

procured a fourth 7.2 MW unit, which will be on line by September 1983.

An electrical rate of $.03/kWh prevailed for eight years prior to September 1, 1976. Since then,

electrical rates have increased to $.06/kWh for 0-2000 kWh/month, $.07/kWh for 2001-25,000 kWh/month

and $.08/kWh for more than 25,000 kWh/month. In 1982, costs to produce electricity, including fuel,

maintenance and personnel expenses, were estimated by the management of the Saipan Permanent Power

plant at more than $.12/kWh. Thus, consumers are still receiving a substantial subsidy.

The largest individual electricity users are the large tourist hotels on Saipan, followed by

commercial enterprises. There are no large industrial electricity users on Saipan, and there is no

military demand. The greatest electricity demands are, in decreasing order, for air conditioning,

water heating, cooking, lighting, refrigeration, and TV and radio. There are 2900 customers, including

800 unmetered users who pay a flat $35/mo rate. The latter tend to use small amounts of electricity.

CNMI government facilities on Saipan do not pay for utilities and the Trust Territory of the Pacific

pays a flat $400,000 per year. The net result of all this is that the total income from electricity

use divided by the amount generated gives an effective income of about $.025/kWh.

Hotels are among the largest energy users on Tinian and Rota. In addition, Micronesian

Development Company, a dairy farm on Tinian, uses about 29,000 kWh/mo and 160 kiloliters (1000 barrels)

of diesel fuel per year. It is serviced by the power plant but has auxiliary and back-up generating

capacity on the order of 125 kW. There are 160 electrical customers on Tinian of which 111 are

metered. The others pay a flat rate of about $20/mo. Average residential use is 250-300

kWh/family-month. Appliances (stoves, TV and refrigerators) are the main electricity users.

Commercial airlines represent a large liquid fuel demand on Saipan. The airlines' activities do

have a direct effect on tourism, but their purchases are made directly from the supplier, Mobil Saipan,

78
TABLE 5-3 -- ELECTRIC POWER GENERATION, CNMI, 1981

FUEL

Type Amount Price a

Purchased

(1000's of($/bbl)

bbl)

LOCALITY OUTPUT END USE

(million kWh/yr) (million kWh/yr)

Res Comrn'l/Gov't Milit

Indust

CAPACITY (c)

(:-fIN )

Rated Operating(b) Standby

LOAD

(MW)

Base Peak

RFD-6 136 35.00 Saipan 95.4 24.0 21.6 11.3 10.5 15.4

Diesel 29 54.81 Tinian 3.1 ------104.8-------- 0.67 0.6 0.6

Rota 5.5 0.67 0.6 0.8

Pagan 0.8 (d) O.l(c,d)

Total 104.8 ---------104.8-------- 25.3 22.9 12.7

(a) Diesel price at the Mobil Bulk Plant, August 1982, exclusive of taxes and local transportation;

RFO-6 (residual fuel oil #6) from Guam Oil Refining Plant, August 1982.

(b) Reflects deratings due to local conditions.

(c) Includes 0.05 MW on order.

(d) Assumes reoccupation of Pagan.

and do not affect the local economy directly. Gasoline comprises an appreciable portion of the fuels

used on the island, as does diesel oil. Both are bought by the private sector for miscellaneous uses

(see Table 5-4). These uses include fuel for the construction industry and auxiliary fuel purchased by

the large hotels, primarily for generating stand-by power. Note that electrical generation consumes

almost half of the imported petroleum products.

ENERGY DEVELOPMENT PLANNING

Renewable energy fuel sources are abundant in the Northern Mariana Islands. Unfortunately, at

present the entire electrical power system and back-up of the Commonwealth are based on oil imported

from countries thousands of miles away. The government of the CNMI is seeking to reverse this trend

through the implementation of programs to develop alternate sources of energy, including the renewable

ones. A number of indigenous energy resources have been identified. In a memo from the Chief Physical

Planner of the CNMI to the Special Assistant for Planning and Budget dated 10/13/82, a revised energy

program was presented. The memo listed the following five emphases: 1. Energy Audits and Conservation

Education; 2. Solar Water Heater Kits; 3. Photovoltaic Power; 4. Biogas Digesters and 5. Biomass

Plantations. Among other technologies which might also find use in the CNMI are solar thermal, wind,

geothermal, municipal solid waste, ocean thermal energy conversion, ocean currents and salt gradient

solar ponds.

Table 5-5 presents estimates of the range of some of the parameters which are important in

selecting the technologies. While all these efforts to utilize alternate energy sources may help ease

the CNMI's dependence on imported oil, it should be recognized that the climatic conditions are both

different and more severe than where many of the sources are being developed. In addition, due to the

remote location and the lack of the infrastructure necessary for timely maintenance, it is often very

difficult to keep systems functioning effectively.

Energy Management

Within the CNMI, a number of energy management and conservation options have been identified.

While the options will not contribute any new sources of energy, they will help to reduce the demand on

existing generation facilities and make them available to help support the CNMI's economic development

goals. It will take time both to implement many of the possibilrties and to see their results. This

79
TABLE 5-4 -- END USES OF FUELS, CNMI, 1981

(in 1000's of bbl)

------1.0------

2l(e)

Amount Price(a,b)

Fuel Purchased ($/bbl) Gov't

Motor Gasoline 67 52 8(c)

Aviation Gasoline 0.4 175

Jet Fuel-K 84 73

Kerosene 62

Diesel 42 55

RFo-6 136 32

Private

0.4

Comm'l/Indust/

Construction

84

Marine

Transportation

Field Ship Other

Electric

Generation

21

136

(a) At Mobile Bulk Plant, February 1981, exclusive of taxes and local transportation.

(b) Guam Oil Refining Company supplied 182,000 bbl in 1980; difference is believed to be related to

storage requirements and losses. RFO-6 price is as of August 1980.

(c) 1500 autos.

(d) 5500 autos, 192 boats.

(e) Private communication George Chan: Comm'l/Indust-16%, Construction-84%.

Population:

Households:

16,862 (Sept. 1980)

3,440 (Sept. 1980)

means that building understanding and consensus among the people will be the first priority action to

be taken. Some of the most important options are listed below:

o Establish the true cost of electrical generation including operating and maintenance costs,

loan repayment and set-aside funds for future equipment procurement.

o Having established this, decide how much of it the Government of the CNMI wants to subsidize

and the means of subsidy.

o Find out where the electrical energy is being used. Installation of meters for all users

will be a first step.

o Bill all users, including the TTPI and the CNMI government units for the electricity they

consume.

o Encourage efficient use of energy by developing and enforcing energy efficiency standards for

all new buildings in the CNMI.

o Encourage efficient use of energy by demonstrating energy conserving techniques such as

passive cooling, utilization of reject heat from air conditioners to preheat water,

co-generation where appropriate and the like.

o Efficiency of cooking is also a prime candidate for reducing the demands for more energy.

There has been significant improvement where the "smokeless stoves" have been introduced in

the Pacific. Their adoption in the CNMI might release electrical generation capacity for

more income producing uses.

o Continue energy education and training within the community, government and educat10nal

systems.

These steps are not to be taken as an exhaustive list of the possibilities, but only as indicative

of the types of actions that have proven successful elsewhere. Probably the most important ones are

80
Table 5-5

Technology selection Criteria

SOLAR BIOMASS

Solar Photo- Solar

Hot . Thenn- WIND GEO- HYDRO- Tree. Liquid

Water voltalcs al ENERGY THERMAL ELECTRIC Farms BlOgas Fuels MSW OTEC

OCEAN

CURRENTS

AND SOLAR

WAVES PONDS

ENERGY

COAL MANAGEMENT

RESOURCE I I

proven • • • • •

suspected • • • • • •

unknown • • none • •

TECHNOLOGY READINESS

IN PACIFIC

high • • • • • • •

medium • • • • •

low • • •

RELIABILITY PROBLEMS

IN PACIFIC

high • •

medium • • • •

low • • • • • • • • •

DURABILITY PROBLEMS

IN PACIFIC

high • • • •

medium • • • • • •

low • • • • •

APPLICATION

centralized • • • • • • • • •

decentralized • • • • • • • • •

POTENTIAL CONSTRAINTS

cultural impact • • • • • • • •

land availability • • • • • • • • • •

environmental impact • • • • • • • • • •

human resources • • • • • • • • • • • • • • •

infrastructure • • • • • • • • • • • • • • •

CAPITAL COSTS

high

(over $10.000/kW) • • • •

intermediate

($3,000 • S10,000/kW) • • • • • • •

low

(up to $3,000/kW) • I • • •

O&M COSTS

high • • • • •

intermediate • • • • • • •

low • • •

COST EFFECTIVENESS

near term (0-5 yrs) • • • • •

mid term (6-15 yrs) • • • • •

long term (16-40 yrs) • ,

• • •

EXPECTED OIL

SAVINGS OR AVOIDANCE I

high • I I •

intermediate • • •

low • • • • • • • • • •

81
understanding what energy costs really are, pricing the energy realistically, and carrying out a

comprehensive energy education and training program in the CNMI.

Tree Farms

Biomass, including agricultural waste and biomass specifically grown as an energy crop, has been

used throughout the world as a fuel for boilers to drive steam turbine electrical generation

equipment. It is possible to fire any of these fuels alone or in combination with each other or with

municipal solid waste or with coal. Thus, a biomass electrical generation system need not depend on

anyone fuel. Biomass fired generating technology is mature, and plant components are readily

available. Direct combustion of a sugar cane residue called bagasse provides more than half of the

electrical power used on the island of Hawaii. While a specific system has not yet been designed to

operate in the CNMI, this experience in a similar climate is encouraging.

Saipan, prior to World War II, had up to 8100 hectares (20,000 acres) under cultivation, most of

it in sugar cane. At present, only 250 ha (600 acres) is under regular cultivation for crops in all of

the CNMI. The ground cover planted after World War II to prevent erosio~, the tangantangan, has done

well on Saipan. Another variety of this, the giant leucaena, has been planted on Saipan in an

experimental plot and it too seems to thrive under the conditions. It is estimated that about 5 kW

baseload power can be generated for a year from one ha of giant leucaena (koa haole) when harvested and

chipped (30 tonnes/ha). If we assume, as mentioned in Chapter 2, that a planting of giant leucaena can

be harvested every four years, it would take only 800 ha to support a 1 MW power plant (see Chapter 2

for a more detailed discussion). This is a plot of land less than 3 kM on a side. Such a plant could

support all the energy requirements of Tinian or Rota. A 10 MW biomass plant, 8000 ha (9 kilometers on

a side), could furnish more than 50% of Saipan's electrical energy needs. Pre-emption of agricultural

land for a tree farm is not expected to be a problem because so much of the land is both fallow and

under the control of the government. An additional possibility is that private farmers might be

encouraged to plant trees for use by the power plant, or even as a cash crop for export as pulpwood.

If the wood were valued at $lOO/tonne, four hectares, one harvested each year, could yield $3000 to the

landowner each year.

Establishment of biomass electrical generating capability in CNMI is expected to cause few social

and cultural impacts of a negative nature. One environmental problem might be the occasional typhoon

and the accompanying high winds. The first planting of giant leucaena in Saipan was slightly damaged

by a typhoon. Regrowth is taking place normally. Some of the electrical generating systems presently

in use in Guam and elsewhere in the Pacific are residual oil-fired steam generators and, while the

sizing of the water tubes would be different for a wood-fired boiler, the concept is very similar and

should lead to similar maintenance experience in the CNMI. In short, the operation and maintenance of

a biomass electrical generating system is expected to be both familiar to the local labor force and to

be readily accomplished by them.

Wood can also be gasified and the resulting producer gas, that gas whiGh comes from the incomplete

combustion of woody materials, can also be made and used in the CN~I. Wood or coconut husks can be

used for raw material as can any other similar material. The gas itself can be used to power a

conventional oil-fired generator system or even to power a vehicle if it has been converted to burn the

fuel. Sources of possible fuel and the steps needed in order to utilize it must be investigated before

the applicability of this technology can be determined.

A number of manufacturers world-wide are marketing systems which can be sized anywhere from a few

kW to several ~W. For sites such as Tinian or Rota this technology may be very appropriate.

If the CNMI is subject to the Clean Air Act, measures to clean-up the stack gas from the biomass

boiler or gasifier are readily available and can be used. Consumptive use of water for the steam and

cooling cycles may present problems, particularly on Saipan where the existing water distribution

system is just now being upgraded and there is an apparent water shortage. If a labor-intensive

technology of biomass cultivation for energy is chosen, it could provide many new jobs. Full time

agricultural jobs are new to many of the residents but there is a tradition of part-time farming. If

the transition can be made to full-time husbandry, this energy option could lead to increased

employment in the CNMI.

~unicipal Solid Waste

As estimated by Barrett, Harris & Associates in 1980, solid waste generated on Saipan might amount to

between 6605 and 9137 tonnes/yr. Presently, little of this is collected. If we assume that it could

82
be collected and that half of this might be suitable for combustion in the biomass plant, it could be

used as a supplement for wood from the tree farm. Used in this way, it would contribute as much energy

as the tree crop from an additional 110 to 150 ha while at the same time reducing the solid waste

disposal problem.

Anaerobic fermentation of biological waste generates significant quant1t1es of methane (natural

gas). Where this takes place in a community sewage treatment plant, this biogas is often used for

process heat for the plant, any excess can be purified in order to remove corrosive gases and the

remaining gas sold to a local utility. Unfortunately, there are no secondary or tertiary sewage

treatment plants in the CNMI where this could be done.

It is the intent of the CNMI to encourage dairies, piggeries and other similar industries to

become energy self-sufficient. To this end, they have established demonstration biodigesters at

several of the piggeries and intend to assist the dairy on Tinian by demonstrating biodigestion of the

cattle waste to provide gas for process heat and to use the excess for electricity generation. The

effluent from the digester can be used to grow algae and aquatic plants for feed and fertilizer.

There are now between 20 and 30 piggeries on Saipan and the wastes from these could be processed

to generate biogas for use at the piggery; excess could be sold to local users or used to generate

electricity. The dairy farm on Tinian could also process its wastes in this manner. While these

sources may not contribute much to generation of electricity for general energy needs in the CNMI, full

use of available sources would reduce demand to some extent and hence the load on conventional

electrical generation facilities. Because there is no gas pipeline distribution system in the CNMI, a

decision to use biogas as a utility fuel would entail a significant expense for installation.

Anaerobic digestion can also be done on a small scale more appropriate for a single family or a

small group of families. Adoption of this technology could replace the energy used by individual

families for their cooking and thus contribute toward reducing energy demand. There is increasing

acceptance of this concept on Saipan and Tinian, however, widespread adoption will entail significant

changes in traditional practices.

Solar Hot Water

While historical data on solar insolation are not available for the CNMI, partial data (beginning

in 1982) and general impressions indicate that the resource is more than adequate for a variety of

solar applications. It is estimated that about five to six kWh per sq meter are available per day on

Saipan. The use of solar energy for heating water for domestic and commercial use is a particularly

appropriate application for the CNMI. In the past, about 40% of the residential electrical energy was

consumed for this purpose. With the general adoption of solar water heating, this component of energy

use could be significantly reduced.

Commercial solar water heaters are readily available. The options on the market range from

sophisticated, pumped systems with separate collectors and storage tanks to simple solar water heaters

which combine the solar collector with the tank storage, the so-called bread-box collector. In

addition, there are a number of designs for simple thermosiphon systems which can be built by the

homeowner for a small fraction of the cost of a commercial one. It is the aim of the Energy Office to

continue to conduct workshops for people who want to make their own solar water heater. Solar water

heaters are marketed through outlets in Japan, Australia and throughout the United States. Five year

guarantees are commonplace.

There are already some solar water heaters installed in CNMI. There seems to be no problem with

acceptability, and, for installation on the roof of a residence or on the property, there is no land

availability question. As is the case with the other technologies, typhoon resistant installations are

necessary, and protection against wind-driven missiles is required. No significant environmental

problems have arisen.

Existing mechanical and electrical capability in CNMI should be adequate to keep the systems

functional. The repair and servicing of solar water heaters is similar to the repair and servicing of

any plumbed system or small electrical appliance. One potential problem may be that the pipes may

scale more severely or corrode faster due to the high mineral content of the water. This can be

mitigated through use of high temperature PVC. Probably the most attractive feature of investing in a

83
solar water heater is that, by doing so, the consumer is setting his costs for water heating for the

life of the solar system, independent of inflation.

Photovoltaics

Photovoltaic systems also capitalize on the solar energy resource available in the CNMI. A number

of photovoltaic concepts exist and have been commercialized, ranging from single crystal silicon

photovoltaic cells to thin film amorphous photovoltaic cells. The single crystal cells, after an

initial period of development, have demonstrated good reliability and durability.

No adverse impacts are anticipated in the areas of cultural, land availability or environmental

effects. The total land required for a 10 MW peak system might amount to about 20 ha. Since

photovoltaics is a relatively new technology, an educational program will be necessary to train

personnel who perform routine O&M. It will also be necessary to develop sources for parts and

servicing.

Sunshine in the CNMI has a daily energy content of about 5-6 kWh/m2• Thus, a PV system which

could supply energy equivalent to a conventional oil or diesel-fired system would be more than four

times as large as the peak rating size. This means that a photovoltaic system which would generate the

same total energy as a 10 MW diesel or oil-fired generator would occupy about 80 ha, almost a square

kilometer. The storage system to allow reliable, continuous 24-hour operation would add to the cost

and land area. However, photovoltaics can also be operated without storage, providing electricity

during the sunlight hours and saving oil or diesel. In addition, if the hours of operation of the

electrical load can be restricted to the sunlight hours, then PV can supply all the energy needed

without the necessity of batteries.

The CNMI intends to use photovoltaics for light and radio for each household in Alamagan and

Agrihan, and for refrigerator/freezers for the dispensaries. They will also be used to power lights

and fans for Rota and Tinian airports.

Operating and maintenance costs are expected to be small. Photovoltaic generation of electricity

is competitive today with intermittent use of high speed diesel generators in off-grid locations.

Costs need to drop another factor of ten before PV can be seriously considered as a base load energy

source for larger electrical requirements (eg kW to MW).

Salt Gradient Solar Ponds

There are a number of solar ponds in use throughout the world in climates ranging from arid desert

areas to more northern areas where the pond itself freezes over in the winter. Experience is

accumulating. While solar ponds have not reached the point of commercialization, indications are that

developments needed will consist mainly of efforts to make the components less expensive and to

integrate the installation to reduce the overall system cost. Solar ponds are especially attractive

because they provide baseload, not intermittent power. Experience to date has indicated that the

concepts are sound and that a fully commercial system should operate reliably and without undue

attention to either operation or maintenance. The wind and salt air conditions in the Pacific may

present special problems.

The scale of proposed solar ponds is fully compatible with the needs in the CNMI. A baseload 10

MW pond might require about 2 square kilometers of pond, and, as the case with the tree farm concept,

could either replace present expensive fossil-fueled diesel generators or accommodate electrical growth

for the next decade or two.

A 10 MW salt gradient solar pond system is a 10 MW baseload system which is not only able to

continuously put out 10 MW but, if it is equipped with the heat exchangers and generators to do so, it

can also handle peaking loads of up to 100 MW for short periods.

A solar pond would be a low-profile installation which would require land dedication but little

else. Leakage of the conce~trated brine from the pond could contaminate the fresh water lens

underlying the islands unless it were contained. A salt-gradien~solar pond has little or no effluent

and the raw materials needed for the pond consist of sunshine and from time to time some additional

salt. The salt would have to either be imported or obtained locally by use of evaporation ponds. If

evaporation ponds were made and used, there is the possibility that salt could become an export

commodity. Skills· needed consist of general construction skills p1us machinery operating and

maintenance. The heat exchangers required are similar to many of those in common use for low grade

84
heat recovery and should present no particular operating or maintenance problems. A comprehensive

educational program should be carried out to upgrade and improve existing capabilities. The remoteness

of the installations may make maintenance more d"ifficu1t.

Wind

Wind power may be able to contribute small amounts of energy to remote locations, however, large

installations seem to be incompatab1e with the fact that the CNMI is subject to heavy typhoon winds.

In addition, current information on winds in the vicinity of the islands seems to indicate that they

vary around 7 mls (15 mph). Most wind generators do not begin to generate energy until the wind

reaches 4.5 mls (10 mph) and are rated for winds in excess of 9.5 mls (20 mph). Dropping the average

wind from 9.5 to 7 mls drops the generated energy by about two and a half, thus de-rating a four kW

windmill to about one and a half kW and increasing the capital cost per kW by the same factor. If

locations with consistent winds in excess of 10 mls can be identified, it may become worthwhile to

attempt to design special wind generators which can survive typhoons. For special cases in remote

areas, particularly for small farms, small wind generators or water pumpers may prove very effective.

Geothermal Energy

The technology needed to convert geothermal energy to e1ectricitiy is well developed for use in

other places. It may be that it could also be applied to the CNMI. The islands of the CNMI have

characteristics which suggest that there may be substantial geothermal resources. The recent history

of volcanic activity on Pagan (May 15-23. 1981 and January 4-6, 1982) emphasizes this. Recently, there

has also been a "sulfur boil" off the coast of Tinian. Other eruptions in the past have been on some

of the other islands. Geothermal resources may exist on the islands of Saipan and Tinian, but geologic

reconaissance is needed to locate geothermal indicators and to assess the likelihood of locating an

exploitable geothermal resource there, or on other habitable islands of the chain. Geothermal power

could either be used for major generation facilities or, where the resource is less, to provide energy

for village needs.

Solar Thermal

Solar thermal energy conversion (STEC), the converting of solar energy into thermal energy and

then into electricity via the usual steam cycle. has received a great deal of attention recently.

While several experimental STEC systems have been fielded, much development work yet needs to be done.

At the size most appropriate for the CNMI, the small village configuration, the first developmental

distributed collector systems are just beginning to accumulate operating experience. As yet, little

information is available on reliability or durability, especially under the relatively hostile wind and

corrosion environment of the CNMI. Sizes envisioned for CNMI seem to be compatible with sizes now

being developed, both commercially and with government funding.

The land availability question remains. About 30 ha would be needed to generate 10 MW at peak

solar incidence. A single "dish" of about 10 meters (30 feet) diameter can supply about 15 kW peak

(see Chapter 2 for more details). This might be appropriate for a remote village. Little in the way

of environmental effects are anticipated. Since the technology is new, a comprehensive educational

program will probably be necessary so that local people can participate in installing, operating and

maintaining the STEC system.

Like photovoltaics, this technology also needs extensive storage capacity before it can be relied

on for base load electricity generation. Such storage costs would be over and above the costs

associated with installation of the basic system. In addition, because the solar resource is about 5-6

kWh/m2-day, the size would have to be quadrupled in order to provide the same energy that a base10ad

conventional system provides. Land requirements might amount to 150 ha (1.2 kilometers square) for a

srEC system which could generate the same total energy as a 10 MW diesel driven or oil-fired electrical

generation system. Costs and land dedication for storage would be in addition to this. This places it

in the same category as photovo1taics and restricts its applicability to situations where intermittent

power is acceptable or to remote locations. Base10ad applications might become more competitive as

costs for energy storage and for STEC fall.

85
Ocean Thermal Energy Conversion

Some of the most favorable ocean thermal resources in the.world are found in the CNMI. Near both

Saipan and Tinian a temperature difference of 21°C (38°F) exists between the surface waters and waters

at 550 meters (1800 feet). This increases to 23°C (41°F) at 900 meters (3000 feet). Based in part on

this, and on the appropriateness of the projected size of a pilot Ocean Thermal Energy Conversion

(OTEC) plant (10 MW), the government of the CNMI proposed to the United States Department of Energy

(DOE) that one of the sites for a first plant be on Saipan. The plan submitted to DOE was for a plant

to be located near Punt an Kagman, on the southeast coast of Saipan. The DOE site selection committee

reported, "The major weakness is centered around the site selection. The site is located in a typhoon

prone area and the survivability of the plant and cold water pipe (CWP) is questionable. The plant

design is also susceptable to a multitude of less critical problems as a result of near shore location

such as trapped currents which would reduce the available sea water temperature differential and

possible build-up of trapped debris." It is not clear whether the site selection committee considered

that no site in CNMI would be acceptable or just that this special site was in particular jeopardy.

There is as yet little relevant data on either the reliability or durability of an OTEC electrical

generating plant. While information and operational experience are being accumulated on the

performance of cold water pipes in ocean environments, pipes to date have been much smaller (70

centimeters or 28 in diameter in the facility the Japanese built in Nauru) than those needed for

megawatt-sized OTEC plants (5 to 10 meters in diameter or 16 to 33 feet). Not only will such

structures be much more difficult to fabricate and to protect from the ocean environment, no one has

ever emplaced a pipe 5 to 10 meters (16 to 33 feet) diameter by 1000 meters (3300 feet) long in the

ocean. The heat exchangers used to date have been titanium, and seem to ·have performed as designed. A

scale-up by a factor of 10 to 100, however, may introduce problems unforseen at the present time.

Recent developmental work by the Trane Corporation on aluminum heat exchangers has shown promise. If

the initial encouraging results are substantiated, costs could fall. The pumps and associated massive

flows of both cool and warm water are on a scale that is unprecedented in such applications. In short,

while development of the technology is proceeding well, it is not yet commercial at any size.

Technically, the CNMI proposed 10 MW OTEC plant would be of such a size that it could make a

significant contribution to replacing some of the present fossil fuel intensive plants or it could fill

expansion needs for the next decade or two. There seems to be little applicability of OTEC to smaller

installations.

The CNMI government has been and is strongly committed to the concept of an OTEC plant on Saipan

or Tinian, thus, there already is an official acceptance of such a plan. Since the CNMI proposal

invisioned a near offshore plant, there would likely be little land requirement except for passage of

the power lines to a central load dispatching point.

Negative environmental impacts are expected to be small. On the positive side. it is possibl~

that the cold water effluent could be used for mariculture, thus combining energy production with food

production.

The CNMI does not have a labor pool with the skills needed to operate and maintain an OTEC plant.

Concurrent with planning and building such a plant therefore, a determined effort should be made to

train local people. This should also extend into the existing school systems. In addition, an

adequate support infrastructure must be established for repair and replacement parts and/or servicing

either on-island or off.

Liquid Fuels Conversion

In addition to the use of biomass for generating electricity, sugar cane, cassava and corn have

been grown and fermented to synthesize alcohol in various parts of the world. While crops certainly

could be grown in the CNMI for conversion in this way. the efficiency of conversion to alcohol is so

low that land available for this purpose in CNMI may not be sufficient to make a significant impact on

present use of transportation fuels. In addition, liquid fuels conversion technology is not yet

commercial. Where it might make sense eventually is in use in single farm situations where sufficient

land can be planted in the appropriate crops to make the farm self-sufficient in fuel for tractors and

other vehicles. This would also make the by-products. such as animal feeds available for consumption

locally without the necessity of drying and transporting. It makes particularly good sense where there

is a waste stream, such as spoiled corn, which can be utilized in this way instead of being thrown

away. More must be done to determine the appropriate crops and the site-specific yield expectations

before this technique can be evaluated for the CNMI.

86
Ocean Tidal and Currents

Ocean currents have not been sufficiently characterized in the CNMI to determine the potential

feasibility of ocean current energy conversion. However, the apparent energy content, the scale of the

machinery necessary to utilize it and the presently undeveloped state of technology make it unlikely

that this technology holds much promise for the CNMI.

Coal

While coal as a fuel has many attractive features, the use levels in the CNMI may not be high

enough to justify conversion from oil to coal. Such conversion would require significant land

dedication for the plant and the coal handling facility as well as improvements in cargo handling

capability at the port. The quantities of coal needed may well be so small as to make them

. prohibitivly expensive, and thus the generated electricity also expensive.

Hydropower

There is little in the way of hydropower resources on any of the islands in the CNMI.

FINDINGS AND RECOMMENDATIONS

With the maximum baseload and peak electricity demands on Saipan running 11.7 and 15.4 MW, on

Tinian 400 kW and 480 kW and on Rota 630 kW and 740 kW, there is good opportunity to replace a

significant fraction of the oil-fired generating capacity with that powered by alternate fuels.

Table 5-6 summarizes the most promising technologies which can make a major contribution to the

base load power requirements:

TABLE 5-6 -- PROMISING BASELOAD ALTERNATE ENERGY TECHNOLOGIES

TECHNOLOGY READINESS LAND FOR 10 MW PLANT

CONS/ENER MGMT Near Term Little or none

BIOMASS (TREES) Near Term 8000 ha (20,000 acres)

SOLAR PONDS Mid Term 200 ha (500 acres)

GEOTHERMAL Long Term Little Required

PHOTOVOLTAICS Long Term 80 ha (200 acres)

STEC Long Term 150 ha (370 acres)

OTEC Long Term Little Required

In addition to these baseload technologies, solar water heating and biogas technologies have great

potential to reduce the demands on the central power system and make it available for more productive

use.

Conservation and energy management are listed as a baseload electrical energy sources because

energy conserved and efficiently used reduces the requirement for additional generation equipment and

it releases present capacity for more productive uses. It can provide immediate additional energy at a

minimum cost.

A biomass tree farm is probably the most promising of the baseload energy generation techniques

for the CNMI. It uses readily available resources and has the potential for both short-term and

long-term contributions to solution of the energy supply problems of the CNMI. A detailed engineering

study on a biomass tree farm at a reasonable power level (1 MW) will be necessary in order to assess

the viability of the concept. Note should also be taken that municipal solid waste and coal can be

used as supplementary fuels in a properly designed biomass system.

87
The solar ponds technology is going through a rapid growth stage and costs may drop markedly in

the near future. This technology is very attractive because it can function both as a base load and as

a peaking electrical energy source.

There are significant prospects for geothermal energy on Saipan and Tinian. The presence of the

"sulfur boil" off Tinian recently indicates that the resource may be present there. The technology is

mature.

Photovoltaics is presently best used for remote area, low power needs. If some of the projections

for cost reductions for photovoltaic systems come to pass, it should be examined for applicability to

base load power production in the CNMI since it is probably the minimum land use option of all the

alternative energy systems.

STEC, with its present vulnerability to high winds, does not appear appropriate for CNMI. As the

technology matures, and as the storage technology also develops, this may change.

OTEC technology, while not commercial at present,

generation source that it should be followed closely.

abundant source of electrical energy for the CNMI.

has such promise as a baseload electrical

It has the potential to provide a ready and

The other alternate energy sources should be utilized for energy wherever appropriate.

Applications in isolated areas may be particularly useful. However, until further development brings

the costs down, other alternate energy sources are not considered to be capable of significant impact

on major electrical generation needs.

Table 5-7 lists energy planning recommendations for the CNMI.

TABLE 5-7 -- ENERGY PLANNING RECOMMENDATIONS - CNMI

o Improved energy management

Carry out electrical rate structure reform

Meter all electricity users

Bill all electricity users

Develop and enforce energy efficiency standards for all new buildings in the CNMI

Encourage efficient use of energy by demonstrating energy conserving techniques

Enhance energy education within the community, the government and the educational systems

o Application of renewable energy technologies where applicable

Exploit solar water heating and biogas use to the maximum extent possible.

Conduct a detailed engineering feasibility study on a biomass tree farm to be located on

Tinian and/or Rota. If found feasible there, proceed with implementation and study the

applicability to Saipan. The power level to be studied for Tinian and Rota should be of

the order of 1 MW and 5 MW for Saipan.

Follow the technology development of salt gradient solar ponds.

Conduct a preliminary survey of Saipan and Tinian to investigate geothermal possibilities.

Use photovoltaic modules for remote sites, particularly those which are able to

accommodate to low power and intermittent use. Prime candidates are on Alamagan and

Agrihan. Follow the technology development of photovoltaics and energy storage.

Follow the development of STEC technology, especially the "dish" approach.

- Follow the development of OTEC technology.

88
CHAPTER 6: ENERGY PLANNING FOR THE FEDERATED STATES OF MICRONESIA

The Federated States of Micronesia (FSM) includes, from east to west, the states of Kosrae,

Ponape, Truk, and Yap, and their outlying islands and atolls. All are former districts of the Trust

Territory of the Pacific Islands (TTPI). The FSM is almost 100% dependent on imported petroleum for

both electricity generation and transportation fuels. The electrical generation facilities, which

depend entirely on imported petroleum products from Mobil Oil Micronesia, Ltd., include the relatively

new and well-maintained Tofol power plant at Lelu, Kosrae and the plant at Colonia Yap. The plants in

Kolonia, Ponape, and Moen, Truk are older and not so well-maintained. The total capacity of each plant

is under 6 megawatts, power outages occur frequently, and future economic expansion is expected to

overburden some of the plants. Much of the generating equipment is composed of medium or high-speed

diesel units that are not designed for base load electricity production, thereby presenting an

additional maintenance problem.

Energy planners for the FSM would like to provide adequate electricity generating facilities for

the population centers, reduce vulnerability to fuel supply interruptions and price increases, and to

provide small, reliable electricity generating systems for outlyilng villages and remote islands.

These goals must be pursued in the context of small areas of land spread out over large expanses of

ocean, a very narrow economic base, and a burgeoning population. Steady migration from the outer

islands and a birth rate of about 3.5% is swelling the size of the urbanized areas. Populations in the

district centers range from about 2000 at Lelu, Kosrae to 10,000 at Moen, Truk. The FSM covers almost

1.6 million square kilometers (1 million square miles) of the Central and Western Pacific Ocean, from

about 10 to 12 0 north latitude and from 135 0 to 172 0 east longitude (see Figure 1-1). The area

includes over 600 islands and atolls in the Caroline archipelago. The total land area is 451 square

kilometers (271 square miles), and the estimated population is 74,404 (1980).

The FSM includes high islands, which are volcanic in origin, and the smaller low islands of the

coral atolls. Island elevations range from two meters (about 7 feet) on coral atolls to 600 to 900

meters (about 2000 to 3000 feet) on some of the high islands. The largest island is Ponape Island with

334 square kilometers (129 square miles) of land area. The climate is tropical, with relatively even

temperatures from the mid-twenties to low-thirties Celsius (high seventies to mid-eighties Farenheit).

Rainfall is heavy on the high islands, up to 760 centimeters (300 inches) a year, and lighter on the

low atolls. Most islands have dry and wet seasons. The westerly islands are more susceptible to

typhoons, but all the islands experience severe storms.

Vegetation varies from high island to low atoll. The atolls have coconut palms, breadfruit,

pandanus, and shore plants which can survive in sandy soils. In addition to these plants, the high

volcanic islands usually have mangrove swamps on the tidal flats, coconut vegetation on the slopes, and

mixed growth on the uplands. The high islands have a somewhat richer soil capable of supporting a wider

variety of plant life, but topsoil is thin, often badly eroded, and at best only moderately fertile.

The state governments own the power plants, and general government budgets cover operating costs.

Billed revenues account for a small percentage of the expenses, so the cost of electricity is

subsidized by local governments, and in turn, by the United States Government. Electricity is usually

billed at about 5t/kWh while the generating costs are around 20t/kWh. Because of their remoteness and

total dependence on imports, the islands are particularly susceptible to supply interruptions and price

increases. Outlying villages and remote islands either do not have electricity now or rely on small

diesel-powered generators. These communities need electricity for essential minimum services such as

communication, refrigeration or lighting. Such systems either do not exist or are becoming

increasingly expensive to operate on imported diesel fuel. Maintenance and repairs are a problem

because there are few technically trained workers.

Various revewable energy resources such as solar, wind, biomas, hydropower, and ocean thermal are

present in the FSM and could help solve energy problems. Technologies harnessing these resources can

be used to power centralized, and decentralized energy systems on scales from 1 kw or so for remote

communities, to 15 MW and larger for population centers. However, it is difficult to introduce these

89
energy technologies because of general logistical problems caused by remote location; the harsh

tropical environment, which includes typhoons and a highly corrosive atmosphere; a lack of local

technical expertise; the unfamiliarity of United States manufacturers and suppliers with Pacific

problems; and a lack of data for assessing the resources and siting the energy systems.

Chapter 2 discusses the general issues of renewable energy technology readiness, performance and

suitability in the Pacific. A number of the technologies that are most promising for the FSM are

discussed from the point of view of specific applications in the individual state discussions which

follow. Other resources and technologies are so heavily constrained by conditions in the FSM that they

are not discussed. For example, although several FSM islands are volcanic in origin. there are no

surface features that indicate the presence of a geothermal resource, and therefore the considerable

expense of a survey for the resource is not justified. Solar ponds are unlikely to be practical in the

FSM because even where solar insulation is sufficient, adequate flat land is unlikely to be available.

Solar thermal system technologies are not yet ready for remote locations, and in many FSM locations

direct solar radiation levels may be inadequate. Population concentrations are not high enough to make

collection and combustion of MSW feasible. Coal, although it is still an imported fuel, has many

advantages of cost and supply reliability over oil, but the FSM is too remote and its load demand is

generally too small to make those advantages persuasive. Technologies for using currents, waves or

tidal energy are not yet reliable for remote locations. Except in certain institutional and industrial

applications, solar hot water systems are not expected to be in demand because high ambient water

temperatures limit interest.

During the last five years, some renewable energy devices have been introduced in the population

centers and on the outer islands. Programs involving these devices are gathering performance testing

data at population centers; testing the reliability of certain systems in the Pacific environment;

collecting data for selecting or siting additional systems; providing electricity at remote locations

where electricity previously has not been available; or improving local well-being in villages with

simple, replicable systems. None of these systems contributes to base load electricial generation. In

addition, funds for these projects have been difficult to come by, are small in amounts. compared to

funds for similar systems in the United States, and are unpredictable with promised money frequently

being withdrawn or attached to unrealistic provisions. Local or United States private funding sources

are limited by the remote location and uncertain economic conditions of the FSM.

During the last few years the United States, FSM and TTPI governments have provided funds to

establish state energy offices, make general feasibility studies, and to purchase and distribute small

energy devices. This work must go further. There is an urgent need to collect reliable, site-specific

data; to install large-scale systems (of the MW size) which will contribute to base load production at

central locations; and to install reliable small systems for remote locations.

HISTORY AND POLITICAL DEVELOPMENT

In 1978, the people of the TTPI approved a constitution, written by elected delegates, forming the

new FSM government. (Palau and the Marshall Island districts rejected the constitution and

subsequently sought their own agreements with the United States). The seat for the new FSM government

is in the town of Colonia in Ponape. A President, elected by the National Congress, heads a government

which includes executive, legislative and judicial branches. Each state remains internally self

governing, with it's own parlimentary body or council, and governor.

In the latter part of 1980, the FSM initiated a Compact of Free Association under which the FSM

retains complete sovereignty over the islands and has full domestic autonomy and responsibility for all

foreign affairs except defense. The United States would provide specific levels of financial

assistance and other services over terms of 15 to 50 years in exchange for exclusive military authority

and certain land use agreements on the islands. Both the people of the FSM and the United States

Congress must approve any final agreement. In addition, the United Nations must terminate the

Trusteeship. Until then, the inhabitants of the FSM will legally be Trust Territory citizens.

POPULATION, EMPLOYMENT AND WAGES

At the time of the first reliable population census, 1973, there were approximately 62,700 persons

residing within the four FS~ states. Population varied widely among the four states. Truk had 31,600

inhabitants, 50% of the total FSM population, while Kosrae had 3,900 inhabitants, 6% of the FSM total.

The 1980 population was about 74,400, an increase of 17% since 1973, with no significant change in

distribution among the states. Current (1980) populations are: Kosrae, 5,522; Ponape, 22,968; Truk,

37,742; and Yap, 8.172.

90
The rate of increase is about 3.5% annually, varying only slightly among the states. At this rate

the 1983 population of the FSM will be about 84,400, an increase of over 34.5% since the 1973 census.

If current trends continue, the FSM can anticipate a high growth rate for the remainder of this

century, doubling the population in about 20 years.

The FSM islands differ in historical development, culture, and traditional socio-political

framework. Equally important are the similarities. Colonial heritage; and common people, problems and

ideas, create a sense of homogeneity among the islands. A complex system of class ranking and social

stratification are common, with variations, to all FSM cultures. An individual's land use rights,

which usually extend into the adjacent lagoon and reef areas, largely determine that person's status 1n

society. The close identification of a family with a parcel of land and inheritance rights to that

land encourage the development of strong kinship groups or clans with particular land holdings.

The islands are in the midst of significant political and cultural changes. New government

systems are being adopted by people more familiar with traditional systems. Societies used to oral

means of transferring information, are now immersed in bureaucracies with the accompanying paperwork.

Islanders are anxious to acquire modern technologies and yet lack the technical background to select,

install and maintain such systems. Four major powers (Spain, Germany, Japan, and the United States)

and two major wars during the last hundred years have had great effects on traditional societies.

Unemployment and poverty are high by United States standards as are suicide rates among young adults.

However, most islanders have not been alienated from the land, which is the fundamental source of

wealth in the Pacific. Paved roads are few. most population centers have "water hours" despite heavy

rainfall. and power outages are frequent. None of the islands have developed local economies, and all

depend heavily on United States Government support.

PRESENT ECONOMY ANO INFRASTRUCTURE

Government spending largely sustains the economy of the FSM, and this financing in turn, depends

upon transfer payments from the United States Government. External trade figures show the unbalanced

state of local economies. (Unless stated otherwise all economic figures are for 1980 dollars. Because

of difficulties in gathering reliable data. current figures are often unavailable.) In FY 1977, the

FSM trade deficit was $33.9 million. Exports of $2.0 million, made up only 6% of the $35.9 million of

imported goods.

Argiculture and fishing make up the largest sector of the private economy. In 1977. 42% of the

employed labor force. 7,900 persons. worked in the village (subsistence) economy in agricultural and

fisheries activities. Evidence indicates this percentage has not changed recently. The value of this

sector's output was about $8.8 million. Output in the village Output in the village economy accounted

for 12-24% of each state's gross domestic product (GOP). Productivity in subsistence agriculture and

fishing, was quite low; 42% employed people generated 18% of the GOP for the FSM.

The major resource available to the FSM for economic development is the vast expanse of ocean with

the 200-mile economic zone. Although the tropical oceanic environment is not noted for it's

productivity. there are exceptions at the bottom of the thermocline. island wakes. submerged banks, and

current boundries. Tuna is the most valuable fish in international markets and is a major

under-exploited resource. Access rights to the extended economic zone of the FSM have been negotiated

with a consortium of Japanese fishing groups. This agreement earned $2 million for the FSM in 1979 and

1980. The agreement included a responsibility to provide data on fishing activities and catches to the

FSM.

Tourism is another important source of income and employment in Micronesia. and it is an area

which has some growth potential. Several hundred jobs are directly or indirectly related to tourism.

There are about fourteen hotels and over 200 rooms in the four states. Other tourism-supported jobs

exist in resturants, airline agencies. tour operations. boat and dive shops. and handicrafts. The

number of visitors to the FSM average over 14.000 a year; their expenditures are about $1 million.

Over one-half of the visitors originate in the United States, and about one-fourth come from Japan.

The major industry in Micronesia is copra production and the processing of copra into coconut

oil. Copra producers in the FSM sell their output to a private firm for delivery to Japanese mills.

Other manufacturing activities in the FSM are mostly cottage-type businesses in the subsistence

sector. The few activities that produce for the market economy generally have inadequate

capitalization, inexperienced management and an untrained labor force.

There is some small-scale handicraft production. employing fewer than 100 persons. The demand for

handicrafts is rising with the increasing number of visitors.

91
Other industries are small, primarily service oriented. These business, usually family-owned and

,operated, include auto repair shops, barber shops, restaurants, a sawmill and stevedoring companies.

Boat building is widespread but is done by individual craftsmen working at home.

Virtually all merchandise sold in the FSM is imported. The present pattern of merchandising in

each state is characterized by one to three large enterprises operating as general import-wholesaleretailer, and many small stores. These small retail stores serve as neigherborhood stores and usually

are secondary family activities. Most of them operate on a very limited budget, buying in broken lots

of perhaps two or three items at a time.

In summary, the economy of the FSM suffers from several inbalances including consumption exceeding

income, and imports exceeding exports. The economic base is underdeveloped. Labor, land, natural

resources, capital, and basic infrastructure are meager and scattered over many islands isolated from

each other by a great expanse of Pacific Ocean. The gross product comes from largely United States

funded expenditures for services and capital improvements, and from tourism, copra, subsistence

agriculture, small-scale fishing and the lease of fishing access rights, and handicraft production.

The economic status of inhabitants varies from the semi-urbanized resident of the government centers

participating in a money economy to outer islanders who may receive only a small amount of cash from

copra sales and handicrafts and remittances from relatives in the government centers. Appropriations

and grants from the United States maintain the present standard of living of the people and level of

government operations in the FSM. Indigenous economic production is low, and the infrastructure needed

to meet basic economic needs and support economic development is not in place.

KOSRAE

Kosrae is the easternmost high island in Micronesia and the easternmost, and most remote, of the

FSM states. It is also the most sparsely settled state, with 5,522 people, 1,998 of whom live on Lelu

(1980). The remainder live in the small villages of Tafunsak, Malem, and Utwe. The population is of

mixed European-Polynesian-Micronesian descent.

Kosrae is entirely dependent on imported petroleum for electricity and transportation. It has an

extremely narrow economic base and its remoteness limits its development potential. -The present

generating system at Lelu is adequate. Renewable resource technologies are most likely to be used in

rural areas.

Kosrae is 4,112 kilometers (2,467 miles) southwest of Honolulu, 2,000 kilometers (1,200 miles)

southeast of Guam and 512 kilometers (307 miles) east-southeast of Ponape island. The roughly

circular, 117 square kilometers (42 square miles) island is 13 kilometers (8 miles) wide at its

greatest point (see Figure 6-1). The island is mostly mountainous with valleys interspersed between

two peaks, one of which, reaches over 610 meters (2,000 feet); the interior is heavily covered with

dense forest. A ring of coastal lowlands and mangrove swamps contains the only human settlements, the

biggest of which is on Lelu. Lelu is a small adjoining island, connected by a causeway, off the

northeast cost of Kosrae. A shallow, flat, reef encircles all of Kosrae.

The climate is tropical: Hot and humid with a temperature of about 27°C (80°F) year around.

Rainfall is relatively high, averaging 470 centimeters (185 inches) a year on the coast and 635 cm (250

in) on the highlands. Typhoons are rare--the last occurred in 1905--but tropical storms are moderately

severe during the rainy season.

HISTORY AND POLITICAL DEVELOPMENT

Micronesian people related to others on the Caroline and Marshall Islands, originally settled

Kosrae. The Spanish arrived in 1529, but travelers visited the island infrequently until the great

whaling era in the first half of the 19th century. Because of its fine harbors and fresh water supply,

Kosrae, then called Strong's Island, became a popular stopover for sailors. The early years were

turbulent with sailors pro~oking several local wars before local rulers restored peace in the 1840s.

In the 1860s, with the decline of the whaling industry, mission~ies began their work and Kosrae became

the evangelical center for the Caroline and Marshall Islands during the next 30 years.

The Spanish did not develop Kosrae commercially during those years because of it's remote

location. After purchasing the island from Spain in 1899, the Germans also did little for

development. At the start of World War I, the Japanese, who had ~ommercial interests throughout the

Pacific, immediately occupied Kosrae along with the other Caroline and Marshall Islands. Again,

because of Kosrae's remote location, the Japanese did not develop the island commercially. During

those years the island was called Kusaie.

92
Figure 6-1

Kosrae State

N

o

!

o

6 KM

4 MI

93

163"00'

163"00'
After World War II, a United Nations mandate placed Kusaie under United States protectorate, first

under Naval administration and then in 1951 under the jurisdiction of the Department of the Interior as

part of the TTPI. At that time it was made an administrative subdivision of Ponape District, one of

the six districts of the TPPI. Finally, the High" Commissioner of the TPPI approved a petition for

separate district status and on January I, 1977, the inhabitants installed a district government and

renamed the island the preferred name of Kosrae. In a constitutional referendum in 1978, its people

voted to join the FSM and their own popularly elected legislative government took office in January,

1979.

ECONOMY AND INFRASTRUCTURE

Kosrae is one of the most remote islands of the FSM. Pacific Missionary Airlines flies there a

few times a week; government field ships stop by with supplies and some passengers about once every six

weeks or so. Lack of more frequent supply trips and travel to Kosrae often causes problems developing,

installing and maintaining energy systems. It also makes Kosrae vulnerable to interruptions in

petroleum supplies, hinders economic development and discourages tourism.

Kosrae, like the other FSM states, has a very small economic base and is almost totally dependent

on government expenditures. Kosrae's Overall Economic Development Committee has established economic

goals that depend on developing agriculture, fishing, forestry and tourism through the specific

projects:

o Agriculture

Using the ship, M.V. Kaselehlia, which has recently been assigned to Kosrae, for farmers to export

their agricultural produce elsewhere in Micronesia, thereby expanding agriculture;

Developing farm roads into Kosrae's interior; and

Building a road around the perimeter of the island as access to the farm roads;

o Fisheries

Building a solar photovoltaic refrigeration system for Utwe village. This village has the largest

group of active fishermen, but does not have refrigeration facilities to preserve the fish.

o Forestry

Obtaining additional data on forest resources with the help of the United States Forest Service;

Building a small dip tank preservation facility for preserving wood; and

Investing in transportation trucks and a tractor cable skidder.

o Tourism:

Promoting the development of a reliable, scheduled air service;

Developing room facilities for visitors to Kosrae; and

Encouraging handicrafts.

A new airport and port facilities are being completed which should improve travel and shipping,

and facilitate developing the above projects.

PRESENT ENERGY SYSTEMS

Kosrae is 100% dependent on imported petroleum as fuel for electric power generation and

transportation. Table 6-1 lists the amounts of various types of petroleum purchased during 1980 and

their end-uses. At present, the largest demand for fuel on Kosrae is diesel oil for generating

electricity; 65% of the fuel brought into Kosrae is for this purpose.

The principle source of electricity is the Tofol power plant which has two new (1980) 400 kW

mid-speed Caterpillar diesel generators. In addition, there are two 10-year-old White 300 kW diesel

94
Table 6-1

End,Uses of Fuels, Kosrae, 1980

(in 1000's of bbl)

Fuel

Amount

Purchased

Price(a)

($/bbl) Gov't Private(b)

Comm'l/Indust/

Construction

Marine Transportation

Field Ship Other

Electric

Generation

Motor gasline

Aviation

gasoline

Jet fuel-K

Kerosene

Diesel

3.5

-0-

-0-

0.8

6.5

54

137

72

64

55

------------3.4(c)---------

------------ 0.8 -----------------

------------ 2.0 -----------------

.1

4.5

(a) At Mobil Bulk Plant, February 1981, exclusive of taxes and transportation from plant

(b) 325 autos

(c) Includes outboard motors

generators which have never been run and need considerable cleaning up, and a backup 350 kW

Caterpillar. The Tofol power plant is able to meet successfully the island's peak electricity demand

of 350 kW. This load occurs during the working days at mid-morning, mostly because of the high

electrical consumption of government offices for air conditioning. Power plant personnel cycle the two

Caterpillar generators to assure even wear--one generator is able to meet the peak demand--and they do

a good job of maintaining the plant. Tables 6-2 and 6-3 give additional information on electrical

generation.

Table 6-2

Electrical Power Generation, Kosrae, 1980

FUEL OUTPUT END USE CAPACITY LOAD

(million kWh/y) (million kWh/y) (MW) (MW)

Type Amount Price(a) Res Comm'l/ Gov't Milit Rated Operating Standby Base Peak

Purchased Indust

(1000's of ($/bbl)

bbl)

Diesel 4.5 55.44 2.1 -----0.8----- 1.3 0 1.4(b) 0.52 0.42 0.22 0.34

TOTAL 2.1 -----0.8----- 1.3 0 1.4(b) 0.52 0.42 0.22 0.34

(a) Diesel price at the Mobil Bulk Plant, February 1981, exclusive of taxes and local transportation

(b) Two new 300 KW generators are in storage

95
Table 6-3

Kosrae Petroleum, Oil, Lubricants (POL) Costs

1979:

1980:

1981

Cost to Government

$100,800

176,800

284,000

Total Operating Budget

$1,900,000

2,100,000

(For 1981 diesel fuel costs alone were about $232,000, based on an average monthly production of

176,000 kWh, machinery efficiency of 12 kWh/gal., and an average price of $1.31 gal.)

Total Energy Production:

Cost to Kosrae Government:

Amount of Energy Production

180,000 kWh/month

17-20¢/kWh

Billed: 55,000 kWh/month

(About 70% of electricity is not monitored or billed)

Generated Revenues at 3¢/KWh: $450/month (out of $1,500 billed)

At present, electricity reaches about 40% of the population. Rates are currently 3¢/kWh despite

generating costs of around 20¢/kWh (1981). About 70% of the users are not monitored or billed; this

includes the government users (60%) and unmetered private users (10%). Of the $1500 in bills sent out

every month about $450 are paid. At present there are no meters at the power plant to record energy

production and efficiencies. Table 6-3 shows that operating the power plant in such a fashion accounts

for a significant amount of the total government operating budget.

In order to remedy some of these misuses and inefficiencies, the FSM Five-Year Energy Plan

(1982-1987) proposes a number of solutions. They include:

o Installing meters at the power plant to record energy production and efficiency

o Installing meters for all customers, including the government sector

o Allowing electrical rates to rise until collected revenues equal actual costs

Other recommendations encourage the development and use of renewable resource technologies.

The only renewable resource currently used to any extent on Kosrae is wood and coconut wastes

burned for domestic and school cooking. Because of the low population density, fuel supplies are not a

problem now; however, cooking in this fashion is time-consuming and smoke from the fires are unhealthy

in poorly ventilated cooking shacks. The use of kerosene for cooking is increasing, but the data are

not available on the breakdown between kerosene and traditional fuel consumption. A small DOE project

is encouraging the use of efficient smokeless stoves on Kosrae; there are no data on how many have been

built and are in use.

Another DOE project is for installing a SunSpot solar hot water system for the small hospital on

Lelu. This has been a difficult project to complete because of supply problems, but a local

contractor, with help for the energy office, should finish the project by early 1983. Data on

projected energy savings are not available, but the project's real worth may be in serving as an

introduction to renewable technologies and in gathering performance testing data.

ENERGY DEVELOPMENT PLANNING

The diesel powered system at Tofol is new and generally well maintained. To date it has been able

to meet the demands adequately. There has been some down time to save fuel and to make repairs. There

are plans to extend the electrical lines to the villages of Malem, Tafunsak and perhaps Utwe, for an

additional 350 domestic connections or so. These connections sould be made over three years, about a

third each year. Each new home is expected to consume an additional 300 kWh/month for an eventual load

growth of 100,000 kWh/month. The new harbor and airport that are being built should increase overall

demand. Based on current peak demand of 350 kW, mostly from the government sector, and the peak

weekend demand of 260 kW, the present system with a nameplate capacity of 1.4 MW should be able to

96
handle this growth. However, the Kosrae government should consider using energy management methods and

renewable energy technologies in order to reduce its vulnerability to fuel interruptions, reduce

government expenditures for producing electricity, and supply electricity to villages not connected to

the grid.

Because of Kosrae's remoteness, sparse and dispersed population, the percentage of villages not

connected to the grid and lack of local technical expertise. certain small-scale systems could be a

useful part of Kosrae's total energy system. Such technologies would not contribute directly to the

base load electricity production, but would help solve certain local energy related problems. They

might also provide some local employment, not require extensive technical backgrounds, and be built and

repaired with local materials.

The smokeless stove project described earlier has been quite successful generally throughout the

FMS. Other similar projects that might be useful include small solar food/copra dryers. sail-assisted

fishing vessels, small solar photovoltaic systems for either refrigeration or communication, or small

wind electric systems (0.5 - 3.0 kW).

The type of project should be decided at the village level. The amount of money involved can be

small ($5,000 or so), and there should be a high level of local involvement. For the most of these

projects, additional data are not needed. Perhaps a small grant could be made through the Kosrae

Energy Office to a community or local group to do one of these projects.

Table 6-4 lists renewable resource technologies and energy management methods along with their

attractive features or drawbacks for Kosrae.

Energy Management

The present pricing system for electricity is ineffective. Costs far exceed revenues, government

uses are not charged, the billing system is ineffective, and these are many unmetered connections.

This system encourages consumption rather than conservation. Costs must be shifted to the users in

order to foster conservation, achieve energy independence and help with economic development. The

Kosrae government should consider using energy management methods, including installing meters at the

power plant to record production and efficiencies; installing meters for all customers, and billing

each customer, including government agencies, for electricity consumed, and increasing rates gradually

so that the revenues eventually at least equal operating costs.

Hydroelectric

The most apparent renewable energy resource on Kosrae is hydropower from Kosrae's substantial

rivers, originating in the interior mountains and fed by the heavy rainfall. There have been a number

of studies assessing this resource, the most recent of which is the United States Army Corps of

Engineers preliminary study (1981) of four major rivers; the Mutante, the Pukussuk, the Malem and the

Finkol. All these rivers are near populated areas and three of them have intakes at existing water

supply diversion dams. Based upon conceptual run-of-river hydropower plans, potential nameplate

capacity varies from 120 kW to 140 kW. and the average annual energy output would be approximately

200,000 kWh at each site. The cost and financial feasibility analyses indicate that none of the sites

are financially feasible if outside contractors do the work, because of lack of raods, high

mobilization and demobilization costs and the remoteness of Kosrae from construction centers. However.

these projects would be financially feasible if local communities (self-help) do the work with

professional supervision.

Based on this idea, Kosrae is using $150,000 of HUD/TTPI capital improvement funds to construct a

50kW run-of-river system on the Malem river. This will be a self-help project with the local villages

providing much of the labor. Work is just starting. This will be an interesting project for testing

the performance and cost-effectiveness of a small hydroelectric system.

Solar

Solar techno19gies are generally well-suited for Pacific needs, but it is difficult to determine

their suitability for Kosrae. Solar insolation data have not bee; collected and the relatively high

proportion of the time the island is under cloud cover casts some doubt on the potential suitability of

some solar technologies for Kosrae. The Department of Energy has just delivered a recording

97
Table 6-4

Technology selection Crtteria

SOLAR BIOMASS

Solar Photo- Solar

Hot . Therm- WIND GEO- HYDRO· Tree, liquid Water voltalcs al ENERGY THERMAL ELECTRIC Farms BlOgas Fuels MSW OTEC

OCEAN

CURRENTS

AND SOLAR

WAVES PONDS

ENERGY

C

OAL MANAGEMENT

RESOURCE

proven • •

suspected • • • • • • • • •

unknown • • • none •

TECHNOLOGY READINESS

IN PACIFIC

high • • • • • •

medium • • • • • •

low • • •

RELIABILITY PROBLEMS

IN PACIFIC

high •

medium • • • •

low • • • • • • • • • •

DURABILITY PROBLEMS

IN PACIFIC

high • • • •

medium • • • • • •

low • • • • •

APPLICATION

centralized • • • • • • • • • •

decentralized • • • • • • • • • •

POTENTIAL CONSTRAINTS

cultural impact • • • • • • • • •

land availability • • • • • • • • •

environmental impact • • • • • • • • • •

human resources • • • • • • • • • • • • • • •

infrastructure • • • • • • • • • • • • • • •

CAPITAL COSTS

high

(over $10,000/kW) • • •

intermediate

• I ($3,000 - $10,OOO/kW) • • • • • • •

low

(uPto $3,OOOikW) • I • • •

O&M COSTS

high • • • •

intermediate • • • • • • • •

low • • •

COST EFFECTIVENESS

near term (0-5 yrs) • • • • • •

mid term (6-15 yrs) • • • • •

long term (16-40 yrs) • • • •

EXPECTED OIL

SAVINGS OR AVOIDANCE

high •

intermediate • •

low • • • • • • • • • • • •

98
pyranometer to the Kosrae Energy Office but it is too soon for worthwhile data to have been gathered.

These will be the first solar data collected on Kosrae.

As part of the Territorial Energy Assessment, DOE has commissioned a contractor to study specific

solar photovoltaic applications throughout the United States. Pacific Islands. One potential

application for Kosrae would power a freezer for fish in a remote village, such as Utwe, with a 7.5 kW

(peak) stand-alone system. Utwe does not have electricity now and this is hindering the development of

a fishing industry. Again, solar isolation data are needed.

The solar hot water system being installed at the hospital will be useful for gathering

performance testing data that can be used to predict the success of similar systems on Kosrae. There

is not much demand for domestic hot water systems because of the high ambient water temperature.

Wind

There may be a potential for wind electric conversion machines to contribute in a fuel saving mode

to the base electrical load of Lelu or for stand-alone electricity production in small villages that

are not connected to the main system. Many of the Pacific Islands may have adequate wind regimes but

it is difficult to assess these regimes without proper site-specific data. To date no reliable or

useful wind data have been collected for Kosrae. Data that have been collected are either for short

terms, not site-specific, not at heights equivalent to those at which a wind generator would be

mounted, not continous, nor at proper locations. For the near term, the most likely use for wind

machines will probably be for small stand-alone systems at outlying villages. Siting of larger

machines will require substantial data collected over at least a two-year period.

Kosrae's remote location and lack of skilled labor make maintenance and repair of these systems

difficult. It would be preferable to erect a small, stand-alone system (1.5 - 3 kW) for performance

testing as a precursor to larger, grid-connected systems. Such a system could be similar to those DOE

is installing elsewhere as part of its Pacific Island performance evaluation program for wind machines.

Biomass and Liquid Fuels

There seems to be some potential for using the Kosrae's biomass resource but no data are available

upon which judgements can be based. One potential use of the resource would be direct combustion of

gathered vegetation or the products of tree farms. Large government land holdings could make this

technology possible, and it ties in nicely with Kosrae's economic plan to develop agriculture and

timber industries. However, there may be barriers to harvesting trees for direct combustion rather

than using them for building and other competing uses. Soil erosion on harvested land could well be a

problem. Using biomass to make producer gas should be investigated for generating electricity in

decentralized, village level systems, as should the combustion of coconut oil.

OTEC

Ocean thermal energy conversion is an appealing technology for most Pacific Islands including

Kosrae, because of the technology's potential to make a significant contribution to the baseload. For

Kosrae, the drawbacks, despite a potentially execellent resource, include engineering problems that

have not been solved, and expense. The smallest economically feasible OTEC plant (5-10 MW) may be far

to large for Kosrae's needs for some time to come. The lack of local technical skills is especially a

problem because of the many engineering problems OTEC has encountered to date.

FINDINGS AND RECOMMENDATIONS

The power plant on Kosrae is new, generally well maintained and able to meet present demands

adequately. Economic development will most likely proceed at a slow pace, so adequate capacity for the

near-term should not be a problem. Additional capacity required to extend lines to rural areas should

not be a problem either.

The Kosrae government should consider some additional methods for managing energy production and

consumption. Properly trained personnel should make energy audits at Lelu and rural areas. To develop

a data base for proper energy planning, the government should install meters at the power plant for

99
measuring electricity production and generator efficiency. All users, including government users,

should be metered and billed. Operating costs, not including capital replacement costs, greatly exceed

revenues and so the government should consider changing the electricity rate structure to reflect true

operating costs. Finally, programs should be established to train personnel to install, maintain and

service renewable energy systems.

It is difficult to make specific recommendations for alternate energy projects because so few data

are available. It does appear for the near-term that renewable energy systems will not be able to make

significant contributions to base load electrical production. Some systems may help for peak or

intermittent situations, particularly for decentralized use. Wind and solar resources may not be

adequate enough for wind electric and solar photovoltaic systems to contribute to diesel fuel savings.

However, additional data should be collected for these resources and for the biomass resouce of tree

farms. This latter technology may encounter certain cultural barriers and there may be competition for

other uses of the trees" Depending on results from the new Malem river hydroelectric project,

hydroelectric systems may have potential, but these systems could be too expensive unless they are done

as village self-help projects. Capacity may also be limited. Producer gas or coconut oil systems have

promise, particularly on a decentralized basis and a small plant should be built for performance

testing. For the mid-term OTEC is promising, but depending on Kosrae's energy needs, there may not be

a satisfactory match with end-use.

For rural areas the government sould encourage energy audits to determine needs and ways to meet

these needs. Wood cooking stoves, small photovoltaic systems, sail assisted fishing vessels, and

perhaps small wind electric machines should be considered. Village ownership and participation in

these projects is necessary, as is training of local people to service these systems. Table 6-16 at

the end of this chapter lists the various recommendations for the FSM, including those for Kosrae.

PONAPE

The state of Ponape is part of the East Caroline Islands in the Central Pacific Ocean and consists

of the 310 square kilometers (112 square miles) high island of Ponape and 39 other small islands,

islets and atolls which together have only 11 square kilometers (4 square miles) of land area (see

Figure 6-2). The population of Ponape is 22,968 (1980). The immediate energy needs of Ponape are

acute. They include deteriorating equipment, frequent outages, transmission lines built, but not

connected due to unreliable generating equipment and inability to meet demand for new electrical

hookups. Like the other FSM states, Ponape is dependent on oil, and the high costs of diesel fuel are

affecting the availability of funds for other services.

The state of Ponape is 5,448 kilometers (3,269 miles) west of Honolulu, 660 kilometers (400 miles)

east of Truk and 512 kilometers (307 miles) west-northwest of Kosrae. The largest and most developed

island is Ponape Island, a heavily forested, rugged mountain formed by the remains of a basaltic shield

volcano. This island has about 90% of the state's population; about 5,500 people live in the capital

city of Kolonia. The rest of the population inhabits the principal outer islands of Mokil, Pinge Lap,

Ngatik, and Kapingamarangi. The island is 21.6 kilometers (13 miles) in diameter with a deeply

indented shoreline which is mostly mangrove swamp. Coral reefs and mostly uninhabited islets encircle

the entire island.

The climate is generally humid and hot with very high rainfall. In the interior it can rain as

much as 830 centimeters (330 inches) a year and rainfall averages 457 centimeters (180 inches) along

the lowlands and coast. Runoff from these rains feed numerous streams and rivers which originate in

the interior highlands. Ponape Island experiences direct sunshine only about 50% of the time. Skies

are completely clear for only 1% of the time and are almost completely clouded over for 75% of the

time. Ponape is not in the typhoon belt, but it periodically experiences short, severe, tropical

storms. Destructive typhoons did strike the island in 1905, 1925, and 1958.

HISTORY AND POLITICAL DEVELOPMENT

Ponape is one of eight distinct cultural areas within Micronesia. The original settlers, about

1500 years ago, were probably canoe voyagers of either mixed Polynesian or Malay descent. The Spanish

discovered Ponape in the 16th century but the islands became widely known only in the 1930s when

whalers used Ponape Island as a stop for provisions. In those days, it was known as Ascension Island.

Christain missionaries came in the last half of the 19th century and ultimately converted most of the

population. '

In 1881, Spain attempted to solidify it's claim to Ponape by building fortifications and a small

mission on the present site of Kolonia. Ruins are still evident there. Germany purchased the island

100
7"00'

158"10' 158"20'

t

N

Figure 6-2

Ponape State

Outer islands and atolls of Ponape State are not Sh:::,

o~~2~~~4~_ ..6'f=~15 MI I

o

7'00'

158°10' 158"20'

101
form Spain in 1899 and introduced private land ownership and plantation agriculture for economic

development.

The Japanese quickly occupied Po nape at the. start of World War I. The League of Nations mandated

the islands to Japan in 1921. Ponape became the seat of the Japanese East Caroline administration and

more than 8,000 Japanese nationals came to colonize and develop the island by introducing large-scale

commercial agriculture and sophisticated fishing methods.

American forces bypassed Ponape during World War II, except for occasional bombing passes. In

September, 1945, they occupied Ponape along with the other Caroline Islands. As with many of the

Pacific Islands, the wartime isolation from foreign supplies encouraged over-exploitation of land and

marine resources, later hindering economic regeneration.

Through a United Nations mandate, Ponape became part of the United States Trust Territory of the

Pacific Islands (TTPI) in 1947. After six years of United States naval administration, Ponape came

under the civilian administration of the Department of the Interior in 1951 as Ponape District. The

years between 1951 and 1978 saw political evolution, educational growth, some infrastructure

construction, but little economic development. During that time, Ponapeans formed a local legislature

and sent representatives to the Congress of Micronesia. In July, 1978, the people voted to accept the

Micronesian constitution, thereby joining the FSM. Subsequently, the new state elected it's own

governor for the first time. Ponape now has full internal self-government under the Constitution of

the Federated States of ~icronesia. As part of the FSM, Ponape is entering into the Compact of Free

Association with the United States, whereby the FSM states will receive monetary benefits in turn for

granting the United States certain military and land use privileges.

ECONOMY AND INFRASTRUCTURE

Ponape has a very narrow economic base. It's economy depends almost entirely on state government

spending, funds for which come from the United States Federal Government. In 1979, of the 3600 people

who worked for cash, 1900 were employed by the state government and were paid $8.8 million. A

significant segment of the population operates largely outside the wage economy.

Ponape is rare amoung Pacific Islands in that it has ample fresh water, a great aid to

agriculture. After government employment, agriculture is the main source of income. Copra and

peppercorns are the main cash crops. Subsistence farming is widespread, as is fishing. Handicraft

manufacture is a growing, small-scale cottage industry. There is little commercial fishing, and

tourism is a minor segment of the economy.

The state has established general projects in the various sectors which should establish an

economic base or improve the infrastructure and institutional services. Table 6-5 lists projects

according to their priority. The government is also encouraging development of small industries or

businesses such as tourist facilities, restaurants, gift shops, pepper processing (the old processing

plant burned down), meat processing, a cannery, a feed mill, a charcoal briquette business, ship repair

facilities, and fish storage facilities. Most of this planning in in the preliminary stage and

projected energy use data are not available.

PRESENT ENERGY STATUS

Ponape is 100% dependent on imported petroleum products as fuel for transportation and electric

power generation. Table 6-6 gives details on fuel end-use. In 1980 there were 1,051 registered

automobiles, trucks and motorcycles, and 500 outboard motor boats contributing to the transportation

demand. Jet fuel is a principal end-use; the government field ships, one of which has been transferred

to Kosrae, account for 10% of the total diesel fuel used. Kerosene and liquid petroleum gases are fuel

for some cooking in population centers and for some commercial hot water heating. Renewable fuel use

includes the widespread burning of wood and coconut wastes for domestic and school cooking; and some

small renewable energy devices, mostly serving as performance testing systems.

The Ponape power system consists of two plants; the Nanphomal plant, built ~n 1977, with three 800

kW Caterpilar diesels; and the older Kolonia power plant with two 750 kW Whites and three 16-year old

500 kW Caterpillars. All the Caterpillars are high-speed, originally designed for peak load supplies.

Total electric installed capacity is 5.4 MW; firm capacity with one machine on maintenance and one on

standby is 3.8 MW. Average daily peak demand is 2.3 MW (1981), or 43% of rated capacity, and 61% of

firm capacity. Maintenance problems and other technical difficulties related to sharing loads between

the two plants make it difficult to meet these loads. Table 6-7 gives additional information on

electric power generation.

102
Table 6-5

General Ponape Projects by Priority

Category

Transportation

o Circumferential road

o Airport terminal

o Outer island airstrips

o Outer island docking facilities

o Lehnmesi bridge

Power:

o Wind/solar power - outer islands

o Transformers and secondary electric line

Health and Education:

o Kapingamarangi dispensary

o Junior high schools (Phase I)

Resources and Development:

o Livestock development center

o Tuna transhipment/vessel service facility

o Village development program

Total:

Table 6-6

End Uses of Fuels, Ponape, 1980

(in 1000's of bbl)

Amount (1980 $)

$2,000,000

1,000,000

225,000

200,000

900,000

250,000

60,000

310,000

300,000

4,500,000

1,000,000

$10,795,000

Amount Price(a) Comm'l/lndust/ Marine Transportation Electric

Fuel Purchased ($/bbl) Gov't Private Construction Field Ship Other Generation

Motor Gasoline 16 52 --------16------- .1

Aviation

gasoline 1 137 1

Jet fuel-K 19 72 19

Kerosene 3 63 .05 ------3.0----

Diesel 47 54 11 9(b) 5(c) 22

(a) At Mobil Bulk Plant, February 1981, exclusive of taxes and transportation from plant

(b) Mainly construction

(c) 1978 data

103
Table 6-7

Electric Power Generation, Ponape, 1980

FUEL

Type Amount Price(a)

Purchased

(1000's of ($/bbl)

bbl)

OUTPUT

(million kWh/y)

END USE

(million kWh/y)

Res Comm'l/ Gov't Milit

Indust

CAPACITY

(MW)

Rated Operating

LOAD

(MW)

Peak

Diesel 22.1 53.76 14.8

TOTAL 14.8

-----5.4-----

-----5.4-----

9.4

9.4

o

o

5.4

5.4

3.8

3.8

2.3

2.3

(a) Diesel price at the Mobil Bulk Plant, February 1981, exclusive of taxes and local transportation

The high costs of petroleum products, complete dependence on imported fuel, and the unreliability

of its eight generators, are Ponape's principal energy concerns. The high cost of diesel fuel for

power production is requiring government money normally set aside for generator maintenance and other

services. The electrical grid now serves on Kolonia, Sokehs and part of Nett. In outer areas there

are about 44 kilometers (26 miles) of new distribution lines not yet connected. Electrical service is

intermittent in parts of the main island that is served and is unavailable to most of the 3,300

households. Voltage irregularities are destructive to many compressors and appliances, and frequent

outages have forced the utility to deny requests for new electrical hookups. As a consequence, some

households, businesses and public facilities (hospital, airport) use small gasoline generators.

Total electricity production is from 700,000 to 1,500,000 kWh/month. The wide range is a result

of equipment failure. Electrical rates were raised in October, 1980 to 3i/kWh for the first 1000 kWh

and 8i/kWh for amounts greater than 1000 kWh. Prior rates were a flat 3i/kWh. In 1980, there were 777

private electrical power users, of which 691 were metered. The government, which uses about 60% of all

power generated, it not metered, and does not pay directly for power consumed. Figures vary

considering the efficiency of power production revenues received versus operating costs, but the FSM

Five-Year Energy Plan estimates that more than 80% of electricity costs are paid by the Ponape state

government. In 1980, costs to the state government for petroleum, oil and lubricants, were about $1.5

million, approximately 21% of the total operations budget.

Current contributions to solving the energy problems by using renewable energy technologies are

relatively insignificant. Existing renewable energy systems are small (0.5 - 15 kW range) and are

mostly for performance testing. Although their production is insignificant when measured against the

total energy needs, they are important as precursors to large-scale projects, as facilities for

training and technology transfer, and as devices for gathering siting and operational data. The small

hydroelectric projects are particularly important and seem to offer the most promise.

The Aramas Kapw School at Nett Point is demonstrating a number of small devices including

photovoltaic panels and wind electric machines and is providing some technical training. Finally,

there is a small methane digester at the state argicultural station (also not working).

ENERGY DEVELOPMENT PLANNING

The immediate energy needs on Ponape are acute. The state government is contemplating two

near-term options: 1) Purchasing three 800 kW diesel units to replace the three 16-year old

Caterpillars, or 2) building a 6 MW residual fuel oil (RFO) generating system using a 8.5% 10-year loan

arranged by International Power Systems Ltd. of England. (This is the same type of system being built

on the Marshall Islands and being considered for Palau.) Three MW would become available in 12 months

and the remainder in 24 months. The deciding factors relate to ability to finance the project and the

time necessary to have a system operating. Both the RFD-fueled plant and development of the island's

hydropower involve considerable more time and money to implement than purchasing replacement diesel

104
generators. An additional problem is providing small electricity producing systems for communltles

that either do not have electricity now or use small diesel-powered generators for generating

electricfiy.

As with the other FSM states, few data are available for assessing renewable energy resources and

the data that have been collected are general and not site-specific. The one exception is Ponape's

hydropower potential. Various groups have collected data from the major rivers during the last few

years and have issued a number of hydrographic surveys. Hydropower is considered a mid- to long-term

solution.

Concerning economic planning, the state government realizes that adequate energy supplies are the

key to developing small industries on the island, including fishing and agriculture. Until these

economic goals are achieved, the annual population growth rate of about 3.5% will drive future energy

demand. It seems likely that by the time hydropower is harnessed, the fossil fuel electrical

generating capacity will no longer be able to meet demand no matter what decision is made concerning

present options to increase the supply.

Table 6-8 shows attractive features and barriers for renewable energy technologies for Ponape.

Energy Management

Energy management techniques will make the greatest impact on fuel savings for the near-term. The

state government paying about 80% of the costs for electricity production (not including capital

replacement costs) does not encourage conservation or well-thought out uses of electricity. Although

plant maintenance has improved somewhat lately, generating efficiency is low. This is difficult to

determine without the proper meters at the power plants. Energy needs for Kolonia, outlying

communities and outer islands, should be determined through energy audits.

The recommendations set forth in the FSM Five-Year Energy Plan, if implemented, should make a

considerable difference in fuel savings and revenue to the state government. These recommendations

include increasing electrical rates over the next few years so that collected revenues at least equal

production costs and perhaps eventually include replacement costs; installing meters for all consumers,

including the government, and billing these consumers; disconnecting consumers if bills are not paid;

and encouraging ownership and operation of the utility through a public corporation or authority. The

state government should encourage better maintenance of existing systems by establishing better

technical training.

Hydropower

Prior to World War II, the Japanese operated a hydroelectric system on Ponape island. During the

last few years there has been a great deal of local interest in using this technology. Various groups

including the United States Army Corps of Engineers, the Japan Consulting Institute, the United States

Senate Committee on Energy and Natural Resources, the Trust Territory Office of Planning & Statistics,

and private consultants have issued or made feasibility and assessment studies of the major rivers on

Ponape Island. These rivers include the Lehnmasi (the largest on the island), the Senpen, the Nanpil,

the Mand, and the Krictilang. While the surveys to date to not permit precise estimates of the

island's hydro-potential, the Army Corps of Engineers believes the potential to be around 5 MW. In the

most optimistic scenario, earliest development would be in the 1990's. The most likely dam sites are

on the Lehnmasi River, but these sites are remote and without roads or transmission lines, greatly

increasing the expenses for developing the resource. Table 6-9, from the FSM Five-Year Energy Plan,

summaries the hydropower potential.

There are four hydropower hardware projects on Ponape Island now. Built or planned installations

include only one mechanical and three electrical devices:

PICS: At Panape Island Central High School at Kolonia, a summer workshop group, built a 1.5 kW

~s-flow turbine system to provide electricity for a school dormitory. The system is not

working now.

Palikir Power: A small private corporation is building a 15 kW cross-flow turbine system for

providing electricity for a small village not connected to ~he grid.

Mand Hydroelectric: A 15 kW hydroelectric system will be built at Mand village.

105
Table 6-8

Technology Selection Criteria

SOLAR BIOMASS

Solar Photo- Solar

Hot . Therm- WIND GEO- HYDRO· Tree, liquid

Water voltalcs al ENERGY THERMAL ELECTRIC Farms BlOllas Fuels MSW OTEC

OCEAN

CURRENTS

AND SOLAR

WAVES PONDS

ENERGY

COAL MANAGEMENT

RESOURCE

proven • • •

suspected • • • • • • • •

unknown • • • none •

TECHNOLOGY READINESS

IN PACIFIC

high 0 • • • • •

medium • • • • • •

low • • •

RELIABILITY PROBLEMS

IN PACIFIC

high •

medium • • • •

low • • • • • • • • • •

DURABILITY PROBLEMS

IN PACIFIC

high • • • •

medium • • • • • •

low • • G • •

APPLICATION

centralized • • • • • • • 0 • •

decentralized • • • • • • • • 0 •

POTENTIAL CONSTRAINTS

cultural impact • • • • I

• • 0 • •

land availability • • • • • • • 0 •

environmental impact • • • • • • • .. 0 •

human resources • • • • • • • • • • • • 0 • •

infrastructure • • • • • • • • • • • • () • •

CAPITAL COSTS

high

(over $10,OOOikW) • • •

intermediate • • • • • • • .. ($3,000 - $10,OOOikW) I

I I

low I

• I (up to $3,OOOikW) •

I

• •

O&M COSTS I

high • • • •

intermediate • • • • • • • •

low • • •

COST EFFECTIVENESS

near term (0-5 yrs) • • • • • •

mid term (6-15 yrs) • • • • •

long term (16-40 yrs) • • • •

EXPECTED OIL

SAVINGS OR AVOIDANCE

high • •

intermediate • • •

low • • • • i • • • • • •

106
Table 6-9 -- Ponape Hydroelectric Potential

Turbine

Head Avg. Flow Rating

River (ft) (cu. ft 3 Sec) (kW)

Nanpil(a) 1040

Lehnmasi 170 22.5 790

Lehnmasi 130 40 1080

Lehnmasi 230 54 2500

Lehnmasi 230 6 700

Senpehn 100 12.3 240

Mand 40 4.0 10

Krictilang 36 4.0 10

Totals: 6370kW

Annual Energy

Output

(millions of kWh

3.65

2.07

2.82

6.6

.77

.68

.05

.06

16.7kWh

a. Incorporates dam; Less darn, annual output drops to 2.5 mil. kwh.

Sources: Army Corps of Engineers, JCI

Mechanical Power: An overshot wheel on a river near Kolonia was providing mechanical power for

some wood-working tools for building boxes for exporting pepper. The system is not working now.

None of the above are operating at this time, but the Palikir project should be finished by early

1983. The United States Army Corps of Engineers plans to finish a design study for a 1.3 MW

installation on the Nanpil River by the summer, 1983.

Hydropower is well suited for Ponape. The resource is proven and systems have worked on Ponape

before; the technology is at a high degree of readiness; performance is not a problem. There are the

usual constraints of lack of infrastructure for servicing and lack of technical skills. The latter

problem may be partially solved through educational programs at the Community College, PICS, the

agricultural stations, and Aramas Kapw.

Capital costs are high, particularly because the river sites are isolated. Community self-help

projects and multiple-use reservoirs could reduce these costs.

Solar

The solar resource is uncertain throughout Ponape because of the high amount of cloud cover and

the lack of data. The only recorder collecting solar data over a period of time is a sunshine switch

at the Ponape Island Weather Station. The Department of Energy delivered a recording pyranometer to

the Ponape Energy Office during the summer of 1982, but data are not available yet. There are no

significant performance data yet from the solar hot water and photovoltaic systems at Aramas Kapw. on

the outer islands, the solar resource has been sufficient to power some small photovoltaic

communication and refrigeration systems.

Solar photovoltaic systems are technically ready and well suited

particularly on the outer islands, as shown by their success to date.

solar hot water and photovoltaic systems will be useful in predicting

for applications on Ponape,

Aramas Kapw's experience with

future success.

Experience has shown that performance issues are usually not a problem with photovoltaic systems.

This has not always been true for solar hot water systems because of corrosion, scaling, and storms.

In addition, even simple repair parts are often not available. and distributors have only a fair record

of servicing their products at remote locations. Lack of technical expertise is a problem, although

the educational institutions on Ponape could eventually change this.

Biomass

A DOE contractor at the University of Hawaii is doing a general assessment of the biomass

potential for the FSM as part of the Phase II Territorial Energy Assessment; results will be available

in early 1983. Despite its rugged terrain, Ponape appears to have an excellent biomass resource,

largely because of the fresh water supply and the abundance and variety of plant life. This resource

can be used for direct combustion or conversion to liquid fuels.

107
Direct combustion of biomass is a technology at a high degree of readiness and should not offer

difficult technical problems for Ponape. Liquid fuels production is not as established or reliable for

remote islands. Using producer gas or coconut oil for generating electricity in small, village-size

systems should be considered.

There are potential constraints however, particularly for direct combustion. Part of Ponape's

economic plan includes developing a timber industry, and forestry agents seem reluctant to use hardwood

timber for combustion. They are also concerned about effects on future wood production, wildlife, and

watershed, and erosion of top soil after harvesting. For now, these constraints may preclude using

biomass for direct combustion. There is interest in using certain plants for enthanol production.

Wind Energy

The wind resource on Ponape is largely unknown, but as on other Pacific Islands, local people feel

there are adequate wind regimes at certain sites. The Ponape Island Weather Station has a continuously

recording anemometer atop a 10 m (33 ft) tower, but data may be misleading because steep heights

surround the station. Three of the outer islands have nonrecording anemometers. By early 1983,

results from the general wind study by a DOE contractor will be available, but these data will not be

site-specific.

Wind electric machines have not worked well on remote Pacific Islands primarily because the wind

resource is often inadequate, and the wind machines are not reliable or durable in the Pacific

environment. There are two small systems at Aramas Kapw now, a 1.5 kW Aeropower atop an 18 meter

(60 foot) tower and a 250 W Windcharger. The Aeropower operated successfully for about a year as the

school's primary source of electricity, but it is not operating now.

The main barriers to wind machines on Ponape, besides an undetermined but probably marginal

resource, include the lack of a developed parts infrastructure and lack of technical expertise.

Capital outlay is high, and the machines do require regular maintenance. Access to proper tools,

including cranes, for installation and maintenance, can be a problem. Additional performance testing

data from the small machines now on Ponape will be useful in predicting the usefulness of other such

systems. The more durable and easily repaired mechanical wind machines for pumping water may be a more

suitable use for wind energy, particularly on outer islands.

OTEC

Ocean thermal energy converS10n (OrEC) seems particularly attractive because of suspected large

temperature differentials within the seawater column around Ponape. There is a lack of site-specific

data concerning temperature gradients, currents, bathymetry, and environmental effects. The technology

has encountered certain engineering problems, particularly regarding cold water pipes. Other problems

include lack of infrastructure support for supplies and maintenance, high capital and maintenance

costs, and effects on and from the environment. Once these problems are solved and the resource is

properly evaluated, OTEC could be an attractive technology for Ponape.

Small-Scale Technologies

The Aramas Kapw School has been worked with small energy devices such as solar food dryers, water

catchment systems, mechanical wind-powered water pumps, solar hot water devices, and small wind

electric and photovoltaic systems. These devices seem particularly useful for outer islands. PICS,

the Community College. and the agricultural station have also been involved in technical training

and/or small energy devices.

The most widely used renewable energy resource is wood and coconut waste burned for domestic

cooking over open fires on the outer islands, remote villages, and fringes of the more populated

areas. These fuels are also used for cooking in the hot lunch program at schools. People are just

starting to experience fuelwood shortages around Kolonia; at other villages there are no shortages

yet. The Trust Territory Office of Food and Nutritional Services has been encouraging the use of more

efficient "smokeless stoves" for domestic and school cooking, and villagers are just starting to build

them. There are a number of these stoves on Ponape in schools and homes near Kolonia. The stoves seem

to encounter fewer cultural constraints on Ponape than elsewhere, perhaps because wood is becoming

scarce around Kolonia. Use of these stoves should increase fairly rapidly during the next few years.

108
Ponape, with its remote islands, rural villages, limited electrical grid, and educational

facilities is a good place to encou~age community level projects. Other technologies which should be

considered include charcoal making, producer gas and coconut oil, and mechanical hydropower. The

constraint to small methane digesters is that small animals are not penned, making it difficult to

collect wastes.

FINDINGS AND RECOMMENDATIONS

Present electrical power production on Ponape is just adequate to meet capacity. Production has

not been reliable; there have been maintenance problems, although this has improved lately; and there

are frequent power outages. The diesel generators at the Kolonia power plant are old, and most of the

diesels at both plants are high-speed, designed for peak power production. The state government

anticipates that soon existing capacity will not be able to meet demands because of the deteriorating

conditions of the equipment and the addition of new customers. The government would like to provide

electrical service around the island and anticipate additional commercial hookups through economic

expansion.

To solve the near-term problems, the government is considering either purchasing three new diesel

units to replace the old units at the Kolonia plant or building a 6 MW RFO plant. similar to the system

on the Marshall Islands. Energy technologies using renewable resources and energy management methods

can make a small impact for the near-term and a larger impact for the mid-term.

A number of changes in monitoring and charging for electricity consumption should be made. The

government subsidizes about 80% of electrical use not by charging rates well below operating costs and

by not metering or charging government users and some private sector consumers. These users should be

metered and charged. Better collection methods should also be used. The government should consider

increasing rates slowly until they at least cover operating costs. and also consider establishing a

power authority to make these changes. Properly trained personnel should make energy audits throughout

Kolonia and rural areas. Finally, the government should encourage training people to install,

maintain, and service renewable energy systems.

Hydropower offers the best near-term possibility to contribute to base load production. The United

States Army Corps of Engineers is completing an engineering study at the Nanpil River for a 1.3 MW runof-river system. This system could be operating by 1986 or so. Remote sites increase capital expenses

for these systems, but work should continue assessing this resource by monitoring water flow at other

sites and by starting other engineering studies.

Because of Ponape's large land area and thick vegetation, biomass technologies are promising, but

there are some cultural barriers to tree farming, competing uses for the trees, and erosion problems.

Producer gas or coconut oil technologies are promising too, and a plant for performance testing should

be built. Additional assessments of the biomass resource should be made.

Solar hot water and photovoltaic systems probably will not contribute significantly to fuel

savings because of Ponape's cloud cover and limitied radiation. Solar photovoltaics may be useful for

some remote applications. Additional solar data are needed before systems using any of these

technologies can be designed.

The wind resource is limited, but at a few seiected sites wind data would be useful to assess this

resource properly. OTEC is not commercially ready.

In remote and rural areas, energy audits, producer gas or coconut oil systems, small hydropower

projects, small wind electric and water pumping machines, and small solar dryer, water heating, and

photovoltaic systems should be considered. Assessments should continue on the cost-effectiveness and

engineering problems of retrofiting the field ships with sails. Table 6-16 lists the various

recommendations for the FSM, including those for Ponape.

TRUK

Truk is located in the center of the Caroline Islands, 1,017 kilometers (610 miles) from Guam and

704 kilometers (424 miles) from Ponape. The state consists of more than 100 islands and atolls spread

over 500,000 square miles (180,000 square miles) of ocean. All but the Truk Lagoon islands are coral

atolls or single coral islands. Truk is the most populous of the FSM states with a population of

37,742 (1980). Most of the people live on the six largest islands within the Lagoon; Moen, the state

capital (10,373), Tal (6,781), Dublon (3,233), Fefan (3,096), Uman (2,320), and Udot (1,083) (see

Figure 6-3).

109
"

To Hall ISlands/

7'27'

151'54'

Moen r

N

151'54'

o 1mile 7"25'

o 1kilometer 1--

Xavier High,School

I)

'i:Romonum

.g

.

151'52'

151'52'

f\..&:et

Wone'I , 'l,I~" WOtel!t ~. (I ~J~r-... , ,

Toon Fanapenges a Teetiw

151'30'

Downtown

r

N

151°45' North Pass

~-~~ Piis ~. -u><li'>- .. ~6b1J 0 6

-""0

II ,

VOJ~~ci"

The outer islands and atolls ofTruk State are not shown. (;) \1

O~I:::::::",,~2iiiiiiiiiii1~4~~1Ii6-=~8KM r:?r '8 .;"

o 2 3 4 ;; Mtf' Truk Lagoon

j?'(j • 'f .}lb>: :"""'1"

/ ,,~~ .

Paata

Figure 6-3

Islands of Truk Lagoon

/)

Moen Airfield /

#

Legislative Center

Plyannu Pass

7'27'

110
Of the islands of Truk State, only Moen has a central generating system. While its capacity is

technically adequate, maintenance problems and outmoded equipment have resulted in inadequate service.

Renewable resources are unlikely to contribute much to Moen's energy demand in the near term. but on

the outer islands, renewable energy technologies could help prevent additional petroleum dependencies

and extend some level of service to areas that do not now have electricity. Energy management and

improved fiscal policies could make a significant contribution to Truk's near-term energy picture.

Truk Lagoon, with a diameter of 66 kilometers (40 miles), is one of the largest lagoons in the

world and is made up of a great ring of reefs and low coral islets within which rise 17 large volcanic

islands. Truk's total land area, including the outer islands and atolls, is under 328 square

kilometers (118 square miles); land area within the Lagoon is about 250 square kilometers (90 square

miles). The islands outside the Lagoon are truly remote; travel between them and Moen is by small boat

or government field ship every six weeks or so.

Truk's climate is hot and humid with little temperature change. Rainfall within the Lagoon

averages 305 cm (120 in) a year. There are pronounced rainy to dry seasons caused by changes in the

wind system. Truk lies on the eastern edge of the typhoon areas. Typhoons and lesser storms

periodically strike the islands causing heavy damage.

HISTORY AND POLITICAL DEVELOPMENT

The Trukese. with their distinct language, technology, social organization, and religious beliefs.

are one of eight Micronesian cultures. They, like the other Caroline Islanders. appear to be

descendants of eastern-moving migrants of Malay descent. Other islanders also moved to the lagoon

islands for refuge from severe storms. When the Spanish arrived on the Truk Islands around 1565, they

found a subsistence agricultural and fishing society. Because of Truk's fierce and warlike reputation.

whalers and traders avoided the Truk Islands until the late 19th century, and even then they visited

the islands with reluctance.

Germany purchased the Truk Islands in 1899, established the capital on Dublon Island. and

attempted to build up the copra trade. Their efforts were only mildly successful. At the start of

World War I. the Japanese. who had strong co~ercial interests in the Carolines. occupied the islands,

replacing Germany.

In 1920 the League of Nations placed Truk. along with the other Caroline Islands, under a mandate

to Japan. The Japanese recognized Truk's strategic location and protected anchorages and began to

fortify the islands during the 1930s. At that time, there were about 35,000 Japanese (mostly military

personnel) on the islands. During World War II, Truk Lagoon became the home port for major Japanese

naval units. Periodic raids by the United States destroyed a number of ships, 60 of which are still in

the Lagoon. These relics are now considered interesting diving sites, thereby supplying Truk with a

small tourist attraction.

After the war. a United Nations mandate placed Truk under United States naval administration as

part of the TTPI. In 1951, administration switched to the Department of the Interior, and the district

center moved from Dublon to Moen. The United States developed an educational and governmental system

similar to United States models and made some improvements with public infrastructure, but little was

done for economic development. Like the other districts, Truk achieved local self-government in 1978

under a charter approved by the United Nations High Commissioner. With the creation of constitutional

self-government in 1979, Truk became a full-fledged state and member of the FSM. It now has its own

popularly elected governor and state legislature. As an FSM state. Truk will receive monetary benefits

from the United States as part of the newly signed Compact Agreement.

ECONOMY AND INFRASTRUCTURE

Truk has very little economic base and depends almost entirely on state government spending, funds

for which come from the United States Federal Government. About 95% of the cash flow comes from United

States Congressional appropriations. Copra is Truk's principal export; fishing and subsistence farming

are secondary industries. Despite diving attractions, dollars from tourism are small. There are 2,100

workers in the private sector, most of whom are in retail trade and light construction. The government

is the leading employer with 3,800 workers.

The state government's general strategies for developing Truk's economic base include increasing

investments in directly productive activities; reducing private consumption while encouraging increased

savings and investment in the private sector; reducing or holding constant imports of consumer goods

111
while increasing exports; and assisting the municipalities outside of Moen to develop economic bases.

During the next few years the state government is hoping to build a copra processing plant, a small

industrial center for manufacturing soap and furniture, a dry dock with a small railway on Tol Island,

and a fishery on Dublon. All of the projects will increase energy demand.

The state government also plans to develop the outer islands selectively. These islands have

strong, well-knit communities, with mostly competent leadership by chiefs and elders. The basic

economies are subsistence, but the fishing resource appears adequate to provide cash revenues if there

were a satisfactory distribution system. Copra sales could also provide additional income.

PRESENT ENERGY STATUS

Truk is almost 100% dependent on imported petroleum products for electric power generation and

transportation. The small use of renewable fuel includes the widespread burning of wood and coconut

wastes for cooking; some photovoltaic systems on the outer islands for communication radios and

dispensary refrigerators; and a 15 kW wind electric machine at Xavier High School. A major

photovoltaic project for small systems is soon to be undertaken on the Faichuk region of the Lagoon.

Tables 6-10 and 6-11 show that the major use for petroleum products is for generating electricity

and for transportation on Moen. Jet fuel and fuel for government field ships are another principal

end-use. Kerosene and liquid petroleum gases fuel some cooking in population centers and some

commercial hot water heating. In 1981 there were 750 registered vehicles. Outboard motor boats used

for transportation between the populated islands within the Lagoon and for fishing are another

signficiant end-use. There are also significant demands on the island groups outside the Lagoon for

outboard motor boats and for electricity generation.

Table 6-10 -- End Uses of Fuels, Truk 1980

(in 1000's of bbl)

Comm'l Marine

Amount Price(a) Indust/ Transportation Electric

Fuel Purch. ($/bbl) Gov't Private(b) Const. Field Ship Other Generation Export

Motor gasoline 21 53 ---21(c)--- 0.2(d)

Aviation gasoline .05 137 .OS

Jet fuel-K 8 72 8

Kerosene 3 63 .05 -----3-----

Diesel 63 54 4 e 30(f) 5 20 4

(a) At Mobil Bulk Plant, February 1981, exclusive of taxes and transportation from plant

(b) 750 autos, 12 boats - registered

(c) Includes outboard motors

(d) 1978 data

(e) May be high

(f) Mainly construction

Population:

Household:

37,383 (Sept. 1980)

5,373 (Sept. 1980)

112
Table 6-11 - Electric Power Generation, Truk, 1980

FUEL OUTPUT END USE (b) CAPACITY LOAD

(million (million KWh/y) (MW) (MW)

Price(a)

KWh/y)

Type Amount Res Corom' 1/ Gov't Milit Rated Operating Standby Base Peak

Purchased Indust

0000' s ($/bbl)

of bbl)

Diesel 20.4 53.76 11.4 ----4.8---- 6.6 0 5.1 3.5(b) 1.9

TOTAL Rl1.4 ----4.8---- 6.6 0 5.1 3.5 (d 1.9

(a) Diesel price at the Mobile Bulk Plant, February 1981, exclusive of taxes and local transportation

The only central operating electrical system on Truk is at Moen. Installed nameplate capacity at

the plant is 5.1 MW, supplied by five 800 kW mid-speed Caterpillar generator sets and a 1.1 MW

low-speed Nordberg diesel. Firm capacity is 3.5 MW with one machine down for maintenance and one on

standby. All machinery is in fair condition. The state is considering purchasing another diesel

generator to increase capacity. There are now about 20 kilometers (12 miles) of electrical lines

connected to the plant. This includes 8 kilometers (5 miles) of new line out to Xavier High School.

New figures on estimated connections are not available. There are also smaller. privately owned

generating units throughout the islands such as the 16 kW and 2.5 kW diesel units at Xavier. Of the

other lagoon and outer islands, only Dublon has installed diesel generators and power lines, but this

system is not operating because of high operating expenses. Other islands such as Tol and Satawan are

anxious to install generators.

Average daily peak demands are around 1.9 MW and occur during weekday mid-mornings and afternoons,

the times of great~st government use for air conditioning. According to a recent energy audit by the

FSM Office of Planning & Statistics and the Truk Office of Planning & Budget, only about 65% of

produced power is accounted for. Many of the largest customers, such as the government. are not

metered. It is estimated that the government uses close to 60% of the electricity generated and that

the remaining 40% is used in the private and commerical sectors. The average customer uses about

400 kWh/month, mostly for lights and refrigerators; the commerical consumer uses about 2,368 kWh/month;

and the more westernized housing uses about 979 kWh/month.

Government agencies recieve the first 1,000 kWh/month free. They pay 6e/kWh for the next

1,000 kWh and 9t/kWh for anything over 2,000 kWh. Coromerical users pay a flat rate of lOt/kWh.

Residential users pay 6t/kWh for the first 1,000 kWh/month and 9t/kWh over 1000 kWh. During part of

1981, average monthly billing was $13,928 and average revenues were $9,368. This amounts to an average

payment of about 1.5e/kWh. Production costs, not including capital replacement, are around 20t/kWh.

During early 1983, the state government will install $200,000 (HUD) worth of small, stand-alone,

solar photovoltaic systems in the Faichuk area to power lighting systems for offices and schools, and

refrigerators for dispensaries. This will be the first major solar photovoltaic installation for

Truk. One operating solar project found on the outer islands is a solar water heating/wind water

pumping system on Satawan. This system is connected to a small health dispensary and is its only

source of hot water.

A major wind project involves installing a 15 kW Jacobs wind electric machine and Xavier High

School on Moen. This will be the largest wind machine in the FSM. Rocky Flats and Wind Power Pacific

personnel are helping with the work; funds come from the DOE Appropriate Energy Technology Grants

Program. Xavier is one of the most highly regarded schools in the Pacific, teaching vocational and

college preparatory courses to young adults throughout Micronesia.

The most extensively used renewable resource on Truk is wood and coconut wastes for domestic and

school cooking. Data are not available regarding cooking with tnis fuel and with kerosene. The Trust

Territory Office of Food & Nutritional Services is encouraging tije use of efficient wood cooking stoves.

113
ENERGY DEVELOPMENT PLANNING

Despite what appears to be sufficient capacity of the Moen system to handle peak demands, the

system is barely able to do this, primarily because of maintenance problems and inappropriate or old

machinery. There are frequent power outages caused by machinery breakdown. Poor operating and fiscal

policies for the Moen plant have discouraged conservation and fostered unrealistic attitudes towards

energy consumption. Another critical problem is to provide reliable electricity through grids on the

more populated Lagoon islands. In most places, the Lagoon is shallow enough to allow the Lagoon

islands to be connected by cable to a single grid. High costs might prevent such a linkage. Small,

reliable systems, which do not require importing fuel, are needed on the outer islands.

Most of Truk's economic expansion plans pertaining to fishing, agriculture. and industry l-ink

directly to reliable sources of electricity or liquid fuels. Expanding fishing operations, in

particular, will require freezer and ice facilities on the outer islands, a supply of fuel for the

boats, and better ship repair facilities. The lagoon and outer islands are not equipped for this now;

however, this is an excellent opportunity for small, renewable energy systems. Table 6-12 shows the

suitability of various renewable energy technologies for Truk.

Energy Management

Energy management is extremely important, not only to encourage conservation but also to encourage

renewable energy technologies by making them more cost-effective. The FSM Five-Year Energy Plan

recommends that rates by raised so that revenues equal costs and eventually include replacement costs

for machinery; that all customers be metered; that free government use stop; and that energy audits be

made. The government should encourage better maintenance of its generating equipment. The state

government should consider establishing a power authority to make these changes.

These actions could have a considerable near-term impact on Truk's energy problems. If the ideas

are implemented they could generate additional revenue for the state, encourage conservation and wise

end-use for electricity, and make renewable energy technologies more cost-effective.

Solar

Truk's latitude and the available, qualitative solar data suggest that there may be some potential

for using solar technologies. However, there are no insolation data with which to evaluate the various

solar technologies, and at some seasons, Truk does have a considerable cloud cover. A sunshine switch

at the NOAA weather station adjacent to the airfield at Moen is the only instrument that has been in

place over a period of time. DOE has just delivered a recording pyranometer to the energy office, but

it is too soon for significant data to have been developed. Photovoltaic systems are an important and

well-established technology for Pacific Islands. It is a particularly appropriate technology for

Truk's large and dispersed populations dependent on importing fuel for small generators. The solar

resource on the outer islands/has been sufficient to power some small solar photovoltaic systems.

Operational data from the photovoltaic systems being installed in the Faichuk area will be useful for

evaluating the solar resource on Lagoon islands. Experience on outer islands shows that performance

issues should not be a problem with photovoltaic systems. There were some problems with the

refrigerators durin"g the Trust Territory's recent effort to put these systems on remote islands, but

refrigerators, not photovoltaic panels, were the problem.

There is a need for solar hot water systems for health dispensaries and perhaps for some other

institutional or industrial applications, particularly on the outer islands. These islands' remote

locations may cause problems in operating the more sophisticated systems necessary for such

applications.

Wind Energy

The Truk islands may have a promising wind regime at certain locations. Producing electricity by

wind machines is a technology of some interest for Truk. However, as on the other FSM islands, very

little useful site-specific data have been collected. An anemometer is collecting wind speed and

direction data at the Moen NOAA weather station, but the instrument is in a shielded area atop a 7 m

(23 ft) tower so data are not useful for siting wind machines there, or elsewhere on Moen. There is

also an anemometer at Xavier High School for collecting data for its 15 kW machine. Finally, there is

114
Table 6-12

Technology Selection Criteria

SOLAR

Solar Photo- Solar

Hot ,Therm- Water voltalcs al

BIOMASS

WIND GEO- HYDRO- Tree, liquid

ENERGY THERMAL ELECTRIC Farms BlOgas Fuels MSW OTEC

OCEAN

CURRENTS

AND

WAVES

SOLAR

PONDS

ENERGY

COAL M~~~ERESOURCE

proven •

suspected • • • • • • • •

unknown • • • • • none •

TECHNOLOGY READINESS

IN PACIFIC

high • • • • • •

medium • • • • • •

low • • •

RELIABILITY PROBLEMS

IN PACIFIC

high • medium • • • •

low • • • • • • • • • •

DURABILITY PROBLEMS I I

IN PACIFIC

high • • • • medium • • • • • •

low • • • • •

APPLICATION

centralized • • • • • • • • •

decentralized • • • • • • • • • •

POTENTIAL CONSTRAINTS

cultural impact • • • • • • • • •

land availability • • • • • • • • •

environmental impact • • • • • • • • • •

human resources • , • • • • • • • • • • • • • .. infrastructure • • • • • • • • • • • • • • •

CAPITAL COSTS

high

(over $10,OOOikW) • • •

intermediate

(53,000 - $10,OOO:kW) • • • • • • • • low

i • I (up to 53,000ikW) • • •

O&M COSTS

high • • • •

intermediate • • • • • • • •

low • • •

COST EFFECTIVENESS

near term (0-5 yrs) • • • • • • • mid term (6-15 yrs) I • • • •

long term (16-40 yrs) • • • •

EXPECTED OIL

SAVINGS OR AVOIDANCE

high •

intermediate • •

low • • • • • • • • • • • •

115
a non-recording anemometer at Puluwat island. Because of Truk islands' varying topography and wide

geographical spread, it is essential that site-specific data be gathered.

On Moen, the students and faculty ot" Xavier High School, with funding from DOE and help from DOE

contractors, are installing a grid-connected 15 kW Jacobs machine. The site seems to have a marginally

adequate wind regime. Xavier has an excellent vocational staff. Results from this project will be

important for determining future plans for wind machines on Truk.

A critical constraint for wind machines, and one that is magnified by the remote location of the

Truk islands, is the human resource and parts infrastructure. Until there is adequate technical talent

and training locally, and until manufacturers are able to supply parts for machines, outer island use

of wind machines will be limited.

Biomass

The biomass potential on the Truk Islands appears excellent with relatively large land areas and

dense vegatation. There are, however, a few critical constraints to developing biomass as an energy

resource on Truk, despite the otherwise attractive features of this resource.

Truk's Lagoon islands have a steep relief once inland from the shore. Cultivation and harvesting

of tree crops is a problem where land is steep and access difficult, and erosion can be a problem.

Housing and subsistence agriculture compete for available flat land.

Apart from some agricultural activity on Fefan Island, there is little commerical crop production

on the Truk Islands. Only copra is produced in quantities large enough to be considered as a biofuel

feedstock. Agricultural production of sugar cane, pineapple, root crops, or other species used in

ethanol conversion are limited by an inadequate amount of arable land. Significantly, the State

Agriculturist views tree or crop yield enhancement as critical to food rather than energy production.

Coconut oil or producer gas systems suitable for generating electricity with small diesel systems

(greater than 50 kW) may be appropriate for the Lagoon islands.

OTEC

Ocean thermal energy conversion (OTEC) is a particularly attractive technology for Truk because of

a suspected large temperature differential in the local seawater column. There are no site-specific

data for temperature, currents, bathymetry, and effects to and from the environment.

This technology is not ready yet for remote locations such as Truk. OTEC has not operated

successfully over a period of time anywhere in the world because of engineering problems, primarily

with the cold water pipes. Truk lacks the necessary technical skills and parts infrastructure. Once

these problems are solved, high capital costs come down, and the resource is evaluated properly, OTEC

could be very attractive for Truk.

Small Scale Technologies

Because of Truk's widely dispersed population, certain small-scale projects may be particularly

appropriate in a fuel-saving mode for the Lagoon and outer islands. Solar food dryers, efficient wood

cooking stoves, small sail-assisted fishing vessels, mechanical wind water pumps, and small producer

gas or coconut oil combustion systems should be useful depending on resources and energy needs. Truk

has no hydropower resource.

FINDINGS AND RECOMMENDATIONS

Most of Truk's population is dispersed throughout six lagoon islands, with the greatest

concentration on Moen. Moen is the only island that has a central power system operating now.

Equipment is in fair operating condition; capacity is just adequate for present demands; and there are

frequent power outages. New customers created by economic expansion and extending distribution lines

will overburden the present system. The other Lagoon islands are anxious for central power systems,

and many of the outer islands need electricity for essential demands. The government is considering

116
purchasing an additional diesel generator to at least take care of Moen's problems for the near-term.

Cables should be considered for extending the grid from Moen to other nearby Lagoon islands. An

engineering study is needed.

It is doubtful that energy technologies using renewable resources will make more than a small

impact for fuel savings on Moen in the near-term. Changes in energy management methods will reduce

fuel consumption on Moen, and some technologies may help the outer islands avoid importing diesel

fuel. Additional data are needed to assess completely the various renewable resources.

A number of changes in monitoring and charging for fuel usage should be made. The government

subsidizes most electrical use now by charging rates well below operating costs. Revenues from

electricity generation are about 1.St/kWh, well below even fuel and lubricant costs. Much government

use is free; many customers are not metered, but are charged flat rates based on estimates; and many

people do not pay their bills. All users should be metered and charged for the electricity they

consume. The government should consider increasing rates slowly to reflect operating costs at least,

and they should consider establishing a power authority to make these changes. Properly trained

personnel should make energy audits throughout Moen and should determine energy needs on the other

Lagoon and outer islands.

Widespread technical training should be established at all educational levels. The government

should train people to install, maintain, and service renewable energy systems. It should also require

the Moen power plant to be maintained on a regular basis.

Existing data suggest that renewable energy technologies will not make a significant contribution

to fuel savings for the near-term. Solar technologies may make some impact, but additional insulation

data are needed before systems can be designed. Cloud cover may be too great for solar technologies to

provide significant fuel savings. Performance data from the photovoltaic system at Faichuk will be

important to see if such systems will be successful.

The wind regime is not promising for the Lagoon islands, and there are no data for the outer

islands. Site-specific data at appropriate heights are necessary to evaluate this resource properly.

Performance data from the machine at Xavier High School will indicate how this size machine will

operate in areas where wind speeds seem just adequate.

The biomass resource seems good, but rugged terrain. poor land access, and competing land uses may

prevent tree farming.

For remote areas, small systems for solar photovoltaics, wind electric and water pumping, and

producer gas or coconut oil could help the communities avoid using imported fuel. Efficient wood

cooking stoves should be encouraged for urban and rural areas. Sail power for fishing boats is being

encouraged and more boats should be built after performance testing of the first one. orEC is not

commercially ready yet, but the progress of the technology should be followed closely.

Table 6-16 lists the various recommendations for the FSM, including those for Truk.

Yap state is in the West Caroline Islands 750 kilometers (450 miles) southwest of Guam. It

consists of IS atolls and island groups with a total land area of 128 square kilometers (46 square

miles). Population is 8,172 (1980). The principal island group within Yap is Yap proper, a high group

of four large and seven small islands, on which the state capital of Colonia is found (see Figure

6-4). The land area of Yap proper is 108 square kilometers (39 square miles). The rest of the islands

are low, coral atolls, the largest of which is Ulithi (population, 720) about 350 kilometers (210

miles) from Yap proper. The state is widespread; Satawal, the easternmost part of the state is 1,067

kilometers (640 miles) from Colonia, and most atolls are at least 833 kilometers (500 miles) away.

Only Yap proper has a central generating systeem, and it is well-maintained and adequate to meet

present and expected demand, including the planned grid extension to Map. The government of Yap would

like to alleviate its present dependence on imported petroleum fuels and resultant vulnerability to

price increases and supply irregularities. It would also like to provide decentralized systems for

outlying villages and islands. Renewable energy resource technologies, especially photovoltaics and

wind power, are expected to be used in this effort.

117
9"35'

9"30'

138"05'

figure 6-4

Yap State

The outer islands and atolls 01 'tip State are not shown.

'~-~-- --........

reel

river

road

1

N

9"35'

9"30'

138'05'

118

138'10'
HISTORY AND POLITICAL DEVELOPMENT

Like the Trukese and Ponapeans, the Yapese, because of their substantially different language,

technology, social organizations, and religious beliefs are one of eight distinct Micronesian

cultures. The Yapese, of Yap proper, speak a unique language apparently unrelated to any other

Micronesian tongue. They probably came from southeast Asia and settled on Yap before the birth of

Christ. They evolved a complex village and caste system, founded on local warfare, which enabled them

to extend their rule far into the Caroline Islands.

The Yapese are skilled builders and sailors. The layout of today's villages attest to their

construction and engineering skills. The huge limestone discs (used for money) the Yapese quarried on

Palau 830 kilometers (250 miles) away and shipped to Yap on large canoes are evidenced of their sailing

prowess.

Diego DaRocha, a Portugese explorer, discovered the Yap islands for Europeans in the 16th century,

followed by various Spanish expeditions. Such explorations did not affect Yap until the American

adventurer, David O'Keefe, organized successful commercial trade based on trepang (sea cucumbers) and

copra. The Spanish contended with O'Keefe during the 1880s and finally established a Jesuit mission

and administrative unit which wrested control and influence from the colorful adventurer. In the 1880s

German traders moved into Yap to develop further trade, and Germany eventually purchased the islands

from Spain in 1899. By that time, the Yapese population, which had once numbered 50,000, had fallen to

2,500.

Yap proper assumed new importance in German times with the laying there, in 1905, of an undersea

communication cable connecting America with Asia. The Germans also dug canals, improved

transportation, and upgraded public health facilities.

At the start of World War I, Japan occupied the islands. In

the other Caroline Islands, through a League of Nations mandate.

continued to consolidate trade and to exploit natural resources.

developments. The Americans invaded only Ulithi, using its huge

stage the invasion of the Philippine Islands.

1920, Japan acquired Yap. along with

During the 1920s and 1930s, Japan

World War II interrupted these

lagoon as an anchorage from which to

In 1945, the United States Navy assumed responsibility for the islands and made Yap a district of

the TTPI. In 1951, the department of the Interior assumed this administrative role. The Yap

legislature was organized in 1969, with traditional councils for both the Yap High Chiefs and outer

island chiefs. The Yapese approved the FSM Constitution and agreed to join the new government as one

of the four states in 1978. Yap elected a state government that year and in 1979 elected the first

Yapese governor in modern history. As an FSM state, Yap will receive monetary benefits under the newly

signed Compact Agreement.

ECONOMY AND INFRASTRUCTURE

Yap's population is relatively small and young. Sixty-five percent of the 8,172 people live on

Yap proper; 60% of the total are under 25 years of age. The work force remains small. There are only

1.300 workers in the money economy (average annual income of $2,510). Yap's gross domestic product in

1979 was only $8 million.

The government employs 70% of the

salaries, and security of employemnt.

income and employment for the economy.

wage earners. Government jobs provide prestige, relatively high

Nonetheless, the subsistence sector still provides the principal

About 1,600 people live in a village subsistence economy.

Copra production, farming and food gathering. and fishing are the mainstays of the state's

economy. Most of this activity is in rural Yap proper and the outer islands. However, the outer

islands are rapidly becoming depopulated as the younger people move to Colonia to look for jobs, attend

schools, and enjoy urban amenities.

Yap has no economic base, and its cash economy depends almost entirely on state government

spending, funds which in turn come from the United States Government. Of the total public capital

investment in Yap state (1980), $47.9 million, the United State~'Federal Government has provided $44.7

million; the remainder has come from FSM and state sources. Of the $47.9 million, about 60% has been

invested in the transportation sector and about 2% in economic development projects. A new airport and

harbor facilities are being built, and roads are being improved and extended.

Current economic development plans by sector include:

119
o Agriculture: Developing commercial agriculture and improving subsistence farming are 'the first

priority of the economic development plan. The state is considering developing integrated farms.

citrus farms, poultry farms. and coconut plantations throughout the various districts on Yap

proper.

o Tourism: Next to agriculture. tourism is the second biggest industry on Yap. The estimated

revenue in 1979 was $80.000. General plans to increase tourism include increasing the local

economy's involvement in tourism and upgrading the existing tourist facilities and developing new

ones.

o Marine Resources: A major natural resource on Yap is its marine resource. In 1978. the FSM

assumed control of the 200-mile economic zone. In 1980. the state legislature passed the State

Fishing Zone Act. establishing a l2-mile fishing zone under its jurisdiction. Projects for

developing a commercial fishing industry include building fish handling facilities. developing ice

making and cold storage facilities. acquiring fishing boats. building a repair shop. and studying

development of a main fishing port.

o Small Industries: There are no small industries on Yap today except for a sawmill which does not

operate regularly. The state is considering developing businesses for meat processing. ceramic

and clay products. coconut processing, and fruit processing coconut cream.

The state government needs to identify sources of funds for these projects. All of them. when

implemented. will affect energy demand.

PRESENT ENERGY STATUS

Like the other FSM states. Yap depends almost entirely on imported petroleum products as fuel for

transportation and electric power production. A very small contribution is made by a few small

renewable energy devices. including solar photovoltaic systems, some small wind electric machines, and

the widespread use of wood and coconut wastes for domestic cooking and copra drying. The central grid

on Yap proper does not extend to many of the rural villages, and most of the outer islands depend on

small diesel generators for electricity.

Tables 6-13 and 6-14 show end-uses for petroleum products and consumption of fuel for electricity

generation. The major use of disel fuel is for generating electricty at the plant on Yap proper. This

plant has two 800 kW Caterpillar and two 750 kW mid-speed diesel generator sets. Installed nameplate

capacity is 3.1 MW; firm capacity is about 1.6 MW. The machinery and the plant building. which is

similar to the one on Kosrae. are about five-years-old, and are in the best condition and the best

maintained of all the FSM systems. Average daily peak load during weekday mid-mornings is about 1.4

kW. The average monthly power production (1980) is 635.000 kWh.

Additional end-uses of petroleum products include jet fuel and aviation gasoline. diesel fuel for

the government field ships. gasoline for a mini-bus system serving Colonia and outlying villages.

gasoline for outboard motor boats (est.: 500-600 in 1980) and for motor vehicles (est.: 420 in 1977),

and kerosene for cooking.

Production costs for electricty are about l8i/kWh. but the rates charged are 5i/kWh for the first

1.000 kWh and 7i/kWh for greater amounts. There are about 400 paying customers of which 150 either

have faulty meters or no meters at all. Reimbursement to the government for electricity during 1980

was about $166.000, less than 1.St/kWh. Largest users of electricity are the state government, Trust

Territory agencies, and Mitsui, a major contractor on the island. Among domestic consumers. United

States expatriates consume about five times more than local residents. During 1981. a combination of

power hours and conservation measures reduced electricity consumption by more than 3% over 1980 levels.

In the outlying islands. the population center on Ulithi has 150 kW and 60 kW diesel generators.

and an outlying community on Ulithi. Asor, has a 15 kW generator. The state government supplies the

fuel. and there is no billing system. There are no data for other small, private generators in rural

communities.

ENERGY DEVELOPMENT PLANNING

The diesel power plant on Yap is in good condition. well-maintained, and able to meet current peak

demand with only occasional·outages. Future growth according to the economic plans. including the new

120
Table 6-13

End Uses of Fuels, YAP 1979/1980

(in 100's of bbl)

Fuel

Amount

Purchased

Price(a)

($/bbl) Gov't Private(b)

Comm'l/Indust/

Construction

Marine Transportation

Field Ship Other

Electric

Generation

Motor ----------7 (c) _________ Gasoline 7 52

Aviation

gasoline 0.1 137 0.1

Jet fuel-K 6 73 6

Kerosene 1 63 1 (d)

Diesel 22 54 2(e) 3(f)

(a) At Mobil Bulk Plant, February 1981, exclusive of taxes and transportation from plant

(b) 685 autos, 10 boats - Registered

(c) Cars, 6.4; Boats 0.7 (includes outboard motors)

(d) Cooking, lighting

(e) Primarily heavy equipment

(f) 1978 data

17

airfield and expanded harbor facilities, should not strain the system. Immediate goals on Yap proper

are to alleviate as much as possible the vulnerability from complete dependence on imported petroleum

products, to operate the existing plant on a more fiscally responsible basis, and to provide electicity

through decentralized systems for outlying villages and islands. The Yap government is anxious that

this be done while preserving traditional cultural integrity.

A major decision was made in 1982 to extend the grid, which had previously served only Colonia and

nearby areas, to the adjoining island of Map. Intense debate preceded this decision as many of the

people on Map wished to use a combination of stand-alone solar photovoltaic and wind electric systems

for electricity. The gird proponents won and work on the extension has begun.

At this time the state government is taking an aggressive position toward developing renewable

energy systems on Yap. Despite having the best-maintained power plant of the FSM states and having

adequate capacity, the government is hesitant to extend the central grid to more communities. The Map

grid extension is likely to be the last one, and in the future, decentralized systems will provide

electricity for outlying communities.

The technologies that have the most promise and raise the most interest are solar photovoltaic and

wind electric systems. In introducing new energy systems, Yap has had the advantage of access to good

technical help from the local Sea Bees. Wind and photovoltaic systems installed to date are small

stand-alone ones (300 W to 3 kW or so) used mostly for refrigeration, communication, lighting and for

communication repeater stations. These systems are on Yap proper and the outer islands. The Yapese

are starting to use small-scale devices such as efficient wood cooking stoves and simple solar

food/copra dryers. Energy management methods will have the most significant near-term impact on

reducing fuel consumption. Table 6-15 shows the features of renewable energy technologies for Yap.

121
Table 6-14

Electric Power Generation, Ponape, 1980

FUEL LOCALITY OUTPUT END USE CAPACITY LOAD

(mi 11 ion kWh/y) (million kWh/y) (MW) (MW)

Type Amount Price(a) Res COImn' 1/ Gov't Milit Rated Operating Peak

Purchased Indust

(1000' s of ( $/bbl)

bbl)

Diesel 16.8 53.76 Yap Island 7.5 3.1 1.6 1.4

2.62 1. 50 3.90 0

Outer

Islands 0.52 0.22 0.12(c)

TOTAL 8.02 2.62 1. 50 3.90 0 3.32 1.6 1. 52

(a) Diesel price at the Mobil Bulk Plant, February 1981, exclusive of taxes and local transportation.

(b) 364 residences (100 with broken or no meters), 32 commercial customers, 80 government buildings, 15

outer island customers, and an additional 65 hook-ups on the outer islands.

(c) The outer islands' use, primarily Falalop, Ulithi, drops to 0.025 MW (base) and 0.04 MW (peak)

during summer months when the high school closes.

Energy Management

The FSM Five-Year Energy Plan mentions a number of energy management techniques which the state

government should consider to reduce fuel consumption. increase revenues, and encourage conservation

and the wise end of petroleum products. If it is implemented, energy management can have a significant

near-term impact.

Meters should be installed for all users, and these users should be responsible for electricity

consumed. Rates should be increased slowly to cover at least operating costs and perhaps eventually

some capital replacement expenses. The government should establish a power authority to make these

changes. Properly trained personnel should determine energy needs through energy audits on Yap proper

and the outer islands. Education programs should be established to train personnel to install,

maintain, and service renewable energy systems.

Yap should have an excellent solar resource because of its latitude and apparent high amount of

sunshine. However, no solar insulation data have been collected either for Yap proper or for the outer

islands. The NOAA weather station near the airfield has been recording minutes of sunshine via a

sunshine switch. DOE has recently delivered a recording pyranometer to the Yap Energy Office, but it

is too early for significant data to have been developed.

Yap has a number of pending or completed solar projects, which should be valuable not only for

their contribution to energy production but also for providing information on performance and

suitability of the solar resource. Small solar photovoltaic units are powering a few refrigeration,

communication, and lighting systems on Yap proper and the outer islands. Performance information from

these systems and solar insulation data may show that solar systems, particularly photovoltaics, will

be the most suitable technology for displacing petroleum or preventing new petroleum dependencies.

Planned projects include a solar water heater for the hospital and a number of photovoltaic systems for

the outer islands.

The usual Pacific Island contraints apply to solar technologies on Yap. Some are more severe,

including cultural impact, land availability, and environmental effects. The Yapese are particularly

122
Table 6-15

Technology selection Criteria

SOLAR BIOMASS

Solar Photo- Solar

Hot ,Therm- WIND GEO- HYDRO- Tree. Liquid

Water voltalc~ al ENERGY THERMAL ELECTRIC Farms BlOgas Fuels MSW OTEC

OCEAN

CURRENTS

AND SOLAR

WAVES PONDS

ENERGY

COAL MANAGEMENT

RESOURCE

proven •

suspected • • • • • • • • •

unknown • • none • • •

TECHNOLOGY READINESS

IN PACIFIC

high • • • • • •

medium • • • • • •

low • • •

RELIABILITY PROBLEMS

IN PACIFIC

high •

medium • • • •

low • • • • • • • • • •

DURABILITY PROBLEMS

IN PACIFIC

high • • • •

medium • • • • • •

low • • • • •

APPLICATION

centralized • • • • • • • • •

decentralized • • • • • • • • • •

POTENTIAL CONSTRAINTS

cultural impact • • • • • • • • • •

land availability • • • • • • • • •

environmental impact • • • .. • • • • • •

human resources • • • • • • • • • • • • • • •

infrastructure • • • • • • • • • • • • • • •

CAPITAL COSTS

high

(over S10,000:kWj • • •

intermediate • • • • I ! ($3,000 - S10,OOO:kWj • • • •

low I

(up to $3,000:kW) •

! • I

• •

O&M COSTS

high --I-- • • • •

intermediate • • • • • • • •

low • • •

COST EFFECTIVENESS I

near term (0-5 yrs) • • • • • • •

mid term (6-15 yrs) • • • •

long term (16-40 yrs) • • • •

EXPECTED OIL

SAVINGS OR AVOIDANCE

high •

intermediate • •

low • • • • • • • • • • • •

123
aware of their cultural heritage and are quite anXLOUS to

use patterns severly limit the availability of even small

Yapese are anxious to adopt these systems so perhaps they

preserve their traditions.

amounts of land for energy

can accomodate such a land

Traditional land

systems. The

use.

The new pyranometer should provide adequate solar data for Yap proper, but similar instruments

should be installed on the outer islands. While the Yap Energy Office is gathering these data and

reviewing performance information from existing systems, the office should encourage the installation

of additional hot water and photovoltaic systems. If funding is secured for pending projects, such

systems may make a significant contribution to energy production.

Wind energy conversion is a technology of great interest to the Yap state government for Yap

proper and the outer islands. However, there are very few site-specific data. The Yap Energy Office

installed a recording anemometer atop about a 9 meters (30 foot) tower next to the power plant in

spring, 1982. There is also a privately owned nonrecording anemometr in Colonia. and there are some

general data from the NOAA weather station near the airport. There are no other site-specific data for

Yap proper. According to NOAA, reliable site-specific data have been gathered on Ulithi for about 10

years, and wind speeds are averaging about 4.5 n/sec (10 mph). The Yap state government is confident

enough of the wind regime on Yap proper to have encouraged the installation of a number of small

machines throughout the island. Performance data from these machines will provide valuable information

concerning the adequacy of Yap's wind resource.

The technical suitability of wind systems is excellent because there is a good match with end-use

for stand-alone systems for outer islands and rural villages and for grid-connected systems at

Colonia. Potential constraints include land availability. However, the Yap Energy Office has been

able to obtain land for the systems being installed now.

The Department of Energy is installing a 1.5 kW EverTech generator near the power plant as part of

the Phase II effort; there is a 1.5 kW Aeropower powering a repeater station atop Mt. Matada near

Colonia. The Yap Energy Office will be installing a 4 kW machine (brand unknown) at nearby Map to

provide electricity for lighting communication and refrigeration, and there·is a Bowjon water pumping

machine near the Sea Bee base. The Kedco machine will convert to the grid; the other systems will be

stand-alone with battery storage. Performance data will be valuable, but additional site-specific data

must be collected at suitable sites on Yap proper and the outer islands. Thought should be given to

installing a machine on Ulithi.

Biomass

Soil conditions, type of vegetative cover, and availability of land limit the potential to use

biomass to make a significant contribution to Yap's central electricity supply. Small systems for

producer gas or coconut oil might playa useful role in rural communities or outer islands.

Inhabitants of a village on Map are doing a preliminary study on burning coconut oil there to produce

electricity. A contractor for DOE will soon be completing a general assessment of biomass technologies

for Yap. For the present, the most suitable biomass applications seem to be for small systems at rural

locations.

OTEC

Tokyo Electric Power Services Co., Ltd. (TEPSCO) commpleted a $25,000 preliminary pre-engineering

OTEC feasibility study for Yap in 1979. TEPSCO is suggesting a 5 MW plant composed of two 2.5 MW

units, but first proposes to do an additional environmental study, collecting and evaluating more

data. According to TEPSCO, electricty from the proposed OTEC facility would cost about 32i/kWh (at

about an 8% interest rate). The Yap state government has decided that the OTEC technology is not

commercially mature for its purposes and will not pursue this technology for a few more years.

Other Technologies

The Yap government has some interest in investigating ocean current, waves. and tides as an energy

source for electricity production, but these technologies are in a developmental stage even for areas

with a good technical infrastructure. The University of Guam has made a biological survey of the Yap

proper marine area, giving some preliminary current data, but more data specific for ocean applications

are needed.

124
Small-scale technologies have been quite successful for Yap's rural populations. Some of this

success is due in part to the work of the Yap Institute of Natural Science. This institute has been

designing, building, and encouragi~g a variety of small energy devices such as wood cooking stoves,

solar ovens, solar ventilators, and solar food/copra dryers. A solar food/copra dryer project, under

the guidance of the Yap Energy Office and designed for the outer islands, has been quite successful.

There are not enough streams on Yap proper for a hydropower resource.

FINDINGS AND RECOMMENDATIONS

Present electrical power production on Yap is adequate to meet peak demands. The diesel power

plant is new and well-maintained. Future economic growth, including the new airport and harbor

facilities, and new hook-ups are not expected to overburden the system. The main concern is to reduce

Yap's vulnerability to imported fuel price increases and to interruptions in the fuel supply. The Yap

government is also anxious to use renewable technologies to provide electricty for remote villages on

Yap proper rather than to extend the distribution lines and to use these technologies to provide

electricity for essential needs for the outer islands.

The government should consider using certain methods for energy management to reduce fuel

consumption and to increase revenues. Meters should be installed for all users, including all

government users, and these users should be billed monthly for electricity consumed. Operating costs

far exceed revenues so the government subsidizes most of the electricity production. Rates should be

increased slowly to eventually cover operating costs. The government should consider establishing a

power authority to make these changes. Properly trained personnel should make energy audits on Yap

proper and determine energy needs on the outer islands. This information should be used for energy

planning. Technically trained personnel are needed to install, maintain, and service renewable energy

systems.

The Yap government has been aggressively pursuing an energy policy based on the use of renewable

energy technologies, and it is supporting a capable energy office. For the near-term, however,

renewable energy technologies will probably not make a significant contribution to fuel savings on Yap

proper. Decentralized systems have promise for the remote villages and outer islands. On Yap proper,

wind electric and solar photovoltaic systems are the most appropriate technologies. Performance

testing data from wind machines being installed and additional site-specific data collected at suitable

heights are necessary to predict how successful this technology will be. Yap has an adequate resource

to power solar photovoltaic systems; the greatest constraints for this technology at this time are

capital costs, land availability, and technical expertise. Available land is also a problem for

biomass technologies on Yap proper. Producer gas and coconut oil technologies show promise. and a

small plant for performance testing should be built. OTEC has great potential for significant baseload

production for the mid- or long-term when the technology is fully developed. On Yap proper and the

outer islands there are no hydropower resources.

For the outer islands and rural villages, a number of renewable technologies can help reduce the

need to import fuel. If adequate resources and technical expertise are available, wind electric and

solar photovoltaic systems have potential. Wind machines for pumping water from shallow lens wells

should also be considered. Efficient wood cooking stoves and solar copra/food dryers have worked well

to date, and their use should be encouraged. Small producer gas or coconut oil facilities should also

be considered.

Table 6-16 lists the overall recommendations for the Federated States of Micronesia, including

those for Yap.

125
Table 6-16. Energy Planning Recommendations for the Federated States of Micronesia

Population Centers

Improve Energy Management.

Install meters at power plants to record electricity production and generator efficiency.

Install electric meters for all users, including government departments and housing.

Bill all users and disconnect service to those who do not pay their bills.

Consider changing the rate structure so that rates will eventually equal operating costs,

including capitalization costs.

Consider establishing a local power authority.

Continue to perform energy audits and develop a data base for energy planning.

Develop training programs for local workers in renewable energy system concepts, including

installation, maintenance, trouble shooting and repair.

Continue collecting solar insulation data and start collecting wind data at a few selected locations at

appropriate heights. Collect performance data on existing systems.

Continue assessing the biomass resource in each state for direct combustion for electricity production

and for use in producer gas and palm oil systems. Install a producer gas or palm oil system for

performance testing. Test effects of palm oil used as a substitue for diesel fuel.

Continue encouraging the use of smokeless wood stoves for domestic and school cooking.

Monitor the new hydroelectric facility being built on the Malem River to see if such systems can make a

contribution to baseload production (Kosrae).

Monitor the newly installed solar hot water system at the hospital (Kosrae).

Continue efforts to develop the hydropower resource on Ponape, particularly the Napil River (Ponape).

Assess performance data from the Xavier wind electric system and the Fairchuk photovoltaic system

(Truk).

Investigate the feasiblity of using cables from Moen to provide electricity to the other Lagoon islands.

Investigate the possibilities of retrofitting field ships with sail power (Ponape, Truk. Yap).

Rural Villages and Outer Islands

Perform audits to determine rural energy needs and to develop a plan to address these needs.

Encourage rural training and education in renewable energy system concepts.

Encourage the use of smokeless wood stoves for domestic and school cooking.

Collect solar insulation and wind data at selected sites to determine whether small, stand-alone wind

and photovoltaic systems will be feasible.

Develop a small-scale energy project or projects with high community involvement for producer gas, palm

oil, hydropower and photovoltaics.

Based on newly acquired solar insulation data, begin enegineering design of a photovoltaic system

suggested for Utwe (Kosrae).

Monitor the Palikir Power hydroelectric project to see if similar projects would be useful in other

rural areas (Ponape).

Continue to develop sait-assisted fishing vessels (Truk, Yap).

126
CHAPTER 7: ENERGY PLANNING FOR THE REPUBLIC OF THE MARSHALL ISL~~DS

The Republic of the Marshall Islands. located 8400 kilometers (5250 miles) southwest of San

Francisco in the Central Pacific Ocean. is the eastern gateway to the 2500 islands of Micronesia. The

Marshall Islands share with the rest of Micronesia. and with American Samoa, an almost total reliance

on petroleum fuels and consequent economic stresses caused by rising fuel prices and uncertain energy

supply. Economic development planning in the Republic is centered on the encouragement of foreign

investment. particularly that which offers new industry and employment opportunities for the growing

labor force.

The government recognizes the importance of firm. reliable electric power in attracting new

investment, and has addressed the problem for the near and intermediate term on Majuro Atoll with a new

12 MW residual oil-powered generating facility and a planned grid extension. This large,

grid-connected power plant for the crowded urban centers is only part of the approach energy planners

are taking in the Marshall Islands. Dispersed populations on remote islands must also be served. In

the longer term. the Republic plans to use renewable fuel resources wherever possible and to extend

electrical services to the outer islands to foster economic development and help stem the population

flow to Majuro and Kwajalein atolls.

The Marshall Islands consist of two nearly parallel chains of coral atolls and islands which

extend over 1000 kilometers (700 miles), about 200 kilometers (300 miles) apart (see Figure 7-l). The

islands are coral caps on great dome volcanoes which rise 5490 meters (18,000 feet) from the ocean

floor. At no point are any of the Marshall Islands higher than 9 meters (30 feet) above sea level.

The eastern. or Ratak (sunrise), chain encompasses 16 major atolls and islands; the western Ralik

(sunset) chain includes 18 atolls and islands. Together, these two chains contain 1152 islands and

islets dispersed over more than 1.3 million square kilometers (500.000 square miles) of the Central

Pacific. but the total land area is only 182 square kilometers (70 square miles).

About 31,000 people live in the Marshalls; the population is divided roughly into thirds, with a

third on Majuro, a third on Ebeye Island (Kwajalein Atoll), and the remaining third on the outer

islands. With a population of 8800 and a land area of 15.1 square kilometers (6.3 square miles), Ebeye

has the highest population density in the Pacific, 583 people per square kilometer (1396 per square

miles).

Majuro Atoll consists of 64 islands atop a reef that encloses a lagoon approximately 324 square

kilometers (125 square miles) in area. The three interconnected large islands of Darrit, Uliga and

Dalap at the eastern end of the atoll make up the municipality of DUD, the government. commercial and

transportation center of the Republic.

The climate is tropical--hot and humid with an average temperature of 27°C (81°F) and daily

variation of less than 7°C (12°F). The islands are cooled slightly by the prevailing seasonal trade

winds. Rainfall averages nearly 460 centimeters (180 inches) per year in the southern atoll. with the

wettest group of islands averaging nearly 80 centimeters (70 inches) a year.

The Marshall Islands are generally not considered to be in the typhoon belt, although planning for

energy facilities must take infrequent severe tropical storms into consideration. Planning must also

recognize that because the islands are true atolls with low-lying reefs and land masses, they are

easily flooded during storms and tidal waves. As recently as late 1979, an inexplicable tidal surge

struck the most densely populated areas of Majuro Atoll over a two-day period. destroying 1100 homes

and causing millions of dollars of damage.

The most important oceanic current affecting the Marshalls is the 480-kilometer-wide (300-mile)

Equatorial Counter Current. which flows eastward at an average speed of 0.4 to 1.0 knots. with maximum

speeds of up to 2.0 knots. Local current velocities along the islands and reefs within the lagoons are

not known. but most have a general flow through the atoll passages into lagoons at rising tide and out

127
Figure 7·1

The Republic of the Marshall Islands

RALiK CHAIN RATAK CHAIN

, Taongl

.Bikar

(::

r·\ Enewetak "-~(

Bikini \ ......... Rongelap

,,:,"-~~.::: ..... J

Rongerik

r:.j -'-i' Utirik

Taka"

'.:;, Ujelang

Wotho~;

Lae

Kwajelein

.::"_4···~'.·"·4

.......... . ... '.

"",,;

Lib (,

Namorik

Jimo.

Likiep

'.. / t';

Kili

r,:::~j\lotje

Erlkub

,Mejit

,...-. Maloelap \, ..,

•••••j,

<~.Aur

, Amo

Ma~~ C:.~.,

Mill ,..... ":

"-._'.: "Knox

10"

5'

0~_~!!!10;i;0==~;;ii2iiOO_~!!!!!!!!30;i;0~;;;;;;;;~4~OO~!!!!!!~5oo KM

o 50 100 150 200 250 300 MI

165'

128

t

N

170"
at the passages at falling tide. Tides are semi-diurnal with a mean range of about one meter (3.5

feet). The extreme tidal range can vary from zero to 2 meters (7 feet).

HISTORY AND POLITICAL DEVELOPMENT

The Marshallese, a Micronesian people of mixed Proto-Malay-Polynesian descent, were skilled

navigators and seamen who traversed the seas over great distances. They formed matrilineal clans tied

in common to the land in an intricate set of heirarchiacal relationships. A complex land tenure system

evolved which affects land use patterns today.

Contact with European whaling ships and traders began in the nineteenth century. The influence of

Christian missionaries from the United States is evident today in the presence of many sects and

faiths, principally Protestant. German copra traders became active in the Marshalls in the last third

of the nineteenth century, and after challenging Spain's claim to the islands in 1885, Germany

purchased the Marshalls along with the rest of Micronesia in 1899.

The German period was marked by the prosperous growth of the copra trade, centered on the island

of Jaliut, then the capital. It was abruptly interrupted in 1914, when a Japanese naval squadron took

posession of the Marshalls at the outbreak of World War I. In the following thirty years, the Japanese

.further extended the copra industry and attempted to exploit the land and water resources, mostly

through the importation of Japanese nationals.

The Marshalls became a World War II battleground and suffered major invasions on Kwajalein,

Enewetok, Majuro, and lesser bombardments in the other atolls. In 1944, most of the atolls were

occupied by American forces. Before the establishment of the United Nations trusteeship in 1947,

Bikini and Enewetok atolls were set aside and, after discussions with and evacuation of the few hundred

inhabitants, used for atomic and hydrogen bomb testing until the mid-fifties. Kwajalein, the world's

largest atoll 112 kilometers (70 miles) long with a lagoon that totals 2180 square kilometers (840

square miles) became a United States Naval Base, and in 1959, a missile testing facility.

Self-government began with the creation of the first Marshall Islands Congress in 1949. By 1976,

the Marshallese had become dissatisfied with the centrally-controlled division of revenue among the

Micronesian island districts, the lion's share of which derived from activities related to the

Kwajelein missile range. It, therefore. established a political status commission to pursue separate

negotiations with the United States. In a 1978 referendum, the Marshallese rejected a closer union

with the rest of Micronesia, and in 1979 established a constitutional government modeled after the

British parliamentary system.

The Government of the Marshall Islands has its own President, who is elected by the unicameral

legislature, the Nitijela. In negotiations with the United States, the Marshall Islands Government has

indicated a wish to join the United States in a Compact of Free Association. Under this fifteen-year

arrangement, the Marshalls retain full political sovereignty and grant certain defense concessions to

the United States in exchange for some services and budgetary support projected to total $800 million

over the 15 years. As of this writing, the final details of the Compact have not been determined. The

Compact must be approved by a plebisite in the Marshall Islands and by vote of the United States

Congress and the United Nations Security Council.

POPULATION, EMPLOYMENT AND WAGES

The indigenous population of the Marshall Islands held relatively steady from 9600 people in 1920

to slightly over 10,000 just before World War II (see Table 7-1). Since WWII, population growth has

been fueled by a high annual birth rate of around 3.5%. Preliminary results of the 1980 census put the

total population of the Marshall Islands at around 31,000 people. The average age is very low, just

over 16 years. Growth projections show the population more than doubling by the year 2000.

Table 7-1. Population of the Marshall Islands

Year 1920 1930 1935 1958 1967 1973 1980

(projected)

1990 2000

9,600 10,000 10,400 13,800 18,600

129

24,100 31,000 42,500 60,300
The economy of the Marshall Islands is characterized by great divisions between the urbanized

areas and the outer islands. About one-third of the Marshallese live in a subsistence economy in the

outer islands. The remaining 70% live and work in a wage economy in urban Majuro and on Ebeye Island

in Kwajalein Atoll. The government of the Republic is the single largest employer and the major

economic force. In the private sector, copra production continues to be the major economic base. The

Gross Domestic Product in 1977 (the most recent year for which figures are available) was $24.1

million, which yields a per capita annual income of $892. Significantly, imports exceeded exports by

more than four to one.

Employment is centered on Majuro and Kwajalein Atolls. About 40% of the labor force is directly

employed by the government of the Republic. On Majuro Atoll, over half of the jobs and nearly 80% of

the salary income are provided by the government, while the remainder is provided by trading activities

and services, such as taxis, air and sea transport, stevedoring, restaurants, bars, banking, and car

repair. A large part of private sector employment in the trades and personal service industry depends

on the income generated through employment in the government sector. A small flow of tourists creates

some demand for tourism-related services. This industry, however, provides only about 5% of the jobs

and income in the economy. Marshallese law sets the minimum wage at eighty cents per hour.

Unemployment has grown rapidly in recent years as unskilled workers from the outer islands flocked

to the urban areas seeking to enter the cash economy. Between 1973 and 1979, 50 to 60 new jobs were

created annually, while the working age population increased by about 275 people per year. Although

only about one-quarter of Marshallese women actively seek long-term employment. limiting labor force

growth to approximately 150 people per year, the labor force still grew more than twice as fast as the

number of jobs. Unemployment was about 40% of the labor force in 1973 and is currently estimated to be

about 45%. More than half of the unemployed are under 25 years of age.

Because most consumer goods are imported, inflation in the country of orIgIn of the goods is also

imported. However, the imported inflation is not necessarily the same size as that existing in the

country of origin. For instance, the large share that shipping contributes to the product cost may

affect the magnitude of the imported inflation. Improved schedules, additional competition, and the

worldwide oversupply of shipping capacities caused by a general slowdown in economic growth have helped

stabilize shipping costs in the recent past.

Between June 1978 and June 1979, average retail prices increased by 9.5%, while the prices during

the following year, to June 1980, increased by 5.9%. Since wages and salaries are not adjusted for

increas~s in the cost of living, the purchasing power of the salary earners has been declining rapidly

in recent years.

Fuel costs increased 75% between 1979 and 1981, the highest rate of increase among imports for

that period. The costs of manufactured goods increased by 69%; food costs increased by 16%, and those

of beverages and tobacco increased by 10%. The costs of transportation and machinery increased by 9%,

and crude materials by only 4%.

INFRASTRUCTURE

The industrial actIvIties in the Marshalls are very limited. A coconut oil extraction plant, a

machine shop, some small boat building operations, a small handicrafts industry, some agricultural and

fishery production and some small service type industries. such as bakeries, tailoring shops and a

printing shop, form the industrial basis of the Majuro economy. A deep ship passage on the north side

of the Majuro Atoll provides access to the lagoon for the commercial shipping lines which serve the

Marshalls. There are docking facilities at DUD. and a new dock is being constructed nearby. The new

facility will accommodate deep draft vessels and allow servicing of more than one ship at a time.

Ebeye has a major docking facility which is being expanded.

The airport facilities, 11 kilometers (7 miles) west of DUD, include a 2400 meter (8000 feet)

runway. Air service is provided by Continental/Air Micronesia to Hawaii in the east, and to the other

districts of the Trust Territory, Guam and Saipan to the west. Air Nauru provides connections to the

South Pacific and Guam via Nauru. Both airlines fly Boeing 727 aircraft. The Airline of the Marshall

Islands (&~I) provides passenger and cargo service on an irregular basis between Majuro and other

islands and atolls with landing strips. AMI, a government-supported carrier, is involved in a

concerted effort to develop strips throughout the Marshall Islands.

The DUD area has a well-developed public water system with a storage capacity of approximately

nine million gallons, roughly a twenty day supply. Most of the water is provided via rain catchment,

supplemented during periods of low rainfall by three skimming wells. Major catchments are the airstrip

and an adjoining field, and roof catchments at the hospital and Marshall Islands High School.

Treatment consists of rapid sand filtration and chlorination. Individual household catchments and

130
approximately 3S shallow wells supplement the public system. About one-third of the DUD population has

hook-ups to the system, but many others use taps to the main line that are provided for public access.

Majuro, Ebeye and Jaluit are the only areas consistently served with electricity. Majuro's main

power plant was constructed in 1960 and expanded in 1963 to accommodate more generators. At present,

peak demand on this power plant is close to installed operating capacity. The existing power plant is

a mixture of six different types of machines generating electricity at four different output ratings.

All of the generators are high speed units, and most were purchased in the late 1970s. Three, however,

were transplanted from diesel submarines and are perhaps the most reliable of the entire assortment.

PROSPECTS FOR ECONOMIC GROWTH

Economic development anywhere in the Marshalls must proceed under constraints of limited land,

energy and water. Clearly, a similar shortage of workers is not anticipated, but without education and

training programs to prepare workers for the industries and types of development the government wishes

to encourage, skilled labor will be in short supply.

One national program now being implemented calls for a significant improvement in infrastructure,

particularly in the outer islands, to lay the base for developing agricultural (principally coconut

replanting) and marine resources. Some evidence indicates that there are commercial quantities of

phosphates in the outer islands. The intention is to reverse the flow of people to the urban centers

of Majuro and Ebeye Island by developing the resources of the outer islands and improving services

there. While the economic goals and objectives of the Marshall Islands' government are similar to

those of the other American influenced islands in the North Pacific, the Marshalls have been more

systematic and aggressive in attaining those goals and objectives. For example, the Republic is

carrying forward an extensive effort to replant its islands with an integrated crop approach which both

increase copra production potential and produce foodstuffs. Coupled with the existing copra processing

facility, the Marshalls is in a solid position to diversify and expand the coconut oil refinery and

enter into the oil products area.

The economy of the Republic is almost totally dependent on the level of government funding. The

government, in turn, has been funded largely by transfer payments from the United States. Other

external sources of income are derived from the lease of Kwajalein Atoll and payments for fishing

access rights. It is expected that the level of funding from the United States under the Compact

agreement will remain relatively constant for several years and then begin to taper off. Other

external sources of income are not expected to increase significantly. This means that the level of

government spending cannot increase substantially, and consequently," that the growth prospects of that

large part of the economy which depends on government spending are dim. Economic growth in the

Marshalls, therefore, will rest entirely on the performance of the currently very limited industrial,

agricultural and fisheries sectors.

A five-year economic development plan is now being drafted for the period 1982 through 1987.

During the plan period, primary emphasis will be given to increasing the Republic's self-reliance in

food production. Agricultural extension efforts in the outer islands will receive special attention.

While copra will continue to be the primary export product, efforts to diversify the export base

are needed to ensure a healthy economy. World prices for copra are cyclical, often volatile, and

beyond the control of any exporting country. Excessive reliance on copra as a foreign exchange-earning

crop makes the economy unstable and subject to the same cyclical fluctuations. The Republic's

diversification of exports plan includes increasing tourism. While tourism produces no physical goods

for export, it contributes to the nations's balance of payments and is therefore an important factor in

the Republic's trade program. A new tourist hotel is under construction in Majuro and is scheduled for

completion in 1983. The plan also calls for establishing a fishing industry that will eventually

produce enough surplus for export; and taking advantage of the Marshall Islands' proximity to important

fishing grounds and shipping lanes, to re-export fuel to fishing fleets and other types of ships and,

possibly, to other Pacific Island nations.

The Republic has identified specific projects which will expand and diversify domestic exports and

re-exports, and which will provide locally-produced goods as a substitute for imported ones. Both

approaches are necessary if the goal of narrowing the export-import gap is to be met. The Republic's

strategy is to favor the economic development sector in the first five years of its IS-year planning

horizon in order to generate an expanding, self-sustaining revenue base.

During the period fiscal year (FY) 1977 to 1981, gross capital formation (GCF) by the government

amounted to $43.6 million, or an average of $1.7 million per year. Of the total amount, $34.4 million,

or 79% was directed towards economic development projects, and the remainder was used in the formation

of social infrastructure (see Table 7-2). The single largest project within the five-year period was

131
Table 7-2. Gross Capital Formation, FY 1977-1981.

ECONOMIC DEVELOPMENT PROJECTS

Majuro Power Plant/Fuel Farm

Docks

Aircraft

Sub-Total

thousands of % of capital

1980 $ formation

25,307 58.1

7,092 16.3

--.hQQQ 4.6

34,399 79.0

SOCIAL INFRASTRUCTURE

Water

Electrical

Sanitation

Airstrips

Sub-Total

Total

4,308 10.0

1,286 2.9

1,589 3.6

4.6

9,183 21.0

$43,582 100.0%

the Majuro Power Plant and Fuel Farm, which is expected to provide returns on the investment through

domestic electricity sales and the sale of fuel to fishing fleets and to other nations.

Two primary sources financed the gross capital formation that occurred between fiscal year 1977

and 1981: overseas borrowing, and the Capital Improvement Program CCIP). Loans were directed

primarily to economic development projects, and CIP funding was used for both social infrastructure and

economic development.

The Capital Improvement Program is a multi-year program initiated by the United States in 1976 to

put infrastructure in place in the Trust Territory governments. During the plan period, $34.4 million

will be spent in the Marshall Islands to complete the CIP. All of the funds have been allocated to

programs, and some of the projects have been started.

During the next five years, the Republic will spend $39.4 million for payment of principal and

interest on previous capital investment projects. This debt service schedule amounts to $7.9 million

for 1983; $9.4 million in 1984. (see Table 7-3). Current and future debt service will draw down

heavily on the Marshall Islands' ability to initiate new projects beyond the scope of projects that

have already been identified. Over half of the Republic's Compact monies will be utilized for debt

service over the next five to ten years. This will severely- limit flexibility in developing capital

projects, and could prove to be a decided deterrent in the long run.

The bulk of the Marshalls' debt service will be for the new power plant being constructed on

Majuro. However, this investment has fairly well assured the Republic of a ready and reliable source

of energy, one which will meet the atoll's demands for some time to come. Small-scale renewable energy

projects are playing an important role in the outer islands as the government has placed a high

priority in meeting basic energy needs throughout the Marshall Islands.

The Republic is also committed to meet the basic housing needs of its citizens and to provide more

community utilities and services. An adequate salt water sewer system for the DUD area is needed, and

smaller scale systems are needed for other areas. The government wants to maximize the fresh water

potential of Majuro Atoll, using all available sources. An adequate solid waste management program is

needed, as is an economical and predictable public transportation system for both land and water.

132
Table 7-3. CIP Account: Funding for New Projects, 1983-1987

FY83 FY84 FY85 FY86 FY87 TOTAL

(mill ions of 1980$)

Basic Grant Allocation 10.4 11.2 11. 9 12.8 13.7 60.0

Capital

Energy Allocation 2.0 2.0 2.0 2.0 2.0 10.0

Communications Allocation 3.0 3.0

15.4 13.2 13.9 14.8 15.7 73.0

Less: Debt Service (7.9) (9.4) (8.2) (7.2) (6. ]) (39.4)

Available for New Projects $7.5 $3.8 $5.7 $7.6 $9.0 $33.6

Fisheries

The Marshall Islands fishing industry is presently constrained by a lack of storage, marketing and

transportation facilities. Because marine resources have an important income-producing potential, the

Development Plan makes development of marine resources a first priority. The Plan objectives include

providing a secure supply of domestic fishery products for a significant proportion of the population

to substitute for imported canned meats. The government would also like to develop a fish export

industry.

Both of these objectives call for a support infrastructure, including the construction of reefer

plants (refrigeration/freezing facilities that blast-freeze fish) on selected outer islands and the

placement of fish freezers on the field ships so that catch from the outer islands can be transported

to the urban centers. The government intends to establish the fish export industry through many

small-scale producers.

Now that a residual oil tank farm has been established at Majuro for ship bunkering, a crew rest

and recreation and medical and operational support base is planned for Majuro. The base would serve

the Japanese fishing fleet, stocking spare parts for the vessels and offering a ship repair facility

and a railway to drydock vessels.

A substantial cold storage facility is also planned so that vessels can offload their catch for

further trans-shipment. The current alternative is to offload in refrigerated containers, which are

available at the Port of Majuro. It may be more feasible to develop a corning facility or a cannery to

process the catch at the Port of Majuro.

Agriculture

It has already been noted that the government of the Republic plans to minimize food imports

through increased crop and livestock production. To do this, it will be necessary to promote farming

as a wage-earning enterprise for outer island inhabitants and to provide marketing outlets and reliable

transportation. Projects intended to increase production of fish, poultry and eggs, vegetables and

pork will include the establishment of breeding stock as well as of facilities for adequate

refrigeration, transportation and marketing.

The Plan objective for the copra sector is to increase exports by

the first year of the plan, the Tobolar facility on Majuro is expected

tons (10,000 short tons) of copra, about 40% of its current capacity.

next five years will be accomplished through the following measu,es:

an average of 5% per year. In

to process nearly 9000 metric

Production increases during the

o Rehabilitate, during the five years, a total of 2025 hectares (5000 acres) of overmature coconut

groves

o Establish replanting projects in many of the other islands, including replanting with high-yield

types of coconut palms

133
o Complete construction of outer-island warehouses by the end of 1984

o Begin a program to place solar-po~ered copra dryers in outer islands communities

o Increase purchases of unprocessed copra from the country of Kiribati to the south

Coconut Rehabilitation Project

The coconut rehabilitation project will be tied closely with a sawmilling project that will use

overmature coconut trees. It is planned that the Agro-Forestry Section will clear selected atolls of

overmature palms, sawing them on a portable sawmill now being refurbished in Majuro. Some logs will be

shipped to Majuro to keep the second sawmill supplied. Replanting will be done on a cooperative

system, whereby supervision will be supplied by the Agro-Forestry Section, but seednuts and labor will

be provided by the landowners. Twenty-five percent of the sawn lumber will be returned to the

landowner, and the Department of Natural Resources will retain 75% for clearing the land and for sawing

the timber.

Tobolar Oil Refinery and Oil Products Plant

The government is reserving over one million dollars for a direct equity injection into the

Tobolar Copra Processing Plant on Majuro to install an oil refinery, soap factory, bottling plant, soap

packaging facility, and a warehouse. A feasibility study will be initiated in 1983 with assistance

from a United Nations Advisory Team to determine the costs, economic potential and marketing area for

the refined products, which will include cooking oil and soap. If the project proves feasible, the

second phase will be the construction of bottling and packaging plants. The products will probably

need to be marketed in other Pacific nations for the concept to be feasible.

The primary advantages to this diversification would be an increase in the overall economic base

of the Marshall Islands, an increase in the skilled labor force, and a stabilization of the raw product

price, which currently fluctuates with the world market.

Fuel Tank Farm

The Government plans to enter into a J01nt venture professional management contract to maX1m1ze

use of its fuel tank farm for the import and re-export of fuel to other nations and shipping fleets.

The fuel tank farm, which has a capacity of 4.5 million gallons, was completed in September 1982 as

part of the Majuro power plant projects. The joint venture company will begin selling fuel to Japanese

and Taiwanese fishing fleets, as well as to commercial cargo carriers, in 1983.

PRESENT ENERGY SYSTEM

The government of the Republic recognizes that if the planned economic development projects are to

succeed, the present energy system will have to be expanded and made more reliable. This applies to

the centralized electrical grid systems on Majuro and Ebeye as well as to extending dispersed

electrical supply systems to the outer islands.

Diesel oil is the main fuel used in the ~arshall Islands in all non-military end-use sectors. It

is used for all electrical power generation, ship fueling, construction equipment, and as a boiler fuel

for industrial applications. Twenty-nine percent of all the fossil fuel consumed is used to produce

electricity. Of the 26 inhabited atolls in the Marshall Islands, three have government-owned and

operated electrical generating plants. These plants provide electrical power to almost 60% of the

Republic's total population. Domestic power requirements for the remainder of the population are met

almost exclusively through the use of kerosene for both cooking and lighting. There is limited

charcoal production, and firewood is used where available.

Electrical Generation

At the time of this writing, November 1982, total electrical generating capacity in the Marshall

Islands is presently 7.7 MW (rated) and about 5 MW (operating). Peak demand is slightly less than 5

134
MW, while the base load totals less than 4 MW (Majuro 2 MW; Ebeye 1.4 MW; and Jaluit less than 0.4

MW). All generators currently in service are high speed units, most of which were purchased in the

mid-1970s. Table 7-4 defines the electric power of generation capacity of the Republic based on the

most recent data available.

Table 7-4

Table 7-4. ELECTRIC POWER GENERATION, MARSHALL ISLANDS, 1980(a)

FUEL LOCALITY (b) OUTPUT END USE CAPACITY LOAD

(million (million (MW) (MW)

kWh/y) kWh/y)

Type Amount Price(c) Res Comm' 1/ Milit Rated Operating Standby Base Peak

Purchased Gov't

(1000's of ($/bbl) Indust

bbl)

Diesel 34 53.76 Majuro 10.4 ---5--- 4.9 4.5(e) 3.0 0.5 1.9 2.4

Ebeye 4.8 2.4 1.4 0.3 0.9 1.4

Jaluit 1. 7 (d) 0.8 0.5 0.3 0.5

TOTAL 16.9 ---5--- 4.9 7.7 4.9 0.8 3.1 4.3

(a) Not including Kwajalein

(b) Population: Majuro 11,893; Ebeye 6629; Jaluit 1485

(c) Diesel price at the Mobil Bulk Plant, February 1981, exclusive of taxes and local transportation

(d) Estimate

(e) There are two additional 800 kW generators in storage

On Majuro Atoll, 53% of the electric power generated is consumed by the private sector, with the

largest private user being a commercial department store that uses about 2400 kWh per month. As of

1980, there were 802 private electrical connections served by the Majuro power plant. The slim margip

between peak demand and rated capacity on Majuro has led the government to decline all requests for new

electrical connections since 1979. An estimated 1 MW in latent demand for electricity has been created

by this moratorium on connections.

The existing power distribution network on Majuro consists of approximately 19 kilometers (12

miles) of overhead transmission lines. The distribution lines are presently being extended to add

another 27.5 kilometers (17 miles) to the system. An additional 1.5 MW of demand is expected to be

served upon completion of the transmission line extension to Laura village.

Costs associated with electric power generation in the Marshall Islands have grown significantly

1n recent years with the rise in world oil prices. Total utility expenditures for petroleum, oil, and

lubricants in FY 82 will be approximately $3 million. Utility staff costs will be on the order of

$250,000, while maintenance costs for the present generating plant are expected to be over half a

million dollars.

On the island of Ebeye, electrical power supply remains unreliable. The present Ebeye power plant

consists of about 2 MW installed generating capacity, although on the average, only half of this

capacity is in service. The low operating capacity of the plant, and increasing population pressures

on the island create a significant amount of unfulfilled electrical demand.

On Jaluit, some 700 kW of generating capacity is in place, with a baseload of 300 kW serving a

total of 109 residential, commercial, and government connections.

Metered customers throughout the Marshall Islands are charged 8t/kWh for electricity, on a flat

rate basis. Unmetered customers pay a charge of $8.00 per month. Electricity production costs on

135
Majuro are estimated at 21t/kWh. The 13t difference between cost of production and rate charged per

kWh of electricity is paid for by government subsidy to the publicly-owned utility.

Across the remaining atolls of the Marshall Islands, the government has provided some 53 solar

photovoltaic-powered units for radio communication. There are also small water pumping stations on

both Kwajalein and Majuro that are powered by mechanical wind energy conversion systems.

Liquid Fuels

Recent data indicate that there are now over 800 registered automobiles in the Republic, plus some

45 outboard motor boats. Aggregate consumption of liquid fuels across all use sectors is presented in

Table 7-5.

Table 7-5. END USES OF FUELS, MARSHALL ISLANDS, 1980 (a)

(in 100's of bbl)

Fuel

Amount

Purchased

Price(b)

( $/bbl) Gov't Private

Comm'l/Indust/

Construction

Marine

Transportation

Field

Ship Other

Electric

Generation

Motor gasoline 22 52 __ -----------22 (c) _

Aviation gasoline 0

Jet fuel-K

Kerosene

Diesel

33

4

98

73

62

54

33

4

33 15 (d) 36

(a) Not including Kwajalein Atoll

(b) At Mobil Bulk Plant, February 1981, exclusive of taxes and local transportation

(c) 700 autos, 20 registered boats and outboard motors

(d) 1978 data

(e) Includes fuel for outer islands

Population:

Houaeholds:

31,045 (Sept. 1980)

1952 (Sept. 1980)

The Republic of the Marshall Islands operates a domestic fleet of four field trip ships to provide

outer island passenger and shipping service. Until the advent of the Airline of the Marshall Islands,

this fleet provided the only trading, supply, and administrative links for the outer island

communities. Presently, field ship service to the outer islands consumes approximately 15% of the

total diesel consumed in the Republic. The domestic fleet is comprised of three Micro class ships and

one Islander class vessel. Each Micro class ship has a cargo capacity of 800 tonnes (789 gross tons)

and is equipped with 2.7 and 4.5 tonne winches to provide dock side loading and unloading. The fuel

consumption rate for these ships is 1200 gallons per 24 hours. The Islander class vessel is a 493

metric ton vessel equipped with identical working load winches. The fuel consumption rate is also 1200

gallons per 24 hours.

There are plans to replace the engines of two of the Micro class ships with slow speed, residual

fuel oil-burning engines to increase fuel efficiency and reduce maintenance requirements. The energy

savings potential of this measure has not been determined yet. A feasibility study has also been

undertaken on the sail-assist retrofit of the Republic's international carrier.

The Republic has recently established the Marshall Islands Maritime Corporation as a government

owned and operated corporation to improve international shipping services to the Republic. The major

136
asset of the company is a 6045 metric ton vessel which is both a break bulk and cargo vessel. The ship

consumes about 60 barrels of MOO and 11 gallons of lube oil each 24 hours.

The Republic established the Airline of the Marshall Islands (AMI) in 1980 as a wholly owned

government corporation. The airline's present inventory consists of one 14-seat and one 16-seat Nomad

plane, and one 48-seat BAC-HS748 aircraft. The government began an intensive program to construct

outer island airstrips in 1980 with the goal of providing air transportation capability to all outer

islands. To date, fourteen domestic airports are in operation, and there is one international airport

in Majuro that is capable of accommodating 707 jets.

Now that air transportation is possible in many cases of medical emergency in the outer islands,

field ship operation has become more reliable. Ship schedules were often affected in the past when

ships were diverted for medical emergencies or evacuations.

In 1981, 33.000 barrels of jet fuel were purchased in the Marshall Islands; the principle consumer

was Air Micronesia. This figure is expected to increase annually with expanded routing of the ~~I 748

and completion of all outer island airstrips.

PLANNING FOR THE FUTURE

The single most important development influencing the present energy system status in the Republic

of the Marshall Islands is the new residual fuel oil-fired power plant on Majuro. When it is complete,

the new plant will be a four-unit, 12.8 MW system, and will include fuel storage tanks and maintenance

facilities. When fully installed, the plant will be operated at 60% (7 MW) of rated capacity. The

four individual 3.2 MW units are mobile, and will be brought on line over a four-year period. The

first unit came on line toward the end of 1982.

The decision to replace, and substantially increase, existing generating capacity reflected a

desire on the part of the Republic to reduce operating costs and to provide sufficient power to

encourage new industry to locate on the island of Majuro. The use of residual oil rather than diesel

is expected to bring a considerable fuel cost savings to the government. Residual fuels have a higher

Btu value per gallon than does diesel fuel, and generators using residual oil run more efficiently than

diesel units. Operating efficiencies of 17-18 kWh/gallon are anticipated with the new units, compared

to the 11-12 kWh/gallon rating of the present diesel generators. Annual fuel savings to the government

are expected to reach nearly $750,000.

In proceeding with the new central power plant, the government has recognized the importance of

firm, reliable power in attracting new investment. As the first units of the new generating facility

come on line, domestic demand is expected to rise, based on the number of requests for new electrical

connections already on order. Likewise, the grid extension to Laura will open the remainder of Majuro

Atoll to the central power network and increase demand on the order of 1.5 MW.

Historically, the government sector was not charged for electricity consumption, and most

government buildings went unmetered. To begin reversing this inherited policy of substantial electric

rate subsidization, the Government of the Marshall Islands has an effort underway wherein all

government departments shall budget for electricity consumption. In addition, power from the new plant

will be sold according to a substantially revised and tiered rate structure, not at the low, flat rates

now in effect. These measures are expected to have a positive effect on efficient energy management,

and to encourage, over time. the introduction of added conservation techniques and energy-efficient

technologies.

The government is also mandating energy-efficient designs for all new buildings. The Public Works

Department is replacing incandescent bulbs with fluorescent fixtures wherever possible to reduce energy

consumption and costs. Lighting needs surveys are being conducted in government facilities to identify

unneeded 'lights.

Energy planning for the outer islands has followed a different approach because there is little or

no government supplied conventional fuel on the remote atolls of the Republic. Photovoltaic modules

have replaced a network of small diesel generators once used to power communication radios on the outer

islands. The solar systems now perform that function at no annual fuel cost to the government.

Additional energy supply options for the outer islands will depend on the Republic's outer island

development priorities. Increased government services to these remote locations, intended to support

improved living conditions and out-migration efforts within the Republic, are also expected to increase

demand in those areas.

The government has expressed a broad commitment to consider the use of renewable energy

technologies in meeting low power requirements on the outer islands. Such a step will preclude the

137
need for expanded use of diesel generators with their inherent fuel costs and maintenance

requirements. A range of alternate energy resourc~s and technologies, including energy management,

available in the Marshall Islands has been considered, and some conclusions may be drawn about the

relative attractiveness of each. The criteria presented in Chapter 2 relative to selection of

alternate energy systems can be applied to the variety of renewable energy sources and conversion

techniques that have been suggested for application in the Pacific Islands. Their relative

appropriateness for the Marshall Islands can be better understood after screening against resources,

conditions, and policies unique to the area. These technology assessments follow below with findings

summarized in Table 7-6.

Energy Management

Within the Marshall Islands, several potential energy management actions have been identified.

Each would contribute significantly to the more efficient use of electrical energy from the Majuro

power plant. This, in turn, would free capacity at the plant for use by new commercial and industrial

users, and help support the Republic's goals for economic development. Among the many energy

management steps which can be taken, those with the most oil savings potential are:

o Institution of an electric power rate structure that better reflects the costs of production on

Majuro, Ebeye, and Jaluit

o Installation of kilowatt-hour meters, first in all government sector buildings on Majuro, and

eventually on all buildings that are not now metered

o Institution of a budget mechanism to begin billing government agencies for electricity consumed

o Development of energy efficiency standards to be applied to all new government and commercial

buildings on Majuro

o Demonstration of passive cooling retrofit on selected government buildings

o Implementation of energy conservation measures beyond those already taken within the government

sector, including replacement or removal of inefficient or unnecessary electric end-use devices

o Development of an energy audit and data management system to increase awareness of how energy is

being used in the Marshall Islands and to support all of the above energy management activities

o Development of an energy education and training program across all branches of government, and

extension of such a program to the commercial and residential sectors upon completion of metering

and rate reform steps

o Initiation of fundamental training in the installation and Operations and Maintenance (O&~) of

photovoltaic systems, and the conduct of building energy audits

Most of the above steps have already been identified for implementation by the Government of the

Marshall Islands. Success will depend on the efforts of many different individuals and groups. The

perception of both individual and social benefit as a result of such actions must be cultivated among

the target populations, perhaps starting with a pilot program and then expanding to a wider audience.

A high priority should be assigned to consensus building for each step. Such preparation will have

more to do with the success of energy management than the relatively simple and cost effective measures

themselves.

Photovoltaics and Solar Water Heating

Solar resource data are being collected on Majuro, Enewetok, and Utirik atolls. Preliminary

returns from Majuro suggest a daily insolation of 4.8-5.5 kWh/m2-day. Although no long-term

insolation data have been collected, solar energy conversion devices have been installed and are

working well in the Marshall Islands. Photovoltaic modules and solar hot water heaters have been

performing well in the Marshalls' relative to the available resource.

From the standpoint of technology readiness, both solar hot water applications and photovoltaic

systems are proven quantities. The main questions that remain to be answered about the use of solar

technologies concern the operational lifetimes that can be expected for installed systems in the harsh

environmental conditions posed by the humid, salt-laden air that is constantly present on the atolls.

Experience with solar systems now in place will be useful in gauging the vulnerability of future

installations to corrosion.

138
Table 7·6

Technology Selection Criteria

SOLAR BIOMASS

Solar Photo- Solar

Hot . Thenn- WIND GEO- HYDRO- Tree. Liquid

Water vottalcs al ENERGY THERMAL ELECTRIC Fanns BlOgas Fuels MSW OTEC

OCEAN

CURRENTS

AND SOLAR

WAVES PONDS

ENERGY

COAL MANAGEMENT

RESOURCE

proven • •

suspected • • •

unknown • • • • • • none • • • • TECHNOLOGY READINESS

IN PACIFIC I I

high • • • • • • •

medium • • •

low • • • •

RELIABILITY PROBLEMS

IN PACIFIC

high • • • • • • • •

medium • • low • • I • • DURABILITY PROBLEMS I

IN PACIFIC I

high • • • • • • • • • •

medium • •

low • •

APPLICATION

centralized • • • • • • • • • • • • • decentralized • • • •

POTENTIAL CONSTRAINTS

cultural impact • • • • • •

land availability • • •

I •

• • •

environmental impact • • • • • • • •

human resources • • • • • I • • • • • • •

infrastructure • • • • • • • • • • • • • •

CAPITAL COSTS

high

(over $10.000/kW) • • • • • • •

intermediate

(53,000 - $10,OOO/kW) • • • • • •

low • I

i (up to $3.000/kW) I

O&M COSTS I

high • • • • • • •

intermediate I

• I • • • •

low • • I

COST EFFECTIVENESS

near term (0-5 yrs) • • • I •

mid tenn (6-15 yrs) • •

long tenn (16-40 yrs) • • • • • • • •

EXPECTED OIL

SAVINGS OR AVOIDANCE

high •

intermediate • • I •

low • • • • • • • • • •

139
Both solar hot water and photovoltaic applications lend themselves well to the Marshalls' small

and frequently isolated centers of demand for energy. These systems are modular in nature and can be

added to a site in increments, depending on the size and growth potential of the load. Construction

and installation times are short, and there are few economies of scale to penalize the phased

introduction of individual systems. The overall demand for hot water in the Marshall Islands is not

high at present, although increased tourism will add to the end-use category.

There is no adequately defined infrastructure for spare parts, servicing, or even installation

support for any of the solar energy conversion systems. This may not be too constraining for hot water

and photovoltaic applications because the technologies are relatively simple to install, and they carry

little in the way of Operations and Maintenance (O&M) requirements. Nevertheless, in anticipation of

having to replace an occasional photovoltaic panel, voltage regulator, or length of wiring, a

satisfactory on-island service capability will be needed. Solar system distributors, rather than the

government, should be looked to for assistance in this task.

As with most renewable energy systems, there will be relatively high capital costs associated with

solar system purchase and installation, particularly of the current generation of photovoltaic

applications. Cost reductions in photovoltaics are expected to minimize the capital cost disadvantages

of the technology in the near term. O&M costs for photovoltaic and hot water systems will not be

significant. For many sizes of demand, both photovoltaics and solar hot water applications are now

cost-competitive with diesel generators or grid extensions. All remote islands are cost-effective

locations for the use of most low-power photovoltaic applications, including village electrification.

Wind Energy

The wind energy resource in the Marshall Islands is attractive. Wind measurement stations,

operated by NOAA, are maintained on the islands of Mili, Jaluit, Ailinglaplap, Wotje, Utirik,

Kawajalein, and Majuro. In the northern atolls, northeast tradewinds blow steadily from December to

March at an average speed of 9.3 meters/second (nearly 21 mph). Average wind speeds from July through

November are approximately 5 m/s (11 mph). In the southern region, winds average 5 and 2.7 mls (11 and

6 mph) respectively, during the trade and non-trade wind seasons. These are average values. There are

occasional periods of calm which would not support continuous power output from any wind turbine.

A significant amount of open ocean wind speed data have been collected for the Marshall Islands.

Because all of the Marshall Islands are atolls, open ocean data are good indicators of land wind speed,

and these data suggest that the northern Marshall IslandS possess a highly favorable wind resource.

Strong average annual wind speeds from 5.7 to 8.4 mps (13-19 mph) are found over and north of the

northern Marshall Islands. The wind energy density corresponding to the upper part of this range is

over 400 Watts per square meter. The North Pacific trade winds originate from a quasi-permanent

anti-cyclone located in the northeast Pacific.

At many locations and in many applications in the United States, wind energy conversion systems

are at a proven state of technology readiness. The transfer of this technology to the Marshall Islands

does not necessarily reveal a similar level of readiness, however, because both reliability and

durability issues remain to be solved. Reliability is affected by the success of routine maintenance

operations, while durability requires that system designers take into account the corrosive effects of

salt air on turbine operation as well as tower and support structure integrity. The use of special

materials, plus preventive design steps (i.e. isolation of particularly vulnerable metal parts and

bearings), will be needed to insure that wind energy systems perform to their intended capacity and

lifetimes.

Few cultural, environmental, or land use constraints affect the potential of wind energy

conversion in the Marshall Islands. However. the mechanical nature of wind turbines will always

require some technical expertise to be available, if only to provide routine maintenance on a system.

Should malfunctions occur, there will be a need for even more skilled labor to troubleshoot and then

repair problems. There will be a concomitant need for facilities and equipment (such as cranes) to use

in reaching and repairing system components. There is clearly a lack of such an infrastructure in the

Marshall Islands, particularly in the distant northern atolls where the wind regime is the most

favorable. These factors represent perhaps the most limiting constraint on wind energy technology 1n

the Republic.

Capital costs of wind energy systems, on an installed kilowatt basis, are higher than conventional

diesel generators, but lower than photovoltaics. The larger the individual system, the more attractive

the total cost per installed kW. There is, of course, no fuel cost. O&M costs are likely to be higher

in the Marshall IslandS than they are on the United" States mainland, because of the remoteness of

likely sites and the effect this has on both crisis and routine maintenance operations. From the

140
standpoint of cost effectiveness, wind energy conversion appears most attractive in the high wind

regimes of the northern atolls. Commercially available wind turbines can be expected to perform at

near rated capacity in such environments. However, the unknown factor of maintenance costs, as well as

system lifetime limits posed by corrosion potential, all caution against too rapid an introduction of

the technology. The use of higher priced materials to deter corrosion, plus the design of less complex

systems, may be needed for the advantages of the Marshall Islands' wind resource to be used fully.

OTEC

General oceanographic maps of the North Pacific indicate a potential ocean thermal energy resource

in the waters surrounding the Marshall Islands. However, to date, no temperature gradient or other

offshore profiles have been conducted to verify the existence of necessary thermal and bathymetric

conditions for OTEC. Apart from experimental work underway in the Republic of Nauru, there is no

operating OTEC facility anywhere in the world at present. The technology is not considered to be well

established enough for either near or mid-term application in the Marshall Islands. If OTEC does

develop successfully, it could become an excellent source of base load power for many Pacific Island

locations.

Biomass

Biomass productivity in the Marshall Islands is constrained by limited land availability, the

relatively poor regenerative capacity of atoll soils, the pre-emptive use of existing agricultural land

and vegetation for food production, and the general cultural distaste toward agricultural employment

that is common throughout much of the Pacific. The overwhelming historical tradition in agriculture

has been one of collecting rather than planting and harvesting. In the Marshall Islands, this factor

further limits the potential of labor-intensive, decentralized agricultural production for energy,

barring the importation of labor to perform such tasks.

Tree Farms

Removing tree stands and other vegetative species for energy conversion would result in erosion of

the very thin layer of soil nutrients that are now found on most of the atolls in the Republic. The

potential development of introduced tree species has not been examined, but given the condition of the

soil, it is unlikely that acceptable growth rates could be achieved, and the erosion problem remains.

Tree farming, even if biologically sustainable, would be likely to require large acreages of land to

achieve economies of scale. The electric power produced from even a minimally sized facility would be

a poor match for most small demand centers in the Marshall Islands.

The infrastructure required to establish, harvest, transport and convert a tree farm resource to

energy would be substantial on a remote atoll. This would be reflected in high capital and O&M costs

for plantation-generator complex. Without acceptable rates of growth, and sustainability of the

resource, neither of which exist in the Marshall Islands, tree farming is an unlikely option for the

Republic.

The readiness of biogas technology has been effectively demonstrated in rural areas throughout

Asia and the South Pacific. The technical suitability of biogas and liquid-fuels conversion matches

well with the limited energy demands found in small remote villages, providing the resource feedstock

is in ample supply. Anaerobic digestion, however, requires high-moisture content vegetative or animal

waste. No centralized supply of these resources exists in the Marshall Islands.

One potential biogas resource is represented in the abundance of coconut husks which remain from

copra production and which could be converted to biogas via a thermochemical process. Now burned to

dry copra, the husks might become more available for biogas conversion if waste heat units at the new

Majuro power plant could be directed to the copra drying task.

The high sugar content crops that are useful in ethanol conversion, are grown in only limited

quantities throughout the Marshall Islands. Any efforts to increase acreage under cultivation (now

about 40 hectares, or 100 acres) will likely be in support of food self-sufficiency program goals

rather than energy development through the production of liquid fuels.

141
Residue disposal from ethanol and biogas conversion may also damage water quality if significant

amounts of waste are involved. However, if properly treated, the residue from biogas and liquid fuels

conversion processes could be made to yield fertilizers capable of soil enhancement on the atolls.

Other constraints include the cultural aversion of Marshall Islanders to the handling of animal waste

of any kind. The otherwise attractive biogas digester technology is precluded from at least near term

feasibility as a result.

Capital and O&~ costs of biogas and liquid-fuels options are low, unless high wages are required

for the labor involved in resource collection. Cost effectiveness of both technologies appears

favorable in the present to near term, again depending on resource availability.

MSW

MSW resources exist in appreciable quantity only in the population centers of Majuro and Ebeye.

Annual tonnage data are available only for Majuro. Based on extrapolation of 1975 data, over 3085

tonnes of ~SW will have been generated on Majuro in 1982. Combustible paper and plastics comprise over

40% of this amount, while the Btu-limiting moisture content has been found to be a high 23%. No

definitive analysis of the energy value (i.e. Btu/tonne) of major MSW has been conducted.

MSW combustion technology has been proven worldwide, however its appropriateness for the ~arshall

Islands may be limited by low population (and MSW) density, infrequent or nonexistent collection, as

well as by the unknown energy value of the resource. Moreover, a near to mid-term energy supply option

for Majuro Atoll will soon be in operation, and should prevent consideration of MSW as a fuel source

based on the sunk costs of the new facility alone. Similarly, additional oil-fired generating capacity

now being considered for Ebeye is expected to restrict early use of MSW at that location.

Solar Ponds

The insolation resource throughout the ~arshall Islands is considered sufficient to support

salt-gradient solar pond development. However, the atolls of the Republic offer little unused land

which could be committed to solar ponds. A pond size of one hectare (2.5 acres) has been suggested as

an economically minimum design dimension for the technology. This requirement would eliminate from

consideration several inhabited atolls in the Marshall Islands with total land areas less than .5 to .8

hectares (1-2 acres).

The use of reef shelf solar ponds has been suggested as an alternative approach to on-land

applications. Throughout the remote atolls of the Marshall Islands, there may easily be conflicting

uses of the reef shelves (such as their role in shellfish production/harvesting) that preclude islander

interest in the technology. The fact that the reef-based approach has never been demonstrated also

weighs against any early interest in its adoption in the isolated atolls of the Marshall Islands.

Solar Thermal Electric Conversion

Solar thermal electric conversion (STEC) applications have been demonstrated outside the Pacific

Islands, but there have been no STEC applications in the islands to date, and the technology is at an

early stage of readiness. There is an uncertain match between potential loads and the size of high

temperature STEC applications because system standardization has not fully evolved. It is expected,

however, that custom sizing and design that includes energy storage could allow a good match between

system performance and the loads to be met.

Land availability may be a constraining factor in large STEC applications, although community or

village-sized systems should not encounter such a limit. The complexity of high-temperature solar

thermal systems will require skilled workers for operation and maintenance and repairs. It is unlikely

that such skilled labor is now present in the Marshalls. O&M e~ertise will have to be imported should

the technology prove itself ready on technical and economic grounds in the near future. Parts and

repair infrastructure would also need to be imported or developed.

High-temperature STEC systems appear to be at least five yea~s away from being cost competetive,

and STEC may be further away from actual application in the Republic, given its O&M and infrastructure

requirements. Because STEC systems. with proper storage, can provide baseload power, however, the

development of the technology to a state of readiness for the Pacific is worth following closely.

142
Coal

Near to mid-term electricity requirements on Majuro are expected to be satisfied by the new

residual oil-fired power plant now being installed. There are no other demand centers for electricity

of sufficient size to warrant even the smallest coal-fired steam electric system. Also,

transportation, storage and handling of very small amounts of coal for applications other than Majuro

would be likely to be prohibitively costly. There is no support in the Marshall Islands at the present

time for any proposals to import coal for electric power generation.

Geothermal

There are no known geothermal resources in the Marshall Islands. Where such resources exist, the

technology is at a high state of readiness and can be most cost effective. However, the scale at which

most geothermal resources must be extracted to be economical renders this technology a poor match for

the remote and widely scattered population centers of the Marshall Islands.

Hydroelectric

There are no rivers in the Marshall Islands and no land higher than 9 meters (30 feet) above sea

level. The combination of these two factors rules out any consideration of hydroelectric energy

coversion in the Republic.

Ocean Tidal and Currents

No resource assessments have been performed to characterize either the tidal or ocean current

resources of the Marshall Islands. Tidal resources are not expected to be of a magnitude to allow

harnessing for energy conversion, given the absence of estuaries or other necessary geographic

features. Both naturally occurring and artificial channels between ocean and lagoon sides of atolls

may offer potential sites for ocean current energy conversion. As yet, however, the technology for

exploiting this resource is not well developed. As the technology matures, there will be

implementation issues related to infrastructure and skilled labor requirements, as well as initially

high capital and O&M costs.

FINDINGS AND RECOMMENDATIONS

Energy development planning in the Republic of the Marshall Islands must encompass both urban and

remote rural energy demand patterns. Anticipated economic development activity on Majuro has led to

the decision to install new and expanded electrical generating capacity. The new plant is expected to

provide ample, reliable power for both current and projected needs through the near to mid-term. The

decision to construct this new, residual oil-fired generating plant is likely to preclude serious

consideration of alternate technologies to displace petroleum as the primary fuel for electricity

generation for many years to come.

Given this eventuality, energy planning for Majuro should then concentrate on energy management

activltles designed to make more efficient use of the imported fuel used to produce electric power at

the new generating facility. These activities should include extension of metering to all electricity

consumers, conduct of building energy audits, and development of energy efficiency standards for new

construction. All feasible energy conservation practices, including rate structure reform, that are

consistent with the productive use of electric power, should be introduced, particularly in the

government sector.

The success of economic development planning for Majuro Atoll will rest in the ability of the new

power plant to provide reliable energy to all potential consumers whose uses contribute to selected

development goals. In the absence of both energy conservation in the government sector and efficient

energy use in the commercial sector, the new increment of generating capacity now being added will not

be available to serve as much economic expansion as planned •. There is every incentive, therefore, for

the government to encourage energy-efficient design and conservation in all new commercial and

industrial facilities attracted to Majuro by the availability of firm electrical power. Finally, the

economically unproductive energy requirements of the government sector should be moderated to make

l43
available as much generating capacity as possible for the _income-producing activities outlined-in the

economic development plan of the Republic.

For areas outside of Majuro, energy development planning should focus on the introduction of

appropriate renewable energy technologies to serve both economic development and social service needs.

Given the limited use of petroleum products on the outer atolls, the principal energy planning

objective should be to avoid, wherever possible, the addition of new petroleum dependencies throughout

the Republic.

The technology which appears most feasible for remote area applications is photovoltaic energy

conversion. Hybrid applications using both photovoltaics and back-up diesel systems could offer

additional cost savings and reliability in some demand centers. Additional investigation of this

option should be made. To the extent that hot water demand develops in the outer islands,

low-temperature solar hot water technology would be feasible and cost-effective. Wind energy

conversion is both technically and economically attractive in the wind regimes of the northern

Marshalls' atolls; however, the lack of support infrastructure for the technology will constrain its

applicability in the near term.

At present, the possibility of coconut husk utilization presents the best biogas potential in the

Marshall Islands. Resource supply, environmental, and cultural factors limit all otherwise feasible

technology options. This is also true of MSW.

Given the scarcity of land on the atolls of the Marshall Islands, and the unproven readiness of

reef-based solar ponds, the technology is not considered a likely option for the Republic in the near

to mid-term.

Based on the review of technology reflected in Table 7-6, and the understanding of energy

consumption patterns presented in this chapter, a set of recommendations can be made relative to future

energy planning activities needed in the Republic of the Marshall Islands. Recommendations for urban

areas (Majuro Atoll) focus on those actions which contribute in a major way to the displacement of oil,

based on more efficient use of existing electric generating capacity, particularly by the government

sector. Recommendations for remote rural areas (outer atolls) concentrate on offering primary

near-term benefit by avoiding new oil dependencies within the Republic, while still providing a desired

level of energy consumption. These recommendations are presented in Table 7-7.

Table 7-7

Energy Planning Recommendations

Republic of the Marshall Islands

Majuro Atoll

o Improved energy management

rate structure reform

metering of all electrical connections

development of energy efficiency standards for all new buildings

implementation of energy conservation measures in the government sector, including passive

cooling building retrofits, replacing light fixtures, and more energy efficient appliance

measures

development of an energy data system to monitor and audit energy use in buildings

o Infrastructure development to support outer island renewable energy technology O&M and Majuro

energy management activities

personnel training in photovoltaic and wind-energy system installation, repair and

troubleshooting, and conduct of building energy audits

education curriculum and teacher training in basic energy use concepts

144
o Implementation of renewable energy technologies in the reduction of government sector electricity

use

- solar hot water retrofit of the Majuro hospital

Outer Islands

o Analysis of infrastructure requirements needed to support specific levels of wind energy use in

the northern atolls

o Wind energy resource assessment, including data collection, statistical analyses, and technology

performance projections based on such data, for selected outer islands in the northern atolls

o Engineering design of a photovoltaic-diesel hybrid system for a selected atoll application

o Refrigeration design of a photovoltaic powered ice making/ice storage box for remote island use

o Specification of design and materials modification and costs for effective corrosion protection of

commercial wind and photovoltaic energy systems

o Installation of diagnostic equipment to measure performance of planned and already installed

photovoltaic energy systems in the outer islands

145
CHAPTER 8: ENERGY PLfu~NING FOR &~ERICfu~ SAMOA

The Territory of American Samoa, an insular possession of the United States, is the only United

States territory south of the equator. It consists of seven tropical islands in the South Pacific

about 3700 kilometers (2200 miles) southwest of Hawaii and about 2575 kilometers (1545 miles) northeast

of New Zealand (see Figure 8-1).

The energy problem of American Samoa is threefold. First; the islands are 100% dependent on

imported petroleum products for electricity generation and transportation and are therefore quite

vulnerable to interruptions in petroleum supply and to price increases. This dependence hampers

economic development and if petroleum supply uncertainties, and price increases similar to those of the

seventies were to occur again, the existing economy and standard of living would be severely affected.

Second, although the American Samoa Government (ASG) has recently tried to improve the power system,

additional capacity and improved reliability are still needed. Power outages occur frequently and

capacity is barely adequate to meet present demands. Finally, the ASG must find ways to supply

electricity to the outer islands that depend on local fuel deliveries. Such fuel is expensive, and

there are often interruptions in supply.

American Samoa includes the seven eastern islands of the Samoan group; the western islands make up

the independent nation of Western Samoa. Tutuila, the main island, has 147 square kilometers (53

square miles) of land area, and Aunu'u, 1.6 kilometer (1 mile) off the southeast coast of Tutuila, has

1.6 square kilometers (0.6 square miles) of land area. The Manu'a group is 115 kilometers (69 miles)

to the east. Rose Island, 400 kilometers (240 miles) east of Tutuila, is only 0.56 square kilometers

(0.2 square miles) in area. Swain's Island, 450 kilometers (270 miles) to the north, is 2.8 kilometers

square (1 square miles). All of the islands are inhabited except for Rose Island, which is a wildlife

preserve.

Tutuila's topography is rugged. The island is a continuous, narrow irregular volcanic ridge

rising steeply from the ocean. The Tufuna Plains on the southwestern portion of the island are the

only expanse of relatively flat land. The ridge forms a drainage divide for the entire island.

Numerous short, intermittent streams descend from the mountains through steep valleys. Larger streams

have formed wide, flat, delta-shaped valley floors where they emerge from the highlands to enter the

sea. Many of the villages are located near the stream mouths.

Tutuila is about 33 kilometers (20 miles) long, 10 kilometers (6 miles) wide at its widest extent,

and less than 1.6 kilometers (1 mile) wide where Pago Pago Harbor intersects the ridge near the center

of the island. The ridge rises abruptly from the sea, and numerous peaks range in elevation from 305

to 457 meters (1000 to 1500 feet). Mt. Matafao at 652 meters (2141 feet) is the highest peak.

The steep slopes, heavy rainfall, and rapid runoff keep the natural residual soil cover thin. The

soil on the steep slopes is held in place only by a dense growth of tropical vegetation. Overlying the

narrow belt of coral around the edge of the island is a thin cover of sandy, organic material that also

supports abundant vegetation. A few inland valleys contain thick deposits of alluvial soil, but even

there the heavy rainfall leaches the soil, making commercial farming difficult without fertilization.

The Manu'a group consists of three separate islands: Ofu, Olaosega, and Ta'u. Ofu and Olosega are

remnants of a single volcanic island and are separated by a 150 meter (500 feet) wide strait. Both

islands rise abruptly from the ocean with little flat land other than a narrow band along the coast.

There are few well developed drainage basins on either island,' The combined land area of Ofu and

Olosega is approximately 13.5 square kilometers (4.9 square miles).

Ta'u is the largest of the Manu'a islands, covering 4~ square kilometers (17.7 square miles). The

south side of the island consists of spectacular cliffs and cascades dropping directly into the sea.

Most of the coastline along the northern and western sides of the island is fringed by a fairly wide

146
I

;'.. S~ains Island American Samoa

Figure 8-1

Manu'a Islands

-4 ----"':'7.::-=::--~1 :~... .".. .... -400km 240ml

\\':J ~\ ~~ TUM:..!"_

Rose Island District

1

N

Swains Island

'71'05'

~~OIOSega ~v-- '\J

Manu'a Islands

I

170'42·

O

Th r-;....

14'12' •

Rose Island District

14'16'S

',4'22'

Tutuila

170'42·

14'16'

o Aunu·u Island

14'22'

147
coastal plain fronted by narrow beaches. The villages on the west end of the island are built on

terraces a few meters above sea level which are composed of sand dunes and storm benches of ~oral

sediments.

American Samoa's climate is tropical with a relatively dry season, June through August, and a wet

season, January through March. Average annual rainfall is between 315 and 630 centimeters (125 and 250

inchelJ, depending on location, and can vary widely from year to year. The average temperature is

about 27 0 C (80 0 F) with little seasonal variation. Relative humidity is high during most of the year.

ranging from 70 to 90% during the wet season and 60 to 70% during the dry season. Trade winds blow

almost continually.

HISTORY &~D POLITICAL DEVELOPMENT

The Samoans are among the last remaining true Polynesians. Samoan traditional stories describe

Manu'a as the heart of Polynesia. The first inhabitants of the Samoan islands, Polynesian seafarers.

came from the west, possibly by way of Indonesia, Vanuatu, and Fiji, at least 1600 years before the

birth the Christ. They are closely related to the Tongans. Tahitians, and Hawaiians. who are also

Polynesians. During these early years. the Samoans evolved a complex social structure around the aiga,

or extended family. which may include as many as several hundred relatives. At the head of the aiga

are the matais, or chiefs. who guide the communal economy. look out for the clan's well being. control

the lands, and represent the aiga in the village and district councils. Life revolved around fishing

and the subsistence farming of taro, breadfruit, and bananas. Now American Samoans are concerned with

preserving these traditions, and the extended families are still the most important element of the

social structure. For example, the extended families own about 95% of the land on Tutuila. This

factor could act as a constraint on developing renewable resource energy technologies that are land

intensive.

First contact with the western world came when a Dutchman. Roggeveen. happened upon the islands in

1722, followed 46 years later by the French explorer, Bougainville. The islands were out of the way of

the growing shipping traffic and whale fleets. and did not attract European interest until the 1830s

when Christian missionaries arrived. In 1839. a United States expedition explored the Samoan islands.

mapping the harbor and several bays. The natural, deep water harbor. one of the finest in the South

Pacific, was of particular interest to the United States. In 1872, the United States ship.

Narragansett, visited Tutuila, and its commander. Richard Meade, entered into an agreement with High

Chief Mauga that granted the United States harbor facilities and rights for a naval station.

International rivalry and confrontation between Germany and Great Britian, as well as warring

among various Samoan factions. with the United States on the periphery, occasioned agreements in the

later 19th century which divided the Samoas between the United States and Germany. In 1900, the United

States annexed Eastern Samoa, as it was called then. under the Deeds of Cession. They added the Manu'a

chain in 1904. but the United States Congress did not ratify the act until 1929.

The United States Navy assumed administration of American Samoa, as the islands became known, in

1901. The peaceful islands and quiet, South Pacific naval station acquired stategic importance during

World War II when Pago Pago became a training area for the United States armed forces. This exposed

the Samoans to the United States way of life and started the migration of Samoans to Hawaii and the

United States mainland.

The Deeds of Cession granted American Samoans United States national status. protected them under

the United States Constitution. and prevented their lands from being alienated. Day-to-day government

derived from United States Naval regulations, which today, form the basis of the Code of American

Samoa. The Fono. a bicameral legislature. was formally organized in 1949 and became the Territory's

law-making body. In 1951 an executive order transferred administration of American Samoa from the Navy

to the Department of the Interior. In 1960, the American Samoans held a constitutional convention, and

the resulting constitution became effective later that year. In 1977, Samoa elected its first governor

and lieutentant governor, a step which nearly completed the process of local self-government. The

government now consists of three branches: executive. legislative, and judicial. Samoa also elects a

congressional delegate, who became a non-voting member of the United States Congress in 1981.

The current relationship of American Samoa and the United States is spelled out in Secretary Order

#2657 of the Department of the Interior. With the installation on January 3. 1978. of the first

popularly elected government in Samoan history. the American Samoans initiated an aggressive

development program. This program called for economic and infrastructure development to bring the

territory closer to self-sufficiency; greater economic and social participation in the community of

emerging South Pacific nations; and greater self-government and political development within the United

States community.

148
POPULATION, EMPLOYMENT, AND WAGES

American Samoa's resident popluation in 1981 was 33,160. Ninety-three percent (30,212) of the

people live on Tutuila, mostly in rural communities. Less than 3000 people live on the Manu'a group

and the atolls. Pago Pago Bay on Tutuila is the economic center of American Samoa, however, a new

industrial center is being built in the Tafuna area. There is a significant amount of emigration out

from American Samoa, mostly to Hawaii and the United States mainland. There are between 80,000 to

100,000 Amercian Samoans living in the United States now, including those serving in the armed forces.

Since 1980, the population has been increasing by about 2% per year. Fifty-six percent of the

population was under 19 years of age in 1979. The territory is expected to experience a steady

increase in population during the next decade, primarily in the Tafuna Plains and West Tutuila areas

where the greatest amount of flat land is available. Populations of the Pago Pago Bay and northeast

and southeast island areas will increase only slightly because land for residential, commercial, and

industrial purposes is scarce. Population of the Manu'a group will probably increase slightly because

of expected improvements in inter-island travel and minor improvements in job opportunities.

The wage economy for American Samoa centers around the Pago Pago Bay area. The principal industry

is tuna processing. The two canneries located on Pago Pago Bay employ about 20% of the work force.

Subsistence family agriculture and small, family-owned businesses are also found throughout Tutuila and

on the outer islands. The labor force for 1980 was 10,596, about 31% of the population. The

unemployment rate for 1980 was about 12%.

It should be noted that many aliens are employed in American Samoa's nongovernmental economic

sector. Privately owned businesses and industry hire employees at the lowest possible wages, and

employment at the canneries fluctuates widely. Over 3000 guest-workers from Korea and Taiwan live in

Tutuila and work in the tuna fishing and processing industries. American Samoans do not generally seek

employment in these industries. Government remains the chief employer of local people, accounting for

46% of the labor force. Government employees' wages constitute 64% of employment income on the

islands. Workers in the private, retail, and services industries, including the canneries, earn about

25% of the income. The other 11% presumably comes from subsistence level activities such as farming

and fishing.

PRESENT ECONOMY fu~D INFRASTRUCTURE

American Samoa differs from most of the other United States Pacific Islands in that it has a

substantial export industry; tuna processing from two large canneries, Van Camp and Star Kist. Sources

of tuna are the l25-boat, long-line fishing fleet owned largely by Koreans and Taiwanese, and about ten

United States-owned purse seiners, docked within Pago Pago Bay. The boats are individually owned, but

both fleets have contracts with the canneries. Like the canneries, the fishing fleets are encountering

hard times caused by increasing expenses and long layovers. In 1977, tuna exports were $73 million; in

1978, $96 million; and in 1980, $125 million. However, 1982 was a bad year for the industry; sales

have dropped considerably, and one of the canneries closed for a month.

Historically, Pago Pago has also been an important fueling station for South Pacific sea traffic

because of its deep water port. It continues that role today with expanding port and servicing

facilities, and diesel exports are high. The Marine Railway facility near the canneries does ship

repairs and maintenance.

Tourism is a slowly growing industry. There is only one tourist hotel on Tutuila, and there is a

general reluctance to change traditional ways to accomodate visitors. This industry is vulnerable to

changes and cutbacks in air schedules, and two major international airlines stopped flying to American

Samoa in 1982.

American Samoa has a relatively well-developed public and institutional infrastructure. The ASG

Public Works Department and some of the villages own and operate the water systems. The Public Works

Department system provides water service to the Pago Pago Harbor area, the airport, industrial, and

residential areas at Tafuna, and several villages in Futiga. Most of the public water comes from

wells; some water also comes from catchment systems. The ASG is extending the large-capacity

transmission mains and distribution lines and is increasing the amount of water available by

constructing new wells and storage tanks. The village systems ususally consist of water catchment

systems on streams with pipelines carrying water to the villages. Indoor plumbing is a recent addition

in many villages.

Tutuila has two major ASG wastewater systems at Tafuna and Utulei. The Utulei system consists of

about 12 kilometers (7 miles) of sewer mains, and the Tafuna systems has about 3.3 kilometers (2 miles)

149
of mains. The primary treatment plants discharge effluent into the ocean. The ASG collects and

disposes of solid waste material from villages that have paved roads. Other villages and the outer

islands use open pit dumps. Disposal of the 30,000 gallons of waste tuna sludge the canneries produce

each day 1S a problem. The sludge is currently dumped at sea.

The southern coast of Tutila and inland areas have about 75 kilometers (45 miles) of paved roads.

Much of the south shore road is built along the shoreline, making it susceptible to erosion. The ASG

is reinforcing sections to prevent this. Almost every village has unpaved secondary roads. The

villages own these roads, but the ASG helps with road improvements.

Pago Pago International Airport is located along the ocean by an artifical lagoon in the Tafuna

area. This is where the largest area of flat land on Tutila is found. There are also small air strips

on Ta'u and Ofu in the Manu'a group. South Pacific Island Airways, Polynesian Airlines, and Air Nauru,

provide service to the Manu'a group, Western Samoa, and other Pacific Islands. There is a daily flight

to Hawaii.

Pago Pago Harbor 1S one of the best deep water harbors in the Pacific. Its deep water extends

from the Bay entrance to the inner harbor, and the right angle bend in the Bay provides the inner

harbor with excellent protection. There is regular inter-island shipping service between Tutuila and

the outer islands. Port facilities are just now being greatly enlarged.

The Lyndon B. Johnson Hospital

American Samoa has four private and

schools, and one co~munity college.

newspaper.

PROSPECTS FOR ECONOMIC DEVELOPMENT

in the Tafuna area is one of the best hospitals in the Pacific.

24 public elementary schools, two private and four public high

There are a local radio station, a television station, and a

The first prioirity of the American Samoa Government is economic development.

does not want to develop with absentee ownership; only Samoans can own Samoan land.

economic development will probably occur at a deliberate pace.

However, the ASe

Therefore,

The main economic activities at present are government, fishing and canning, port operations, an

industrial center and a small tourism industry. Specific goals for expansion of these areas include

enlarging the port facilities, developing the industrial park area, providing additional recreational

sites and activities, fishing for additional varieties of seafood, encouraging expansion of the fishing

and canning operations, and perhaps building more hotels.

The ASG is developing a major cargo handling center for the South Pacific. The government is

working on a major extension of the main dock. This dock serves 182-meter (600-foot) tankers and

refuels fishing vessels. A 42-meter (140-foot) inter-island dock serves smaller vessels up to 91 miles

(300 feet) in length. The Marine Railway Authority is also expanding so that it can service the

largest purse seiners in the Pacific.

Expansion of agriculture is a high priority because it is necessary to slow the large flow of food

imports. The subsistence family farm is common on American Samoa, but cash crops that could be

important to the economy are not widely grown. Land availability is a key factor, and much of the

available land is too steep for cultivation. Nonetheless, some farms are now extending into the

steeper areas of Tutuila. The large supply of rainwater could be used for agriculture or other

purposes if there were adequate collection and storage facilities. Multiple use reservoirs could be

useful for both agriculture and developing hydropower.

Van Camp is rebuilding and expanding its facilities, and this expansion should increase the

plant's energy demand by about 10%. The company has considered a proposal to utilize tuna sludge

wastes for biogas generation but does not regard it as economically attractive for now. Star Kist

presently uses propane for cooking and fork lift operation, and if diesel fuel becomes too expensive,

the company plans to switch all diesel-fueled operations to butane. In 1981, Star Kist envisioned a

future increase in electric power demand of 10% to 25%, but with the 1982 cutback in operations these

figures may be high. Star Kist's research laboratory is also considering using tuna sludge to generate

methane.

PRESENT ENERGY STATUS

Like the other United States Pacific Islands, American Samoa depends almost entirely on imported

petroleum products for electricity generation, process heating, and transportation. A number of

150-
renewable resources suitable for energy conversion are found in American Samoa, but contributions by

such resources now are slight. Table 8-1 shows the end uses for petroleum products.

TABLE 8-1. END USES OF FUELS, AMERICAN SAMOA, 1980

(in 1000's of bbl)

Fuel

Motor gasoline

White gas

Aviation gasoline

Jet fuel-K

Kerosene

Amount

Purchased

76

0.2

2

241

4

Price(a)

($/bbl)

60

103

60

50

52

(b)

Gov't

10

(c) Comm'l/Indust/

Private Construction

.2

2

193

4

Marine Transportation

Government Exports

0.02

Electric

Generation

Diesel 953 42 0.5 43

(a) Wholesale prices include llt tax/gal except for diesel, June 1981

(b) 402 government vehicles

(c) 2702 private vehicles 3435 total

(d) 331 commercial vehicles

(e) Local noncommercial registered fishing boats, 11

(f) Includes outboard motors

(g) Includes 1200 bbl for construction--heavy equipment (estimated)

(h) Includes industry plus fishing fleets

(i) Estimated from FY 80

Population: 32,395 (Sept. 1980)

Households: 4724 (Sept. 1980)

Total electric installed capacity on Tutuila is 30 MW, with an available reserve margin

fluctuating between 0 and 2 MW. Minimum daily demand is 8 MW, and average daily peak load is 13 MW.

There are two power plants on Tutuila, one at Satala near the canneries on Pago Pago Bay (16 MW), and

the other at Tafuna near the airport (14 MW). They are about 20 kilometers (12 miles) apart and are

connected by a tie-line for transmission of power from either one. Satala is the older of the two

stations; its first generator system was installed in 1962. There is on-site storage for 48,000

gallons of diesel fuel. The system serves mostly the canneries and the industrial part of the island.

The first generator was installed in the Tafuna station in 1974. This station serves the western part

of the island which includes the airport, a new industrial park, and a large residential area. There

is on-site storage for 200,000 gallons of diesel fuel. The actual amount stored is never ~ore than

60,000 gallons. Generators at both stations run at 400 to 900 rpms. The grid connects to every

village on Tutuila, and an underwater cable connects the grid to Aunu'u Island.

The ASG owns these stations, and until recently the ASG Electric Utility Division (EUD) operated

and maintained them. In 1981, the new American Samoan Power Authority replaced the EUD. The new Power

Authority has the right to make contracts, purchase and lease property, and suggest rates. Rates are

set by vote of the people. Over the years, maintenance programs and plant conditions have ranged from

fair to good. Both plants are in fair condition now. Power outages are common, and the ASG recognizes

that generating reliability and capacity must increase and the total dependence on imported fuel

sources must change if American Samoa's energy program is to encourage economic development.

There are two generating systems on the Manu'a group: two diesel generators each at Gfu and Ta'u

with a total installed capacity of 1 MW. All Manu'a Group villages are connected to the grid. Swain's

Island has a small diesel generator which is not working now.

Other major generating equipment on Tutuila include stand-by generators at the canneries in case

of power outages. Van Camp has three 500 KW diesel generators purchased in 1980, and Star Kist has one

125 KW unit. The hospital, ASG computer center, and the airport 'also have stand-by systems.

Diesel fuel arrives by tanker monthly from the Marlex (Long Beach, California) and Pacific

Resources, Inc. (Honolulu, Hawaii). Fuel is piped from the dock to the Punaoa Valley tank farm

operated by Marlex. Table 8-2 lists the liquid fuel storage facilities on Tutuila. Union Oil, through

an exchange agreement with Marlex, distributes 30% of the petroleum products on the island. Fuel is

sent by barge to the Manu'a group. Storage reserves for diesel fuel and jet aviation fuel total about

two months supply. Gasoline storage is about four months supply, although this is the potential not

151
Source:

TABLE 8-2 - LIQUID FUEL STORAGE FACILITIES ON TUTUILA

Major Storage Capacity Demand Reserve

Facilities (Gal) (Gal/Day) Capacity

(Days)

Marlex Tank Farm (Punaoa Valley)

Diesel 4,536,000 80,276 57

Jet Fuel 1,701,000 25,659 66

Unleaded Gas 512,400 3,899 131

Regular Gas 411,600 3,249 127

Supreme Gas 100,800 886 113

Aviation Gas 100,000 298 338

Satala Electric Plant

Diesel 48,000 12,600 4

Tafuna Electric Plant

Diesel 200,000 9,366 21

Airport

Jet Fuel 110,000 25,659 4

Aviation Gas 25,200 298 85

Canneries

Diesel 39,000 4,600 8

Territorial Energy Office, ASG Geothermal Energy For American Samoa, Pago Pago, 1980.

the actual reserve because the storage tanks are not usually kept filled. There are also storage

facilities for 200 tons of butane, which is shipped from Australia three or four times a year.

Table 8-3 gives additional information on electricity production, costs, and revenues. It is a

policy that almost all electrical customers are metered. Individual government offices are held

accountable for their energy consumption. According to the Territorial Energy Office 1981 Energy

Statistics Booklet, of the 5651 users in 1981, 4867 were residential, using an average total of

1,668,571 kWh month; 500 were commercial, using an average total of 2,346,967 kWh/month; and 284 were

government, using an average total of 1,725,648 kWh/month. In order to encourage commercial growth,

the graduated rate structure favors large users with lower rates. Failure to pay results in

discontinued service, so there is a high remittance rate. Even so, revenues do not cover the costs of

producing electricity which are known to at least exceed 20t/kWh.

The present production of electricity on Tutuila is barely adequate, despite new equipment and

improved maintenance. Economic expansion will be difficult without additional capacity, the present

system is inefficient, and price increases or interruptions in fuel supply will have drastic effects on

the Territory's economy and well-being.

American Samoa has an aggressive Territorial Energy Office (TEO) which is addressing energy

problems. To date most of its efforts have been for conservation, education, and energy management.

The TEO is also encouraging resource assessment and feasibility studies, and renewable technology

installations, primarily for performance testing.

There are a number of specific renewable energy projects on American Samoa. The TEO has just

moved into the American Samoa Energy Efficient Demonstration House near the airport. This building

combines passive cooling architectual features with renewable energy technologies, such as solar

photovoltaics, solar hot water, a heat pump, and wind electric systems. In 1977, a contractor for the

152
TABLE 8-3. Electric Power Generation, American Samoa, 1981

Fuel

(million kWh/y)

Load (MW)

Type

Amount

purchased

(1000's of

bbl) Locality

Output

(million

kWh/y) Res

End use

Comm'l/

Indust Gov't

Capacity (MW)

Rated Operating Base Peak

Diesel 130 Tutuila 72.2 20.0 28.2 20.1 30.0 13.0 8.0 13.0

Ofu 0.4 Incl Incl Incl 0.5 0.5 0.05 0.05

Tau 1.2 Incl Incl Incl 0.5 0.5 0.10 0.20

Total 73.8 20.0 28.2 20.1 31.0 14.0 8.15 13.25

ASG installed 36 domestic solar hot water systems on government housing. These were simple commerical

thermosiphon systems, but the contractor had problems installing them, and only one or two of the

systems are operating now. A DOE Institutional Conservation Program project, which is just being

completed, is constructing a solar adsorption air conditioning system at the hospital. DOE has alao

financed 24 solar hot water systems which have recently been installed on Federal Aviation

Administration housing.

Burning wood or cocunut husks for cooking is common in rural areas throughout the United States

Pacific Islands and usually represents the largest use of renewable fuels on these islands. About 70%

of American Samoans cook their traditional Sunday meals over covered fires (Umu) , and about 10% use

wood or coconut husks for cooking on a regular basis. This is considerably less than other Pacific

Islands, and fuel is not scarce.

ENERGY DEVELOPMENT PLANNING

The central generating system on Tutuila just suffices for reliability and capacity. Despite the

new generating equipment installed in 1982, American Samoa is as susceptible as ever to hardship from

fuel shortages and price changes. Although the present diesel-powered systems can be expanded, the TEO

is pursuing a number of alternatives to diesel fuel in order to reduce this vulnerability and to

achieve the necessary reliability and capacity. The government would like to do this while maintaining

local control over generating systems and without sacrificing local traditions.

American Samoa is fortunate in having a wide variety of renewable resources to consider.

Conversion and conservation technologies for the near term include energy management; solar water

heating and solar photovoltaics; biomass, including producer gas and direct combustion of palm oils;

wind-powered mechanical water pumps; and possibly, wind generation. These systems show promise either

because small systems have succeeded, the somewhat limited historical data indicate success, or

intuitive analysis suggests apparently adequate resources. For the mid- to long-term, technologies

worth investigating include geothermal, OTEC, MSW, solar thermal for process heat, solar ponds, and

possibly hydroelectric technologies. Of all the energy systems discussed in Chapter 2, only coal and

ocean current technologies do not now seem suitable for American Samoa, and even this could change with

technological developments (ocean currents), new harbor facilities (coal). End uses, include base and

peak load electricity generation, process heating, and transportation. Some technologies, such as

photovoltaic systems, seem to be most promising for rural applications while others, such as geothermal

or OTEC, could make significant contributions to baseload production.

All of these energy systems encounter the same general constraints throughout the United States

Pacific Islands. They include lack of technical training, undeveloped repair and maintenance

infrastructure, harsh environmental conditions, land availability, cultural attitudes, and lack of

data. Some technologies that appear promising are not at a sufficient state of technical readiness.

ASG educational institutions will need to provide technical training to young adults in order to reduce

American Samoa's dependence on outside technical help. Tropical storms and a highly corrosive

153
atmosphere will affect the durability of systems, such as wind and solar devices, that work well in the

milder climate of the United States mainland. Because of American Samoa's rugged topography and

complicated land tenure system, land availability will often be the controlling element for developing

energy systems. This applies to all technologies that use even small amounts of land. Historical data

for many resources--solar, wind, hydroelectric, and geothermal--have not been gathered or are not

site-specific. Cultural barriers, such as the Samoans' land tenure system prohibit developing

technologies such as geothermal. Some alternate technologies, such as OTEC, are not commercially

ready, and other technologies, such as coal or LPG, still depend on imported fuels. Finally,

technologies such as efficient wood cooking stoves or small solar photovoltaic systems may improve

rural community well-being and limit further oil dependence, but they will not make significant

contributions to energy production.

On the positive side, there are educational facilities such as the community college which can

provide technical training. Some facilities such as the Marine Railway Authority and Department of

Public Works can help with construction and maintenance. The various alternate technologies for nearand mid-term use complement each other. Certain systems if developed now, such as fuelstorage, energy

management, and solar water heating, would help solve some of the energy problems for the short-term,

allowing mid- and long-term technologies such as geothermal and OTEC time to mature. American Samoa is

fortunate to have a relatively wide array of energy resources to select from and a government which is

making this selection on a deliberate and realistic basis. Table 8-4 shows the suitabilities of

various energy technologies for American Samoa.

Energy Management

American Samoa, through the TEO and with support from various DOE programs, is spending a good

deal of effort on energy management.

The TEO is making energy audits of government and commerical buildings, offering public

educational programs, monitoring electricity production and end uses, and may help determine the true

cost of electricity generation. The TEO is also developing energy data bases to support energy

management decisions.

Current data are not available on how effective these measures have been, but indirectly they are

certainly reducing cultural constraints on developing alternate energy technologies. The TEO should

continue these programs as an integral part of energy management.

Solar

American Samoa has some historical solar insolation data. The NOAA Geophysical Monitoring for

Climatic Change Station (GMCC) at Cape Matatula, Tutuila began measuring solar insolation with four

Epply pyranometers in January 1976. A sunshine switch is operating at the Tafuna airfield NOAA

station, and during 1982, the TEO installed recording pyranometers at the hospital and at the Energy

House.

Daily total global solar energy values show variations due to cloud cover and atmospheric

scattering and seasonal variations due to austral summer and winter. For July 1979 (austral winter),

the total global values ranged from 1.2 kWh/m2 to 5.1 kWh/m2 , with a mean of 4.1 kWh/m2• For

January 1979 (austral summer), the range was from 2.7 kWh/m2 to 7.6 kWh/m2 , with a mean of 5.6

kWh/m2• These data adequately characterize the solar resource in areas of Tutuila, such as the flat

coastal areas where many solar energy applications might occur and show that the resource could support

a number of such applications. However, the insolation data recorded at the GMCC station probably

exaggerate the solar resource of the more cloudy areas of Tutuila such as the harbor area. This area

receives some 200 cm (80 in) more annual rainfall than the southeastern coast. Using the GMCC data to

design solar systems in the harbor area could result in selecting sub-optimal systems.

In the Manu'a group, the solar resource should not vary significantly from that measured at the

GMCC station since the islands are beyond the climatic influence of Tutuila. Measurements from the

GMCC station should also be adequate for Swain's Island.

154
Table 8 - 4

Tecfinology Selection Criteria

SOLAR BIOMASS

Solar Photo- Solar

Hot . Thenn- WIND GEO- HYDRO- Tree. liquid

Water voltalcs al ENERGY THERMAL ELECTRIC Fanns BlOgas Fuels MSW OTEC

OCEAN

CURRENTS

AND SOLAR

WAVES PONDS

ENERGY

COAL MANAGEMENT

RESOURCE

proven •

suspected • • • • • • • • • • •

unknown • • none •

TECHNOLOGY READINESS

IN PACIFIC I

high • • • • • •

medium • • • • • •

low • • •

RELIABILITY PROBLEMS

IN PACIFIC

high •

medium • • • •

low • • • • • • • • • •

DURABILITY PROBLEMS I

IN PACIFIC I

high I • • • •

medium • • I • • • •

low • • • • •

APPLICATION

centralized • • • I • • • • • • •

decentralized • • • • • • • • • •

POTENTIAL CONSTRAINTS

culturallmpacl • • • • • • • • •

land availability • • • • • • • • •

environmental impact • • • • • • • • • • - - - -

human resources • • • • • • • • • • • • • • •

infrastructure • • • • • • • • • • • • • • • CAPITAL COSTS I

I

high

(over $10,000/kWj • • •

intermediate

($3,000 • S10,000ikW) • • • • • • • •

low I

(uP to $3.000/kW) •

i

• • •

O&M COSTS

high • • • • --

intermediate • • • • I • • • •

low • • •

COST EFFECTIVENESS

near term (0-5 yrs) • • • • • •

mid tenn (6-15 yrs) • • • • • •

long tenn (16-40 yrs) • • •

EXPECTED OIL

SAVINGS OR AVOIDANCE I

high I • •

intermediate • • • low • • • • • • • • • •

155
Solar Water Heating, Air Conditioning, and Photovoltaics

Both solar hot water and photovoltaic systems are in a good state of readiness and are durable and

reliable enough for American Samoa. There are 24 systems operating in Federal Aviation Administration

housing on Tutuila now, at least two private systems, and one or two of the old government housing

systems. However, most American Samoan homes do not have hot water now, so while solar systems may

prevent new petroleum dependencies, they will not save fuel. There is a good match with end use.

American Samoa has a large demand for process heat for industry and tuna canning, and this is a good

use for solar heated water. Because this end use is located mostly in the Pago Pago Harbor area with

its greater cloud cover, concentrating solar collectors more sophisticated than those used in homes

would probably be needed, thereby affecting durability, reliability and maintenance.

The solar absorption air conditioning system at the hospital will be the first one on the United

States Pacific Islands. Air conditioning is a large energy end use, particularly for government

buildings, but this is also a highly sophisticated application for solar technologies. Performance

data from this system will be useful in predicting how successful other such systems will be on

American Samoa, at least for the near-term.

Solar photovoltaic systems are in a satisfactory state of readiness for American Samoa as shown by

their success on other United States Pacific Islands. The GMCC station is just now installing a 1 kW

array at its station at Cape Matatula. The Department of Agriculture also installed a small

photovoltaic stand-alone array for electrifying fences on farms on Ta'u of the Manu'a group. A

tropical storm destroyed the fence in 1981, showing once again the critical role environmental

conditions play on these islands. There is also a 1.6 kW (peak)" demonstration system at the Energy

House for performance testing and backup power, and two schools have 0.8 kW systems for powering

ventilation systems.

There is a good match for solar photovoltaic systems for individual home applications in urban

areas and for critical demands in rural areas. The DOE Phase 11 report, Photovoltaic Applications for

Remote Island Needs, gives information on sizing a small photovoltaic system for powering the lights of

a small aircraft landing strip on Ofu in the Manu'a group.

The most critical constraints are the ones found with almost all energy systems on American

Samoa: lack of available land and lack of repair and parts infrastructure. The largest pieces of

available flat land now are near the airport at Tafuna. A number of potential uses, including energy

systems, may be competing for this land. The TEO is sponsoring various public education programs which

may eventually result in more land being made available. The parts and repair infrastructure must

develop at the same time.

Solar hot water and small photovoltaic systems could be cost-effective in the near-term, depending

on the size and sophistication of the systems. Potential oil savings or avoidance for both is

intermediate as both provide energy for highly consumptive demands. Oil savings will depend in part on

the amount of land and capital available, and on the effectiveness of the repair infrastructure.

Performance data from the hospital's solar air conditioning system will be particularly useful for

determining the near-term effectiveness of sophisticated solar systems. The TEO needs to collect more

insolation data for cloud locations on Tutuila where the solar hot water systems for process heat will

be needed. Because of high capital costs for photovoltaic systems and uncertain insolation,

photovoltaics may be most valuable in the near term for providing electricity in remote areas.

Biomass

The extensive vegetative cover on the American Samoan Islands seems well suited for developing

biomass technologies. However, other considerations affect the possibilities for using this resource.

As on other Pacific Islands, land is limited and needed for agriculture, housing, and economic

development. These uses, along with the land tenure patterns of American Samoa, compete for biomass

resources which might appear attractive from an energy-producing perspective alone. Over 75% of the

land mass on Tutuila has a greater than 30% slope; on the other· American Samoan Islands, this

percentage is even higher. Biomass harvesting and conversion activities are difficult and potentially

uneconomic on such steep terrain. There are, however, two biomass resources which appear attractive

and worthy of additional investigation.

The two tuna canneries on American Samoa produce about 30,000 gallons of waste tuna sludge daily.

A preliminary sludge-to-methane experiment conducted for the TEO showed a significant energy value for

this resource, and an accompanying economic feasibility report projected a pay-back period for a full

scale waste conversion facility of less than three years. This resource is privately owned, however,

156
and neither cannery considers methane conversion attractive at this time. Undoubtedly, the depressed

state of the tuna industry affects this decision.

The second biomass technology, ~hich may be more important for rural applications, concerns

producer gas and associated technologies such as the direct combustion of palm oils to generate

electricity. Although these technologies are marginally cost-effective at this time and may pose some

environmental problems, they could alleviate dependency on imported fuels and be quite effective at the

village level. On Tutuila and the outer islands it might be best to use a decentralized approach with

small conversion units meeting individual family or community needs. Anaerobic digestion, ethanol

production, palm oils, wood-charcoal conversion, and producer gas processes are all interesting

options. Of these, palm oils and producer gas appear to be the most suitable at this time for

generating electricity.

Performance issues and technical suitability are not a problem, except with some liquid fuel

conversion technologies. Long-term data are not available on the effects of burning coconut oil in

diesel generators, and there are no producer gas facilities in the Pacific from which to gather

operational data. Potential constraints which could be of critical importance include the cultural

impacts of village level conversion facilities, environmental impacts, land availability and

competition for land for agricultural purposes, and maintenance and parts support, particularly on a

rural level.

Geothermal

American Samoa has an unmeasured but promising geothermal resource. A study funded by DOE in

1980, Geothermal Energy for American Samoa, identifies the Samoan Islands as one of five Pacific sites

where volcanism has occurred in historic time at or near sea level. The signs of recent volcanism,

along with normal faulting and rifting and volcanic activity at widely scattered locations along the

Samoan Island chain are characteristic of areas with geothermal potential. There are no known hot

springs, but one significant temperature anomaly was discovered while a 91 meter (300 feet) water well

was being drilled. A good deal of expensive reconnaissance work is needed to identify and quantify

potentially useful geothermal reservoirs. The DOE report discusses a three-stage survey which includes

geologic mapping of surface characteristics, geophysical and geochemical exploration methods, remote

sensing of temperatures, and finally, drilling several test wells to measure temperatures and flow.

Most of these methods are expensive, especially the last; all require off-island help; and no single

method by itself will give conclusive data. Nevertheless, this technology deserves attention because

it has the potential to provide large amounts of base load power.

Potential constraints, besides land availability, include certain environmental effects which

might be critical, considering the role that land traditionally plays on American Samoa. These effects

include noise, release of toxic or offensive gases, possible surface or reservoir water contamination,

and land subsidence. If the resource were to be developed it would be on a large-scale, 10 MW or so,

thereby requiring additional off-island service and maintenance support. Capital costs to develop the

resource would be high, and conversion systems must be specifically designed for each site. Operating

costs would be quite economical.

Geothermal production of electricity is making significant contributions to baseload supplies at a

number of places in the world, including New Zealand and Hawaii. Because of this potential for

providing large-scale electricity production for base load demands on American Samoa, we recommend that

at least the preliminary measurements suggested in the DOE report be made.

OTEC

American Samoa appears to have an excellent site for an on-shore OTEC plant by the lagoon near the

airport. The water is deep enough nearby to provide the needed temperature difference of at least

20° C, the plant could be built on-shore, the land is available, the site is near the Tafuna power

plant, and there should be some natural protection from storms. Some useful site-specific data have

not been collected, but there is no reason to believe that temperature differences, currents, and

environmental conditions do not favor a plant at that site. Other near- or on-shore sites might also

be appropriate. The 10 MW plant that has been suggested is a good size to make a significant

contribution to American Samoa's electricity production.

Because of these favorable conditions, the ASG has maintained an active interest in the progress

of OTEC technology. In 1976, Purdue University did a preliminary study of the possibilities of

installing an OTEC plant on Tutuila. In 1981, the ASG established an industrial and financial

consortium headed by Science Applications, Inc., prepared a proposal for DOE for a 10 MW plant to be

157
located by the lagoon near the airport. This proposal was withdrawn because the Commonwealth of the

Northern Mariana Islands had submitted a similar proposal. and there was not enough time to prepare a

competitive response.

OTEC has encountered certain engineering problems. particularly regarding the cold water pipes.

and at this time there are no operating plants anywhere in the world. Development of this technology

is proceeding well. however, and a number of commercial firms are developing prototype installations.

Eventually. OTEC should be an extremely interesting technology for American Samoa. offering

considerable potential for long-term cost effectiveness and oil savings.

Potential constraints. including land availability, cultural acceptance, and environmental

effects. may be minimal at the proposed site. At this time there is a critical constraint concerning

local technical resources and a parts, operations, and maintenance infrastructure. This constraint

might be overcome by the time OTEC becomes commercially feasible. The chief drawback to OTEC at this

time is that the technology is at a low state of readiness for Pacific Islands such as American Samoa.

We recommend that American Samoa conduct a pre-feasibility study for an on-land OTEC plant at the

lagoon, taking into consideration such factors as the thermal resource, optimum plant size, specific

site location, additional hydrographic data, and technical. environmental and economic feasibility.

MSW

In 1978, Dames & Moore, Hawaii, developed a municipal solid waste management plan for American

Samoa. According to this study, Tutuila disposes of approximately 87 tons of domestic waste and 26

tons of commericial and industrial waste daily. The total solid waste generation on Tutuila. including

waste from uncollected miscellaneous sources, is approximately 0.40 to 3.43 kilograms (0.88 to 7.56

pounds) per capita per day. Dames & Moore estimates that total wastes will be 174 metric tons (192

tons) in 1983 and 252 metric tons (278 tons) in 1993. There are no data on composition of the waste,

but field observations estimate that 70% to 75% is combustible. Trucks collect the solid wastes and

dispose of them at a sanitary landfill site near Futiga. The remote villages are required to collect

and bury their wastes.

Based on a figure of 129 metric tons (142 tons) of total, collected

semi-suspension system for burning shredded and sorted waste, similar to

providing steam from bagasse, could generate about 30.000,000 kWh/year.

significant amount of Tutuila's total electricity production.

solid waste per day, a

systems on Hawaii and Fiji

This would represent a

for

Constraints include the high capital costs of a recovery and processing facility, high operating

costs, and air pollution. There may be problems collecting the full 129 metric tons of waste per day.

In addition, highly skilled labor would be required over the long term. The range of figures given for

amounts of available solid waste is wide and the upper limit is high when compared to an upper limit of

2.26 kilograms (5 pounds) per capita per day for the United States mainland. Finally, there is the

environmental barrier of odors from burning, and there may be additional cultural barriers.

Burning MSW to generate electricity is an established technology, but it is fairly complicated to

operate successfully. Nonetheless, this technology may eventually have potential for American Samoa

because of the manner in which the population is distributed on Tutuila, the amount of solid waste

generated, and the amounts of waste that are presently collected. The Department of Public Works

should begin to collect long-term data on solid waste amount and composition. If these data verify the

Dames and Moore estimates, the ASG should undertake a preliminary feasibility study to investigate

various MSW technologies and provide costs analyses. Some Phase II funds are set aside for a portion

of this work; at this time DOE has not awarded the contract.

Wind

American Samoa has prevailing southeasterly trade winds throughout the year. From December

through March, the winds tend to be directly from the east; during the rest of the year the winds come

predominantly from the east-southeast and southeast. Wind speed measurements are recorded at the GMCC

station and at the Tafuna airport NOAA station. The TEO is also installing a recording anemometer at

the Energy House. One NOAA anemometer, 8.4 meters (28 feet) above ground, records wind speed and

direction for the airfield station. A second NOAA anemometer at this location continuously reads wind

speed data; however the data are only periodically recorded by hand. The anemometer at Cape Matatula

is 14 meters (46 feet) above ground, where it receives uninterrupted trade winds. None of these

anemometers are mounted as high as a wind electric generator would be. No wind speed data are being

collected elsewhere on Tutuila, Aunu'a, the Manu'a group, or Swains's island. Average wind speed at

the GMCC station in 1978 ranged from 3.0 meters per second (6.7 mph) in April to 6.1 meters per second

158
(13.6 mph) in June, with an annual average of 4.5 meters per second (10 mph). At the NOAA airport

station, the annual average wind speed was 4.8 meters per second (10.8 mph) in 1980. From April

through October, the average monthly wind speed exceeded 4.8 meters per second (10.7 mph). The lowest

monthly speed was 3.2 meters per second (7.1 mph) in January. These data suggest the wind resource in

American Samoa has only marginal potential to make significant contributions to electricity

production. Measurements should be taken at the heights at which a wind generator would actually be

.mounted. .

On the United States mainland, wind energy technologies are at medium state of readiness, but wind

machines have not been successful in remote Pacific islands. Reasons include typhoon and storm damage,

corrosion, lack of repair parts, and lack of technical skills. Phase II of the DOE Territorial Energy

Assessment is sponsoring the installation of two machines on Tutuila. The first machine is a 3 kW

Kedco on a 18 meter (60 foot) tilting tower at the Energy House near the airport. The machine

generates DC power which is inverted to AC and then fed into the grid. The TEO, working with

off-island consultants, completed the installation. The machine failed five months after installation,

probably as a result of corrosion-induced blade failure, and is now inoperative. The second machine, a

1.8 kW EnerTech, will be installed atop an 18 meter (60 foot) free-standing tower at th~ .calava Quarry

near Aoloau Fou village. This machine generates AC directly and also will connect to the grid.

Experience from this first machine along with operational data from machines installed elsewhere

in the United States Pacific Islands as part of this same program shows that problems can be expected

with these and larger machines until corrosion problems can be solved and more local expertise and a

parts and repair support system are available.

Because wind speeds in American Samoa are only marginal for large-scale electricity production by

wind machines, the best end use match will be for intermittent electricity production by small

generators at remote locations. Land availability could be a problem, particularly for tilting towers.

In order to assess thoroughly to what extent wind can be used on American Samoa, more

site-specific data should be gathered at actual wind machine heights. Recording anemometers should

collect these data at suitable locations on Tutuila, perhaps inland where wind speeds might be

topographically enhanced, and at suitable outer island locations. Additional performance testing data

should be gathered from operating small wind machines with an emphasis on corrosion prevention. Wind

water pumps should also be considered, especially for remote villages.

Hydroelectric

American Samoa will not have the same success that nearby Western Samoa has had with hydroelectric

systems because the resource is more limited. A general study by the United States Army Corps of

Engineers (1979), in conjunction with earlier studies by the United States Geologic Survey and Dames &

Moore, shows that only six streams within five of 23 drainage basins are worth investigating, and none

of these rivers has enough year-around flow to be adequate for reliable, year-around hydroelectric

power generation. Run-of-the-river systems without storage facilities rely on adequate, continuous

flows of water. The lowest 7-day flow on streams within these drainage basins over a 10-year interval

is from 0.22 to 0.48 cubic feet per second, making them inadequate for generating electricity. Long

penstocks would not provide enough head to overcome such low flows. The United States Armys Corps of

Engineers' economic evaluation of single-purpose reservoir systems show that although such systems with

long penstocks would provide an adequate combination of discharge and head, the costs would be

prohibitive.

Hydroelectric technologies for Pacific Island locations are at an appropriate state of readiness.

They are reliable and durable for such locations, and depending on the type of system selected can

provide either baseload or peakload production for rural or urban use. Potential constraints include

environmental effects; effects on other water uses, particularly with reservoir systems; land

availability and access; and parts and maintenance support. Because of the technology's readiness, its

reliability and its success elsewhere in the Pacific, additional studies on hydroelectric power as an

intermittent supply technology or in conjunction with multi-purpose reservoirs might be worthwhile.

Solar Ponds

Solar ponds are at a medium state of technological readiness for Pacific Islands, and have some

potential for contributing to baseload electricity generation on Tutuila or the Manu'a group. The

chief constraint may be land availability. One possible site is the lagoon area near the airport;

other possible sites exist on the Manu'a Group.

159
Coal appears at first to be an attractive

of coal from Australia would not be a problem.

severe. Coal shipments would probably require

imported fue 1.

Ocean Currents and Tides

technology for American Samoa because obtaining a supply

However, land and environmental constraints are

a new harbor, and American Samoa would still depend on

Ocean current and tidal energy conversion systems are operating on a limited basis elsewhere in

the world but are at a low state of commercial readiness for American Samoa. The resources are

unmeasured for American Samoa but are likely to be insufficient and inconveniently located.

Other Technologies

Small-scale technologies can make a small contribution by helping communities avoid the use of

petroleum products. The small photovoltaic-powered electric fence was working successfully at a remote

farm until a storm destroyed it. Small photovoltaic sytems such as this would be useful for essential

electricity generation for Swain's Island or other remote sites. Mechanical wind-driven pumps might be

useful for remote village applications.

Data are not available on the

feasts are cooked over wood fires.

there may be cultural barriers for

amount of cooking done with wood fuel. In most communities, Sunday

Efficient wood cooking stoves would reduce wood consumption but

such stoves, particularly for the Sunday feasts.

There is some interest in increasing petroleum reserves with an expanded fuel supply system,

thereby reducing supply vulnerability. The TEO is investigating various ways to do this. The TEO is

also interested in studying the use of heat pumps in commercial and public buildings, and in

encouraging the American Samoa Power Authority and private industry to work with them in developing

cogeneration ideas.

FINDINGS AND RECOMMENDATIONS

American Samoa's present power system on Tutuila, which depends entirely on imported diesel fuel,

has a fair maintenance program and barely adequate capacity. The Territory is extremely vulnerable to

interruptions in petroleum supplies and to price increases, and this has a direct effect on the economy

and community well-being. Energy systems are needed at remote sites and outer islands that either do

not have operating electricity generating systems (Swain's Island) or that depend on importing fuel for

small diesel power plants (Manu'a Group). American Samoa is fortunate to have a number of renewable

energy resources to consider and an effective energy office with strong government support to

investigate these resources.

Based on recent studies, geothermal, MSW, and OTEC offer excellent potential for significant

base load electricity production. Extensive investigation is needed to identify and quantify the

geothermal resource, but this technology deserves particular attention because of its overall

suitability for American Samoa. MSW conversion is attractive, but existing data should be verified,

new data gathered, and studies done on what type of conversion system would be most suitable. OTEC

will offer excellent mid-range possibilities when the technology reaches a higher state of readiness.

American Samoa is using an increasing amount of process heat for canning and other commercial and

industrial operations, and therefore solar thermal applications are promising. Domestic solar hot

water systems have had mixed success because of design and installation problems, but they offer the

potential for some electricity savings. Major constraints for solar ponds include competition for land

use and the teChnology's medium state of readiness for island lo~~tions.

Constraints to biomass technologies include the rugged land,'the small amount of flat terrain, the

land tenure system, and competition for land use. Palm oils and producer gas are promising

technologies for generating electricity on the outer islands. Hydroelectric and wind technologies have

limited possibilities because of limited resources. Additional site-specific wind data should be

collected at proper heights, and multiple-use reservoir systems for hydroelectric generators might show

these technologies to be cost-effective in certain places. Land availability, environmental effects,

160
and continued dependence on an imported fuel, are problems for coal, and this technology might'also

require a new harbor.

Wood cooking stoves, wind-driven water pumps, and small photovoltaic systems would reduce or avoid

petroleum fuel use on the outer islands and remote-villages.

The TEO's energy management efforts have been very effective in promoting conservation and energy

awareness, assembling a data base, and achieving energy savings with institutional projects. It should

continue with these efforts. Table 8-5 lists the various recommendations for American Samoa.

Table 8-5

Energy Planning Recommendations For American Samoa

Tutuila

o Continue with energy management for conservation, rate structure reform, and data accumulation

o Continue retrofitting, especially for heavy air condiditoning loads, and investigate effeciencies of

water pumps and other heavy equipment

o Collect more site-specific data for OTEC

o Monitor, the hospital solar cooling project, and use data to project feasibility of similar projects

o Develop a plan for preliminary investigations of the geothermal resource and begin these

investigations

o Develop more MSW data, verify existing data, and investigate various MSW conversion technologies

o Continue installing domestic solar hot water systems and start preliminary studies of solar thermal

systems for process heat

o Investigate the use of palm oils or producer gas for electricity production

o Collect additional site-specific wind data at actual wind machine heights

o Investigate multi-use reservoirs for use with reservoir hydroelectric systems

Remote Villages and Outer Islands:

o Determine village energy needs through energy audits

o Continue installing small photovoltaic systems, investigate installing such a system on the airstrip

at Ofu, and consider applications on Swain's Island

o Collect site-specific wind data at actual wind machine heights

o Investigate using wind-driven mechanical water pumps for remote applications

o Investigate using solar hot water systems for public buildings on the Manu'a Group

o Investigate building a solar pond on the Manu'a Group

161
CHAPTER 9: FINDINGS AND CONCLUSIONS

The principal objective of this assessment is the identification of near-term, cost-effective

energy planning options for each of the Pacific Island governments, based, to the extent possible, on

the use of indigenous renewable energy resources. The intention of this effort, as reflected in the

language of the enabling legislation (P.L. 96-597), is to help reduce island dependence on imported

fuels and to contribute to overall economic development goals in the region.

Previous sections of this assessment have: 1) outlined the context of the current energy situation

in each island group; 2) presented a framework in which alternate energy technologies can be evaluated;

and 3) discussed the status of current and future energy options for each government. This last step

has resulted in the identification of specific energy planning recommendations for each government,

based on three critical factors: availability of an alternate energy resource base; readiness of

technologies that can exploit that resource base; and the attractiveness of various technology

applications given site-specific economic, social and environmental considerations.

Each step of the overall assessment occurred as an outgrowth of two years of interaction between

the Department of Energy and the responsible energy, economic, and resource development officials of

the island governments. This interaction featured on-site data collection, a Phase I Report based on

preliminary data, follow-up meetings and on-site technology assessment work, computer analyses, plus

review and comment periods for island energy planners on all written material produced during

successive stages of the project. The technology-specific analytical work conducted during the second

phase of the project helped support determinations made in this final report about the appropriateness

or inapplicability of various technologies in the locations under consideration. Table 9-1 identifies

the technology and resource analyses conducted during the project's second phase. Copies of the final

reports of each will be available as supporting documents to this final report.

TABLE 9-1. -- Phase II Technology Assessments

Wind Energy Assessment for the Western Pacific Based on Ship Reports, Thomas A. Schroeder and Arnold M.

Hori, University of Hawaii, December, 1982.

Coal as an Option for Power Generation in the United States Territories of the Pacific, I.Y. Borg,

Lawrence Livermore National Laboratory, Novermber 30, 1981.

Suitability of Salt-Gradient Solar Ponds for Electrical Power Generation in the United States Trust

Territory of the Pacific Islands, Guam and American Samoa, Thomas B. McCord et al., SETS, Inc.,

Honolulu, Hawaii, October, 1982.

Photovoltaic Applications for Remote Island Needs, Davad A. Schaller and Ronal W. Larson, Black Hawk

Associates, Denver Colorado, December, 1982.

Biomass Resources for the United States Pacific Territories, James L. Brewbaker, University of Hawaii,

December 1982.

Municipal Solid Waste Energy Conversion Feasibility for Guam and American Samoa, James R. Roney, Inter

Energy, Inc., March, 1983.

Technical and Economic Feasibility of Sail Assist for Field Ships, Charles W. Case, Pacific Energy

Technology, Inc., March 1983.

As a consequence of political, economic, and social developments during the two-year period of

this project, the energy status of nearly every government included in the analysis has evolved since

P.L. 96-597 was enacted. Even though the crisis in international oil pricing which helped amplify the

162
energy dependencies of the Pacific Island has abated some-what, island oil dependencies remain. The

current stabilization in world petroleum prices has moderated, at least temporarily, the imported fuel

cost burden, the steady oil price rises of the late 1970s placed on island governments, but imported

fuel costs continue to claim a disproportionate share of island wealth. This reduces the amount of

capital available to develop the resources needed for economic growth and limits the provision of

necessary public services.

Spurred by the vulnerability they experienced during the last oil price rise, some island

governments have recently taken actions which are likely to result in more stable, though still costly,

electric power generation for at least the near to mid term. The Marshall Islands government has

purchased an entirely new residual oil-fired central generating facility, complete with guaranteed fuel

supplies and a service agreement for plant operation and maintenance. The governments of the Republic

of Palau, American Samoa, and the Federated States of Micronesia are considering similar action.

Though they perpetuate dependence on outside sources of energy, such actions are intended to add

stability and efficiency to the central generation of electricity until the transition to indigenous

energy resources becomes more feasible.

Another development which has occurred during the time periods of this assessment has been the

introduction of several renewable energy technologies at selected island locations. Photovoltaics,

small hydroelectric, wind energy, and solar hot water technologies, as well as energy-efficient wood

stoves for village'use, have each been installed in one or more of the island groups. System

installation, operation, and maintenance experience is being developed at the local level, and

equipment performance is being evaluated. The results from these pioneering efforts with renewable

energy technology have been noted in previous chapters and underlie many of the recommendations of this

assessment.

One final development has taken place, the Compact of Free Association, which will influence

greatly the ability of several of the island goverments to control their energy planning futures more

directly. Under one of the provisions of this agreement, the United States has agreed to provide

annual funding grants to the governments of the Federated States of Micronesia, Republic of Palau, and

Republic of the Marshall Islands to be used in support of energy self-sufficiency. Additionally, major

infrastructure development projects will be constructed for each of these three governments as an

outgrowth of the Compact.

It is too early to identify the individual energy projects to be supported by this expected new

funding. However, the respective governments will soon have the opportunity to begin moving away from

the conditions which made the "crisis management" approach to energy planning so commonplace in each of

the island groups just a couple of years ago. The new generating station in the Marshall Islands, to

be financed in part with new Compact funds, represents that government's willingness to discard its

existing patchwork of unreliable diesel units and to begin to assume full responsibility for its own

energy future.

As this assessment has proceeded, perhaps the greatest uncertainty and debate has been over the

relative potential for one or more of the renewable energy technologies to emerge as a ready,

cost-effective option for island governments. Several technical achievements in the last few years

have lowered the acquisition cost of many renewable energy conversion systems. Still, the high first

cost of most of these systems masks their economic attractiveness, which emerges when they are compared

with conventional energy systems to a life-cycle basis. Capital costs of many renewable energy systems

are expected to drop considerably in the near to mid-term, making the potential for island applications

even more attractive. Table 9-2 presents current cost and operational characteristics for most of the

major technologies examined in this report. These cost ranges were used to support the economic

evaluations of each technology for each island group in the preceding chapters.

As the chapters for each government indicate, technology options vary widely based on their

present state of technical readiness, economic feasibility, and their suitability for meeting local

needs. Each island group appears to possess one or two principal renewable resources which should

receive first attention as technology options are considered in coming years. It is not possible to

generalize across island groups because each differs in either the resource base or site-specific

characteristics needed to make best use of available resources. The recommendations included at the

end of each of the preceeding six chapters, and summarized below, present the most favorable renewable

energy resource and technology options for each area.

Considerable promise has been held out for the role that renewable energy resources will at some

point play in the Pacific Islands. However, local governments face energy problems that are both

immediate and pervasive. Island planners do not have the luxury to take time to anticipate what

technological advances and cost reductions will be possible for future energy systems. As a

consequence, energy planning activity in the islands, and in this assessment, has proceeded along two

general fronts: the urban setting, where either rehabilitation or replacement of existing

163
Table 9-2. Characteristics of Technologies for Production of Electricity

Under Consideration for Pacific Territories

Technology

Wind

Wind

Photovoltaic

energy

Photovoltaic

energy

Solar

Thermal

energy conv.

Hydropower

Geothermal

energy

Ocean tidal/

current

Size/Description

of System

Few to tens of kW,

not grid connected

Few to tens of MW,

grid connected

fuel-saver mode

Several kW range,

not grid connected

Few to tens of MW.

grid connected

fuel-saver mode

Several kW to tens of

MW, stand alone or

grid connected

Few MW, grid connected

Tens of MW, grid

connected

Harness ocean currents

or tidal flow

Current(a)

Capital Cost

Estimate

K$/kW

3-6

1-2.5

10-15

10-20

5-20

0.8-1.3

1. 5-2

Unknown

Current(a)

Cost/kWh

$ .50-1.00

$ .25-.50

$1.00-2.00

$1.00-2.00

$ .50-2.00

$ .10-.50

$ .10-.50

Unknown

Capacity

Factor(b)

Range (%)

10-30

10-30

15-25

15-25

lj-25

50-70

70-90

Area

Required

Little

20 ha/MW

2 ha/HWp

3 ha/MWp

15 ha/MW

Little

As

required

Temporal

Characteristics

Intermittent, needs

storage

Intermittent, fuel

storage mode with

no storage

Intermittent, needs

storage

Daily cycle, intermittent, fuel-saver,

no storage

Intermittent, needs

storage; or fuelsaver, no storage

Water availability

dictates limitations

Baseload power

OTECshore based

Solar pond

Wood

5 MW

40 MW

5 MW salt gradient

excavating/diking

Few MW and up, boiler

gasifier

8-10

5

2-20

1-2

$ .20-.40

$ .50-.40

$ .25-.50

$ .12-.15

70-90

70-90

70-90

Little Baseload power

20 ha/MW Baseload power with

peaking possibilities

800 ha/MW Baseload power

Coal Few MW and up

Diesel Fractional to several

MW engine generator

Residual oil Several of tens of MW

boiler

$ .10-.15

$ .40-.50

$ .15-.20

70-90

70-90

70-90

1 ha/M'.J

Little

Little

Baseload power

Baseload power

Baseload power

(a) "Hawaii Intergrated Energy Assessment," LBL 12061, January 1981; "Cost of Energy from Some Renewable

and Conventional Technologies," SERI/SP-74l-l022, April 1981; other sources.

(b) Fraction of time source can produce energy, averaged over a year of operation.

(c) Environmental protection equipment will increase cost.

petroleum-based systems are needed just to maintain day-to-day qperation of government and commerce; and

the remote island and village environment, where the high cost of introducing or maintaining small,

diesel-powered generating systems cannot be supported.

The potential for displacing petroleum fuels in the island population centers rests largely on:

1) the opportunities which exist for governments to improve the operating efficiencies of existing

generating facilities; and 2) efforts at energy management in all end-use sectors, particularly the

government sector. These steps can save petroleum on a day-to-day basis and free system capacity to

support economic development or other revenue-producing activities. Even those island groups which are

164
moving to new, more efficient residual oil-fired generating systems can benefit in fuel savings and

government outlays by adopting proven energy management techniques. Significant savings also should be

realized by those governments willing to adopt rate structures, billing, and collection practices more

designed to generate revenues. The present practice of most governments is to subsidize electrical

consumption.

In the many scattered remote villages and outer islands of the region, energy use continues to be

dominated by the gathering and combustion of fuelwood. Yet, as the frequency of communication and

travel increases among the people of the region, even those remote areas are becoming candidates for

some form of energy technology. In fact, governments perceive extension of electrification and its

benefits to outer islands as a way to help stem in-migration to already overcrowded island centers. As

a consequence, government efforts to provide energy to these areas is expected to accelerate in the

near term. The application of certain renewable energy technologies in these instances appears both

technically and economically justified, and should help avoid further dependence on imported fuels.

Specific recommendations for each of the island groups 'include those renewable energy measures believed

to have reached a degree of readiness and cost effectiveness that warrants immediate exploitation.

Another issue posed in this investigation of alternate energy options for the Pacific Islands is

the appropriate locus of responsibility for actions needed to implement findings and recommendations

made in the report. The role of the private sector in initiating changes to assist in displacing

petroleum fuels appears constrained by the overwhelming presence of government involvement in decisions

affecting energy use in any of the areas studied; thus the local governments have total responsibility

for electricity production. Until and unless private utilities evolve in the region, government

responsibility for energy technology selection will remain exclusive.

In addition to direct control over electricity production and distribution, government decisions

often indirectly influence future energy options. The most apparent examples include the siting and

construction of new roads, the approval of new infrastructure developments (airfields, hospitals,

etc.), and control of permits for new commercial and residential construction. Such actions influence

the energy use opportunities that will be available to future end users, and can have the effect of

forcing energy technology choices at later dates. Road extensions are often followed by power line

extensions, thus encouraging central power distribution at the expense, perhaps, of a more

decentralized renewable resource technology option which would otherwise be cost-effective.

There are some areas in which the private sector will be able to initiate energy-efficient

activities in the islands. Information dissemination, product distribution, and system servicing are

among the most needed. Many of the energy management techniques and renewable energy systems of

potential application are too new to have received widespread understanding among even the government

technical and administrative staff responsible for energy decision-making in the islands. For example,

the replacement of electromagnetic ballasts with electronic ballasts in flourescent lights is a

relatively recent technology development which promises energy savings in many lighting applications in

the islands.

Given the time lag and an often random flow of technical information to the Pacific, private

sector product distribution and service companies are needed to disseminate product data aggressively

on all aspects of alternate energy and energy conservation hardware. Only with more complete

information can government decision-makers be expected to choose accurately among the

technology options available to them.

To the extent that United States government agencies remain responsible for technical assistance

in the islands, they should assist the United States private sector to recognize the market

opportunities of the region. Once the private sector commitments have been made, governments should

provide reasonable direct assistance to project developers to insure that initial efforts succeed.

This assistance could include, at a minimum, communication and transportation services where they are

operated exclusively by the government. Historically, the islands have attracted little commercial

interest compared to other areas in the region, largely because of the distances and logistical

difficulties that have to be considered in moving people and products. Government can assist in

mitigating these conditions so that there is less a deterrent to United States companies' investment 1n

the islands and more chance of successful projects. .

Private renewable energy companies have been active elsewhere in the Pacific Basin, and often work

closely with host governments to advance the use of one or more technologies. Technical assistance

should not be limited to the narrow definition of "energy technology", but should encompass the larger

economic arena in which energy use takes place. Therein, the· private commercial and industrial

activity necessary to support energy investments can be developed. For example, private repair and

maintenance facilities could provide skills needed to support new energy technologies, particularly

those smaller, decentralized systems which may not be directly owned by the government.

165
Many island governments now provide or soon will provide tax and other financial incentives to

encourage outside investment in economic development activities. The use of such mechanisms similar to

the many innovative and successful third-party financing arrangements for renewable energy systems in

the United States should be pursued to promote energy-related investment. The United States

government, together with each of the island governments, should make a serious effort to highlight to

potential investors the opportunities that exist in the context of these tax benefits.

The introduction of new energy systems, all largely developed and pioneered outside the Pacific,

will have to be a joint effort between an informed public sector and a willing and cooperative private

sector, with technical assistance provided by United States agencies where it is appropriate.

Governments must realize how the unique circumstances of remoteness and unfamiliarity have limited

United States private sector interest in the Pacific Islands in the past. The most crucial role for

government, therefore, apart from striving for more complete information on the costs and benefits of

each energy option available, will be to encourage private investor interest in energy development.

Governments should also realize that, in some instances, such as on unusually remote islands with small

populations, private sector initiative may be unlikely under any circumstances. In these cases,

governments must decide whether to maintain the status quo or to make changes strictly as management

decisions aimed at reducing overall operating costs.

Given the broad context in which future energy planning must occur, it

specific findings and conclusions that have resulted from this assessment.

presented in the Phase I Report and remain valid at this time.

TERRITORIAL ENERGY ASSESSMENT

FINAL REPORT

FINDINGS AND CONCLUSIONS

is possible to itemize the

Many of these were

1. All areas included in this analysis depend on imported petroleum for nearly 100% of their energy

needs.

2. Electricity is the principal energy form supporting economic development in the region.

Electricity generation also presents the greatest number of opportunities to use alternate

technologies and indigenous, renewable energy resources. Given the present state of development

of synthetic fuels production or alternate transportation technology, there is little likelihood

that the island governments will be able to meet a significant portion of liquid fuels demand for

aviation, marine transportation or construction in the near term with indigenous resources.

3. The island governments are the principal suppliers of electrical energy. There are no private

utilities.

4. The fuels local governments purchase are used primarily to generate electricity which, in turn, is

used by households, commercial and industrial enterprises and government public services. The

fuel cost of generating electricity is generally not recovered from the end-user, except on Guam

and American Somoa. Given local wage levels, full cost quite possibly cannot be recovered. Thus

fuel costs alone have weakened the local governments' ability to continue to provide, let alone

extend, essential electrical services. This has limited opportunities for growth in the

developing economies of the Pacific.

5. The total cost of generating electricity in the Pacific Island groups is not known, but estimates

place it between l7i/kWh and 25t/kWh. Mainland United States costs range from 2i/kWh to l5t/kWh,

with a national average of 7.2t/kWh in late 1982. The high cost of fuel oil, a tropical climate

which results in a high generating system derating factor, and often inadequate operation and

maintenance practices all contribute to high generating costs.

6. Major private commercial and military operations often provide their own power because government

run central systems are insufficient or unreliable. This is believed to be the major reason that

new commercial enterprises have been reluctant to locate in the islands.

7. Though not provided by the local governments, the fuels consumed by private or military operations

are extremely important to the overall energy picture of each government. The presence of

military facilities and the few major commercial enterprises generally represents the critical

underpinning of the host government's economy.

8. All of the island governments express an adamant desire for energy self-sufficiency coupled with

economic independence. There is a common need for assistance in comprehensive energy planning,

technology evaluation, and the development of alternate energy resources.

166
9. Economic development plans generally have not given in-depth consideration to energy requirements

for the future. Therefore, there is a need to bring some emphasis on future energy demands into

the long range planning processes of each government. Linkages between new economic development

and energy demand must be quantified wherever possible.

10. Energy management and greater energy efficiency of existing production and end-use systems offer

some immediate fuel savings potential in each island group. However, high birth rates, the high

percentage of population without electricity in many island groups, the potential for rapidly

expanding demands as economies develop, and other factors all indicate the value of long-term

emphasis on new sources of supply.

11. All of the island groups appear to possess various renewable energy resources which, when proven

and developed, could substantially relieve the current dependence on imported petroleum for

electric generation. Additional resource assessment is required for some island groups, and more

exhaustive performance testing of hardware is needed before large immediate expenditures on some

technologies could be justified. In addition to indigenous renewable resources, coal may be a

possible transition fuel on Guam.

12. The current high costs of fuel, operating, and maintenance of conventional electricity generation

equipment make several renewable energy technologies appear economically attractive for the

islands. Renewable energy technologies generally have fairly high capital costs but relatively

low operating costs. In selecting technologies appropriate for specific island groups, special

consideration must be given to problems unique to the area, such as the frequency of maintenance

in the highly corrosive tropical environment; social, cultural, and political compatibility; and

training of operating and maintenance personnel.

13. A transition to alternate energy systems will require

in most island areas is both long term and immediate.

efficiency and reliability of existing energy systems

solutions unfolds.

some years to complete.

Steps must be taken to

while the transition to

The energy problem

improve the

longer range

14. Investment in the most favorable alternate energy systems can and should be made as soon as

possible. Given that the existing energy supply systems are now inadequate, and that the United

States has an ongoing commitment to Guam, American Samoa, and the Commonwealth of the Northern

Mariana Islands and a minimum IS-year commitment to the economic, social, and political well-being

of the emerging nations of the Trust Territory of the Pacific Islands, this is a critical and

opportune time to invest in energy supply systems which will strengthen the developing economies

of the islands and lead to greater self-sufficiency. Such investments will eventually lower costs

to the United States government as well as to the local governments, and will allow for creation

of a broader economic base across all of the island groups.

Chapters 3 through 8 discussed each government's energy situation in detail and provided the

supporting data and analyses to justify several major recommendations for energy planning and energy

technology selections in both the central, urbanized islands and remote outer islands and villages.

167

THE CARIBBEAN REGION

PUERTO RICO

UNITED STATES VIRGIN ISLANDS

j -I

TABLE OF CONTENTS

Executive Summary 5

•

Part I: Analysis of Energy in Puerto Rico

and the United States Virgin Islands

Alternative Energy Resource Assessment

for Puerto Rico. . . . . . . . . . . .

Territorial Energy Assessment for the

United States Virgin Islands .....

9

11

55

Part II: Supplemental Analysis of Energy in Puerto Rico

and the United States Virgin Islands. . . .. 75

Preceding page blank

CARI~BEAN ENERGY ASSESSMENT

EXECUTIVE SUMMARY

In December 1980 the Omnibus Territories Act was passed to assist the insular areas in the Caribbean in the development of their renewable energy resources and to aid in the achievement of greater energy

self-sufficiency. Since that time, these geographically isolated islands continue an almost total dependence on imported petroleum products as an energy source. Although petroleum prices have stabilized, the

continued high cost of oil results in strain on these local economies and utilizes capital that is critical

for needed economic development. In view of this situation, the U.S. Department of Energy has prepared

this energy analysis for the benefit of Puerto Rico and the Virgin Islands in response to the mandated

objectives of the Omnibus Territories Act, P.L. 96-597.

In meeting the requirements of the Act, this planning effort was conducted in cooperation with each

insular area. The DOE sought out and obtained the active participation of the Governor's energy office of

the Commonwealth of Puerto Rico and of the U.S. Virgin Islands in the completion of these energy programs.

Grants were awarded to these offices in support of this work and the results are published here in full.

Puerto Rico will continue to complete a detailed wind energy resource assessment utilizing its remaining

funds through the balance of Fiscal Year 1983.

The Puerto Rico assessment evaluates the potential for the renewable energy resources of wind,

hydropower, solar, bioenergy and OTEC and for cogeneration. Each resource is evaluated for its feasibility

in displacing oil-fired electric generating capacity. Projected savings, in millions of barrels of oil,

are provided through the year 2000 for the major renewable energy resources which have significant development potential. Emphasis is given to the wind resource due to its potential for significant contribution

in the relative near term. A wind resource assessment will be a primary focus of the Puerto Rico Office of

Energy for continued renewable energy development. During 1982, thirteen of the more feasible hydropower

sites were visited and assessed for restoration on a cost-benefit basis. Due to the high costs of power,

these abandoned hydropower sites are now deemed feasible for redevelopment. Evaluations of the remaining

renewable resources were also provided with cogeneration and bioenergy showing significant near term oil

displacement potential. The Puerto Rico Office of Energy concludes that these technology assessments and

other work under way, "will allow realistic achievable goals to be set and policies adopted that will lead

Puerto Rico to a more energy 'self-sufficient' future."

The U.S. Virgin Islands Energy Office also recognizes a potentially major role for indigenous

renewable resources. This office projects that by the year 2005 a significant portion of electricity

required could be produced from these resources. The preliminary economic- analysis shows that these

resources could compete favorably now with current oil price levels. The rate at which these indigenous

resources can be exploited, however, depends more on the availability of capital and rate of technolvgical

deve lopment than on oi 1 price. The Virg in Islands Energy Of fice report conc ludes that rep lac ing imported

petroleum with indigenous energy resources can have a beneficial effect on the Islands' economy. In

addition, energy conservation efforts could lead to substantial reductions in electricity and gasoline

consumption.

In addition to the submission from the Governor's energy office of Puerto Rico, detailed stud ies

on hydropower, cogeneration and solar insolation measurements were also provided, which are available

separate ly. The Caribbean submissions are the work 0 f the energy 0 Hices of Puerto Rico and the U. S.

Virgin Is lands, or their consultants, and represent their response to the Act. The submissions are published without alteration. Any follow-up questions on the technical data presented should be referred to

the concerned energy office.

In Part I I 0 f this document part icu lar emphas is is given to est ima t ing fut ure energy need s, based

on broad ranges of economic development possibilities. Additional in-depth assessments of the potential

for deve lopment of the severa 1 indigenous energy sources are also provided. A broad range of proposed

actions were developed as a result of this analysis and these constitute the proposed energy program

in the long term. Estimates of costs to implement the resultant recommendations are provided for the use

and benefit of Puerto Rico, the U.S. Virgin Islands, and interested energy planners.

The major findings of this work can be summarized as follows:

Preceding page blank 1- 5
Puerto Rico

o In the period 1950 to 1973 the economy of Puerto Rico grew at an annual average

rate of 6.1%. The impact of the OPEC oil price increases reduced the growth to

-2.0% in 1975. The economy rebounded to a 5.9% growth in 1979, but dropped to

0.7% in 1981 and to -3.9% in fiscal year 1982. The economy has changed from a

predominantly agricultural system 07.5% of gross product in 1950 to 3.2% in

1981) to a predominantly industrial system 05.9% in 1950 to 42.9% in 1981).

The petroleum refining and petrochemical industries are significant components

of Puerto Rico's economy. They were developed when Puerto Rico had a significant cost advantage over mainland u.s. facilities due to the then lower price of

foreign crude oil.

o Two economic growth scenarios have been postulated for Puerto Rico.

growth scenario estimates growth at 3.7-4.0% per year for the period

The low growth scenario estimates growth at 2.5-2.8% per year.

The high

1983-2020.

o The Puerto Rican economy depends almost exclusively on petroleum products and

on electricity derived from petroleum products for its energy supply. Current

consumption (1981 data) is 315 trillion Btus; approximately 54% is in the form

of petroleum fuels, 43% is electricity (virtually all oil-fired), and 3% is from

bagasse combus~ion. Industry consumes 45% of the energy, transportation 22%, and

the residential/commercial sector 22%. Under the high economic growth assumptions, the energy consumption will be almost double by the year 2000 and will

more than triple by the year 2020. Under the low economic growth assumptions,

consumption will slightly more than double by 2020.

o Puerto Rico's reserves of fossil fuels are unproven. Some earlier geological

explorations have indicated that oil- and/or gas-bearing formations might

exist, but there have been no confirming exploratory test wells.

o There is a sizable petroleum refining operation in Puerto Rico (284,000 barrels

per day) and sizable petrochemical facilities. These are facing complex problems of crude oil and feedstock supply and prices, transporation costs, and

considerations under U.S. oil entitlements, quotas, and price controls. The

future of these industries, and any downstream secondary industries using their

outputs, will depend on the resolution of these problems.

o The electric system in Puerto Rico is about 4200 MW in size. Peak loads are in

the range of 2100 MW. The system experiences reliability problems because of

its isolation, the large size of several units relative to total system size,

limi ted quick res ponse capabi lity, and maintenance prob lems. The system is

about 98% oil-fired with the small balance coming from hydroelectric facilities.

o There is currently very little use of renewable resources in Puerto Rico. The

potential is, however, high because of the tropical location. Cost is a major

factor influencing the use of renewable resource technologies. A series of

incentives will be needed for these technologies to make any significant market

penetration. With a large number of alternatives available, a major concern is

the allocation of limited resources to the development of the most promising

technologies.

o Direct use of solar energy has a high potential for utilization in Puerto Rico.

Average daily insolation levels are among the highest in the world. It has been

estimated that solar water heating can save 630,000 barrels of oil per year in

the year 2000, solar ponds could save 2,190,000 barrels per year, and photovoltaics could save 1,550,000 barrels per year.

o Wind systems offer a special opportunity for Puerto Rico. A 200 MW demonstration unit is currently in operation. It is estimated that the maximum technical

market based on implementation of wind systems at all the favorable sites, is

300 MWe.

o Biomass, in the form of agricultural crops, residues, and urban waste is estimated to be able to save 6,650,000 barrels of oil in the year 2000.

o Ocean

Puerto

Plants

thermal energy conversion (OTEC) is an attractive alternative since

Rico has the proper conditions of water depth and temperature gradients.

of the 40 MW size range have been proposed.
o Hydroelectric stations offer the potential of 100-200 MW of electrical power

by the Mid- to late-1990s. It has been estimated that 3,280,000 barrels of

oil could be saved by the year 2000.

U.S. Virgin Islands

o The economy of the U.S. Virgin Islands is dominated by the tourist, industrial,

and government services sectors. In the decade 1970-1980, total employment

grew at an average rate of 2.1% per year. In 1981 the growth rate was 0.1%.

A significant component of the economy is the Hess Oil Virgin Islands Co.

refinery, which is the third largest in the world. The Martin Marietta alumina plant is another major component of the economy.

o Two economic growth scenarios have been postulated for the Virgin Islands. The

high growth scenario assumes a growth rate in employment of 2.5-2.7% per year

out to the year 2020. The low growth scenario estimates employment growth at

only 1.3% per year.

o The Virgin Islands are almost exclusively dependent on petroleum for energy.

Approximately 65% of the energy consumed is in the form of electricity (all of

it oil-fired) with the balance In the form of petroleum products. Current

consumption 0980 data) is 76.5 trillion Btus. Under the high economic growth

scenario this will increase by 170% by the year 2020. For the low growth

scenario this will increase by 70% in 2020. The Hess Oil refinery and the

Martin Marietta alumina plant currently account for 90% of the energy consumption in the Islands; they are both self-sufficient with respect to fuel,

electricity and water supply.

o The electric system is divided between St. Thomas and St. Croix. St. John is

connected to St. Thomas via cable. The installed capacity on St. Thomas is

about 115 MW and on St. Croix about 88 MW. The capacity for some units is

derated as steam is extracted for water desalination purposes. The peak loads

are 39.5 MW for St. Thomas and 29.0 HW for St. Croix. Despite the large reserve margins, the system experiences reliability prob~ems because of its

isolation and because of maintenance difficulties.

o Electricity costs are high by U.S. mainland standards - 18 to 21 cents per

kilowatt hour. All of the electricity generation equipment is oil-fired,

which contributes to the high cost.

o There is current ly very 1it t Ie renewable resource use in the Vi rgin Is lands,

although the potential is very high.

o Solar water heating is the technology likely to be the most cost-effective in

the near term due to the high cost of electricity, its largest market

compet it'or.

o Wind systems have some potential but the wind resource data are sparse. It has

been est imated that 5-10 MWe of wind power might be imp lemented on each grid.

o Biomass has some potential but is not very large because of limited land availability.

o Ocean thermal energy conversion (OTEC) has some potential and some sites have

been proposed for small units.

o Hydroelectric potential is limited because of the terrain and climatic conditions. Water supply, itself, is a critical problem for the Islands.

PART I: ANALYSIS OF ENERGY IN PUERTO RICO AND

THE UNITED STATES VIRGIN ISLANDS

This part contains two reports. The first was prepared by the Puerto Rico Office of Energy and is

entitled Alternative Energy Resource Assessment of Puerto Rico. The study conducted by the Office of

Energy is reproduced here in its ent i rety with the except ion 0 f three append ices. These append ices,

because of their size, are not included and can be found as the following references:

Appendix I:

Appendix II:

Appendix III:

Gebhard, T.G., Brief Reconnaissance Studies for the Addition of Hydropower

in Puerto Rico, submitted to U.S. Department of Energy, Atlanta, Georgia

(October 1982).

Cogeneration Potential in Puerto Rico's Commercial and Industrial Sectors,

submitted to Puerto Rico Office of Energy by Energy Research and Application, Inc. (December 1981).

Lopez, A.M. and K.G. Soderstrom, The Availability of Insolation in Puerto

Rico, to be published in the 67th Annual Technical Conference, Solar Energy

Division, ASHE.

The second report in this part was prepared by the Virgin Islands Energy Office and is entitled

Territorial Energy Assessment for the United States Virgin Islands. It is reproduced here in its entirety.

Preceding page blank

1"- 9

ALTERNATIVE ENERGY

RESOURCE

ASSESSMENT

FOR

PUERTO RICO

puerto rico office of energy

office of the governor

Ball 41089 • Santurce. Puerto Rlco 0Q9.40

". "

Preceding page brank 1.- 11
OOffice of the Governor of Puerto RIco .

~~~::.~!,,~~~y.,oo, "'"''-,,,..''''''' ___

November 12, 1982

Mr. William H. Rankin

Technical Project Manager

U. S. Department of Energy

Savannah River Operations Office

Aiken, South Carolina 29801

Dear Mr. Rankin:

We are pleased to submit a preliminary resource assessment of alternative energy sources for Puerto Rico. As

you know, the resource assessment as originally planned

was not fully funded. At the reduced funding level, a

comprehensive assessment as previously planned was not

possible, therefore, the report has been prepared by

the Puerto Rico Office of Energy staff utilizing the

various sources of available data.

I trust the report will assist you in fulfilling the

Department of Energy's commitment to the requirements

of Public Law 96-597.

Should you have any questions, please feel free to contact this Office.

.Sincerely,

(

!dit1~~., ~J .IJ&?--t,·

Eduardo L6pez-Ballori ;C~~

Director (./r/J

ELB:RDS:cim

Enclosure

..J: - 12
I

II

TABLE OF CONTENTS

PREFACE

ALTERNATIVE ENERGY RESOURCE ASSESSMENT .... """ .. "" .... " .... "" .. """""""" .. """ .... "" .. """ .. "" .. """ .... """"""""" .. "" .... "

15

17

A INTRODUCTION" ".. "".... "".... "".... """.. "".... """.. ".... "".. """" ".. """.. """""".. "".. """.. """".. """".. .... .. .. .... .. .. .. .. .... .. ...... 17

B CURRENT USE AND PROJECTIONS FOR PUERTO RICO •••••••••••••••••••••••••••••••••••••••••••••••••••• 17

C TECHNOLOGICAL FORECASTING " 18

III APPROPRIATE ALTERNATIAVE ENERGY SOURCES ••••••••••••••••••••••••••••••••••••••••••••••••••••••••••• 21

A WIND ENERGY IN PUERTO RICO "........................................................................ 21

1 Introduction ".. .. .. .. .. 21

2 Existing Data............................................................................... 21

3 The Puerto Rico Office of Energy Wind Program•.•..•.••......•...•..••.••...•..••.••.....•..• 24

4 Wind Energy Resource Assessment Program..................................................... 24

B HYDROPOWER IN PUERTO RICO...................................................................... 28

Summary of Reconnaissance Study for Hydropower Potential

in Puerto Rico •••.••••••.•••.••.•••.••.•••••.••.••.•••••••••••••.•••••••••.•••.••••••.•••••.

a. Objectives of Study .....•...........................................•..................•

b. Summary of Results •••.•••.••••••.•••.•••••••••••••••••.•••••..•••.••.••••••.•••.••.•••••

c. Potential for Small Scale Hydropower •••••.••••••••••••••••.••••••••••••••••••••••..•••••

30

30

30

31

2 COUlIDon Data................................................................................. 31

a. Value of Power.......................................................................... 31

b. Potential Developers.................................................................... 32

3 Institutional Data.......................................................................... 32

a. Changing Use of Flow.................................................................... 32

b. Right of Access and Development......................................................... 32

4 Safety Data................................................................................. 32

5 Environmental Data.......................................................................... 32

a. Restricted 'Development.................................................................. 33

b. Migratory Fish.......................................................................... 33 c. Rare And Endangered Species............................................................. 33

6 Proj ec tions For The Future.................................................................. 33

C OVERVIEW OF ASSESSMENT AND PROJECTIONS •••••••••••••.•••••••••.••••••••••••••••••••••••••••••••• 33

1

2

3

4

Direct Solar Energy Overview ..............................•.........•...•..................•

a. Solar Hot Water 'Heaters •.••••••••.•••.••.••.•••••••••.••...•.•••••..•••.••••••.••.••.•••

b. Solar Ponds And Industrial Process Heat•••••••.•••.••••••••••••••••••••.••••••••••••••••

c. Photovoltaics•...••...•..••......•..•..•...............•....•.....•......••.....••.••..•

Bioenergy Overview .

a. Bioconversion .

b. Methane From &'\nimal Waste And Biomass .

c. Biomass...•..•...•..••......•......••....•.........••..•..••..••..•...•.....••.....••...

d. Electricity From Bagasse •..•••.••.••.•••••••••.•.•••.•••..••••••.••.•••..••••••••.•••.••

e. Solid Waste ...•...•...•...•.".••.....•..•.........•..•..•....•.........••..•..••.•...••..

f. Current Proj ect B ••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••

Co-GeneI' ation.......•...•......••......•.....•..•..•..••..•..•...••.••..•...•.........••..•.

Ocean Thermal Energy Conversion (OTEe) Overview •••.••.'•••••••••••••.••••••••••••••.••.••••••

33

35

37

38

39

40

42

42

43

44

45

46

47

IV SUMMARY ... . 50

A ENERGY SELF-SUFFICIENT......................................................................... 50

B CONCLUS ION. • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • . • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • 51

V REFERENCES .

1..- 13

52
ACKNOWLEDGMENTS

This report was prepared by the Energy Sources Area of the Puerto Rico Office of Energy.

In particular the following individuals should be recognized for their contributions:

Mr. R. D. Scott: Assistant Director, Energy Sources

Dr. Edgar Werner, Deputy Assistant Director

Kathy Kelly; Editor and integrator of the report

Tina Rodriguez, for contributions in the Bioenergy and Hydropower sections

Wanda De Jesus and ,Dennis Sotolongo for staff support and the extensive typing of the

report by Irin Martinez and Helen Ubri.

Grants provided by the Department of Energy will augment the sections on the Wind and Hydropower

Resource Assessments during the Fiscal Year.

We also acknowledge the help provided by:

1. Dr. Edwin Nunez, Consultant in Meteorology and author of the chapter on Wind

Energy.

2. Dr. Thomas Gebhard, Consulting Engineer and author of the Hydropower reconnaissance

study.

3. Dr. Angel Lopez, Center for Energy and Environment Research. Mayaguez, Puerto Rico,

for his paper on Solar Insolation.

":t ' 14
I PREFACE

Since 1973, the economic impact of rapidly rising world 011 prices has been particularly severe on

the U. S. territories, the Trust Territory of the Pacific Islands and the Commonwealth of Puerto Rico.

Though these localities vary greatly in the size and complexity of their economies, their political status,

and social and cultural backgrounds, they all share certain traits: they are geographically isolated island

groups with an almost total dependence on imported petroleum products as an energy source. Dramatically

rising oil prices, coupled with the uncertainty of supply over the near as well as long term, are resulting

in severe strains on local economies and capital that is badly needed for economic development.

In order to address the critical needs of these insular areas, Congress included Section 604 in P.L.

96-597, the Omnibus Territories Act (December 1980), which requires the development of comprehensive energy

plans with the goal of reducing the reliance on imported oil through making maximum use of indigenous energy

resources:

MANDATED OBJECTIVES (Highlights of Section 604 of P. L. 96-597)

"(c) The Secretary of Energy •••shall prepare a comprehensive energy plan with emphasis on indigenous

renewable sources of energy for Puerto Rico, the Virgin Is lands, Guam, American Samoa, the

Northern Mariana Islands and Palau. The plan shall be prepared with the approval of the

Secretary of the Interior and in cooperation with the chief executive officer of each insular

area by:

1. Surveying existing sources and uses of energy;

2. estimating future energy needs to the year 2020, giving due consideration of

economic development possibilities;

3. assessing, in depth, the availability and potential for development of indigenous

energy sources;

4. assessing the mix of energy sources (including fossil fuels) and identifying those

technologies that are needed to meet the projected demands for energy; and

5. drafting long-term energy plans for such insular areas with the objective of minimizing their reliance on energy imports and making maximum use of their indigenous

energy resources.

(d) The Secretary of Energy •••with the approval of the Secretary of the Interior, as palot of the

comprehensive energy planning, may demonstrate those indigenous renewable energy technologies

which are determined to be most cost effective through the use of existing programs.

(e) Within two years from the date of enactment of this Act, the Secretary of Energy •••shall submit

the comprehensive energy plan for each insular area to the Congress.

(f) There are hereby authorized to be appropriated such sums as may be necessary to carry out the

purposes of this section."

This section of P.L. 96-597 was authorized but unappropriated. Recognizing the serious nature of the

situation, however, the Acting Under Secretary of DOE directed in April, 1981, that a three-phased approach

to neeting the intent of the legislation be defined. The first step was to characterize the current energy

situation in each territorial entity and to provide an estimate of the cost connected with developing comprehensive territorial energy plans. The Savannah River Operations Office (SR) was assigned responsibility

for the Caribbean region (Puerto Rico and Virgin Islands), and the San Francisco Operations Office (SAN) for

the Pacific entities (Guam, American Samoa, Northern Marianas, Palau, Federated States of Micronesia, and

Marshall Islands). The Office of Intergovernmental Affairs, Territorial Affairs Branch (HQ/IR), was

assigned DOE Headquarters responsibility for overall coordination.

Consistent with the Acting Under Secretary's direction, a strategy for the conduct of this effort was

written and approved in May, 1981 which defined a three-phsse approach:

.I _15
Phase I, was intended to provide a current perspective on territo rial energy problems; to ident i fy

existing energy supply and demand data; to identify energy resources that might be developed and appropriate

technology options. Based on these findings, Phase I defined and estimated the cost of the technical

assessment and economic analysis activities required to support the development of specific energy plans.

Phase II would involve the conduc t of the technical assessments defined under Phase 1. Successful

completion of these tasks would provide the information necessary to understand and compare alternate energy

development options in each territorial entity.

Phase III would complete the process wi th the preparation of energy plans for each territorial

entity. Involved would be an integrated analysis comparing al ternative energy options, the coord ina ted

selec tion of proposed energy proj ec ts, the subsequent draft ing of energy plans, and territorial/DOE/DOI

coordination and concurrence before the plans would be submitted to Congress.

In executing Phase I, SAN and SR each named a team of energy specialists to visit the Pacific and

Caribbean regions. The SAN team of seven included individuals from SAN, the DOl, the Solar Energy Research

Institute, the Lawrence Livermore National Laboratory, and Advanced Technology Associates, a private consulting firm. The SR team of six was composed of specialists from the Argonne National Laboratory. These

team visits to the territorial entities were conducted in May-June, 1981. During this time the information

presented in the Phase I report was collected and tentative agreement reached with the territorial energy

offices on recommendations for Phase II.

As noted above, the primary purpose of the Phase I report was to present the results of Phase I alone

with the recommendations of SAN, SR and Ho/IR as to those technical assessment and economic analysis activities required to allow DOE and 001 to meet the intent of Congress under P.1. 96-597. The total estimated

cost of these proposed assessments for both the Pacific and Caribbean entities was $3.94 M.

In the case of Puerto Rico, the cost proposal developed by DOE in the Phase I report to conduct Phase

II and Phase III was $996,591. Subsequent to the completion of the Phase I report on September 22, 1981;

the DOE requested the Puerto Rico Office of Energy to submit for planning purposes a program plan which

would define an approach to accomplish Phase II and III at a reduced funding level. On January 15, 1982;

PROE submitted to SR three Planning options, indicating Phase II could be accomplished for $395,000.

Further communications from SR indicated that the total funding allocation for Puerto Rico and the VI to

conduct the effort would be $125,000. At this dramatically reduced level a priority was established by the

PROE to conduct a Wind Energy Resource Assessment. A program plan was submitted to the DOE/SR on March 16,

1982; indicating two options at the $121,750 and a reduced scope option of $87.000 to conduct an Island Wind

Resource Assessment with heavy reliance on existing data.

On April 15, 1982, the DOE provided a Grant of $80,000 to aid in a Wind Energy Resource Assessment

for Puerto Rico.

This background is provided to place this report in perspective. It is not an indigenous energy

resource assessment of all the alternative energy sources, but is a reflection of the work accomplished to

date and planned for next year in two specific areas; Wind Energy and Hydropower Resource potential for

Puerto Rico.

Section III of this report, utilizing existing data in the several alternative energy areas: undertakes a projection of the energy potential from thes~ sources to the year 2000.

Even though the projections are based on a limited resource data base, the information should prove

useful for developing implementation strategies and plans for the future.

:r.. 16
II ALTERNATIVE ENERGY RESOURCE ASSESSMENT

A. INTRODUCTION

The Puerto Rico Office of Energy reports directly to the Governor and has the responsibility to

coordinate and integrate all energy related programs. Specifically, the Office formulates policy, monitors

petroleum and other energy usage, administers an Energy Conservation Program, develops and promotes Alternative Energy Sources and Systems; and, in general, assures the availability of energy for the Island.

Because the Government of Puerto Rico is convinced that alternative energy can make a significant

contribution to the long-term solution of the Island's energy problems, the Government has appropriated

about $5 million to be available for the development of alternative energy sources for Puerto Rico.

In order to expend this sum most efficiently, it is important to quantify the potential and the

"technology readiness" for commercialization for the various sources.

Alternative Energy Sources is a term utilized to describe a range of technology options that would

diversify the fuel sources for energy production. Traditionally, this has included the "Solar Technologies"

which includes all Renewable Energy Sources. For Puerto Rico, alternative, energy could be viewed as any

source other than petroleum, since 97% of the Island's energy production is derived from this source.

Currently, there is a surplus of oil on the world market. Supplies flow freely and during periods

like this, we tend to forget the fragile balance between world supply (production) and demand (consumption).

The opportunity exists to begin a steady transition to renewable energy sources over the next

decades, and bring on line those technologies which are proven and ready for the marketplace.

The Island is blessed with a great solar resource in the form of wind, hydro, bioenergy, ocean, and

direct sunlight. What is not known is the exact magnitude of this resource. One of the first steps that

must be undertaken before wide-scale deployment of these technologies by the private sector will occur, is

the quantification of the renewable resource potential of Puerto Rico. This is one of the key activities in

the Energy Sources Area this fiscal year and the subject of this report.

The overall objective of the program is to promote the wide-scale exploitation and utilization of

energy sources which are reliable, cost-effective and environmentally acceptable.

The overall strategy of the Energy Sout"ces Program is to create a favorable environment for the

various technologies such that the private sector (with the cooperation of the Government) can develop and

deploy (commercialize) their products.

The implementation of this strategy will vary for each technology option. In some cases it may be

policy statements and/or tax incentives; for other technologies, it may include research, development and

demonstration. In any case, if the energy source is environmentally acceptable, economically viable and

technology readiness proven; then wide-scale deployment would be expected.

The purpose of this report is to describe the methodology we have established to evaluate the various

energy sources based upon the existing resource data base.

B. CURRENT USE AND PROJECTIONS FOR PUERTO RICO

To understand the "energy problem" of Puerto Rico, one must understand that 97% of the energy consumed is imported petroleum; however, to obtain a clear picture, the energy use by sector must be analyzed.

In brief overview, the total energy consumption peaked in Puerto Rico in 1979 at just over 358 x 1012

Btu per year. It has steadily declined since then to an overall consumption of 315 x 1012 Btu in 1981.

Indications are that a further reduction to approximately 290 x 1012 Btu can be expected in 1982. Economic

and energy use models predict a continuing decline to around 260 x 1012 Btu in the 1985 timeframe.

Table 1 reflects the energy consumption in Puerto Rico s'ince 1976 by Fiscal Year. For the same

years, the relationship between energy consumption and Gross Domestic Product has been declining (e.g., 1979

- 78.3 x 103 Btu/GOP $; 1981 = 68.6; and in 1985, it is projected at 56.6).

I- 17
Table 1 Energy Consumption in Puerto Rico

Fiscal Years

ITEM 1976 1977 1978 1979 1980 1981

QUANTITY (TRILLIONS OF BTU)

TOTAL CONSUMPTION•••••••••••• 320.1 335.5 344.6 357.8 337.6 315.9

FUELS •••••••••••••••••••••••• 177.5 182.1 188.4 204.3 188.3 169.2

REFINERY GAS •••••••••••••• 21. 1 21.2 19.2 21.1 20.8 18.1

MIDDLE DISTILLATES •••••••• 24.0 25.2 16.0 19.5 17.1 10.6

RESIDUAL FUEL OILS •••••••• 45.9 43.0 50.9 56.8 49.2 43.0

MOTOR GASOLINE •••••••••••• 77 .2 82.1 86.E 90.1 87.2 84.0

AVIATION FUEL••••••••••••• 9.3 10.6 15.7 16.9 14.1 13.4

ELECTRIC ENERGy •••••••••••••• 125.2 138.1 142.4 142.3 138.3 135.8

THERMOELECTRIC •••••••••••• 123.7 137.2 141. 3 141. 1 136.2 134.5

HYDROELECTRIC ••••••••••••• 1.5 0.9 1. 1 1.1 2.1 1.3

BAGASSE••••••••••••••••••••• 17.5 15.3 13.8 11.1 11.0 10.0

PERCENT DISTRIBUTION (%) :

TOTAL CONSUMPTION•••••••••••• 100.0 100.0 100.0 100.0 100.0 100.0

FUELS ••••••••••••••••••••••• 55.4 54.3 54.7 57.1 55.8 53.7

REFINERY GAS •••••••••••••• 6.6 6.3 5.6 5.9 6.2 5.7

MIDDLE DISTILLATES •••••••• 7.5 7.5 4.7 5.5 5.1 3.4

RESIDUAL FUEL OILS •••••••• 14.4 12.8 14.8 15.9 14.6 13.7

MOTOR GASOLINE •••••••••••• 24.1 24.5 25.1 25.2 25.8 26.7

AVIATION FUEL••••••••••••• 2.9 3.2 4.6 4.7 4.2 4.3

ELECTRIC ENERGy••••••••••••• 39.1 41.2 41.3 39.8 41.0 43.1

THERMOELECTRIC •••••••••••• 38.6 40.9 41.0 49.5 40.3 42.7

HYDROELECTRIC••••••••••••• 0.5 0.3 0.3 0.3 0.6 0.4

BAGASSE••••••••••••••••••••• 5.5 4.6 4.0 3.1 3.3 3.2

As in every story there is good news and bad news. The good news is that we are conserving more and

becoming more efficient: the bad news is that several energy intensive industries have closed and the trend

reflects the current state of world economics.

If we examine the total energy consumption by sector, in Puerto Rico, we find the following:

Electricity production accounts for

Fuels

Bagasse

43%

54%

3%

100%

This percentage distribution has remained relatively constant over the last five years, and will

probably remain that way through the mid-1980s.

An interesting statistic is that fuels account for 54% of the total consumption, approximately half

of which is gasoline (Reference Table 1). As shown in Table 1 while gasoline consumption for automobiles

declined approximately 12% in the U.S. during Fiscal 1981, it declined only 3% in Puerto Rico. Liquid fuel

consumption must therefore become a prime target if energy self-sufficiency is to be realized.

At the same time as the total consumption of energy in the near-term is proj ected to decrease, the

percentage for electrical power generation will remain significant; therefore, another target of opportunity

will be reductions in petroleum usage for electrical power generation.

C. TECHNOLOGICAL FORECASTING, OR "MARKET PENETRATION TAKES TIME"

All new technologies encounter a limited initial acceptance in the marketplace during the years of

commercialization. Numerous studies have found the average time from first discovery to a product in the

marketplace was approximately 15-20 years. Heat pumps introduced in the late 1950s never really penetrated

the marketplace until the 1970s. Historically, the commercialization process for new products has followed

an S-shaped curve typical to the one shown in Figure 1.
100 r-----------,..-----------.,...---------__

Acceple.ce s. , • r a II o.

1101------------1-------------1;jjIO<-- 1

Ul

801--------------1-----------".

c(

to..

UJ

U

U

c(

UJ

40 I------------t------,J·--------I-------------I

tz

111

U

'k.

UJ

0..

20 I------------~'[------

oa--=::;;;.-----_--' -1 -'

YEARS SINCE INTRODUCTION

Figure 1 Typical Commercialization Curve

The first phase is characterized by an initial lag in the marketplace resistance to change and perception of high risk, cost and uncertainty. The second phase is the "bandwagon" period. The innovation

rapidly gains marketplace acceptance coupled with reduced cost; which comes about by the learning curve

effect of increased production volume and refinements in the technology. The final phase reflects saturation of the market by the mature version of the initial innovation.

In the case of alternative energy technologies, the time for each phase will vary significantly.

There are several reasons for this:

1. First, the resource potential (ultimate market share) will vary.

2. The level of technology can vary significantly (solar hot water heaters vs. photovoltaic

systems).

3. The characteristics of the ultimate user (individual, industry, utilities, etc.) will

affect the rate of market deployment.

In order to develop a methodology for use in technological forecasting of alternative energy market

penetration, it is necessary to estimate the manner in which alternative energy technologies will replace a

petroleum-based society. To accomplish this purpose, three tasks will be performed.

1. The resource potential needs to be analyzed and quantified.

2. The various technologies must be listed and their "technology readiness" assessed.

3. And finally, the method, time and rate of entry into the marketplace for each technology

must be estimated.

t. 19
With exception of step functional variations produced by the addition of large centralized energy

plants, all technologies are assumed to follow an S-shaped market penetration curve; with only the time to

market saturation and the percent of the total potential to be anticipated as variables.

The establishment of the limits of these variables, however, is a most difficult task. Expert option

and a modified Delphi process may be utilized to establish a consensus. With this established, projections

of alternative energy futures can be made by varying the magnitudes of the parameters and the source of

energy combinations. The projection becomes not what will be, but what is possible should policies be

adopted and plans implemented to achieve the market goals in technologically feasible time frames.

The scenario of what is technologically possible must then be subjected to the economic, social and

political considerations and analyses which can result in a definitive policy and implementation plans.

The material which follows, focuses primarily on the technologically feasible scenario for Puerto

Rico and must await further analysis in order to allow the proper establishment of policies in regard to the

future development and deployment of the various technologies.

2- 20
III APPROPRIATE ALTERNATIVE ENERGY SOURCES

The following sections address alternative energy technologies considered for this report.

The technologies are as follows:

1. Wind Energy

2. Hydro Power

3. Direct Solar

4. Bioenergy and Solid Waste

5. Co-generation

6. OTEC

Wind energy and hydropower are addressed first in the report, because a large body of information

exists and definitive resource assessments are currently being conducted by the PROE under grants from the

Department of Energy. This work has just been initiated under contract and more definitive material will

exist at the end of this fiscal year.

The remaining technologies are addressed in summary fashion; first indicating the estimated resource

potential based on existing data, the status of commercialization, and finally the market development potential for the year 2000.

A. WIND ENERGY IN PUERTO RICO

1. Introduction

The atmosphere of the Caribbean Basin is affected by strong, consistent easterly winds known as the

trade winds. The trade wind system covers on the average about one-third of the earth's surface. The winds

are high directional; over 80% of direction observations are within 45 degrees of East-Northeast.

Puerto Rico is geographically located within this system and, therefore, is well-positioned to harness the wind as a source of power for electricity generation. The known behavioral characteristics of the

trade wind system, however, are not sufficient to determine the adequacy of the wind resource for conversion

to usable energy and power in Puerto Rico. The variety of topographic attributes of the Island, including

height above sea level, surface roughness, land-sea breezes and local terrain features, affect the flow,

magnitude and turbulence of the Island's wind characteristics. Because of this, wind as a potential source

of energy must be quantified as a function of these influencing factors.

Past studies and preliminary investigations of Puerto Rico's wind resource have indicated that

certain broad areas exhibit wind speeds with the potential to economically produce power. Some interest has

been expressed by potential small wind turbine system users and large wind farm developers. However, the

meteorological data do support site specific systems analyses and economic feasibility studies are inadequate for most of the Island.

2. Existing Data

Previous studies of Puerto Rico's wind resource have been limited to data collection activities

performed on coastal locations associated with airports (San Juan, Ramey AFB, and Roosevelt Roads Naval

Station) as shown in Figure 2. As a result, little wind data exists for broader coastal areas and no

measurement data has been collected for the interior of the island. Additional sporadic wind data collections activities have been performed in conjunction with planned conventional power system development in

Puerto Rico. The Puerto Rico Electric Power Authority (PREPA), for example, has gathered wind data over

varying time periods at existing or proposed power plant sites (Palo Seco, Tortuguero, Islote, Guayanilla

and Aguirre).

.' Pacific Northwest Laboratory (PNL) has produced the most recent document on Puerto Rico's wind

resource (published January 1981). In this study, currently available and historic data were used to

estimate wind power density throughout the Island. Data from non-documented locations were derived using

extrapolations of existing upper air data. The authors of this study stated that their findings are

1- 21
0c.=:-.I.O==-..2i:0==::530..__4j(0===li.O__.I.O===7liO...__IO===I:iO.._.1.00 MILES

0Ci==-_.2i:0=::JI_.4i:0::::=:J__IO,====I.O I.OO KILOMETERS

Figure 2 Locations of Data Stations (Source: Wind Energy Resource Atlas)

approximations since much of the available data tended to be inconsistent on a source-by-source basis and

since extensive modeling was employed to compensate for the paucity of data ever much of the Island. Even

with these approximation, the document is currently the best source of information on Puerto Rico's wind

resource. Wind power estimates (Figure 3) are encouraging in terms of the potential for cost-effective wind

generated electrical power. The findings of the reports were summarized below:

• Approximately 0.06% of the Island is designated Class 4 (6.0 mls winds with a wind power.

density of 250 watts/m2 ). These areas are located on Cape San Juan on the northeastern

coast.

• Approximately 4% of the land area showed Class 3 characteristics (5.6 mls and a wind

power density of 200/watts/m2). These are the exposed coastal locations in the north and

northeastern coast as well as exposed ridge crests in the mountainous interior.

• Approximately 21% of the Island has been estimated as Class 2 (5.1 mls and a wind power

density of 150 watts/m2 ). These areas include the northern plains, northern slopes,

valleys in the interior, and less exposed mountain tops.

• The remainder of the Island (75%) was designated as Class 1 (4.4 mls and a wind density

of 100 watts/m2). The area includes the southern and southwestern coast and slopes.

. . .

These estimates of wind speed and wind power density in the PNL document were dependent upon the

subjective integration of several factors: quantity of wind data, qualitative indicators of 'wind' speed or

power, the characteristics of exposed sites in various terrain, and the familiarity with the meteorology,

climatology and topography of the region. Due to the lack of knowledge of many of these factors, the degree

of certainty with which the wind power densities have been estimated for Puerto Rico tends to be very low.

study.

rating

Figure 4 indicates the certainty ratings given to estimates in the regions developed by the PNL

Very large areas, mostly in the mountainous interior, are given the lowest degree of certainty

(1). A few regions, mostly in the eastern and southern parts of the Island, have a certainty rating

J. - 22
0C:I::::I..'i!::0::::I.JeO=:::530..._."O==510.._'ii:0==7:i0__.cO==II.O__'OO MIlEI

e:f=_.2i::°=_....cO==-_ii:.O====:5.O 'OO ~L~~!.~!~••

Figure 3 Annual Average Wind Power in Puerto Rico

(Source: Wind Energy Resource Atlas)

Ft@1 RIDGE CHEST ESTIMAtES

....----..-,---. -_.3 3 ..-.----. 3." .. I_ I'" _.. .

I -_.- - 1,"'.'.'-" ''''-'-''

._ _- .--_ ---- - .

~~-__ -~---~--~-J-3---~-r~--I--~-- --~ 1._+_____ 3-_.:.. _- _

18° .......! .~_. ·- ··~· l -.. I; I ,j !- -··1 - •·..········ ·..·..·..T"..·-· - -{- - 18

---f------J-~--f-~1-~r~--I--?1---~-I:-~.-l'?--;-~----~J -----1---1---1------1----\-----

----f----- ----- -----!-----l---I+-------l------L -,----I--j--------i--I----f---l------------

j I I ! i I I I I' I I ! I I . I I .'

°C:I::::I..'eO==-...20r==:530..._ ...0==5110........:0==7:ii0__.CO==••O__111O MILES

°CI=_..2i:;°=_....CO==-_·EO===::illO 100 ~~~!.'2~,S

Figure 4 Certainty Rating of the Puerto Rico Wind Resource

(Source: Wind Energy Resource Atlas)

:r 23
of 2, that is, a low to intermediate degree of certainty.

are classified with a rating of 3, a high to intermediate

terrain of low complexity and site where data had been

highest certainty classification (4).

Only the north, western and south coastal regions

degree of certainty. These areas tend to have a

collec ted previously. No region was given the

The low certainty ratings, resulting from the fact that previously gathered wind resource data has

been sporadic and limited, indicate the need for a carefully designed, more comprehensive wind resource

assessment program to adequately assess the wind energy potential for Puerto Rico.

3. The Puerto Rico Office of Energy Wind Program

Current wind energy activities of the Office of Energy include:

• An anemometer loan program for individuals interested in measuring wind characteristics

at particular sites. Interested citizens - after filling out a questionnaire - have been

selected to receive, without charge, wind measuring instrumentation from PROE. The

loaned instruments allow them to determine if their site has a potential, worthy of a

more detailed study. Since the instruments do not log data automatically, readings have

to be estimated by the user, introducing a large degree of uncertainty. Average wind

data would be suspect due to sporadic data recording, however, peak wind velocity can be

evaluated more accurately. Though the instruments lack the necessary accuracy to permit

inclusion of the data gathered by the users in the Wind Resource Assessment Program,

their utility to potential residential users has been demonstrated.

• Development and implementation of a set of regulations to be required of all wind

turbines manufactured or marketed in Puerto Rico. The purpose of this activity is to

assure that wind turbines perform according to specifications claimed by the manufacturer

and to enable consumers to compare turbine options. Using the general guidelines

established by the American Wind Energy Association through industry concensus, a methodology has been developed whereby the wind turbine is subj ected to a series of tests to

ascertain and certify its power curve and energy production.

• Dissemination of information with respect to all aspects of small and large scale wind

turbines, their performance, and their potential in alleviating the Island's energy

problem. Information services are provided through conferences, booklets and personal

interviews to private citizens and educational institutions. This program provides the

general public wi th first-hand information concerning wind energy development potential

for different applications.

• Design and implementation of the Wind Resource Assessment Program. This last task is the

focus of this report and is described in detail below.

4. Wind Energy Resource Assessment Program

a. Potential Large and Small Scale Users

The potential users of the Wind Resource Assessment results include small scale, residential users

and large scale (windfarm or MW size turbine) developers and users. Members of the first group are citizens

seeking information concerning the wind potential in the area where their farms or residences are located.

Companies interested in developing large windmills or windfarms comprise the second group. An evaluation of

the average wind conditions within the different meteorological regions of the Island is beneficial to the

needs of the first group. It answers a basic question: Is the particular site located in an area with a

good wind resource potential? Those seeking to install large wind turbines or to develop windfarms need to

determine the locations of the maximum wind speeds in Puerto Rico in addition to the degree of variability

and turbulence at the sites. Other considerations such as land availability, distance to transmission lines

and access to the site are also important issues. On a short-term basis, windfarms can make a more

significant contribution toward alleviating the Island's dependency on foreign oiL On a long-term basis,

as small wind turbine technology improves and becomes more cost-effective, and as the public becomes aware

of the program and the benefits of wind power, the former group will also contribute to a less oil dependent

society.

):. - 24
b. Purpose

The Wind Energy Resource Assessment Program is a joint effort between Meridian Corporation and PROE

to achieve the following objectives.

L Augment the data coverage of previous studies especially as developed in the Pacific

Northwest Laboratory Wind Energy Resource Atlas O-legley al. , 1981).

2. Provide wind data over the Island I s mountainous interior region to estimate the windpower density of this area.

3. Provide the future users of both small- and large-scale wind turbines with a basic guide

to assist in turbine sizing and siting efforts.

c. Methodology

Two sets of instruments will be deployed over a period of at least one year to measure wind characteristics: four fixed meteorological towers and one mobile meteorological station.

The fixed tower locations will tentatively be selected from the sites designated in Figure 5, Preliminary selection of these sites was based on the following general conclusions:

1. Quality and reliability of historical meteorological data. In general, the wind data

gathered by the National Weather Service, PREPA, U. S. Navy and Air Force are of good

quality. Consequently, the fixed tower sites will not be located in areas where

adequate historical data exists.

2. Location of the meteorological stations used in previous studies. Without variation,

they are located over the Island's coastal plains very close to the shore, at or near

sea-level. The fixed towers will initially be located in the interior highlands.

An analysis of the location, altitude, type of instrumentation, instrument height, accuracy. data

collecting procedure. reliability. time period over which data was collected. and data format has been

initiated for sites with historical wind measurement data. Data from other collection sources area also

being gathered for the analysis.

Figure 5 Tentative Selection for Fixed Measurement Stations

(Source: Wind Energy Resource Atlas)

.r -25
The mobile meteorological station will "~rospect" for those sites which appear to have potential for

high wind speeds. most likely on mountain ridges. Measurements with the mobile unit will be taken over

periods of two to four weeks at various locations. The mobile station will also be used to gather wind data

for:

• The validation of data from existing instruments.

• The acquisition of wind data to correlate measurements taken at different stations.

• The acquisition of wind data to investigate phenomena like the land-sea breeze and localized wind characteristics.

A kite anemometer will be used in conjunction with the mobile instrument to investigate turbulence

and vertical wind shear at heights representative of installed large scale wind turbines.

d. Site Selection: Fixed Measurement Towers

Figure 5 depicts the sites which have been tentatively selected for the initial instsllation of the

fixed measurement towers. They are:

1. Cerro Maravilla in the Toro Negro Reservation. Some of the Island's highest ground is

within this area, including Cerro Punta which is the highest mountain (1338 m). The

site was selected in order to assess the wind speeda over the highest ground. to explore

the effect on the trade winds to the NE (in conjunction with site 2). and to determine

the penetration of the sea breeze since the site is about 25 km from the southern seashore. Existing communication towers at this point will facilitate the deployment of

the instruments.

2. Corozal Area. Located approximately 20 kIn from the northern shore over mountains with

intermediate heights of approximately 300 m. In conjunction with the San Juan station.

the site allows for the study of the change of the trade winds as they traverse the

Island from the NE direction. By correlating this data with that of Vega Baja and San

Juan, the penetration of the sea breeze in the northern coast can also be explored.

3. Cerro La Santa. Located around the eastern-central part of the Island at a height of

903 m. Data acquired at this station will be correlated with that of Aguirre. Yabucoa

and Roosevelt Roads. Television towers in this area will make the deployment of the

instruments easier.

4. Pileteas Area near Lares. This location represents a plateau over ground of intermediate heights (400 m) in the central northwestern part of Puerto Rico. Correlations

with the data from Arecibo and Ramey will be made to examine the penetration of the seabreeze. if present st that point.

5. Cerro Gordo nesr Maricao. Located over the central western part of the Island at a

height of 883 m. The data will be correlated with that from Mayaguez and possibly

Guayanilla.

5. Contractors

Meridian Corporation is working in close cooperation with PROE in carrying out the diverse tasks

necessary for the successful completion of the Wind Resource· Assessment Program. They are performing the

following activities:

1. Definition of the Wind Resource Assessment Project operating parameters,

2. Establishment of field equipment specifications,

3. Development of a methodology for siting. installation operation and collection of

recorded data,

:t..- 26
4. Establishment of equipment maintenance procedures,

5. Establishment of equipment maintenance procedures,

6 Assistance in the selection of the field operation subcontractor and in the supervision

of the field operation,

7. Analysis to correlate the new data received from the field operations to the historical

data set,

8. Development of a computer model for windfarm and dispersed wind turbine performance

evaluation,

9. Identification of highest potential windfarm sites,

10. Development of wind resource maps for the Island,

11. Provide software and analytical instrumentation to enable PROE to perform in-house wind

analysis and modeling,

12. Socio-economic analyses for both small wind energy turbines and wind farms as directed by

PROE.

6. Future Development

By this time next year, a better understanding of the Island's wind energy potential will be

evolving. An estimate of the prevailing wind power density over much of the interior of the Island and an

identification of specific regions with a potential for windfarms will have been made. Additional, more

comprehensive studies are planned to extend the findings of the initial project for site-specific development.

In the meantime, the following proj ections have been made assuming that wind speed and sites will

prove favorable~

a. Small Wind Machines

Individual small wind electrical generators (2 to 50 kw) to replace imported oil which is used to

generate electricity for residences in Puerto Rico, is an attractive alternative energy source. They are

marginally cost-effective at this date; however, with the recent passage of tax incentives and the consumers

anticipation of rate increases, this technology is ready for commercialization in Puerto Rico. It is conservatively estimated that the commercialization potential, by the year 2000, is 7500 units for an annual

energy production equivalent of 1.35 x 10 12 Btu/year. Because wind technology uses a free source of energy,

its rate of deployment could be quite rapid as it becomes more cost-effective. This could change these

projections by an order of magnitude, or more, depending on these socio-economic factors. A plot of the Btu

output from the conservative 1% acceptance scenario stated above is shown in Figure 6. This produces the

following estimates of oil savings, assuming the electricity which is generated replaces fossil fuel generated electricity:

Year (FY) 80 81 82 84 85 86 88 90 95 2000

Millions 0.00 0.00 0.00 0.08 0.16 0.22 0.38 0.47 0.63 0.77

of BBls

of oil

savings

b. Large Wind Machines (Wind Farms)

Large wind machines are an attractive alternative as wind farms or central wind generating plants

(greater than 40 MW) to replace imported oil which is used to generate electricity for the residential and

industrial sectors of the Puerto Rico energy economy.

1- 27
3

cr:

« 2 cr:

LLJ

a..

=>

ICD

N

o

1 I

I I : I

, I

I

! I

i

I

I

i

,

,

I I

!

: l..----

i

I - ! I ~~

,

I

/~

I

I i

'82 '84 '86 '88 '90

YEAR

'92 '94 '96 '98 2000

Figure 6 Electricity from Small Wind Machines

The wind resource potential and the site availability for large wind farms is in the process of being

evaluated. The third generation large wind machines will not be under test and evaluation until the 1984

time frame. A reasonably conservative scenario suggests that the first 40 MW facility will go on line in

Puerto Rico in 1988, wi th a second one being added in 1991, and two more in 1995, for the combined

contribution of 160 MW. This represents a total of 3.8 x 1012 Btu/year by 1995.

A plot of the probable Btu output of this commercialization scenario is presented in Figure 7. The

BBls of oil year savings, as far as replacement of imported oil is concerned, is listed as follows:

Year (FY) 80 81 82 84 85 86 88 90 95 2000

Millions 0.00 0.00 0.00 0.00 0.00 0.00 0.55 0.55 2.20 2.20

of BBls

of oil

savings

Obviously, the cost effectiveness and ultimate success of wind farms is highly dependent on the

electricity purchase rates established by the utility in response to the PURPA legislation.

B. HYDROPOWER IN PUERTO RICO

During the first decades of this century, hydropower was a significant element in the Island's energy

picture, supplying close to 90% of the electric power needs. As the demand for electricity grew and petroleum fuels became competitive, the expansion of the Island's hydropower system slowed. Eventually, the

!"xpansion stopped altogether and existing facilities were allowed to deteriorate. At present, hydropower

~upplies less than 1% of Puerto Rico's electricity needs.

The potential for hydropower in Puerto Rico has not been fully evaluated. Recent estimates by the

U.S. Corps of Engineers (COE) suggest that at least 106 megawatts are available from 19 existing and

I~ 28
I I I

I

I

i

I

I

I

I

I

I

,

!

:

I

i

I

,

i ,

I

i

I

I i

7

6

5

ex:

c:(

w

>- 4 ex:

w

c..

:::>

tea 3 N

-0

2

o

'82 '84 '86 '88 '90

YEAR

'92 '94 '96 '98 2000

Figure 7 Electricity from Large Wind Machines

potential sites evaluated. This potential, which does not cover all possibilities, doubles the existing

installed capacity of hydropower on the Island. Excluded from this estimate are low head (under 50 feet)

installations. An additional potential 74 dam sites were evaluated by COE, but hydropower information for

these is not immediately available. In addition. there is an undetermined potential for small scale. low

head installations that could be made for low demand applications in rural areas.

Puerto Rico's hydropower potential in the short- to mid-term future lies in the development of very

small (micro) installations and in the retrofitting and renovation of existing facilities. The construction

of new major impoundments presents many problems in a densely populated region such as Puerto Rico.

Consequently, the Office of Energy with support from DOE has conducted a brief reconnaissance study for the

addition of hydropower in Puerto Rico. In addition, an overall resource assessment is presently being

undertaken whose purpose is to stimulate timely investment of private and/or public funds in two hydro

projects, each a prototype of the above-mentioned types of installation. These prototypes will serve to:

• Demonstrate to other potential investors the viability of hydro installations.

• Expedite the development of the necessary regulations and procedures at the pertinent

local agencies.

• Create confidence by lending institutions in this type of investment.

• Provide experience that will serve to guide investors, government and the utility in the

future.

The work will require the following:

• Identify the prototype projects to be assisted. Several prospects are already available

for the micro dam project, and one local government has shown interest in retrofitting an

impoundment about to be built for water supply and recreation. Selection of the

prototypes will be on the basis of how advanced the proj ect is at present and the

availability of assured financing for the project •

..r-29,
• Lead the project proponents through the permitting process. Since there is no explicit

permitting procedure currently in plac~, the PROE will assist the proponents in receiving

timely and equitable responses from the pertinent agencies, as well as assist and urging

the agencies in implementing straight forward procedures for future hydro proponents.

• Assist in equipment selection.

equipment and manufacturers.

The PROE will provide information from its files on

• Assist in negotiating the terms of the interconnection of the facility to the utility

grid.

1. Summary of Reconnaissance Study for Hydropower

Potential in Puerto Rico

Recently a reconnaissance study was performed on potential hydropower on the island. The following

are observations and insights on the potential development for small scale hydroelectric power in Puerto

Rico.

a. Objectives of Study

This study had two obj ectives:

suitable sites in Puerto Rico, and

hydroelectric power in Puerto Rico.

1) to collect site specific data for brief reconnaissance studies on

2) to determine the poten tial for the development of small scale

Thirteen dams and hydroelectric sites were visited during a four day trip to Puerto Rico in September

1982. Ten brief reconnaissance reports have been prepared to, describe the potential at those sites.

Information on the remaining three sites - Lago Garzas, Lago Loiza, and Lago Cidra - was insufficient to

develop a meaningful report. Nevertheless, some judgments can be made.

To develop an insight into the potential for the development and use of hydroelectric power in Puerto

Rico, the types of dams were categorized into three types: 1) abandoned hydroelectric sites, 2) dams that

have been dedicated for other beneficial uses, and 3) dams that were a part of an active, existing

hydroelectric system. Brief reconnaissance reports have been prepared on five abandoned hydroelectric

plants, two dams dedicated for other uses, and three active hydroelectric generating plants.

b. Summary of Results

All of the hydroelectric plants visited and described appear to be financially feasible for the

development of hydroelectric power, but one site, Lago l-a Plata, is not practical for development because of

future plans for development.

The abandoned sites, Comerio 1 and Comerio 2, are excellent sites for the development of run-of-theriver hydroelectric plants. Presently, the reservoirs are filled with sediment, but enough sediment could

be removed inexpensively, to enable the reservoirs to function as run-of-the-river facilities.

The three abandoned Carite sites are excellent sites for the development of small scale hydroelectric

power. The facilities and equipment appear to be in excellent condition for abandoned equipment and could

be repaired for a relatively small investment. The hydrologic data used in this study was based on

estimates, and better hydrologic data should improve the economic feasibility of these three sites.

La Plata Dam appears to be economically feasible for the development of hydroelectric power at the

site, but the study was based on the current withdrawals for municipal water supply. The dam was built to

provide potable water for residential and industrial use. Hydroelectric power is practical at this site

only if the excess water that passes over the dam is §ufficient in quantity and frequency. This is the

objective of current plans. Lago Cidra and Lago Loiza are sim~lar to l-a Plata Darn in their water

management. In fact, a hydroelectric power plant exists at l-ago Loiza, but it has, been abandoned due to

the lack of water.

Patillas Dam appears to

water released for irrigation.

of the water produced and the

power appear to be practical at

meager, but better data should

at the site.

be economically feasible for the development of hydroelectric power on the

The dam was built to provide irrigation water for agriculture. The quantity

frequency with which it is released, make the generation of hydroelectric

this site. The data obtained on the quantity of the irrigation releases is

improve the economic feasibility for the development of hydroelectric power

The operation of the three active hydroelectric plants which form the Dos Bocas-Caonillas system

indicates that the system was well conceived and properly designed to operate as an integrated system to

I- 30
produce the maximum amount of power from the geographic area. Water is diverted by tunnels between watersheds to sites that have very high head. The system is operated in a manner to reduce the amount of water

that flows over any spillway and to produce the maximum amount of power. No data was obtained which would

indicate that the existing equipment should be replaced. It is apparent that the operation of integrated

systems provides for high base loads and that the operation of run-of-the-river facilities at these sites

does not offer any economic advantage. The published streamflow data on this system was meager and could

not be used to develop any reliable data.

c. Potential For Small Scale Hydropower

The potential for the development of small scale hydroelectric power in Puerto Rico appears to offer

significant economic advantages. Certainly, the terrain and the streamflow characteristics enhance the

potential for small scale hydroelectric power. The Corps of Engineers has developed and extensive body of

information on the potential for additional base load by the development of hydroelectric power. It does

not appear that many hydroelectric sites or systems can be economically developed to provide new base load.

Run-of-the-river operations characterize most small scale hydroelectric facilities. When streamflow

is available, the units generate hydroelectric power. When streamflow is not available, the units cannot

generate hydroelectric power. A modest storage capacity in a reservoir can enable a facility to produce

hydroelectric power during the daily peak demand period when the streamflow is below the average. One can

store water during part of the day and generate during the periods of peak demand.

As the storms that produce rainfall on Puerto Rico yield a high volume of 'water in the streams, many

days exist during which hydroelectric power can be generated on a dependable basis. This would allow for a

reduction in the use of fossil-fueled generation units. If run-of-the-river hydroelectric units were

scheduled into the operations of the electrical system, it is possible to reduce the spinning reserve of the

system by saving larger hydroelectric systems to meet the instantaneous demand for power.

The economic evaluation of small scale hydroelectric power should be based on values which reflect

the economic condition of PREPA. As PREPA has excess generating capacity and additional capacity is not

needed in the near future, the value of power should be that which would properly reflect the savings in

operation and maintenance to the utility. As the current cost of fossil fuel for electrical generation is

approximately eight cents per kilowatt hour, this should be used as a standard on which to evaluate the use

of run-of-the-river hydroelectric operations. This value was used in this study, and the value was

sufficient to indicate that small scale hydroelectric power can provide benefits to the utility.

Another potential resource for small scale hydroelectric power that has not been evaluated is the

potential for new small diversion dams. A small, ten foot high, diversion dam can be constructed without

excessive expense. The dam can be used to divert water into a penstock which is constructed to a small

powerhouse downstream. This type of facility is becoming popular in regions with terrain similar to the

mountains of Puerto Rico. A cursory analysis indicates that a potential of more than seven megawatts of

additional capacity exists. These seven megawatts could produce an average of 33,000,000 kwhr per year.

This type of hydropower development is extremely site specific and depends on the terrain and the

streamflow.

In summary, it appears that the terrain and streamflow characteristics are favorable to the

development of small scale hydropower in Puerto Rico for the existing economic conditions. Small scale

hyd ropower would not solve the existing problems of the elec trical utili ty, but the development of small

scale hydropower would be beneficial to the utility.

2. Common Os ta

In the course of this study, it became apparent that a lot of the data gathered for a brief

reconnaisance study of a site was similar for all sites seen by the author. Thus, to improve the

presentation of the data, data common to all sites is presented in this chapter.

a. Value of Power

In developing the comparison of benefits to costs for a reconnaissance study, the value of the power

is one of the most important items as it establishes the benefits. In Puerto Rico, it is more important,

because it can seriously effect the financial condition of the electrical utility. In most other places,

the value of the power equals or exceeds the customer's purchase price of the power. This higher value is

accepted because the electrical utility can postpone the development of new generating facilities. In

Puerto Rico, PREPA has excessive generating capacity, and, thus, there can be no capital savings to the

utility. Additional hydroelectric capacity would be beneficial to PREPA if it can reduce the operating and

maintenance expenses, specifically the cost of fuel. The cost of fuel is approximately eight cents per kwhr
and is the major component of the 11-13 cent per kwhr average charged. For this study, the value of electricity will be eight cents per kwhr so that the benefits to PREPA will not be inflated.

b. Potential Developers

If the development of small-scale hydroelectric power is beneficial to PREPA, the utility could

develop the hydroelectric sites. If PREPA cannot acquire the money to make the developments, the utility

could provide for development by entrepreneurs and purchase the power at a rate equal to or less than eight

cents per kWhr for an extended time period.

It is also logical that PREPA develop the majority of sites investigated in this study, because PREPA

owns most of the sites.

3. Institutional Data

This section contains information of the alteration of the existing dam usage, the existing flows,

and the ownership of the right of access to develop the site and to acquire right-of-way for the

transmission of power.

a. Changing Use of Flow

If a site is not currently generating hydroelectric power, the existing usage of the dam will be

altered by putting the water to beneficial use. For run-of-the-river operations, most of the flows would

not be altered. However, many of the abandoned sites do have some small storage capacity which, if used,

would alter the flow regimes.

If a site is currently generating hydroelectric power, the existing use of the dam should not be

modified. If a site is currently operating as a storage facility to control the generation of hydroelectric

power, then the operations should not be altered to reduce base load potential.

If a site is currently serving as a water supply facility for residential, industrial, or irrigation

water, then the patterns of operation and flow should not be changed unless the change also benefits the

other users. High flows that are not stored could be used for power generation. Hydroelectric power can be

generated from flows to other dedicated uses, if the flow has excess head that would be lost during

transmission to the point of use. For example, the irrigation flows out of Patillas Dam have head which is

lost, thus, hydroelectric generation with irrigation releases has merit at that site. However, the domestic

and industrial water supply at La Plata Dam must be pumped from the reservoir, thus, hydroelectric

generation does not have merit at that site.

b. Right of Access and Development

At all dams visited in this study, a governmental agency or authority owned the dam. Thus, the right

of access and development would have to be acquired from the agency before the site could be developed by

anyone other than the owner.

Electrical transmission lines were adj acent to all sites visited. Thus, no additional right-of-way

for transmission facilities would have to be acquired.

4. Safety Data

All of the dams visited in this study have had Phase I Dam Safety Inspections performed on the

structure. All dams were listed as high hazard structures, because of the potential for loss of life

downstream if failure occurred. No dams were listed as unsafe. A copy of the Corps of Engineers data is

appended to the discussion of each site.

S. Environmental Data

This section contains a description of the existing environmental data that would effect the

development of hydroelectric power at a site.

J..- 32
a. Restricted Development

No site in this study was on any stream segment designated as a Wild or Scenic River. Nor could any

evidence be found that any stream segment has been listed as a potential site by the Federal Government.

No site was listed on the National Register 0~ Historic Places.

No sites were found to be in any park, wilderness area, wildlife preserve, recreational area, or in

other restricted activity area.

b. Migratory Fish

No data was found to indicate that migratory fish were present in the stream segments adjacent to the

sites; nor was any data found to indicate that the life cycle of a fish would be adversely affected by the

installation of hydroelectric power at any site visited.

Fish passage should be concern of any hydroelectric development. Screens should be constructed to

reduce the opportunity that adult fish may go through a turbine. There is no apparent need for fish ladders

on any stream segment adjacent to a site visited during this study.

c. Rare And Endangered Species

Rare and endangered species have been identified for Puerto Rico by the U. S. Fish and Wildlife

Service and the Puerto Rico Department of Natural Resources, Division of Coastal Resources and Wildlife

Planning.

Both agencies have determined critical habitat areas. In a review of this data, no information could

be found to indicate that a species of critical habitat would be damaged by the development of run-of-theriver hydroelectric power at any site in this study. Nevertheless, both agencies should be contacted early

in any feasibility study to determine if additional, specific investigations are needed.

6. Projections For The Future

Based upon the reconnaissance study and local expertise, approximately 200 MW of potential exists on

the island.

Therefore, a hydropower scenario based on 24 hour per day operation, at a capacity factor of 90%, the

Btu equivalent of this electrical energy is 5.70 x 1012 Btu/year. The output currently equals 1.5 x 1012

Btu/year, and may reach the full potential in 10 years.

Figure 8 plots this estimate over a technologically realistic time frame. If it is assumed that the

energy output from this alternative is used directly to replace fossil fuel produced electricity, then a

mul tiplication ratio for savings is imported 011, which is similar to that used for the solar hot water

technology results. The resulting savings in terms of fiscal years for this commercialization scenario are

the following:

Year (IT) 80 81 82 84 85 86 88 90 95 2000

Millions 0.86 0.86 0.86 0.86 0.89 0.98 1. 73 2.73 3.28 3.28

of BBls

of oil

savings

c. OVERVIEW OF ASSESSMENT AND PROJECTIONS

1. Direct Solar Energy Overview

When viewed from the broad perspective, solar energy is the base source for all the energy resources,

fossil or renewables, which provide the power, light, and heat .. for Puerto Rico as well as the rest of the

world. For practica1 operational purposes, however, it is necessary and convenient to consider the direct

radiation as a discrete energy source and discuss the appropriate technology required to tap it.

Puerto Rico, as wi th all the areas situated in the tropical belt is endowed with the climatic

conditions which favor extensive utilization of direct solar energy in thermal systems or photovoltaics. Of

:r - 33
i

,"

,

i

i

I

I

I ,

,

I

! ,

,

:

I

I

I /

Y I

I

i

I

I I ! I i

I i ,I

14

12

10

c:r:

et:

I.LJ

>- 8

c:r:

I.LJ

c..

:=J

tcc 6 N

-0

4

2

o

'82 '84 '86 'G8 '90

YEAR

'92 '94 '96 '98 2000

Figure 8 Hydroelectric

the two technologies, the thermal application has had early implementation right at the onset of the energy

crisis: precipitated by the oil embargo in 1973. Photovoltaic systems, on the other hand have been slow in

making their appearance in the island due primarily to their high capital cost and the fact that there are

really very few sites so isolated from the utility grid, that PV installations would be immediately cost

effective.

Residential solar water heaters, by virtue of their relative technical simplicity, potential for

local manufacture, and the high cost of electricity, have had a high degree of acceptance in Puerto Rico.

In view of the normally high tropical temperature ranges, extensive assessment of solar insolation on a site

specific basis has not been carried out. Data from the few metered sites and the generalized solar

insolation maps published by DOE and other institutions have provided sufficient information to design,

construct, and install solar water heaters up to the present time.

The more sophisticated area of solar thermal technology - the production of process hot water for

industrial use - has been relatively slow in being implemented. Only a few systems have actually been

designed and built and a much more thorough characterization of the solar insolation of the entire island

will be necessary before the technology gains wider acceptance by local industry.

The most recent review(8) of the assessment of solar insolation for Puerto Rico carried out by Lopez

(CEER) has described the instrumentation, the siting, and analyzed the available data. Figure 9 illustrates

the distribution of the instrumentation. Table 2 presents the average daily insolation measured at each

station taken between the last two and four years. Insolation in a monthly basis for a one year period for

six stations is shown in Figures 10 and 11.

Both solar pond technologies and photovoltaic applications are still in the early stages of being

considered for Island appl ica tion, while proposals are at present being evaluated, the consensus is that

much better site specific solar insolation data will be required in order to assure maximization of the

resource.

:L - 34
Figure 9 CEER Stations in Puerto Rico (Source: Dr. A. LOpez

and Dr. K. Soderstrom, CEER, 1982)

Table 2 Average Daily Insolation on a Horizontal Plane

Station Component Dates Insolation (.J 1m2 )

MAYAGUEZ Global Jan. 1976 - present 16.0

Diffuse June 1977 - present 6.9

Global June 1978 - prese;'\t 16.6

RIO PIEDRAS Diffuse July 1978 - present 7.7

PONCE Global March 1978 - present 19.3

Global July 1978 - June 1979 18.1

CATANO Diffuse July 1978 - June 1979 7.9

MAMTI Global Sept. 1979 - Feb. 1981 18.6

CABO ROJO Global April 1980 - present 19.9

Source: Dr. A. LOpez and Dr. K. Soderstrom, CEER. 1982.

a. Solar Hot Water Heaters

The use of solar hot water heaters in Puerto Rico, as an alternative to heating water with

electricity, is an alternative energy technology which is currently cost-effective, and which shows promise

to continue in this status for the rest of this century. Since 1976, the annual installation of units on

residences has steadily increased from about 2,000 units per year to an estimated 5,800 units per year in

1981 as shown on Table 3. There are presently about 17,000 units installed in the residential sector. If

the rate of installation is assumed to increase linearly to 12,000 per year in the year 2000, there will be

an estimated 187,737 units in place by that time, which represents about 23% of the estimated 800,000

residences which will exist in Puerto Rico at that time. A capacity factor of 0.50 is estimated.

It is assumed that each collector averages 40 sq. ft. in area, and that the average collector efficiency is 40%. It is further assumed that an average of 2000 Btu per sq. ft. pe~ day is available as solar

:t- 35
15

...

<

-J

o

IS

>- -J

- 5

c PONCE

A HAYAGUEZ

o RIO PIEDRAS

3 5 6 7 B 9 1" 11 12

MONTH

Figure 10 Average Daily Insolation on a Horizontal Plane vs. Month

N- 2l!l

s:

......

s:

-

z 15 0

...

<

...J

0

en IS z

c CATANO

>- oHANflTI ..I

-

< A CABO ROJO

Q S

1 3 s 6 7 e

MONTH

Figure 11 Average Daily Insolation on a Horizontal Plane vs. Month

(Source: Dr. A. LOpez and Dr. Soderstrom, CEER, 1982)
Table 3 Yearly Installation of Solar Water Heater in Puerto Rico

6,000 5,800

5,000

4,000

3,000

1976-78 1979 1980 1981

energy which may be collected. Consistent with these assumptions, a plausible commercialization curve for

this technology may then be produced. This curve is shown in Figure 12.

A Btu of energy which has been generated by an electric heating element, replaces 3.33 times as much

energy in the form of imported fuel if an overall conversion efficiency rate for electrical generation and

transmission for central fossil fueled power station is taken as 30%, and if it is assumed that the power

plant is operated with imported fossil fuel.

At a rate of 5.8 million Btu per barrel, it is possible to predict the barrels of imported oil which

may be saved by the predicted solar hot water heater commercialization. This has been done for this case,

and the results are as follows, in terms of fiscal years for the commercialization scenario described:

Year (FY) 80 81 82 84 85 86 88 90 95 2000

Millions 0.03 0.06 0.09 0.11 0.15 0.18 0.25 0.33 0.52 0.63

of BBls

of oil

savings

b. Solar Ponds And Industrial Process Heat

An additional alternative energy source with potential in Puerto Rico is the shallow salt-water pond

collector which produces hot water or electricity to replace imported oil which has been used for industrial

process heat or for generating electricity. In addition, focusing and flat plate collectors may also

contribute.

Solar ponds are state-of-the-art and are operating in Israel. The potential in Puerto Rico is

inhibited by land values, and by lack of level terrain. An assumed region one-half mile in width

I- 37
3

0:::

<:(

I.LJ

>- 2 0:::

W

0-

::::>

I-

<:0

.... '"

0

I

I I

I

! I

i

I

I

I

:

I

I

!

I ;

i : I

i

I

, I

I

- I ~I""""

i

I

-'

~~

I . I

- I I ; I

'82 '84 , 86 '38 '90

YEAR

'92 '94 '96 '93 2000

Figure 12 Solar Water Heating

surrounding the island, with 1% of this area, or one square mile in width surrounding the island, with 1% of

this area, or one square mile. being converted by solar pond would produce a usable heat energy of 2.85 x

10 12 Btu/year by the year 1995. A doubling of this figure, to account for the additional contribution from

other collectors, yields a usable heat of 5.7 x 1012 Btu/year by the year 1995.

A plot of the contribution from this resource is Btu per year is shown in Figure 13. The imported

oil which is replaced by this technology, under this commercialization scenario is the following:

Year (FY) 80 81 82 84 85 86 88 90 95 2000

~ill ions 0.00 0.00 0.00 0.05 0.05 0.08 0.21 0.40 1. 03 1. 19

of BBls

of oil

savings

c. Photovoltaics

Another promising energy alternative from a technological point of view is the use of photovoltaic

devices which generate electricity.

Photovoltaics is state-of-the-art technology, and has been used widely in space and remote

applications, where the economics have proved viable. Should the U. S. program cost goals be achieved (70

cents per peak watt by 1986) then wide-scale utilization of this technology could be expected. It is that

commercialization of this technology in Puerto Rico will be initiated in 1988, with its full potential of

2.69 x 1012 Bt u/ year being realized in the year 2000. As was the case wi th small wind systems, this

commercialization potential is highly dependent upon cost factors, an estimates could vary by an order of

magnitude.

:r: - 38
I

i

:

I

;

I

,

I

i

!

I

./ ;

v

I

i

-"V

-/

14

12

10

c:::

<C

La.J

>- 8 c:::

La.J

0-

Ia:l 6 N

-a

4

2

o

'82 '84 '86 '88 '90 '92

YEAR

'94 '96 '98 2000

Figure 13 Solar Ponds

In preparing the estimates for this technology, an assumed conversion efficiency of 11% was used for

an ultimate area of photovoltaic cells which was equal to an average of 200 sq. ft. per horne for 100,000

homes, at a capacity factor of 0.90. In addition, an 86% increase was allowed for industrial and commercial

applications.

The forecast for Btu output for this solar energy technology is shown in Figure 14.

The predictions for BBls of imported oil savings is the following:

Year (FY) 80 81 82 84 85 86 88 90 95 2000

Millions 0.00 0.00 0.00 0.00 0.00 0.00 0.66 0.20 1.26 1.55

of BBls

of oil

savings

2. Bioenergy Overview

Abundant rainfall, a high level of insolation, and a tropical climate provide the optimum condition

for the existence of a rich and varied biota in Puerto Rico. During the peak of its agricultural period the

Island was a primary producer of sugarcane and a wide variety of tropical fruits and vegetables. With the

onset of industrialization, however, agriculture declined as the economic and pol:Ltical emphasis shifted

towards the establishment of industrial complexes which were planned to enhance the economic level of the

population.

1- 39
3

-'"

o

~-l r

, I , I

I

i

i

""""" ~. ,/ i I

I

" ,

/ I

I

I :

I V

/ ,

! I

1//

i

I

'82 '84 '86 '88 '90

YEAR

'92 '94 '96 '98 2000

Figure 14 Photovoltaics

There still remains a fairly substantial agro-industry which produces enough organic matter, from

which a considerable amount of bioenergy could be derived. Using this waste material and planning future

agricultural projects specifically oriented towards energy production, could be a significant factor in

Puerto Rico's future energy scenario.

The bioenergy resource is quite diverse. Sugarcane and bagasse can provide fuel for direct

combustion' or, via various bioconversion technologies, liquid or gaseous fuels. Agro-industry wastes and

field residues can also be a source of fuel and animal waste and municipal garbage can be anaerobically

digested for small site specific energy resources.

The PROE has been able to do a limited amount of assessment of the resources (see Table 4) and has

funded a few small projects to assess and quantify specific agricultural and municipal waste sources. Plans

are presently being formulated for a full scale, island wide systems analysis effort which will integrate

bioenergy resources, institutional requirements and constraints, and the policies which can be promulgated

or revised to expedite the development of a viable bioenergy industry for the Island.

With an adequate assessment of the resource and its judicious development, a substantial potential

impact can be seen as the Puerto Rico energy scenario develops over the next decade.

a. Bioconversion

Bioconversion is a technology which can be best applied at agricultural farming facilities. It

serves both as a fuel producer (methane) and a waste management system for animal organic waste, derived

from dairy, chicken and hog farms. The products resulting from this system, are the biogas (composed of 60%

CH4)' a liquid effluent, and a sludge. The methane is a valuable fuel and both the liquid effluent and

sludge are sui table for fertilizing purposes. In utilizing a waste of this kind, which under normal

conditions is discarded haphazardly, and which can also cause contamination problems in the environment, we

can obtain a large amount of energy production with considerable economic value.

1"- - 40
Table 4 Estimated Potential of Currently Available Bioenergy Sources

-----------------------------------------------

Municipal Solid

Waste 1

RESOURCE

Residential &

Commercial at

Landfills

AMOUNT OF WASTE

1,510 Thousand ton/year

for 1980

POTENTIAL ENERGY (HEAT VALUE)

6,000 Btu/lb of dry solids

METHODOLOGY

Direct Combustion; methane

generation

Sewage Sludge 2 Waste water

treatment

47.82 dry TPD (Tons

Per Day)

Digested Primary

Sludge

7,600 Btu/lb

dry solids

Digested Primary & Secondary Sludge

8,550 Btu/lb

dry solids

Methane

Generation

H

.l:-

f-'

Slaughterhouse

Waste 3

Agricultural

Waste4- 5

Cattle &

Hog

Animal Waste

&

8,741 ton/year for '80

4,350 ton/day (liq. waste)

760 ton/day (dry waste)

for 1980 Animal Waste

3.85 x 1010 Btu year

3.01 x 1010 Btu/yr of liq. waste

5.27 x 109 Btu/yr of dry waste

Methane

Generation

Agriculture

Methane

Generation

Biomass

REFERENCES:

83-110 ton/acre/year 4.5 x 108 Btu/acre/year Direct

Combustion

1. Solid Waste Management Authority, Islandwide Resource Recovery Plan, Brown and Caldwell Assoc.

April 1982 - Preliminary copy.

2. Ibid

3. Ihid

4. Environmental Quality Ik>ard, Data on Agricultural Waste, 1930.

5. Alexander, Alex C., UPR/CEER, Rio Piedras, The Energy Cane Alternative - UPADI '82.
The advantage of using a bioconversion system on agricultural or animal facilities is that it can be

sized specifically for each individual project.

b. Methane From Animal Waste And Biomass

Anaerobic digestion of animal waste and biomass residues to produce methane gas which may be used to

replace imported fossil fuels in heating and power generation is an alternative energy technology which is

current state-of-the-art, small scale, and highly dispersed. It is difficult to estimate the potential, but

it appears to be at around 14.94 x 1012 Btu per year. A capture rate of 22% would thus yield about 2.63 x

1012 Btu per year by the year 2000 at a capacity factor of 0.80. A plot of this production rate is shown in

Figure 15. Because the methane that is produced would tend to be used in applications which directly

substitute for imported fossil fuel, the multiplication as far as savings in imported fuel is less than for

the solar hot water technology by about a factor of 3. The estimated savings in imported oil from this

commercialization scenario follows:

Year (FY) 80 81 82 84 85 86 88 90 95 2000

Millions 0.03 0.03 0.03 0.04 0.06 0.08 0.13 0.22 0.43 0.46

of BBls

of oil

savings

c. Biomass

Diversity of biomass resources for energy planning is extensive for regions that have tropical

agricultural capability. Such is the case for Puerto Rico. Terrestrial biomass forms include both woody

o

3

.....'-l

1-----+----

-

l

i

I

I

I

I

I

i

!

'82 '84 '86 '38 '90 '92

YEAR

'94 '96 '98 2000

Figure 15 Methane from Animal Waste

'I.- 42
and herbaceous species. Each group has members suited to intensive cropping, "conservation" cropping,

minimum tillage, and growth in the wild st;3.te. Added to this are the terrestrial aquatic plants (water

hyacinth, water lettuce, cattail, etc.) which have the ability to cleanse and beau·~ify the environment as

well as to produce biomass feedstocks. Other potential resources which have scarcely been examined are the

coastal aquatics and marine species. 1

Consideration of the potential utilization of sugar cane or related fibrou6 species of grasses as

biomass for the production of energy in Puerto Rico leads to the necessity of analyzing production and

conversion systems on a near and far term basis. 24

d. Electricity From Bagasse

The burning of bagasse in boilers to produce steam generated electricity is a form of alternative

energy which may be used to replace imported fossil fuels which are used to generate electricity. Currently

the burning of bagasse consumed 10 x 1012 Btu/year which is in the form of electricity and process heat. It

is estimated that 450 MW equivalent potential could be achieved by 1992. This converts to a total energy of

26.5 x 1012 Btu/year, or an electrical equivalent of 8.0 x 1012 Btu/year by 1994, ~t an assumed efficiency

of 30%. A plot of this production rate is shown in Figure 16.

Estimates of the contribution of this technology in savings of imported oil are the following:

Year (FY) 80 81 82 84 85 86 88 90 95 2000

Millions 1. 75 1.75 1. 75 1. 79 1.97 2.18 2.75 3.42 4.81 5.41

of BBls

of oil

savings

, I , I I , I

I

!

:

:

I

i

I

!

~L..--- ,

: I

// I , ,

;

!

I ,

/~ I

i

- , ; I

, I

!

,

i I I ,

I ,

14

12

10

a::

c:(

.....

>- 8 a::

.....

0-

=' Ic:l 6 N

0

4

2

U

'82 '84 , 86 '38 '90 '92

YEAR

'94 '96 '98 2000

Figure 16 Electricity from Bagasse

J. 43
The realization of this projection requires favorable agricultural policy, and a conscious decision

to divert land use to the production of sugar cane, and in this case the more prolific bagasse producer, or

"energy cane" would need to be implemented.

e. Solid Waste

Electricity that is generated from steam which is created by burning solid waste represnts an

alternative energy source.

It is estimated that in the city of San Juan, the first 20 MW increment of solid waste energy

conversion will be on-line by 1986. The introduction of additional units is under study at this time, and

it is estimated that the success of the San Juan facility will result in another 20 MW increment being added

by 1990. The Btu output of these facilities is plotted in Figure 17. If it is assumed that the electricity

produced by these plants replaces imported fossil fuel generated electricity, then a multiplication effect

occurs similar to that experienced for the case of solar water heaters. The resulting savings in imported

oil, consistent with this scenario, are the following:

Year (FY) 80 81 82 84 85 86 88 90 95 2000

Millions 0.00 0.00 0.00 0.00 0.00 0.31 0.31 0.65 0.92 1.24

of BBls

of oil

savings

3

0:::

c:(

2 0:::

I.LJ

c..

::>

I-

<:C

N

-a

I 1

I

I

j

!

;

;

I

I ;

I , I , i

I I

I I

'82 '84 '86 '88 '90

YEAR

'92 '94 '96 '98 2000

Figure 17 Electricity from Solid Waste

x- 44
f. Current Projects

Puerto Rico has an excellent biomass production potential which includes not only agricultural crops

and wastes but also human and industrial wastes. Therefore, any energy production from locally produced

renewable sources will not only benefi t the specific communi ty but also will enhance to economy of the

Island.

The following is a description of two on-going proj ects which fulfill some of the obj ectives stated

for the Bio-Energy Program.

°1. Systems Analysis and Design of an Energy

Integrated Tropical Dairy

Energy-integrated farming technologies are essentially needed in Puerto Rico. Significantly, the

development of alternative energy sources at the small farm level is an acceptable concept on the Island.

This year an important proj ect was initia ted involving sys tems analysis of an energy in tegrated farm

in Puerto Rico. Its objectives are:

• To design a safe and simple system of energy-integration technologies that will reduce

signficantly the farm's reliance on external feed and energy sources.

• To design an energy-integrated

environmentally-acceptable level.

system which will reduce farm wastes to an

• To perform a preliminary assessment of the system's technical and economic feasibility.

These approaches will be integrated into one facility for the production of energy from available

wastes, the collection and use of available solar and wind energy and the recycling of valuable waste

nutrients.

In addition to the proposed demonstration project which will produce ene::gy from animal wastes,

collateral benefits in terms of energy savings will also become apparent as noted below:

1. Energy requirements for waste disposal would be reduced.

2. Utilization of digested residue as a fertilizer will decrease the need for synthetic

fertilizer which requires a very energy intensive process to manufacture.

3. Use of the effluent as a growth

considered an energy conservation

requirements of the farm.

medium for algal

practice because

protein

of the

production can also be

decreased imported feed

Farming

Therefore, the

production and

technology in Puerto Rico and Third

success of the proposed project will not

conservation but also to other countries

World countries is not substantially different.

only be beneficial to Puerto Rico in terms of energy

with similar farm management practices.

2. A project which is expected to be initiated this fiscal year is a SysteJ15 Assessment of Biomass

Potential for the Production of Energy and Other Products in P.R. 9

The Commercialization of biomass as a potential energy source could prove to be an economically

viable venture. This project has as its goal to stimulate the private sector development of a commercially

viable biomass-to-energy industry on an accelerated basis. The following objectives are to be accomplished

by this assessment:

A. To compile, integrate and document previously developed Puerto Rican biomass resource

analyses.

B. To assess the market potential for biomass based energy products and by-products.

C. To identify commercially feasible conversion technologies.

1. 45
D. To assess the role of existing Puerto R1~an industry and infrastructure in the Program.

E. To integrate the social and economic needs and objectives of the Commonwealth into the

Program and estimate the potential impacts of the Program upon them.

F. To analyze,

opportunity

analysis.

via a systems approach, the options available and identify targets of high

for in-depth, commercialization evaluation and socio-economic impact

G. To provide the Commonwealth with an overview and perspective as to long-term direction

of a Biomass Commercialization Program.

H. To recommend Government policy options toward these target areas and biomass development

such that the commercial sector has a consistent framework within which investment

decisions can be made.

I. To recommend Government programs where necessary to stimulate rapid private sector

participation.

J. To develop specific recommendations for the performance of a Phase II Program

Development and a Phase III implementation.

These objectives are to be approached within a systems framework of resource-through-end-use wherein

the various system elements including land, labor, capital, management, environment, and other elements are

considered and the interaction of these elements with the available technologies and their marketable

products are evaluated with respect to optimizing the benefits to Puerto Rico.

An overall approach will be taken from a systems perspective, where to the extent possible, all

factors having an influence on resources-through-end use are integrated into an overall evaluation

framework.

Accomplishment of these objectives will provide not only an overview assessment of bionass potential

for Puerto Rico but also indicate specific near-term activities and longer-term policies which can be

inacted if desirable.

3. Co-Generation

Co-generation technology may be defined as mechanical devices which generate electrical energy at the

site of use, and which are designed to provide heat energy to other processes at the same time, thus

replacing imported fossil fuel which was formerly used for thes processes.

In 1981,

all commercial

Append ix II)

the PROE undertook a study to determine the overall theoretical co-generation potential of

and industrial consumers in Puerto Rico (Ref. Energy Research and Applications, Inc ••

The general approach was as follows:

• Establish listing of all electricity customers with annual consumption greater than

200,000 kwhr.

• To ascertain

requirements,

generate.

which

ratio

customers

of thermal

are

load

candidates for co-generation based upon thermal

to electric demand, potential power each could

• Enlist the services of experienced firm to conduct the analysis - Energy Research and

Applications, Inc.

A methodology was established which allowed systematic evaluation:

• Acquire a list of utility customers above a minimum size by kwhr/yr consumed (2,000,000

kwhr/yr) •

r-46
• Screen the list by SIC (Standard Industrial Classification), excluding operations

inherently unsuitable for co-generation retrofit.

• Acquire operating schedules, heat rate, temperature, and electricity consumption data

from representatives of the SIC's remaining on the list.

• Use the process description data to generate average co-generation potential (indexed by

average kw demand) for each SIC.

• From generic co-generation system costs develop SIC-Specific economic evaluations of cogeneration installations.

• Apply the results of SIC process and economic analyses to the screened list of PREPA

customers and calculate co-generation potential (kw) and simple payback (years) for each

power customer.

• Draw general

discussion of

units.

conclusions

incentives

about calculated

and deterrents to

potential. Qualify

the installation of

the results with a

actual co-generation

From this effort a final list of 788 were screened. Further analyses identified 347 potential cogenerators; 183 "Classical Co-generators" 56 "High Electricity Users" and 108 "Process Industries."

From this grouping, Energy Research and Associates estimates that approximately 473 MW co-generation

potential, now exists in Puerto Rico. Of this total, 150 MW is readily achievable, and could be put in

place by 1986. This represents 12.73 x 1012 Btu per year (energy equivalent of electricity generated at 90%

capacity factor). A plant efficiency of 60% is assumed.

The technology is current state-of-the-art. The rate at which the co-generation will be brought on

line is highly dependent upon institutional constraints and how the PURPA legislation is implemented with

respect to the tariff (stand-by and payback at avoided cost).

On the basis of these figures, a plausible commercialization curve for this technology may be

developed. This scenario is shown in Figure 18. If the Btu per year values are converted into BBls of oil

per year replacements as far as imported fuels are concerned, the increased in plant efficiency, over

conventional electricity generating methods, allows a credit to be realized. The following savings in

imported oil then results, consistent with the described scenario:

Year (FY) 80 81 82 84 85 86 88 90 95 2000

Millions 0.00 0.00 0.00 0.21 0.42 0.77 1.59 1.82 1.83 1.83

of BBls

of oil

savings

4. Ocean Thermal Energy Conversion (OTEC) Overview

Tapping the energy potential which exists in Puerto Rico's surrounding oceana is one of the long-term

obj ectives of the Island Energy Program. The OTEC technology which has been rapidly developing over the

last decade has raised the expectation for its commercial implementation during the latter part of this

Century. The Island energy interests (PREPA, CEER, and PROE, among others) have been very much involved

during the period in which the various proposals responding to the DOE Program Oppo~tunity Notice (PON) were

being developed.

The resultant loss of potential federal funding has constrained further active development of this

technology in Puerto Rico. The current plans of the PROE regarding OTEC is to continue monitoring

developments in the private sector until such a time, as potential commercial inte~ests can become actively

involved.

The resource itself, has been well researched and categorized. The critical criterium (Delta Y) has

been clearly defined and other parameters (site proximity to shore; near shore ocean dynamics; and

environmental considerations) have also been investigated and documentated. 13

1- 47
1

,

I

:

I

I ,

! v---

!

V -----VI I I I

30

0::

c:x:

w

>- 20 0::

w

a...

:::J

lcc

N

0

10

o

'82 '84 '86 '88 '90 '92

YEAR

'94 '96 '98 2000

Figure 18 Co-Generation

An extremely valuable component of the OTEC resource assessment was developed in Puerto Rico as a

result of a PROE-DOE cost shared project contracted to CEER for a study of the biofouling effect of tropical

marine organisms upon heat exchanger tubes.

Based on the results of a continuous experiment it appears that only slight differences exist between

aluminum and titanium heat exchanger tubes, with respect to their heat transfer loss resulting from exposure

to circulating sea water. It was also shown that biofouling was progressively more difficult to dislodge

later in the experiment. The information gained from this series of experiments provides valuable site

specific data in making future assessments of the OTEC resource for Puerto Rico.

Additional heat exchanger studies funded by NASA and the Kaiser Co. were directed at determining the

effect of the site specific corrosion differences between the materials intended for use in OTEC heat

exchangers. While this project was not specifically directed at resource assessment, the results will be

equally valuable as the various geographically dispersed potential OTEC sites are reviewed.

At the present time, Ocean Thermal Energy Conversion is yet to be proven as a viable cost-effective

energy producer. Further development must proceed, but it is assumed that 40 MW may be on-line by 1994,

with 80 additional MW being added in 1998, for a total electrical energy equivalent of 3.5 x 1012 Btu/year

by the year 2000, as shown in Figure 19.

The contribution in terms of savings of imported oil follows:

Year (FY) 80 81 82 84 85 86 88 90 95 2000

Millions 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.62 1.86

of BBls

of oil

savings

-;J:. - 48
3

0:::

c:(

I.LJ

>- 2 0:::

I.LJ

c..

le)

... '"

0

I

I

:

I

I

I

I ,

!

:

! : I

!

i I

I

!

i I

i

I

i

, , i I

'82 '84 '86 '88 '90

AREA

'92 '94 '96 '98 2000

Figure 19 Ocean Thermal Energy Conversion

J> 49
IV SUMMARY

A. ENERGY SELF-SUFFICIENT

The previously described technologies. together wi th others which remain to be identified, each

possess the capability of contributing technologically to a degree of energy self-sufficiency for Puerto

Rico, as far as freedom from dependency on imported oil is concerned. Although it is obvious that variations may exist in the degree and time at which each is commercialiled, a summation of the estimates of the

contribution does yield useful insights to the composite technological potentials of an alternative energy

program.

Figure 20 presents just such a summation for imported fossil fuels which are used in the electric

power generation sector, and Figure 21 presents a composite for total energy imports. It should be noted

that a 1.5% per year growth rate in energy consumption is assumed after 1985. This is an "assumed" value to

reflect economic growth; however, it could vary significantly, depending upon continued conservation

measures and economic policies adopted in future years.

If it is assumed that the forecasts made previously are achievable within all applicable socioeconomic and political constraints, then it may be said that a major degre of energy self-sufficiency for

Puerto Rico is an idea, whose achievement is definitely possible. As a matter of fact, it may be observed

that with the introduction of each new alternative energy technology, savings in imported oil tend to

accumulate wi th increasing rapidity. The degree to which this self-sufficiency is real1led is obviously

dependent on numerous economic and non-technological factors, but such a forecast prOVides an excellent

first step in the identification of the achievable. The technological forecasts on which this scenario has

been based have been intentionally pragmatic and conservative, but the results appear to be very promising.

Wi th sufficient incentives and technological breakthroughs, some of these proj ec tions could increase by

orders of magnitude, with the result of shortening the data to a more self-sufficient state as far as

imported energy is concerned.

30

0::

c(

UJ

>-

0::

UJ

0- 20

..J

-0

u..

0

II)

..J

a:l

a:l

10

0 10

r-t

NOTE AFTEF 1985 (ROHTH R~TE IS I\SSUMEtl AT 1. 5%

PR JEeTED ElECTR CAL ENf RGY IMP PRTS

WIT OUT Al ERNATt' ES

l,-----

-

t'...... .............I----

PR )JECTED ELECTR CAL EN RGY IMF I----I--

WIT ALTERr ATiVES I

--

------

'02 '84 '86 '88 '90

YEA R

'92 '94 '96 '98 , 2000

Figure 20 Composite of Electrical Energy Imports

:1-- 50
60

.....J

a

f'l3TE:Af TER l~ ~,- RA 1E IS AS ~DAT 1.5%

PROJECTEI TOTAL. Ef IERGY Ip.fl{ JUS

WITlOOT " LTERW\TI\ ES----, ------ - ----- '--- .-::t- -

PROJECTI

--

o TOTAL.

----Et£RGy 1Mpo~ Wlni AL ERNATIVE

20

.82 84 86 88 90

YEAR

92 94 96 98 2000

B. CONCLUSION

Figure 21 Co~posite of Total Energy Imports

The information and data presented reflect a first projection of what is technologically feasible and

has not been subjected to economic and social considerations and further policy studies.

Refinements in the resource potential for wind may indicate that only cert.ain areas of the Island

have wind speeds of sufficient magnitude and consistency to warrant deployment of wind machines. This

finding would resul t in a reduced proj ec tion of this technology's energy contribution. Similarly, further

analysis may indicate that land availability for "energy cane" production is limited and the initial

assumption will be modified to reflect the potential constribution of bagasse as a fuel.

The capital cost of some of the technologies may remain too intensive and never have an opportunity

to compete in the marketplace. An example of this is photovoltaics. The installed system's cost may never

achieve their cost goals. On the other hand, this particular technology could experience a technological

breakthrough in efficiency and cost and our first projections would have to be modified upward

significantly.

These examples are shown to indicate the fragility of technology forecast'lng and planning itself;

however, not to forecast and to plan is to leave the future unaffected; for the decisions made today

determine what path we take into the future.

It is our conclusion that the methodology and the modeling underway that considers all elements of

the economic, social and political systems will allow realistic achievable goals to be set and policies

adopted which will lead Puerto Rico to a more energy "self-sufficient" future, and it is to this end that

all of us are dedicated to serve.

::r. 51
V REFERENCES

1. Alexander, Alex G., The Energy Cane A~ternative, UPADI-1982, UPR CEER.

2. Brown and Caldwell Assoc., Solid Waste Management Authority, Island Wide Resource Recovery P~an, April

1982-preliminary copy.

3. Ibid.

4. Ibid.

5. CEER, UPR, Design, Constpuction and Demonstration of an Energy Integrated Dairy Farm, 1981.

6. Crowe, P. R., 1949. The Trade-Wind Circulation of the Wor~d, Transactions and Papers, Institute of

British Geographers, 15, 39-56.

7. Environmental Quality Board, Data on Agricultura~ Waste, Solid Waste Division, 1980.

8. LOpez Berrios, Angel, et. al. The Availabi~ity of Inso~ation in Puerto Rico, CEER, - UPR, 1982.

9. Mueller Associates, Inc., Proposa~ for a Systems Assessments of Biomass Potentia~ for the Production of

Energy and Other Products in P. R., October 1982.

10. Nieuwolt, S., 1977, Tropical Crimato~ogy: An Introduction to the C~imates of the Low Latitudes, John

Wiley & Sons, London, 207 pp.

11. Oficina de Energia, La Po~itica Energetica de Puerto Rico: Un Primer Paso, 144 pp.

12. Oficina de Energia, La Situacion Energetica de Puerto Rico en e~ Ano Fisca~ 1979, 324 pp.

13. Proposa~ for C~osed Cyc~e Ocean Therma~ Energy Conversion pilot PLan, Puerto Rico Electric Power

Authority (PREPA), San Juan, P. R., February 27, 1981.

14. Biofou~ing, Corrosion, and Materia~s Study from a Moored P~atform at Punta TUna, Puerto Rico, Project

80-1 Puerto Rico Office of Energy Jointly Funded by U.S. DOE; Contractor, Center for Energy and

Environment Research University of Puerto Rico; Final Report April 2, 1981.

15. Puerto Rico Office of Energy, Energy ConsWTlption in Puerto Rico:

Prospects, June 1982. Contractor, Jorge Freyre.

Recent Development and Short-Run

16. Puerto Rico Office of Energy, Projections of the Puerto Rican Econorrr;j:

Contractor, Jorge Freyre.

Fisca~ Years 1982 to 1984,

17. C~osed Cyc~e Ocean Therma~ Energy Conversion Pi~ot P~ant, Ocean Solar Energy Associates (OSEA):

Submitted by Sea Solar Power, York, PA; February 27, 1981.

18. Sasscer, Donald S., et al., In Situ Seawater Corrosion of Bare, Diffusion Zinc Tread and A~c~ad Aluminum

Heat Exchanger Materials, Oceans '82 Conference Record Washington, D.C., September 20-22, 1982.

19. U.S. Dept. of Commerce, Economic Study of Puerto Rico, Vol. II, Dec. 1979, 492-518 pp.

20. Ocean Therma~ Energy Conversion Fi"la~ Environmenta~ Impact Statement, U. S. Dept. of Commerce, NOAA,

Office of Ocean Minerals to Energy, Washington, D.C., July 1981.

21. Program Opportunity Notice for C~osed Cyc~e Ocean Therma~ Energy Conversion Pilot Plant, Solicitation

#DE-PNOI-80CS8000, U.S. Dept. of Energy, Office of Procurement Operations, Washington. D.C., September

22, 1980.

22. Wegley, H., J. Ramsdell, M. Orgill, and R. Drake, 1980, A Siting Handbook for Small Wind Energy

Conversion Systems, PNL-2521 Rev 1, Pacific Northwest Laboratory, Richland, Washington.

"I._ 52
23. Wegley, H.L., D.L. Elliott, W.R. Barchet, and R.L.

Puerto Rico and U.S. Virgin IsLands, PNL-3195

Washington, 83 pp.

George,

WERA-12,

1981, Wind Energy Resource Atlas: VoL 12-

Pacific Northwest Laboratory, Richland,

24. Werner, Edgar, Fiber as an Energy Resource: Short and Long-term OutLook.

T- 53

PHASE II

TERRITORIAL ENERGY ASSESSMENT

FUR

THE UNITED STATES VIRGIN ISLANDS

Prepared by

Royal Energy Management

as part of a contract with

The Virgin Islands Energy Office

Frederiksted, St. Croix, and

Charlotte Amalie, St. Thomas

and The Department of J::nergy

Savannah River Operations Office

Preceding page blank 1-55
ENERGYOFFICE

47A Mars Hill

St. Croix

U.S. Virgin Islands

00840

Phone: (809) 772-2616

November 5, 1982

Mr. William Rankin

Project Officer

U.S. Department of Energy Savannah River Operations Office

Box A

Aiken, South Carolina

Dear Mr. Rankin :

Pursuant to our application for federal assistance

for a Territorial Energy Assessment Program, enclosed

you will find a final submission of the Phase II

Assessment Plan.

The Document is open for your review and comment.

do hope that the short time frame allowed for the

development of this plan has not taken away from its

thoroughness or feasibility.

I look forward to hearing from you soon. Should any questions arise, please do not hesitate to contact me.

Sincerely,

~~C},

John Abramson, Jr

Energy Director

cc: M.C. Kirkland

Walter Butler

Enclosures

OFFICE OF THE GOVERNOR

:t -56
TABLE OF CONTENTS

INTRODUCTION ...

MAJOR CONCLUSIONS

THE UNITED STATES VIRGIN ISLANDS.

ENERGY CONSUMPTION .

ALTERNATE ENERGY TECHNOLOGIES

Ocean Thermal Energy Conversion.

Biomass.

Variable Sources . .

Wind .

Solar Thermal Energy Conversion.

Photovoltaics....

Hydroelectric Power.

Pumped Hydro Storage

Nuclear Power ...

Electric Vehicles.

Solar Ponds.

Coal ....

ENERGY CONSERVATION

UTILITY ASSESSMENT.

:I _57

59

59

60

62

62

64

64

64

65

65

66

66

66

66

66

67

67

67

69

INTRODUCfION

The United States Virgin Islands has a generous endowment of indigenous, renewable energy resources

which could help to alleviate our almost total dependence on imported petroleum. With 9Y% of its energy

derived from imported oil - most of that from foreign sources - the Virgin Islands is highly vulnerable to

the full impacts of rising oil prices and the growing risk of supply interruptions. This study addresses

the questions of how, when, and to what extent wind, solar, ocean thermal and biomass energy resources can

be harnessed to displace oil during the next 25 years.

Projections of the means by which our future energy demands can be met will be based on evaluations

of technologies considered appropriate to the Vi rgin Islands, est imates of their flit ure costs, and directly

relevant projected economic parameters. Environmental impacts, institutional structures, the relevant body

of laws and regulations, and social attitudes that may affect resource development were also taken into

account.

Three energy demand-supply projections are possible to quantify the transiti.on to the commercial use

of indigenous resources. Energy Projections 1 and 2 will take form partly in response to an average 3% per

year increase, over inflation, in the price of oil. Projection 2, however, will incorporate improvements in

end-use energy efficiency and conservation beyond those induced by oil price alon':. Projection 3 will be

shaped by a high rate of increase in world oil price - 10% per year over inflation. While a sustained price

escalation at this rate would be severely disruptive to society as a whole, it serves the purpose of

providing perspective on the sensitivity of a transition to indigenous resources attributable to oil price

alone.

This analysis excludes petroleum product s refined in and exported from the V:lrgin Islands by Hess Oil

Corporat ion on St. Croix, although energy consumed by the refinery operations are included in our energy

consumption figures.

When we provide an approach to integrated energy analysis for the Virgin Islands, this assessment

will offer a model for decision-makers in the Territory who must plan to meet the needs for energy in a time

of possible short supply and high oil prices. This report is intended to help us plan conversion to

available resources without relying entirely on one technology or one source of en,:rgy. Only after all the

feasible options have been examined can a reasonable emphasis be placed on those most likely to meet our

energy needs. Future events will certainly alter specific details, but the method of analysis used in this

study is highly adaptable and should give de cision-makers a basis for flexible response to changing

circumstance s.

MAJOR CONCLUSIONS

1. Electricity. By the year 2005, the Virgin Islands could produce as much as 80% of its

electricity with indigenous, renewable resources. Economic analysis shows that these

resources could compete favorably under a wide range of oil prices and levels of energy

conservation. The rate at which indigenous resources can be exploited depends more on

the rate of technological development and the availability of capital than on oil

price. If oil prices continue to rise, the use of renewable resources for electricity

generation would help stabilize electricity prices.

2. Liquid Fuels. The prospects are less bright for liquid fuels, which represent about 40%

of all the energy used in the Territory. This is largely because there is no indigenous

substitute for the large amounts of diesel fuel consumed by Hess Oil and Martin ~arietta

Aluminum on St. Croix. At least 10% of the gasoline consumed could be replaced by

liquid fuels produced from b.iomass, making it possible for all vehicles in the Territory

to run on a 10% alcohol/90% gasoline mixture. Little liquid fuel should be needed to

generate electricity in 2005.

3. Undersea Cable. A submarine transmission cable is critical to the energy future of the

Virgin Islands. Two-thirds of the land mass on the island of St. John is designated as

Park area by the Department of Interior. This would .• restrict the amount of land

available for alternate energy development on that island, and its electric power might

have to be continually supplied from St. Thomas power stations by undersea cable.

Preceding page blank"- :r- 59
4. Economic Impacts. Replacing imported petroleum with indigenous energy sources would

have a benefici al ef feet on our economy. Over the next 25 years, the use of renewables

could save the Territory be-tween $50 and. $120 million, depending on the price of oil.

Constructing new energy facilities would not have a major economic impact on the

Territory, but the Water and Power Authority would encounter financing C1ifficulties

during the peak construction period unless present financing rules and practices were

modified.

5. Conservation. Energy conservation could lead to substantial reductions in electricity

and ga soline consumpt ion. Improved appliance a nd building efficiencies and the use of

heat pumps and solar water heaters could cut electricity use by 25%.

6. If plans to use domestic coal were made immediately, the Virgin Islands could be

released from its dependence on imported foreign oil sooner than it would if we waited

for renewables to reach mat urity. The use of coal would pose environment al problems,

particularly with air pollution and solid waste disposal. Complete loading facilities

with crusher and conveyor would have to be constructed.

7. Public Opinion. Virgin Islands residents consider energy costs to be a major

contributor to the high cost of living in the Territory. Consumers know less about

energy and uses and will not necessarily place energy savings above convenience in

purchasi ng new cars and appliance s. Increasi ng ene rgy costs seem to af fect energy use

patterns more than a desire to conserve. Strategies for increased public support of

conservation programs include strengthening public information programs, providing

accurate and timely information on proposed projects, and making energy data more

readily available to consumers.

THE UNITED STATES VIRGI~ ISLANDS

The Virgin Islands population of approximately 120,000 people is distributed among three islands, St.

Thomas, St. Croix, and St. John. These are separated by ocean channels of 7 to 40 miles wide. The three

islands are divided into two political districts (St. Thomas-St. John and St. CroiX) with each having its

own electrical supply system. St. John's electrical power is supplied by undersea cable from St. Thomas,

but it has an emergency diesel generator for stand-by power.

Located on the island of St. Croix is the third largest oil refinery in the world (capacity:

approximately 750,000 bbls crude oil per day) yet, residents of this Territory itself purchase gasoline fuel

at the pumps at much higher prices ($1.60 per gal.) than on the United States mainland. The large quantity

of crude oil imported does not necessarily signify a large supply of fuel available to motorists and other

consumers, since most of the refined produce is "exported" to the United States mainland for sale. The only

advantage derived from having a "local" refinery is that fuel is more readily available than it would be if

it had to be brought in from any other part of the country thereby eliminating problems of transportation.

The distributors of fuel in the Territory are the same major distributors as on the United States

mainland, ESSO, Shell, and Texaco, all of whom purchase fuel from the Hess Oil Refinery on St. Croix. The

Hess refinery is also a major distributor of diesel fuel - supplying diesel directly to various industrial

units like the Cruzan and Brugal Rum Distilleries, some construction companies, the V. 1. Water and Power

Authority, and Martin ~~rietta Alumina.

Energy supply and demand systems are complex and do not lend themselves readily to prompt, precise

reporting. For the present purpose, however, the most recent, highly detailed data available for the Virgin

Islands which are for 197~, 79 and ~O are adequate to characterize trends in recent energy demana.

Figure 1 shows the relative proportions of major liquid fuels and electricity consumption in the

Virgin Islands and, for comparison, the ~,ation in 1977. It is evident that an important feature of our

energy picture is the large proportion of energy used for industrial processes by Hess Oil and Martin

Marietta Aluminum which accounts for approximately 90% of our total energy consumption. The energy used in

the form of electricity is particularly significant because electricity generation possesses the greatest

potential for a major shift from oil to indigenous resources. Electricity represents about 65% of our total

energy use, yet, it accounts for 25% of the total demand for oil. The Virgin Islands uses less energy per

capita than the country as a whole because it has little heavy industry and no space heating.

I- 60
Diesel 20%

Gasoline 4.8%

Propane Gas 0.4%

Diesel 24%

(b)

Gasoline 4.5%

Propane Gas 0.4%

Diesel 28%

Aviation Fuel 2.5%

Residual

4.-5%

(c)

I\viation Fue12.2~~

Gasoline 4.4%

Propane

Gas 0.5%

Fig. 1 Energy Consumption by Energy Type United States Virgin Islands:

(a) 1978, (b) 1979, (c) 1980, and (d) 1977 U.S. Mainland

The demand for diesel fuel, residual oil and gas has increased about 5% per year since the Arab oil

embargo of 1973. In contrast, sales of electricity and gasoline have remained fairly stable since 1973.

Gasoline now represents about 5;' of the Territory's energy consumption, which is a 2% decrease from 1Y78.

Among data that have been assembled on end uses of energy, those compiled by the Virgin Islands

Energy Office afford the most detailed scenario. In general, however, highly detailed data on energy end

I 61
use have not been collected. Such information will be essential for evaluating specific opportunities for

energy savings and creating effective energy conservation and end-use efficiency programs.

ENERGY CONSUMPTION

The major form of energy that is utilized by residents in the United States Virgin Islands is

electrical energy. This is produced almost exclusively by oil-fired generators using three different types

of diesel fuel which are obtained from Hess Oil Virgin Islands Corporation on St. Croix. In 197~,

approximately 68 Quads of energy were consumed in this Territory with an average 4 Quads per year increase

in 1979 and 1980. Electricity accounted for 72% of total energy consumption in 1978 but fell off to 6b% and

65% respectively in 1979 and 1980. The second major energy form utilized in the Virgin Islands was the

chemical energy found in diesel fuel. This source contributed £0% of our energy needs with a 4% increase

per year through 1979 and 1980. Gasoline consumption remained virtually constant (4.5%, 2M gallons per

month) during the same period, inspite of an increase in population and the number of automobiles. We

believe that this is a result of a switch to more fuel-efficient small cars as the price of gasoline jumped

from approximately $.75 per gallon to $1.30 per gallon.

Propane gas, which is used mainly for cooking, remained at the 0.4% level of total energy consumption

during this period. Aviation fuel was at the 3% level for 1978 and 1979 but fell to approximately 2.2% in

1980, reflecting the reduction in the number of inter-island flights and flights to the United States

mainland caused by increased airfares.

ALTERNATE ENERGY TECHNOLOGIES

The alternate energy technologies discussed in this study rely on resources indigenous to the Virgin

Islands and they are expected to be ready for large-scale commercial use, primarily to generate electricity,

in the next 25 years. The selection process took into account the present state of development of the

technologies, projections of their technical and economic feasibility, and potential environmental, social

and institutional constraints on their development.

Table 1 Energy Consumption Statistics for the United States Virgin Islands

Energy Consumption Total (In Gals. Except kWh for Electricity)

Source 1978 1979 1980

Amt. Btu Amt Btu Amt Btu

(x106 ) xlO 12 % (xI0~) (xl0 12 ) % (xlO~ ) (xlO 12 ) %

Diesel Fuel 110.00 13.8 20.0 141.00 17.6 24.0 17.3 21.60 28.0

Gasoline 25.40 3.3 4.8 25.60 3.3 4.5 25.9 3.40 4.4

Propane Gas 3.22 0.3 0.4 3.59 0.3 0.4 4.0 0.37 0.5

Jet Fuel 13.00 1.7 2.5 14.20 1.9 2.6 11.1 1.40 1.8

Aviation Gas 2.40 0.3 0.4 2.38 0.3 0.4 2.2 0.3 0.4

Electricity 439.00 49.0 72.0 445.00 49.6 68.0 443.0 49.40 65.0

Total 68.4 100.1 73.0 99.90 76.50 100.1

Conversion Factors: Diesel - 125,000 Btu/Gal, Gasoline - 130,000 Btu/Gal, Propane - 92,000 Btu/Gal.

~el - 130,000 Btu/Gal, Aviation Gas - 130,500 Btu Gal.

Electricity - 11,150 Btu/kWh

Does not include figures from Hess Oil and Martin Marietta who generate their own electricity •

.I - 62
None of the technologies has had significant commercial operating experience i.n the Virgin Islands to

date. Expert estimates of capital and operating costs and rates of commercial penetration therefore differ,

sometimes widely. In recognition of a tendency to underestimate costs and development times, the estimates

used in this study are not the most optimi.stic. Table 2 lists the alternate technologies that can be

expected to contribute to our electri~ty supply during the next 25 years. All costs are expressed in 19BO

dollars.

Among potential changes in the end uses of energy, only the electric vehicle and solar water heating

were considered. Other end uses are amenable to improved efficiency and conservation without major shifts

in technology.

Our land area is limited and each of the renewable energy technologi.es has huge land use

requirements. Planning for a transition to renewables should include an extensive land use survey to

identify the best sites for power plants fueled by indigenous renewable resources. Location of the resource

will have to be considered in the context of present land use patterns and laws, land costs, expected trends

in population growth, the presence of other energy sources and environmental impacts..

All of the alternate energy technologies likely to be utilized will need some government backing to

carry them to full implementation. All will have some environmental and social impacts. Construction

always involves considerable site disturbance and noise; increased transportation, especially trucking; and

Table 2 Alternate Energy Technologies

When Commer- Suitable for Capital

ci ali zat ion Base, Inter- Cost/KW

Expected in mediate or 1980 Assumed Maximllm Resources

Technology Virgin Islands Peak Load (1980 $) Potential in 2005

OTEC Mid term Base 8,000 10 MW for St. Croix Grid

Wind Near term Intermediate 2.500 5 MW for each of the two Grids

Biomass Near term Peak 1.500 2 MW for St. Croix Grid

Resource

Recovery Mid term Intermediate 1,200 5 MW each for St. Thomas/St. John -

St. Croix Grids

STEC Mid term Intermediate 3,000 5 MW for each Grid

l'hot ovolt aics Long term Intermediate 18,000 6 ~lW for each Grid

Hydroelectric Near term Peak 800 2 MW for each Grid

Pumped

Storage Mid term Peak 1,000 4 MW potenti.al for each Grid

Submarine Near term Not BOO No t heoret ical limit; to be used to

High Vol- Applicable t ransmi t pow·er from island to

tage DC island

Transmission

Cable

aNear term, present to 1985; mid term 1985-1995; long term 1995-2005 or later.

bBaseload power sources run 24 hours a day, intermediate load, 17 hours a day, and peak load 2 to 3 hours.

Wind, hydroelectric power, biomass, and its subset municipal solid waste, can power baseload facilities

only when supplies are uninterrupted by seasonal or daily variatiops.

cSTEC - High Temperature Solar Systems

OTEC - Ocean Thermal Systems

I- 63
often the creation of new access roads. Even when the final plant is relatively inoffensive, access roads

will remain and transmission lines will become a new feature of the landscape.

Ocean Thermal Energy Conversion

Ocean Thermal Energy Conversion (OTEC) is an emerging technology well suited for the Virgin Islands

because of our warm outdoor temperature year-round and our ocean shelf near to shore. OTEC taps the large

energy potential created by the temperature difference between sun-warmed surface water and cold deep ocean

waters to generate electricity. Theoretically, the resource is virtually infinite. Just off the north

shore of St. Croix, the sea floor rapidly descends to the required depth to meet the projected demand for an

OTEC plant site.

In the past two years, research on Mini-OTEC, Hawaii's 50 KW experimental platform, has shown that

OTEC is technically feasible. Commercial scale components still need to be developed, and the economic

feasibility of the system must be demonstrated. If the existing federally-funded programs are continued,

OTEC should be carried through the complete research, development and demonstration cycle by the early

1990s.

The design of several major OTEC plant components is not final, and therefore all capital cost

figures for commercial scale plants are speculative. However, OTEC is expensive because its extremely low

(average 3%) thermodynamic efficiency necessitates very large water flows and huge heat exchangers.

Bio-fouling of the components necessitate the use of special construction materials and cleaning

resulting in high material and operating costs. Present estimates place capital costs at about $8,OOO/KW of

capacity for prototype plants. Operating costs are expected to be in the neighborhood of 5 mills/KWh,

compared to 2 mills/KWh for the other renewable technologies.

The major visual impact of OTEC development will take place where the cable from a plant comes

onshore, although some plants may be visible from the shore. The magnitude of orEC development planned for

the Virgin Islands is expected to have little or no negative impact on marine life.

Biomass

Fuels can be derived from several types of biomass resources; organic wastes of many kinds,

agricultural residues, and crops grown specifically for their energy-producing potential. Because the exact

nature of the biomass used determines the conversion technology, it is difficult to generalize about the

costs of biomass energy technologies or the environmental problems associated with them, but combustion

usually produces air pollution and solid waste problems, and fermentation can add water pollution to the

list of problems to be solved.

Bagasse (a fibrous sugarcane residue), wood chips, and coconut shells can be

steam plants to generate about 5% of the electricity consumed in the Virgin Islands.

plans 5 MW of generating capacity to be fired by municipal solid waste.

burned in conventional

The Virgin Islands now

With government subsidies, successful cultivation of 2,000 acres of land in St. Croix could produce

enough bagasse to generate up to 10% of our total electricity by 2005. It would require 6,OUO to 7,00U

acres of sugarcane to fuel a 10 MW power plant, if one assumes a 2-year cutting cycle, which means that 300

to 350 acres would be harvested each year.

Biomass could also supply 10% of our liquid fuel needs by 2005 if feedstocks were available. Barring

the collapse of the international sugar market, molasses will be the most readily available feedstock for

producing alcohol over the next decade or 50. Cane trash, wood, and other cellulose materials could be

processed into ethanol or methanol, but they are most economically used in direct combustion as boiler

fuels. Because biomass resources are valuable for many uses, it would take a drastic shift in market values

or government incentives to redirect potential biomass resources in the Virgin Islands to an energyproduci ng program.

Variable Sources

Some of the most promising sites in the world for implementing solar technologies are found in the

Virgin Islands. However, solar technologies, with the exception of OTEC, are intermittent power sources.

J. - 64
Their output varies with the sunlight, or wind velocity and peak power does not often correspond with peak

demand. Present energy storage technology is not yet adequate to allow the Virgin Islands to meet its

electricity needs with intermittent sources alone. Potential pumped hydro-storage sites are not numerous,

large or fortuitously sited enough to make a significant contribution to our energy picture. Lead-acid

batteries remain the only potentially suitable storage in the near future, but at a first cost of $125/KWh

they are prohibitively expensive except possibly for short-term storage. Advan-::ed batteries and other

storage systems such as molten salts may become feasible by the end of the century" However, even without

storage, wind is already competitive with oil, and other intermittent energy sources will become so later in

the century.

Wind

Wind generators could contribute significantly to our electricity supply in the next 25 years. ~any

excellent wind power sites have been identified and the technology is advanced enough to be practical and

economical.

Wind generators are modular rnd

production can be realized by increments

years for conventional oil-fired plants.

do not require a Territory wide grid.

adaptable to add-on capacity. Installation and electricity

and with a lead time of only 2 or 3 years, compared to 8 to lZ

In addition, wind generators can be installed on each island and

The major problem with wi'ld power is that the source cannot be controlled or matched to load

requirements. Utilities have had little experience with long-term, large-scale, grid-connected wind

generation, and problems with grid operation and reliability will arise. As a result, most utility system

planners hold that wind should not represent more than 20% of installed generatj,ng capacity. This study

projects 10 MW of wind generation for each of the two electric grids in the Virgin Islands.

Current costs for wind generators are about $2,500/KW but by 2005, costs are expected to drop to

S700/KW. This would make wind highly competitive with other indigenous energy sour~es.

Wind energy appears to have minor environmental impact. Bird kills, insect kills, and climate

modifications will be expected. The generators require land and emit low-level noise. Safety could be a

problem with wind machines that are located near population centers. Visual impacts will be present unless

remote siting in the ~ational Park on St. John, neighboring uninhabited islands or on larger St. Croix is

ut ilized.

Solar Thermal Energy Conversion

Solar thermal energy conversion (ST£C) uses mirrors, lenses, and other focusing devices to

concentrate solar energy to produce high heat which can then be used to produce industrial process steam.

The most likely near-term use for STEC in the Virgin Islands is powering of steam generators and Absorbtion

Chillers, augmenting or even substituting for oil as the energy source to produce electricity or solar

cooling. One study places STEC's entry into commercial electricity generation neal' the end of the century.

It is difficult to make overall cost estimates for STEC. Efficiency of conversion is highly

variable, depending upon the design of the heliostat system, receiver system and generators used. In

addition, there is no commercial production of STEC components at the moment, and prototype plant costs

include research and development.

Molten salt storage for heat rather than electricity is often mentioned in connection with Rankinecycle STEC. The main problems with this type of storage appear to be economic rather than technical.

A major limitation for STEG use in the Virgin Islands is the need for sufficient amounts of suitable

land at affordable prices. STEC requires two square miles of land for each 100 MW of capacity. Potential

solar sites for these large-scale generating facilities could be found on the island of St. Croix, but a

survey and feasibility study including site-specific insolation measurements is needed.

Some proposed high temperature fluids for heat storage and heat exchange are toxic and could cause

injury or fire in the case of accidental release. If solar radiation from the collectors were misdirected,

it could also cause serious injury and fires.

T.- 65
Phot ovo It ai cs

Photovoltaic (PV) power systems use solid-state semiconductors which convert solar radiation directly

into electricity. PV's are reliable, but because of their high cost they have been used only in remote offgrid, installations. PV's are used to power distant weather stations, seismic monitoring equipment, space

craft, and satellites.

Nearly all of the photovoltaic devices produced to date have employed very thin (200 to 250 cicron)

slices of purified, single crystal silicon. They display a conversion efficiency of 10% to 14% and last

about 10 years. Further research is expected to raise conversion efficiencies to Hl% and to double the

Iifetime of the cells.

High production costs of silicon solar cells have led to research on other semiconductor materials.

The technology is evolving rapidly, and while current capital costs can be set as high as $18,OOO/KW, it is

expected that by 2005 costs will drop to $2,600/KW.

In the meantime, photovoltaic power systems may be used to power drip and trickle irrigation systems

in the 1980s. This could find use in the Virgin Islands where electricity costs are high. Grid-connected

photovoltaic power systems may be competitive with conventional electric generation by 1990 in isolated

areas that now rely on costly diesel fuel. The Virgin Islands which has small, high-cost power grids is a

prime candidate for photovoltaic applications.

New toxic semiconductor materials will lead to health hazards in manufacturing and end-use. Land

requirements for central station receivers are expected to be similar to those for solar thermal power:

about two square miles per 100 MW of capacity.

Hydro-Electric Power

There are a few potential hydropower sites which are undeveloped, and and are found on St. Thomas and

St. Croix. These are mainly old and poorly developed dam-sites whose potential vary with seasonal

rainfall. There are no natural rivers or large waterfalls for exploitation. A complete feasibility study

will have to be undertaken to evaluate the potential of this technology in the Virgin Islands.

Pumped Hydro-Storage

St. Thomas would appear to be an ideal place for pumped storage for peaking power because it has high

elevation regions suitable for storage and an ocean nearby. However, if salt water were used, potential

problems of salt water intrusion into the fresh water system would reduce the attractiveness of this

resource. Despite the existence of promising sites, pumped storage is not expected to occupy a significant

place in our future electricity supply system because of frequent power outages and problems meeting peak

demand.

Nuclear Power

The only nuclear reactors now available are in the 1,000 MW range, and small reactors will probably

not be available in the United States for at least 15 years or longer. Several European corporations have

plans to develop small reactors, but their production will depend largely on the development of a market for

them in the third world, and the growth of this market is uncertain.

It should be particularly noted that a climate of acceptance for nuclear energy does not prevail in

t he Virgin Islands. Surmounting polit ical, regula tory and soci al barriers, plus our lack of technical

personnel could consume much of the next five decades. Most importantly, the smallest proposed Nuclear

Power Plant(200 MW) already exceeds by far all current and projected requirements of our electric grid.

Electric Vehicles

Since 100% of our electricity is still generated by oil-fired power plants, electric vehicles would

use petroleum indirectly, and use it less efficiently than gasoline-powered cars. If alternate energy

technologies begin to supply most of our electricity in the 19905 and the current high cost is reduced in

I-66
1990 dollars, electric vehicles could reduce oil demand. However, their effect on a subsequent increase in

oil-fired peaking power would have to be taken into account.

A second level of problems results from the inadequacies of present batteries. Today's lead-acid

battery has 1/1000 the specific energy (Watt-hours/kilogram) of gasoline. State-of-the-art electric

vehicles have a range of about 50 miles, and they do not perform well on hilly terrain, common on St. Thomas

and St. John. They are small but heavy and cost more than conventional cars.

Once battery technology is advanced enough to make electric vehicles feasible, they might find use in

the Virgin Islands because of our short distances travelled. It would take ove;~ five years before enough

EV's would be in use to affect oil consumption. In addition, all facilities for repair and maintenance, as

well as for recharging, will have to be developed.

Sola r Ponds

A solar pond is a body of still water that absorbs solar radiation and stores it as thermal energy.

This thermal energy can then be used for a variety of purposes including electric power generation and

industrial process heating.

If a salt concentration gradient can be maintained between surface and de€:p water, a pond becomes an

efficient solar collector. The gradient at the Salton Sea Project, California is maintained by washing the

surface with low-salinity water from the sea adjacent to the pond and pumping concentrated brine through a

horizontal diffuser submerged near the pond bottom.

The upper layer collects and the lower layer of the pond stores solar energy with temperatures

approachi ng 90°C (194 OF) or mor e. Evaporat ion cools the upper layer of the pon:i so that it se rves as the

power plant cooling medium and eliminates the need for cooling towers.

The complete system shown in Fig. 2 acquires a more efficient temperature difference than OTEC

systems.

Through a heat exchange process in a closed Rankine Cycle system simile.r to OTEC, electricity is

produced. Organic solvents such as Toluene and Carbon Tetrachloride are used as the working fluid instead

of Ammonia.

Although there are several natural salt ponds in the Virgin Islands, and cost of electricity produced

by this technology is low (8-9~/kwh), our limited land mass and inclement weather would seriously hinder the

development of this concept in the Territory.

Coal

Coal could offer an economically attractive, lower risk alternative to oil. Conventional coal

handling and burning technology is well established, and ample coal is available from the United States and

foreign sources.

However, for small utilities such as the Water and Power Authority here tn the United States Virgin

Islands, coal-fired generation will be difficult. The delivered price of coal has become volatile; and

capital investment in new conveyors, crushers, storage bins and ash removal systems by WAPA might be

prohibitive. Martin Marietta Co. on St. Croix has begun construction of a 15 MW coal-fired plant, but plan

to use some of their bauxite hanaling facilities for the coal.

The use of coal in the Virgin Islands would present difficult air plus water pollution and solid

waste problems. Coal-fired power plants would face some public disapproval and resistance from the tourist

industry, which depends on our unique environment. Compliance with emission standards might be difficult to

achieve at acceptable costs, and the disposal of ash and sludge would be a particularly demanding problem to

solve. Coal, like oil, is not a renewable resource, and it too must be imported.

ENERGY CONSERVATION

Virgin Islands energy consumers are far more responsive to high electricity prices (l8~/Kwh) and

gasoline prices ($1.60/gal) than to any other conservation pressure. The potential for conserving energy in

the Territory must be assessed in terms of our unique energy use pattern. Unlike the rest of the Nation, we

-r - 67
Condenser

0 ," '\' ",-" \ ,\ ",-"

" \ \ \ "-

\ \ "-

\ \ \ "'- "

\ \ '\ " \

\ "-

'\ \ \

" , \ \

"

\ "'- , Low Salt Content Cool Water

(Lightier Layer Floats on Top) '\

High Salt Content Hot Water

Heavier Layer Sinks 10 Bonom

'". ~~._: .:..:.:.: .. " .. ,:. :::",." :::".".: ':.:.::, .~ .;:~:.:

: Dark Heet Absorbing Bonom

Cold Water 6

Hot

Water Organic Working Fluid

Evaporation Boiler

Land Surface

Electricity

Pump

fig. 2 Solar Pond Generating Concept

use no energy for space heating, and except for the Hess Oil Kefinery and Martin Marietta Aluminum Co., we

have very little energy-intensive industry.

The Virgin Islands' major conservation savings could be realized in the realms of electricity

consumption (65% of total energy use now) and civilian ground transportation (5%). The coQbined effects of

technical innovation in the form of improved energy efficiencies, increased energy prices, and consumers I

efforts will change not only the amounts of energy Virgin Islands residents consume, but also the way in

which they use it. Estimates of these energy savings are given in a separate section. These assumptions

make it possible at least to forecast basic trends in the reduction of energy consumption.

Residential energy use is characterized by an almost complete reliance upon electricity (35% of daily

electricity consumption). Heating water is the major residential energy use (35%), followed by

refrigeration (20%) and cooking (10%). The introduction of solar water heating, along with energy-efficient

electric heat pumps could reduce residential energy use by the year 2005. Other savings will be realiz€d

over time as more efficient appliances, including refrigerators, replace existing ones.

Commercial buildings, hotels, and hospitals are almost the only buildings that require space cooling

in the Virgin Islands. They use approximately one-third of the total electricity consumed. It is estimated

that electricity use in the service sector could decline depending upon the size of expected utility rate

increases.

Rising gasoline prices, coupled with a switch to smaller cars is already reducing present gasoline

use in the Territory. The development of electric-powered mass transit could further reduce transportation

dependence on petroleum fuels.

.I- 68
The Virgin Islands Energy Office (VlEO) has a number of energy conservation programs in effect and

their staff monitors and collects energy"savings data from these projects. Some of these are summarized and

described below and resulting estimated energy savings shown in Table 3.

1. Thermal Efficiency Standard

This is based on an energy conservation building code which set standards for wall

and roof specifications in new and renovated building construction that assures

efficiency for air-conditioning and lighting.

2. Solar Hot Water Heating

This is part of the Schools and Hospital program in which

used for domestic hot water in eligible institutions

Systems.

3. Energy Efficiency Procurement Purchase

electrical resistance heating

is replaced by Thermosyphon

By setting efficiency standards for the purchase of energy-intensive items such as ThruThe-Wall Air Condit ioners, Re frigera tors. Hot Water Heaters and Automob iles by the

Virgin Islands government, one can reduce total energy consumption when these devices

are in use.

4. Thermal Window Films

Application of a thin, dark, polyester film to windows in air-conditioned rooms can

reduce the heat gain by the building interior, thereby reducing the air-conditioning

load.

s. Roof Insulation

In the tropics it is estimated tha 90% of the heat gain in a building comes through the

roof. Roof insulation therefore becomes an effective method for reducing the airconditioning load in a building.

6. Industrial Savings

These are mainly mechanical changes performed at the Hess Oil and Martin Marietta plants

on St. Croix to reduce their energy use and overall operating costs. Many of these

modifications are trade secrets and VIEO only monitors the resulting savings.

UTILITY ASSESSMENT

There are substantial energy-saving opportunities in the operation of the publicly owned Water and

Power Authority (WAPA) of the Virgin Islands. WAPA accounts for nearly one-third of all non-industrial

energy consumption in the Virgin Islands and is a prime target for application of commercial-size solar

technologies. Although some industries produce their own power and water (notably Hess, Martin~tarietta and

Frenchman's Reef Hotel), WAPA is the only producer and distributor for electric power and water for the

remainder of the domestic, commercial, industrial, and governmental users. Utility-Interface experimentation with wind machines for example must all be coordinated with this organization.

Although more than sufficient standby capacity is physically available at the plant site, these units

are often in a state of disrepair and not available to permit a systematic program for removing major units

from service for extended periods. This would be necessary in order to perform the periodic maintenance

necessary to achieve peak operating efficiency. Units are often run continuously to the point of failure or

fatigue and removed from service only in crisis situations. Having a mixture {)f diesel, steam and gas

generators results in the need for excessive inventory, different operating and m3intenance procedures and

operator training methods.

Alternative available energy options must be considered if we are to reduce our high electricity

costs, import less fuel, and lower consumption. There are only three alternative:, which can be applied to

WAPA, namely, oil-mixtures, coal or renewable energy. Use of oil-coal mixtures, low grade diesel fuels, or

1. - 69
Table 3 Estimated Savings in Btu for 1981

Virgin Islands Energy Program

Program Measure

Thermal Efficiency Standard

Solar Hot Water Heaters

Installation of Window Films

Insulation

Procurement

Carpooling/Vanpooling

Left Turn on Red

Emergency Building Temperature

Restriction Program

Industrial

Estimated Savings (in Btu's)

0.08 x 109

1.4 x 10 9

3.0 x 109

0.75 x 10 9

2.3 x 105

288 x 10 9

3.99 x 109

38 x 109

44,667 x 109

burner-modification to burn 100% coal, need to be considered, however these options will save money, not

BTU's.

Energy alternatives such as solar and wind are being commercialized on a large scale and can offer

near-term solutions to WAPA. However, these technologies can offer immediate economic relief to the

homeowner and small businessman for they are very effective in small applications and if installed in large

quantities can serve to reduce the peak demand of our utility and allow them to operate more efficiently.

Once WAPA's actual generating system is completely rehabilitated, the next step is to plan for the

generation additions that will be required in the years to follow.

The main objective of generation planning is to determine the generating capacity required to satisfy

the electrical load in a reliable manner during a given period of time. One of the most up to date

approaches for fulfilling this objective is to rely on probability analysis to calculate the risk of not

being able to meet the forecasted peak demands.

In any electrical system, its generating capacity can be divided into two parts; one part is used to

supply the demand for energy, and the other is maintained as a reserve. This reserve is required to:

1. Provide maintenance to the generating units.

2. Account for the forced outage of units.

3. Account for the partial outages (units on limitation).

4. Provide an additional reserve for absorbing variations in any of the above items.

To accurately assess the need for new generating capacity using this approach, it is necessary to add

the reserve requirements and the peak demand figures and compare this total to the installed generating

capacity when it is really needed without over-building the system. This minimizes the economic burden on

WAPA in that it avoids the extremely high cost of installing too much capacity. However, there is a

disadvantage and it is that an underestimated load forecast may force WAPA to install short load time

generating units such as gas turbines or diesel units.

One of the cornerstones of any generation expansion evaluation is a forecast of the electrical loads

to be expected throughout the period of time to be analyzed. Also important are the expected costs of the

I-70
fuels to be considered. As examples of the latter, there are the capital investment costs, operation and

maintenance costs (O&M), forced outage rates, and unit heat rates.

The physical separation between St. Thomas and St. Croix, and the depth of intervening water, make

interconnection of an electric grid near impossible. As a result, each of the two islands must have its own

power and water systems. St. John's modest power needs are provided by underwater electric power cable from

St. Thomas as well as 1.5 MW of standby capacity as a result of a diesel generator on that island. The

diversified compos"ition of each of the two grids is shown in Tables 4 and 5 below.

Gross electrical consumption in the Virgin Islands remained relatively constant between 1971 and

1976. There was an increase in consumption patterns between 1976 and subsequent years; however, the change

was not very significant (3%). Peak demand in St. Thomas was constant from 1971 to 1977 when a slight

increase occurred. St. Croix's peak demand pattern was constant throughout the 10-ye~r period.

Electrical consumption on St. Croix remained lower (up to 25%) than St. Thomas throughout the 10-year

period.

Below is 8-year fuel consumption data for WAPA that was helpful in the analysis of a generation

profile. We currently spend the equivalent of 20% of the total budget of the Virgin Islands government (or

$38M) for the purchase of fuel for our utility. As was mentioned earlier, plant efficiency is poor,

therefore our fuel consumption is high and needs to be reduced through improved operations and renewables.

Figures are collected July 1 through June 30 of the following year. The consumption figures appear to be

around 1.15M bbls/yr until July 1980 when there was a sizeable increase. If fuel consumption continues at

the present rate, the 1980-81 year will be 2.5M barrels, almost double the 1974-79 average. This is due to

the fact that gas turbines have been operating more frequently than Unit 13 and they burn more fuel and are

less effic1ent.

UTILITY CONSUMPTION DATA

*July to June

*Fiscal Year

1974

1975

1976

1977

1978

1979

1980

July 1980-Feb 1981

Fuel Consumption (xl000 bbls)

1,102

1,114

1,076

1,112

1,095

1,274

1,273

1,847

Table 4 St. Thomas-St. John Electric Gridt

Year Design **Current

Generat i ng Uni t Installed Capacity (MW) CapacJ.ty

No. 7 - D1esel* 1966 2.0 1.7

No. 9 - Diesel 1960 3.0

No. 10- Steam 1966 7.5 6.5

No. 11- Steam 1968 18.0 14.0

No. 12 - Gas 1970 15.0 13.0

No. 13- Steam 1974 3.0 26.0

No. 14 - Gas 1971 15.0 12.5

No. 15 - Gas 1981 20.0 21.0

*Standby Only.

**As of April I, 1981.

tCurrently there is a total of approximately 116 MW design capacity

available, seventy-four (74) MW of which is available on a day-to-day

basis to meet a peak demand of 42 MW.
Table 5 St. Croix Electric Gridt

1969 4.5

1962 2.2

1967 7.S

1970 18.0

1968 4.5

1971 15.0

1972 15.0

1981 2.0

Generating Unit

No. 6 - Diesel'"

No. 7 - Diesel

No. 10 - Steam

No. 11 - Steam

No. 12 - Diesel

No. 13 - Gas

No. 14 - Gas

No. 16 - Gas

"'As of April 1• 1982.

Year

Installed

Design

Capacity (MW)

"'Current

Capacity

4.0

7.5

18.0

4.0

21.0

tThe St. Croix grid has a total of 67 MW to meet a daily peak

demand of 32 MW. The power generating capacity currently

available is only 34 MW. and actual operating capacity is

just 33 MW. Small losses in power generating efficiency

often result in power rotation or complete outages.

Table 6 10-Year Power Generation Profile

of Virgin Islands Utility

Avg. Peak

Gen (l03MW )

Demand (MW)

Gross Elec. Total (lO~W)

Year STT-SJ St. Croix Consumption STT-SJ St. Croix

1971 177 152 329 27 24

1972 193 174 367 29 28

1973 211 184 395 33 28

1974 206 185 391 32 29

1975 213 186 399 32 29

1976 2L5 184 399 33 28

1977 226 189 415 34 30

1978 240 199 439 37 30

1979 254 191 445 40 31

1980 261 192 443 40 20

:£-72
MW

45

40

35

30

25

20

0-----0 ST. Thomas

15

10 l::!- - - St. Croix

5

75 76 77 78 79

Years

71 72 73 74

o '--_...l..._.....L._.....,j,__"'--_...L..._....l.._.....__L....._..L-_,..J1L.....---J

80

Fig. 3 WAPA Peak Load by Year (1971-1980)

- 0 St. Croix ..... .... - 0 St. Thomas r- r-

.... r- r- rr- .... r- r- r- r- r-

- rr- rr-

,...-

-

MW

45

40

35

30

25

20

15

10

5

o

71 72 73 74 75 76

Years

77 78 79 80

Fig. 4 WAPA Average Peak Loads (1971-1980)

r - 73

PART II: SUPPLEMENTAL ANALYSIS OF ENERGY IN

PUERTO RICO AND THE UNITED STATES

VIRGIN ISLANDS

Preceding page blank ! - 75

CONTENTS

INTRODUCTIO~....................................................................................... 79

2 COMMO~J::ALTH OF PUERTO IU CO •........••.•......••.••.•••••••••.••••••••..•.........•..••••••..••..•• 80

2.1 Description of the Island..................................................................... 80

2.2 The Economy................................................................................... 81

2.2.1 Current Situation...................................................................... 81

2.2.2 Propects for Growth.............................. 86

2.2.3 Energy Demands of the Economy.......................................................... 90

2.2.4 Possible Future Energy Demands......................................................... 9~

2.2.4.1 Methodology................................................................... 99

2.2.4.2 Energy Demand Projections. •••••••••••••••••• ••••••••••••••.••...••••••••••• ••• 100

2.2.5 Energy Conservation Possibilities 104

2.3 The Energy Supply System...................................................................... 106

2.3.1 The Current Energy System.............................................................. 106

2.3.1.1 Fossil Fuels ••••••••••••••••..••.•..••••.•••••••••..••••..•••••••••••••••••••• 106

2.3.1.2 Electric Sector•••••.•••.•••••••.••.........•••.••.•••••••.•••••••••••••••.••• 114

2.3.1.3 Renewable Energy Resources 118

2.3.2 The Future Energy System............................................................... 119

2.3.2.1 Future Fossil Fuel System' configuration......... 120

2.3.2.2 Future Electric Sector Configuration••••••••••••••••••••••.••••.•••••••.•••••• 123

2.3.2.3 Future Renewable Resource Use................................................. 126

2.4 The Energy Program............................................................................ 142

2.4.1 Fossil fuels••••••••••••••••••••••••••••••••••••..•••••.•••••.•.•••.••.••...•..••.••••• 143

2.4.2 Electricity............................................................................ 144

2.4.3 Energy Conservation.................................................................... 146

2.4.4 Renewable Resources.................................................................... 148

2.4.5 Energy Planning........................................................................ 149

3 UNITJ::D STATES VIRGIN ISLA..~DS....................................................................... 151

3.1 Description of the Island...... 151

3.2 The Economy................................................................................... 151

3.2.1 Current Situation...................................................................... 151

3.2.1.1 Employment and Unemployment Rate ........•..••••••.••••••••.••••••••••••••••••• 151

3.2.1.2 Inf lation.. • ••• • •• • • •• • •• •• •• •••• • •• •• •• ••• • • •• • •••••• • •• • ••• • •• • • ••• •• • •• • • •• 154

3.2.1.3 Composition of the Economy................................ 154

3.2.1.4 Miscellaneous.......••.........•..•..••..••......••.•..••.....••..........•..• 155

3.2.2 Propects for Growth.................................................................... 156

3.2.2.1 Development Policy and Goals.................................................. 156

3.2.2.2 Macroeconomic Development Scenarios........................................... 156

3.2.3 Energy Demands of the Economy 158

3.2.4 Possible Future Energy Demands......................................................... 161

3.2.4.1 Methodology •.••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••• 161

3.2.4.2 Energy Demand Projections..................................................... 162

3.2.5 Energy Conservation Possibilities...................................................... 163

3.2.5.1 Residential/Commercial. 163

3.2.5.2 Transportation................................................................ 164

3.2.5.3 Agriculture................................................................... 165

3.2.5.4 Industry .••..••••••••.•••.••••••••••••••••••••••••••••••••.••••••••••.•••••••• 165

3.2.5.5 Water Supply •••••••••••••••••••.••..•.••••••••••••••••••••.••••••••••••••••••• 165

3.2.5.6 Public Education.............................................................. 165

3.2.5.7 Government Procurement......... 165

3.3 The Energy Supply System...................................................................... 166

3.3.1 The Current Energy System..•..•••.••..••....................•.....• I................... 166

3.3.1.1 Fossil Fuels ...............•......•..•..••...•.•••.•••.••.....•....•..•....... 166

3.3.1.2 Electric Sector.. ••••••• •••• ••• •••• ••• .••..•.. .•••••••• •••.• ••••• •••••• ••• •••• 167

3.3.1.3 Renewable Energy Resources 173

3.3.2 The Future Energy System............................................................... 173

Preceding page blank .
CONTENTS (Cont'd)

3.3.2.1 Future Fossil Fuel System C.onfiguration....................................... 173

3.3.2.2 Future Electric Sec'tor Configuaration......................................... 174

3.3.2.3 Future Renewable Resource use.... .••.••.•••. 176

3.4 The Energy Program............................................................................ 186

3.4.1 Electricity............................................................................ 186

3.4.2 Water Supply........................................................................... 187

3.4.3 Fossil Fuels........................................................................... 188

3.4.4 Renewable Resource Use................................................................. 189

3.4.5 Energy Conservation.................................................................... 191

3.4.6 Energy Planning........................................................................ 192

REFERENCES............................................................................................. 193

-;:: - 78
INTRODUCTION

This report presents additional data and analyses of the contributions of current and potential

future energy resources to meeting the energy demands in Puerto Rico and the Virgin Islands, and is intended

to supplement the reports (Section I) prepared by the Puerto Rico Office of Energyl and the Virgin Islands

Energy Office 2 in support of the second phase of the Territorial Energy Assessments (TEA). The additional

information presented here was developed from the reports of the first phase of the TEA3 and from documents

referenced herein.

This section also attempts to distill all the available information into a concise picture of the

energy situation in the islands and suggests certain specific actions which should be considered in

implementing a comprehensive energy plan. Because information has been drawn from studies done at different

times by different organizations, it has been necessary to deal with the problem of inconsistent and

sometimes conflicting data. To the extent possible, these inconsistencies have been either resolved or

presented side by side for comparison. Nevertheless, the specific actions suggested are based on best

technical judgments after weighing all available data and information.

~- 79
2 COMMONWEALTH OF PUERTO RICO

2.1 DESCRIPTION OF THE ISLAND

The Commonwealth of Puerto Rico is a hilly, tropical island lying between the Atlantic Ocean to the

north and the Caribbean Sea to the south (see Fig. 2.1). It is the easternmost of the West Indies group

called the Grea ter Antilles. Puerto Rico consists of numerous small islands, including Vieques, Culehbra,

and I-Iona, and the main island, which measures 35 miles wide and 105 miles long.

The population of Puerto Rico is 3,186,076 (1980 census). Four cities have populations over 100,000,

including San Juan (the capital) with a population of slightly over 1,000,000; Ponce at 252,000, Caguas at

174,000; and Mayaguez with 133,000.

On July 3, 1950 the United States Congress adopted an Act (Public Law No. 600) that was to allow "the

people of Puerto Rico to organize a government pursuant to a constitution of their own adoption." This Act

was submitted to the voters of Puerto Rico and accepted in the summer of 1951. A new constitution was

drafted in which Puerto Rico was styled as a commonwealth, or Estado Libre Asociado, "a state which is free

of superior authority in the management of its own affairs" though it remained in association with the

United States. This constitution was ratified by the people of Puerto Rico in 1952, and following approval

by the Congress of the United States, the Commonwealth of Puerto Rico was established on July 25, 1952.

A TL ANTIC OCEAN

.... • o.w..

'----""\."'-T ..• eu"nc R..co l .....~. . . • •

CARIBBEAN SEA

'!-I-"T"".....-r--i...·,·"-"T"" __~1- o io .~ ...

r-l'·

Fig. 2.1 Commonwealth of Puerto Rico

.r- 80

H L'r

I

, ',' r
Under the terms of political and economic union between the United States and Puerto Rico, U.S. citizens in Puerto Rico enjoy the same privileges and immunities they would if Puerto Rico were a member state

of the Union. Puerto Ricans are citizens of the United States and may freely enter and leave the mainland.

Puerto Ricans elect their own governor, legislature, mayors, and municipal assembly representatives.

They have no vote in national elections and no voting representation in Congress. However, Puerto Rico

participates in the House of Representatives through a Resident Commissioner, who has a vote in House

Committees and caucuses of which he is a member but has no floor vote. Puerto Rico has a bicameral

legislature consisting of a Senate of 27 members and a House of Representatives of 51 members who are

elected to four-year terms concurrent with the Governor.

Puerto Rico is exempted from the tax laws of the United States. The U.S. social security system is

extended to Puerto Rico except for unemployment insurance provisions. The laws providing for economic

cooperation between the Federal Government and the states of the Union for the construction of roads,

schools, etc., apply to Puerto Rico and are administered by the Commonwealth Government. Puerto Ricans do

not pay federal income tax but are subject to most federal laws. The Puerto Rican government imposes its

own personal and corporate income taxes.

2.2 THE ECONOMY

The following sections will describe the current economy of Puerto Rico, the perspective on growth

and the current and possible future energy demands of the economy.

2.2.1 Current Situation

Puerto Rico, with its per capita personal income of $3,724 in

year ending June 30) qualifies as an industrial and modern economy.l

transformed from its agriculture orientation to manufacturing over

economic development pattern is provided below.

1981 (all economic data are for fiscal

The structure of the economy has been

the years. A brief overview of the

Until the 1940s the economy was dominated by the agriculture sector and its related industries. In

1940 the agriculture sector accounted for 45% of the total employment in the economy. 2 Realizing the

urgency of industrialization, the Puerto Rico Government initiated a program known as "Operation Bootstrap"

in 1948. 3 Under this program outside investment was sought through financial incentive schemes that

included exemption from Puerto Rico corporate income and property taxes. Together with the benefits of

federal tax exemption and lower wages in Puerto Rico, a remarkable growth in tr..e economy was achieved

between 1950 and 1970. Figs. 2.2.1-1 to 2.2.1-4 and Table 2.2.1-1 show changes in key macro economic

indicators over the last thirty years.

Real Gross Product

The . real gross product grew 6.2% annually between fiscal 1950 and 1970. The high growth era

continued from 1970 to 1973 as real gross product increased at an average annual growth rate of 5.9%. This

dramatic growth rate was slowed down as a result of sharply higher prices of O?EC crude oi l, and the

slowdown in the U.S. economy. The real gross product increased only by 1.3% in fiscal 1974. As recession

worsened in the U.S. economy, Puerto Rico experienced its first reversal in modern history as the real gross

product declined by 2% in fiscal 1975. As shown in Fig. 2.2.1-1, the economy T'.ever captured its prerecession growth rate of 7.3% in fiscal 1973. Along with the U.S. economy, Puerto Rico's economy grew 2.1%

in fiscal 1976, 4.5% in 1977, 4.8% in 1978 and 5.9% in 1979. As a result of another OPEC shock in the 1979-

80 period and the 1980 recession in the U.S. economy, Puerto Rico's economy also faltered. The gain in real

gross product was 2.3% in fiscal 1980 and 0.7% in 1981. According to preliminary statistics of the Puerto

Rico Planning Board, the island's economy suffered a drop in real growth of 3. 9~: in fiscal 1982. 4 At

present, Puerto Rico's economy seems to mirror the current recession in the U.S. economy.

In spite of the setbacks in the economic growth rates during the last ten years (including two

unprecedented recessions), Puerto Rico's economy has made major strides between 1950 and 1980. The island's

real gross product increased 4.7 times during this period. The averag~ standard of living has been boosted

significantly as characterized by more than three-fold increase in the per capita real gross product between

1950 and 1980 (Fig. 2.2.1-2). In fiscal 1980, Puerto Rico gross product stood at $11.0 billion (equivalent

to per capita gross product of $3475).

J- 81
10

Sources:

1, Puerto Rico Planning Board 1980-81 Economic Report to Governor

2, Puerto Rico Business Review-Oct 1982

7.3

CD

Cl

C

5

(,)

p - preliminary

-2.0

4.8

5.9

2.3

0.7

-3.9 P

-5 --i--r--..,....--......-~--.--ooy-----.-----r---,--r---.--- ......----r

1975 1980

Fiscal Years (ending June 30)

Fig. 2.2.1-1 Economic Growth of Puerto Rico - Real Gross Product

1970

1800 5076

1600

Source: Puerto Rico Planning Board

1980-81 Economic Report to Governor 4512

1400 3948

800

600

1128

en

..

a:l

o

o

o

564

2820 -

C

a:l

-en

c

o

(,)

1692

2256

3384

1950 1960 1970 73 74 75 76 77 78 79 80 81

200

400

1200

o

o

_ 1000

c

en

c

o

(,)

Il)

(l)

Fiscal Years (ending June 30)

Fig. 2.2.1-2 Per Capita Gross Product of Puerto Rico
21

1980 1970 73 74 75 78 77 78 79 80 81

Fiscal Years (ending June 30)

Fig. 2.2.1-3 Unemployment Rate of Puerto Rico

19150

20.0

20

Ql

U

0

u.

15

0

.a

II

..J

-0

-c 10

Ql

U

..

CD

A5

10 Source: Puerto Rico Planning Board

1980-81 Economic Report to Governor

7.9

CD

D

C

II

0

'E

CD

u 5 ..

Ql

A-

-;

:::J

C

C

C

1970 1975

Fiscal Years (ending June 30)

1980

Fig. 2.2.1-4 Inflation in Puerto Rico - Implicit Price Deflator of Gross Product

::r. 83
Table 2.2.1-1 Historical Overview of Puerto Rico's Economy -

Key Macro Economic Indicatorsa

(Fiscal Years Ending June 30)

1950 1960 1970 1973 1974 1975 1976 1977 1978 1979 1980 1981

Personal Consumption 662 1,398 3,746 5,222 5,690 6,390 7,361 8,167 9,043 9,843 10,929 12,155

Government Consumption 86 218 765 1,231 1,326 1,612 1,616 1,728 1,877 2,025 2,245 2,513

Gross Fixed Investmentb III 355 1,402 1,603 1,677 1,907 1,784 1,536 1,735 1,865 2,030 2,121

Inventory Investment 1 42 50 188 148 336 386 176 175 151 408 327

Net Exports -105 -336 -1,276 -1,975 -2,044 -3,116 -3,620 -3,490 -3,897 -3,891 -4,580 -5,345

Gross Product 755 1,676 4,687 6,270 6,798 7,129 7,527 8,116 8,932 9,993 11 ,031 11,771

Real Gross Product (1954 $) 879 1,473 2,901 3,450 3,494 3,422 3,494 3,652 3,827 4,052 4,146 4,174

Personal Income 653 1,374 3,753 5,336 5,894 6,843 7,644 8,134 8,947 9,894 10,934 11,984

Disposable Personal Income 638 1,333 3,564 5,040 5,564 6,446 7,182 7,601 8,461 9,336 10,314 11,271

Implicit Price Deflator of

Gross Product (1954=100.0) 85.9 113.9 161.6 181.7 194.6 208.3 215.4 222.2 233.4 246.6 266.0 282.0

I Unemployment Rate (%) 12.9 13.1 10.3 11.8 12.3 15.4 19.4 20.0 18.8 17.5 17.0 18.0 00

-1-' Total Employment (1,000) 596 543 686 757 775 738 718 735 780 807 826 833

Population (1,000) 2,206 2,342 2,711 2,866 2,878 2,911 2,974 3,040 3,091 3,133 3,174 3,218

Number of Visitors (1,000) -- 347 1,088 1,322 1,441 1,339 1,299 1,326 1,474 1,662 1,679 1,517

Net Receipts From Federal

Government, State Governments

and Non-residents (Million

Dollars) 63 50 80 199 223 599 1,036 1,121 1,359 1,465 1,617 1,815

Per Capita Gross

Product - (dollars) 342 716 1,729 2,188 2,362 2,449 2,530 2,670 2,890 3,190 3,475 3,658 - (constant 1954 $) 399 630 1,070 1,204 1,214 1,176 1,174 1,201 1,238 1,293 1,306 1,297

aSource: "Economic Report to the Governor: 1980-81", Area of Economic Research and Evaluation, Puerto Rico Planning Board,

Puerto Rico.

bAddition of Gross Fixed Domestic investment and Maritime Shipping Authority investment.
Employment and Unemployment Rate

As the economic development came about, the number of employed persons increased from 596,000 in

fiscal 1950 to 826,000 in 1980. 5 However, the labor force increased much more rapldly in the same period.

This resulted in a much higher unemployment rate. As shown in Fig. 2.2.1-3, the unemployment rate was 12.9%

in fiscal 1950, 13.1% in 1960 and 10.3% in 1970. This high unemployment rate bec,ame even worse after the

economy experienced its first recession in 1975. During the period of 1975··81, the· average annual

unemployment rate remained in the range of 15.4 to 20.0%.

Inflation

The inflation in the economy (as measured by the implicit price deflato:: of gross product) has

remained in quite an acceptable range. During the high growth period of fiscal 1950-73, the average annual

price increase was 3.3%. However, the average annual price increase was 5.5% in the subsequent period of

fiscal 1973-80. The annual price changes were relatively higher in fiscal 1974-75 and 1980-81 periods which

also included large OPEC crude oil price increases (Fig. 2.2.1-4). Puerto Rico's economy is heavily

dependent on the imported crude oil that provides almost all primary energy needs of the Island. 6

Composition of Gross Product

Based on the data from the Puerto Rico Planning Board 1980-81 Economic Report to the Governor, Table

2.2.1-2 provides the distribution of Puerto Rico gross product by major industrial sectors. 7 The shift in

the structure of the economy is captured by the facts that the agriculture share of gross product declined

from 17.5% in fiscal 1950 to only 3.4% in 1980, and the manufacturing share of gross product rose from 15.9%

in 1950 to 44.2% in 1980. This increase in the manufacturing sector has made Puerto Rico's economy more

capital intensive over the years.

The other sectors that had above average growth included transportation and other public utilities

(8.1% share of gross product in fiscal 1950 vs 11.4% share in fiscal 1980), trade (19.1% share in 1950 vs

20.2% share in 1980); finance, insurance and real estate (9.9% share in 1950 vs 13.9% share in 1980),

Table 2.2.1-2 Puerto Rico Gross Product by Major Industrial Sectora

Percentage for Fiscal Year

(ending June 30)

1950 1960 1970 1980 1981

Gross Product 100.0 100.0 100.0 100.0 100.0

Agriculture 17.5 9.8 3.4 3.4 3.2

Manufacturing 15.9 21.9 25.4 44.2 42.9

Contract Construction and Mining 4.0 6.0 8.1 3.4 3.2

Transportation and Other Public Utilities 8.1 9.3 9.4 11.4 11.5

Trade 19.1 19.0 19.2. 20.2 20.3

Finance, Insurance and Real Estate 9.9 11.8 13.1 13.9 13.5

Services 5.9 8.4 10.9 12.3 12.5

Local Governments (Commonwealth, Municipalities) 10.0 11.2 13.0 17.2 17.3

Federal Government D 6.1 4.7 3J 2.3 2.5

Other Nonresidents C -2.0 -5.6 -10.8 -28.6 -26.9

Statistical Discrepancy 5.5 3.5 4.9 0.2 0.0

aBased on data from Puerto Rico Planning Board 1980-81 Economic Report to the Governor,

p. A-5.

bwages, salaries, and supplements paid by Federal Government.

c(Factor income received from the rest of the world) - (Factor income paid to the rest

of the world).
services (5.9% share in 1950 vs 12.3% in 1980), and local Commonwealth and municipalities governments (10%

share in 1950 vs 17.2% in 1980.

The sectors that had below average growth included agriculture (17.5% share of gross product in

fiscal 1950 vs 3.4% share in 1980) and Federal Government payments of wages, salaries and supplements (6.1%

share in 1950 vs 2.3% share in 1980).

Miscellaneous

Puerto Rico attracted a greater number of tourists after the Cuban crisis in the early 1960s. The

number of tourists increased from 347,000 in fiscal 1960 to 1,088,000 in 1970. 8 The visitors spent $615.4

million in fiscal 1980. 8 This amounted to a very significant share (5.6%) of gross product in fiscal 1980.

Total net balance (total receipts-total payment) of transfers between Puerto Rico and the Federal

Government, state governments, and other non-residents have also seen an increase from $49.6 million in

fiscal 1960 to $1,815 million in 1981. This net balance corresponded to a 3.0% share of gross product in

fiscal 1960 to a 16.5% share in 1980, showing a greater influence of these transfer payments on the Puerto

Rican economy.

2.2.2 Prospects for Growth

Having established Puerto Rico's economic past trends, the projections of future economic growth and

the related energy implications must be developed. This section addresses the issues of economic growth

scenarios for Puerto Rico.

Development Policy and Goals

Puerto Rico does not have any formal economic development plan providing specific projections or

targets for individual sectoral growth rates or for the island as a whole. The Puerto Rico Planning Board

has the jurisdiction on this issue and it provides economic guidelines to various government agencies from

time to time. In fact, the Government of Puerto Rico has played a critical role in the development of the

economy. The most important of all initiatives was the 1948 enactment of the highly successful program

known as "Operation Boot Strap." The private sector development has been aided by local financial

incentives to encourage investment, primarily by mainland corporations. Over the years, Puerto Rican

development has come about as a result of the free market process, government guidelines and supportive

legislation, and other financial incentives. It is reasonable to expect that the cooperative approach,

which has made Puerto Rico's economy modern over the last thirty years, will continue in the future.

~acroeconomic Development Scenarios

As with any long-range forecasting, there is uncertainty as to how Puerto Rico's economy will develop

in the next four decades. For the purpose of this report, two alternative scenarios have been derived from

the report "Energy in Puerto Rico I s Future" prepared by the National Academy of Sciences (NAS) in 1980. 1

This study provided certain economic projections to the year 2000. Economic data for the period 2000-2020

have been extrapolated from this information. The NAS assumptions and economic projections to year 2000

are:

A. Basic Assumptions - The economic projections were developed through the analysis of past

economic trends. Several key assumptions were made: 2

1. The partial tax exemption for attracting outside investment will continue to be in

force to the year 2000.

2. The projections recognize that Puerto Rico is basically a region within the U.S.

economy. As such, the forecast of the U.S. economy was derived by the National

Academy of Sciences from the well-known Wharton Annual ModeL The projected U.S.

economy growth rates were 2.6% in 1979-85 period, 2.8% in 1985-90, and 2.9% in 1990-

2000. (The actual average annual growth rate of U.S. economy was 3.2% in 1979,

-0.2% in 1980 and 1.9% in 1981. 3)

"7- 86
3. In spite of the mainland minimum wage rate being applicable to P~erto Rico, the

existing difference between the average U.S. wage rate and the average Puerto Rico

wage rate will continue to prevail, except for the extremely labor-intensive

industries (such as apparel and textiles.)

4. No major revision will take place in the present tax system.

5. Transfer payments from the Federal Government will grow but at a lo~er rate than in

the past.

B1. "High Growth" Economic Projections: 1978-2000 - The study documented that Puerto Rico's

economy has grown more rapidly than that of the Uni ted States mainland. For example,

the Puerto Rican gross domestic product ~rowth averaged 3.6% annually compared to 2.9%

in the mainland gross national product between 1970 and 1978. On the basis of this

relatively higher growth rate in Puerto Rico and the assumptions discussed above, the

study estimated that growth rates for Puerto Rican gross domestic product would be 4.0%

for 1979-85, 3.8% for 1985-90, and 5.7% for 1990-2000. 4 The proje,ctions of gross

product by major sectors for 1985-2000 are shown on Table 2.2.2-1, which is the same as

"Case A" of the NAS study report 5. The corresponding growth rates ar~ shown on Table

2.2.2-2.

The projections are based on the expectations that capital-intensive industries will experience a

significant increase in employment as well as in real output. Pharmaceuticals is expected to be a leading

Table 2.2.2-1 Projections for Gross Product by Major Sectors -

(High Growth Scenario)

Amount (millions of 1978 dollars)

Sector 1978 1985 1990 2000 2020

Agriculture 303a 365a 407a 505a 780

Manufacturing 3,785a 5,370a 6,673a 10,092a 22,979

Construction 339a 381a 425a 528a 816

Transportation and other

public utilities 969a l,261 a l,520a 2,160a 4,382

Trade l,810a 2,319a 2,742a 3,768a 7,075

Finance, insurance,

and real estate l,110a l,361 a l,583a 2,16Sa 4,072

Services l,141a l,623a 2,043a 3,190a 7,842

Government l,558a l,814a 2,073a 2,705a 4,609

Subtotal (Gross Domestic

Product) 11,014a 14,494a 17,465a 25,117a 52,555

Rest of the World -2,026b -2,666 -3,213 -4,621 -9,557

Total (Gross Product) 8,988 11,828 14,252 20,496 42,998

aSource: Energy in Puerto Rico I s Future, National Academy of Science (1980).

Table 10 (Case A).

bSource: Economic Report to the Governor: 1980-81, Puerto Rico Planning

Board.

Notes: (1) Fiscal 1978 date is actual. May have been revised by "E'uerto Rico

Planning Board.

(2) Projections based on average annual growth rates in Table

2.2.2-2.

(3) See footnote on "Rest of the World" category in Table 2.2.2-1.

(4) 100 constant 1978 dollar = 42.8 constant 1954 dollars

120.8 constant 1981 dollars.

1> 87
Table 2.2.2-2 Projections of Annual Growth Rate of Real Gross Product -

High Growth Scenario

Growth Rate, %

Sector 1978-1985 1985-1990 1990-2000 2000-2020b

Agriculture 2.7a 2.2a 2.2a 2.2b

Manufacturing 5.1 a 4.4 a 4.2a 4.2 b

Contract, construction

and mining 1.7a 2.2a 2.2a 2.2 b

Transportation and other

public utilities 3.8a 3.8a 3.6a 3.6a

Trade 3.6a 3.4a 3.2a 3.2b

Finance, insurance

3.2b and real estate 3.0a 3.1 a 3.2a

Services 5.2a 4.7a 4.6a 4.6b

Government 2.2a 2.7a 2.7 a 2.7 b

Subtotal (Gross Domestic

Product) 4.0a 3.8a 3.7a 3.7

Rest of the Worldc 4.0 3.8 3.7 3.7b

Total (Gross Product) 4.0 3.8 3.7 3.7

aSource: Energy in Puerto Rico's Future, National Academy of Science

(1980). Table 11 (Case A).

bThe sectoral gross product to grow at the 1990-2000 average annual

rate.

cThis "Rest of the World" category consists of three sectors: (1)

Wages, salaries and supplements paid by Federal Government, (2)

Other factor income received from the rest of the world, and (3) less

factor income paid to rest of the world. Assumed to grow at the rate

of gross domestic product.

industry followed by nonelectrical machinery. However, the construction activity is to be below average,

thereby dimming the outlook for stone, clay, glass and concrete products. On an overall basis, the

manufacturing sector will show an average annual increase of 4.6% compared to 3.8% for gross domestic

product in the forecasting period of 1978-2000. The Services sector also shows an above average annual

growth rate (4.8% between 1978 and 2000), creating new job opportunities.

The performance of trade and other key private sectors is expected to be at par with the growth rate

of overall economy. Below average performance is expected for the agriculture sector with its average

growth rate of 2.3% in the planning period 1978-2000 (compared to 3.8% for gross domestic product).

The labor-intensive industries are expected to show declines as Puerto Rico's economy becomes more

modern and industrialized. According to the projections, real output and employment will continue to

decline in the tobacco, textile, apparel, furniture and leather industries.

In order to estimate the real gross product, the real gross domestic product ($11,014 million in

fiscal 1978) is added to the gross product under the category of "Rest of the World".6 This "Rest of the

World" value was obtained by adding the wages, salaries and supplements paid by Federal Government (as an

example, $248 million in fiscal 1978) to the factor income received from the rest of the world ($262 million

in fiscal 1978) and subtracting the factor income paid to the rest of the world ($2536 million in fiscal

1978).7 A Puerto Rico real gross product of $8,988 was thus estimated for fiscal 1978. Furthermore, it was

assumed that this "Rest of the World" category would grow at the overall growth rate of the gross domestic

product. The real gross product in 1978 constant dollars was, therefore, $14,252 million by 1990 and

$20,496 million by 2000. This is equivalent to real gross product growth rates of 4.0% for 1979-85, 3.8%

for 1985-1990, and 3.7% for 1990-2000.

B2. "High Growth" Economic Projections: 2000-2020 - Beyond 2000, the various sectors of

Puerto Rico's economy are assumed to continue to grow at the rates established during

I. - 88
1990-2000 period (NAS Report, Case A). Table 2.2.2-2 provided these sectoral growth

rates. Based on these projections, the real gross product of Puerto Rico reaches

$42,998 mi l110ns in 1978 constant dollars by 2020. The average growth rate of gross

product is estimated to be 3.7% between 2000 and 2020.

CL "Low Growth" Economic Projections: 1978-2000 - In order to have a range of plausible

economic outlooks, an alternative scenario was derived from the NAS report (Case B).8

This scenario shown in Tables 2.2.2-3 and 2.2.2-4 and is based on a more pessimistic

view for Puerto Rico. The manufacturing sector growth is lower because of expected

higher energy, transportation and labor costs. The agriculture and construction

sectors hardly grow in the period of 1978-2000. Because of the weaker economy, emigration to the mainland picks up, thereby reducing the population growth. The study estimated that Puerto Rico's gross domestic product will grow only at 2.8% for 1978-85

(compared to 4.0% under High Growth Case), 2.6% for 1985-90 (compared to 3.7% under

High Growth Case). By following the same methodology as for the "High Growth" scenarios, the Puerto Rico gross product is projected for 1978-2000 (by adding "Rest of

the World" category gross product to gross domestic product). The Pu'~rto Rico gross

product increases from $8,988 million in fiscal 1978 to $10,880 million (constant 1978

dollars) in 1985 to $12,385 million in 1990 and $15,806 million in 2000.

C2. "Low Growth" Economic Projections: 2000-2020 - Similar to the "High Growth" scenario,

the sectors of Puerto Rican economy are assumed to continue to grm.7 at the rates

established during the 1990-2000 period into the 2000-2020 period, Table 2.2.2-4 shows

these sectoral projections. Accordingly, the real gross product of Puel:to Rico reaches

Table 2.2.2-3 Projections for Gross Product by Major Sectors -

Low Growth Scenario

Amount (millions of 1978 dollars)

Sector 1978 1985 1990 2000 2020

Agriculture 303a 334 353 394 481

Manufacturing 3,785a 4,848 5,702 7,663 13,840

Construction 339a 361 381 429 545

Transportation and other

public utilities 969a 1,176 1,337 1,695 2,724

Trade 1,81Oa 2,137 2,383 2,905 4,317

Finance, insurance,

and real estate 1,110a 1,266 1,391 1,679 2,446

Services 1,141a 1,522 1,808 2,501 4,788

Government l,558a 1,694 1,825 ~. 2,853

Subtotal (Gross Domestic

Product) 11 ,014a 13,338 15,180 19,38L; 31,994

Rest of the World -2,026b -2,458 -2,795 -3,578 -5,863

Total (Gross Product) 8,988 10,880 12,385 15,806- 26,131

aSource: Energy in Puerto Rico's Future, National Academy of SCienCE!

(1980), Table 12 (Case B).

bSource: Economic Report to the Governor: 1980-81, Puerto Rico Planning

Board.

Notes: (1) Fiscal 1978 date is actual. May have been revised by Pu'~rto

Rico Planning Board subsequent to the National Academy report

published in 1980.

(2) Projections based on average annual growth rates in Table

2.2.2-4.

(3) See Footnote on "Rest of the World", category in Table 2.2.2-4.

(4) 100 constant 1978 dollar = 42.8 constant 1954 dollars = 120.8

constant 1981 dollars.

't,89
Table 2.2.2-4 Projections of Annual Growth Rates of Real Gross Product -

Low Growth Scenario

Growth Rate, %

Sector 1978-1985 1985-1990 1990-2000 2000-2020b

Agriculture 1. 4a lola 1.1 a 1.1

Manufacturing 3.6a 3.3a 3.0a 3.0

Construction 0.9a 1.la 1.2a 1.2

Transportation and other

public utilities 2.8a 2.6a 2.4a 2.4

Trade 2.sa 2.2a 2.0a 2.0

Finance, insurance,

and real estate 1.9a 1.9a 1.9a 1.9

Services 4.2a 3.sa 3.3a 3.3

Government 0.9a 1.sa 1. Sa 1.5

Subtotal (Gross Domestic

Product) 2.8a 2.6a 2.sa 2.5

Rest of the Worldc 2.8 2.6 2.5 2.5

Total (Gross Product) 2.8 2.6 2.5 2.5

aSource: Energy in Puerto Rico's Future, National Academy of Science

(1980), Table 13 (Case B).

bThe sectoral gross product is assumed to grow at the 1990-2000 average

annual rate.

cThis "Rest of the World" category consist of three sectors: (1) Wages,

salaries and supplements paid by Federal Government, (2) other factor

income received from the rest of the world, and (3) less factor income

paid to the rest of the world. Assumed to grow at the rate of gross

domestic product.

$26,131 million in constant 1978 dollars in 2020 (compared to $42,998 millions under

"High Growth" scenario). The alternative projections of real gross product are plotted

in Fig. 2.2.2-1.

2.2.3 Energy Demands of the Economy

The industrialization and rapid development of the Puerto Rican economy since 1950 has brought with

it increases in GDP and per capita income as well as sharp increases in overall energy consumption.

Improvements in the standard of living and expansion of the industrial base have served to contribute to a

rapid increase in the intensity of energy in relation to GOP (until the mid-1970s) with the ratio of energy

to GDP for Puerto Rico keeping pace with that of the mainland. 1 More recently these ratios have been

declining (78,3000 Btu/$GDP in 1979 and 68,600 Btu/$GDP in 1981). The implications of this trend for Puerto

Rico's energy future are significant. The form that increases in future energy demand take (electricity for

air conditioning in households, fuel oil for industrial boilers, gasoline for automobiles) will affect

Puerto Rico's ability to meet that demand and also determine what alternatives to imported oil should be

developed.

At the present time, the primary sectors of the Puerto Rican economy (residential, commercial,

transportation, agriculture, and industry) rely either directly or indirectly on imported oil for almost

100% of energy requirements. The energy consumed is either in the form of petroleum products or electric

power, 98% of which is provided by oil-fired generating units. The preponderance of energy is consumed in

industry (45%), transportation (27%), and residential/commercial (22%).2

The energy consumption patterns characteristic of each of the sectors are varied. Energy consumption

in the residential sector is primarily electricity (accounting for nearly 33% of sales in 1980 and 1981)3 to

meet the basic household needs of cooking, lighting, domestic water heating and use of appliances. There

are limited demands for direct petroleum use in the form of LPG and kerosene for cooking. In contrast, the

I _90
20 History 48.60 III --- High Growth III .. .. III III

0 --.-- Low Growth 0

0 / 0

/ II)

10 34.95 ,... 0) 15 / 0)

c / -C

I'll / III

-ell / -III

C C

0 ./ /' 0

t) ./ t)

- 10 ./ ./ 23.30 0 ...". -0

en ./ .....,.. ......,.. III

c

/// ........ c 0 0

.- .....,.. ........ m m / .----

5 .::;.- .---- 11.85

o ~-----'T'"----""""---~----"""T"""----r------r-----+-

1950 1960 1970 1980 1990 2000 2010 2020

Fiscal Years

Fig. 2.2.2-1 Projections of Economic Growth of Puerto Rico - Real Gross Product

transportation sector consumes petroleum products. almost exclusively, in the form of gasoline, diesel,

kerosene, and aviation fuels. Private automobiles are the maj or consumers, respollsible for nearly 66% of

transportation energy demand. In 1977, of the total petroleum fuels consumed in thE' economy, transportation

accounted for 32%.4 This dominance continues to the present.

The industrial sector, because of its size and diversity, accounts for consumption of significant

quantities of both electricity and petroleum products. The source from which data could be drawn for total

energy consumption combines commerce and agriculture as subsectors of industry in t(!rms of petroleum product

consumption. Industrial demand was 30% of total petroleum product consumption in 1977, in the form of

residual fuel oil, distillate, gasoline and LPG. Direct industry/agriculture electricity consumption

accounted for 42.8% of sales and commercial 26.3% in 1977. 5 Industry / agriculture consumption declined to

36.4% of "sales in 1981 and commercial consumption increased to 30.1% of sales.

Table 2.2.3-1 summarizes the consumption of electricity by major class of customer for the years 1976

through 1981. Table 2.2.3-2 indicates levels of internal consumption of petroleum products by type for 1976

through 1981. Table 2.2.3-3 provides an overview of Puerto Rican energy demands disaggregated by sector.

The important feature of this information is the relative contribution of each sector to the demand levels.

The following sector-by-sector discussions provide details regarding the co~position of each sector,

the major energy-consuming activities, and the sectoral issues that bear on Puerto Rico's energy future.

For the most part, the latest data available on the distribution of energy consumption within each sector

are for 1977. The level of consumption has changed since then but not necessarily the distribution.

Residential

The residential sector includes single and multifamily residences and small commercial establishments

that are classified as residential customers under the Puerto Rico Electric Pow,~r Authority (PREPA) rate

structure. Residential energy uses include space conditioning, domestic water heating, cooking and

J..-91
Table 2.2.3-1 Consumption of Electricity by Major Classes of Customers: 1976-81

Residential Industriala Commercialb

Total

Fiscal Millions Percentage Millions Percentage Millions Percentage (millions

Year of kWh of Total of kWh of Total of kWh Total of kWh)

1976 3,277 31. 0 4,558 43.1 2,740 25.9 10,575

1977 3,462 30.8 4,812 42.8 2,956 26.3 11 ,230

1978 3,630 31.4 4,874 42.1 3,062 26.5 11,566

1979 3,661 31.6 4,738 40.9 3,172 27.4 11 ,572

1980 3,657 32.9 4,214 37.9 3,250 29.2 11,121

1981 3,666 33.4 4,004 36.5 3,306 30.1 10,977

aIncludes consumption by agricultural firms. The consumption of electricity by the

agricultural sector was segregated for the first time in fiscal year 1978, and amounted

to only 33.9 million kWh.

bIncludes electricity consumed by government agencies and instrumentalities, and public

lighting.

Source:. Estadisticas Energeticas Anuales, Puerto Rico Office of Energy, 1981.

appliances (most of which require electricity -- lighting, televisions, fans, irons, toasters, dishwashers,

stereos, vacuum cleaners and freezers). With the exception of cooking, a significant portion of which uses

LPG and some kerosene, all residential energy use is in the form of electricity. Consumption amounted to

3.7 million kWh in 1981, for a 33% share of total electricity sales. This represents an increase in

residential electricity consumption of 0.2 million kWh over 1977 and a 3% increase in share of electricity

sales. Table 2.2.3-4, Residential Energy Use, summarizes the levels of demand by use and fuel for 1977.

Wi th increasing standards of living, there is a broader saturation of appliances that meet basic

household needs (cooking, lighting) and a more rapid increase in demands for such items as dryers and air

conditioners, which increase energy consumption for households. In a survey of low-income families, it was

found that the maj ority owned stoves, refrigerators, electric irons and clothes washers. Less than 30%

owned electric fans and water heaters, while fewer than 7% owned air conditioners and clothes dryers. 6

Further development of the Puerto Rican economy will find increasing demands by low- and middle-income

groups for the higher-energy-consuming convenience appliances. Table 2.2.3-5 provides a breakdown of

appliance ownership in the San Juan Metropolitan Area and indicates the average consumption of electricity

by appliance.

Commercial

The commercial sector includes such public and private facilities as schools, hospitals, shops,

hotels, restaurants and offices. Energy consumed in the commercial sector is primarily electricity - 2.9

million kWh in 1977 - accounting for 26.0% of total sales and 3.3 million kWh in 1981, for 30% of sales.

Limited amounts of LPG are used in cooking and laundries. End us~s of electricity in the commercial sector

closely resemble those in the residential sector; namely, space conditioning, lighting, television, water

heaters, water pumps, stoves, ovens, refrigerators, motors and compressors. Detailed data on energy use by

device is not available.

Transportation

Transportation is a major energy-consuming sector in Puerto Rico and is dominated by the automobile.

The growth in automobile use is reflected in the 10% average annual growth rate in gasoline sales

experienced in the years 1968-72 and the 3.5% rate since 1973. 7 As of mid-1977, the fleet of vehicles on

the island was estimated at 830,373 for a person-vehicle ratio of 4 to 1. This is a significant increase

over the 1965 rate of 10 to 1. 8 Between 1977 and 1981 the average annual new registrations were 103,000,

81% of which were new cars. This is a significant change over 1976 when new (as opposed to used) cars

constituted 53% of new registrations. Nearly 60% of the households in San Juan own cars. Table 2.2.3-6

details the composition of the vehicle fleet in Puerto Rico.

1:.-_ 92
Table 2.2.3-2 Energy Consumption in Puerto Rico Fiscal Years 1976-81

Item

Quantity (Trillions of Btu)

1976 1977 1978 1979 1980 1981

Total Consumption

Fuels

Refinery Gas

Middle Distillates

Residual Fuel Oils

Motor Gasoline

Aviation Fuel

Electric Energy

Thermoelectric

Hydroelectric

Bagasse

Percent Distribution (%):

Total Consumption

Fuels

Refinery Gas

Middle Distillates

Residual Fuel Oils

Motor Gasoline

Aviation Fuel

Electric Energy

Thermoelectric

Hydroelectric

Bagasse

320.1 335.5 344.6 357.8 337.6 315.0

177 .5 182.1 188.4 204.3 188.3 169.2

21.1 21.2 19.2 21.1 20.8 18.1

24.0 25.2 16.0 19.5 17.1 10.6

45.9 43.0 50.9 56.8 49.2 43.0

77.2 82.1 86.6 90.1 87.2 84.0

9.3 10.6 15.7 16.9 14.1 13.4

125.2 138.1 142.4 142.3 138.3 135.8

123.7 137.2 141.3 141.1 136.2 134.5

1.5 0.9 1.1 1.1 2.1 1.3

17 .5 15.3 13.8 11.1 11.0 10.0

100.0 100.0 100.0 100.0 100.0 100.0

55.4 54.3 54.7 57.1 55.8 53.7

6.6 6.3 5.6 5.9 6.2 5.7

7.5 7.5 4.7 5.5 5.1 3.4

14.4 12.8 14.8 15.9 14.6 13.7

24.1 24.5 25.1 25.2 25.8 26.7

2.9 3.2 4.6 4.7 4.2 4.3

39.1 41.2 41.3 39.8 41.0 43.1

38.6 40.9 41.0 49.5 40.3 42.7

0.5 0.3 0.3 0.3 0.6 0.4

5.5 4.6 4.0 3.1 3.3 3.2

Source: Alternative Energy Resource Assessment for Puerto Rico. Puerto

Rico Office of Energy, Office of the Governor, 1982.

In 1977, 55% of personal vehicles were in the standard category (3,000-4,000 lbs), 34% light (2,000-

2,500 lbs) and 10.5% heavy (greater than 4,000 lbs). 9 Almost 23% of cars imported at that time were used

cars, the majority being large, poor-fuel-economy models. New, fuel-efficient cars represented about 10% of

the whole fleet. More recently, however, 70% of new registrations have consisted of more fuel-efficient

Japanese models.

Trips in private cars grew from 64% of the daily total in 1970 to 78% of the total in 1977, with the

majority taking place within the San Juan metropolitan area. lO The trips are, therefore, relatively short

in distance, leading to higher fuel consumption. For the mainland, trips shorter than 5 miles accounted for

15% of all auto mileage and 30% of fuel consumption -- 50% more fuel than that consumed by automobile trips

40 miles or longer. ll It is assumed that similar performance holds true for Puerto Rico.

The rapid increase in the number and use of personal vehicles, primal:ily automobiles, has been

matched by a decline in demand for public transportation. Bus ridership peaked at 66 million in 1966 and by

1977 had experienced a 47% decline to 35 million. 12 At the same time, fuel consumption has increased

primarily because of declining efficiencies and load factors. The average speed of buses in 1977 was 7 mph

and average passenger trips per mile for buses capable of carrying 50 passengers was 2.6 persons. Energy

efficiency for buses averaged 3.98 mpg between 1975 and 1977. Exc14sive bus lanes have been designated, but

by 1977 average speed of traffic in them was below 10 mph, bringing the average speed of the whole bus

system to 7.2 mph -- equal to that in congested U.S. cities. Bus system service varies with respect to

reliability and adherence to schedule. 13

-r, 93

--
Table 2.2.3-3 Summary of Energy Demands

by End-Use Sector

Percent Distribution

Oil Use Distributiona

To Electricity

To Residential

To Transportation

To Industrial and

Commercial

Total

Electricity Distributionb

Industry/Agriculture

Commercial

Residential

Total

41.0

1.0

32.0

26.0

100.0

36.5

30.1

33.4

100.0

aBased on 1977 data. Energy in Puerto

Rico's Future. Energy Engineering Board,

National Academy of Sciences, 1980, p. 68.

bBased on 1981 data. Estadisticas Energeticas Anuals. Oficina de Energia, Oficina

del Gobernadar, Puerto Rico, 1981, p. 20.

Table 2.2.3-4 Residential Energy Use, 1977

Electricity LPG Kerosene

End Use 1012Btu % 1012Btu % 1012Btu %

Cookinga 1. 37 12 2.02 100 1. 44 100

Water heating 3.93 33

Air conditioning 1.23 10

Television, refrigerator 3.37 29

Lighting and miscellaneous

appliances 1. 90 16

Total 11. 80 100 2.02 100 1. 44 100

aConversion efficiences: electricity; LPG 0.60; kerosene 0.40.

Source: Energy in Puerto Rico's Future, National Academy of Sciences, 1980.

Public transportation demand is served primarily by "publicos" (cars and vans serving as taxis with

fixed routes and multiple riders) and is relatively the most energy efficient component of the collective

transportation system in Puerto Rico. Publicos total nearly 13,000, a quarter of which are privately

owned. 14 Taxis account for a minor share of passenger transportation. Table 2.2.3-7 indicates the relative

use of energy in passenger transportation and shows that the majority of consumption is by private vehicles.

Freight transportation in Puerto Rico is by light (pickups, panels etc.) and heavy (2-axle, 6 wheels,

and multi-axle) trucks. In 1975, 2.6% of vehicle population was classified as heavy trucks. Use of these

is primarily linked with the service and manufacturing sectors of the economy -- agricultural and food

distribution, construction, trade and utilities. Freight transportation accounts for 11% of total petroleum

consumption.

J. - 94
of the

small

Table 2.2.3-5 Percent of Puerto Rico Electric Power Authority Customers Owning

Various Appliances--San Juan Metropolitan Areaa

Percent of Customers Owning Appliances

Usage in Central

Kilowatt Electric Solar Air air

hours per Regrig- Electric Gas Clothes Tele- water water D5.sh- condi- condimonth erator range range washer vision heater heater wa!iher tioner tioner

1-425b 100.00 35.85 59.19 73.70 92.93 56.16 0.00 0 .. 60 14.15 0.00

426-1,000 99.27 75.46 21.24 93.41 98.80 88.28 0.00 4.40 58.24 0.37

Over 1,000 100.00 90.42 8.98 99.40 98.20 93.41 1.20 28.14 96.41 3.59

Average

consumption

by appliance

(kilowatthours per month) 90 100 0 15 50 200 0 30 340 850

aGas rate customers (regular residential rate). Low rent public housing customers

are not included.

bFor computing subtotals and total percentages, the data for each individual strata were weighted to account

for its population relative to the other intervals (frequency distribution of populetion (percent) in San

Juan metropolitan area by kilowatt-hour intervals of October 1976).

Source: Energy in Puerto Rico's Future p.130. Correspondence from Jose Marina, Puerto Rico Water Resources

Authority, to F. Castellon, Director, Puerto Rico Office of Energy, April 21" 1978. Results

derived from a survey conducted from December 1977 to February 1978.

The preponderance of air travel is by Puerto Rico residents to and from the United States, with most

jet fuel consumed in Puerto Rico used by flights leaving Puerto Rico. Air freight is a relatively , 15

component, accounting for only .4% of total cargo passing through Puerto Rican ports in 1977.

Table 2.2.3-8 summarizes energy use for the various transportation modes for ?uerto Rico in 1977.

Industry

The industrial sector in Puerto Rico is highly diversified and includes man~facturing, construction

and mining activities. It is the major contributor to GOP and, as such, is the largest consumer of energy,

both electricity and direct use of petroleum products. The development of P'Jerto Rico's industrial

infrastructure over the past several decades' has seen a dramatic change in the patterns of output.

Agriculture has declined in its contribution to GDP while manufacturing has increased substantially.16

The extraordinary growth in the manufacturing subsector has been accompanied by a process of

structural change. The most significant change has been the disappearance or decline of labor-intensive

industries, which has to a great degree been offset by the creation and rapid development of capitalintensive industries. In terms of output and employment measures, the major ind'Jstrial groups in Puerto

Rico in 1949 were sugar, apparel, tobacco, food and stone, glass and clay. By 1977, apparel, electrical

machinery, food products, pharmaceuticals, professional and scientific instruments, stone, glass, and clay

and petrochemicals accounted for 65% of employment and 71.7% of output. 17

The energy requirements to support the growing manufacturing sector are varied and depend on the

level of activity and particular processes or technologies used. As such, structu~al changes have a direct

effect on energy consumption patterns. It is also important to note that industries that are not major

contributors to GOP, income and employment can be of great significance in terms of the energy situation.

Puerto Rico's petroleum refining industry is a case in point. It contri buted only about 1% to GDP in 1977

and less than 0.5% of employment. However, as shown in Table 2.2.3-9, it is a major energy-consuming

:1- 95
Table 2.2.3-6 Puerto Rican Vehicle Fleet,

Fiscal Year 1977

Mode

Number of vehicles

(thousands)

Personal vehicles

Privately o~ed autos 660

Light trucks 93

Subtotal 753

Public vehicles

Buses 2

For-hire autos and vans (publicos) 13

Taxis 2

Subtotal

Freight vehicles

Heavy trucks and tractors 25

Trailers 19

Subtotal

Cycles 7

Government vehicles 9

Total 830

Source: R. Shackson. August 1979. Assessment

of Opportunities for Conservation in

the Transportation Sector and Strategies

for Implementation. Report prepared for

the Committee on Future Energy Alternatives for Puerto Rico, Energy

Engineering Board, Assembly of

Engineering, National Research

Council. Arlington, Va.: Mellon

Institute-Energy Productivity Center.

Table 2.2.3-7 Relative Use of Energy in Passenger Transportation

Mode

Private

Urban

Intercity

Public

Urban

Intercity

Percentage of Total

Passenger Transport

Energy

72

20

3

5

Percentage of Total

Passenger Miles

53

28

6

13

Source: Energy in Puerto Rico's Routine Energy Engineering

Board, National Academy of Science 1980.

"t - 96
Table 2.2.3-8 Transportation Energy Use, 1977

AUTOMOBILE ENERGY USE

Year

1977

Gasoline

consumption

(trillions

of Btu)

67.7

Miles per

gallon

14.5

Btli per

vehicle-mile

8,621

Vehicle miles

(billions)

7.85

Number of

automobiles

660

Yearly

miles per

automobile

11,900

ENERGY USE BY TRUCKS

Energy Consumption (trillions of Btu)

Freight

Year

1977

Heavy

Trucks

5.8

Light

Trucks

4.2

Total Truck

Freight

10.0

Light Trucks

Passenger Mode

4.2

Total Energy

Consumption

by Trucks

14.2

AVIATION FUEL USE

Year

1977

Aviation fuels

(trillions of Btu)

14.2

FUEL USE FOR BUSES, "PUBLICOS," AND TAXIS

Fuel (trillions of Btu)

Year

1977

Gasoline

5.8

Diesel

(bus)

0.3

Kerosene

(bus)

0.4

Total

6.5

Source: Energy in Puerto Rico's Future.

National Academy of Sciences

(1980)

industry in Puerto Rico. The industrial groups with the highest energy intensities in terms of direct fuel

use in Puerto Rico are petroleum refining, petrochemicals, stone, clay, glass and concrete, paper products,

printing and publishing, metal products and electrical machinery. Nearly 60% of total industrial electricity consumption is in pharmaceuticals, oil refining and petrochemicals, and cement (see Table 2.2.3-10).

The leading growth industries in Puerto Rico are pharmaceuticals, prJfessional and scientific

instruments, and petrochemicals. Of these, petrochemicals is a major consumer ()f both petroleum products

and electricity. Pharmaceuticals is a significant user of electricity. The traditional industries that

continue to account for major shares of GDP and are low.in energy intensity are textiles and food products.

Little growth is expected in this group. Petroleum refining and stq.ne, glass, clay and c~ment are industries high in energy intensity, both petroleum product and electricity use. They face uncertain futures.

The future of Puerto Rico's induatries will largely depend on their compet~tiveness with those on the

U.S. mainland. This is particularly important for the petroleum refining and pet~ochemical industries. The

-r: _97 .--
Table 2.2.3-9 Direct Fuel Use by Industry, 1977

Standard

Industrial

Classification

22, 23

21

20

38

36

32

33, 34

26, 27

283

281,282,286

29

Textiles, apparel and related products

Tobacco products

Food and related products

Professional and scientific instruments

Electrical machinery

Stone, clay, glass and concrete products

Metal products

Paper products, printing and publishing

Drug products

Petrochemical products

Petroleum refining and related products

Other

Total

A

Fuel consumed

(thousands of

barrels)a

48.2

5.2

749.9

4.8

779.4

1,839.9

208.1

369.7

1,137.2

1,140.7

4,828c

57.9

11,189.0

B

GOP

(millions

of dollars) b

325.4

121. 3

521.1

165.3

381.7

89.6

94.4

64.9

866.1

253.5

117.8

317.9

3,319.0

A/B

Energy

Intens~ty

(bbls/lO $)

0.15

0.04

1. 44

0.03

2.09

20.53

2.20

5.70

1. 31

4.50

40.98

0.18

3.37

apreliminary Results, Puerto Rico Office of Energy, Survey of manufacturing energy use. October

1977.

bJorge F. Freyra. July 1979. Long Term

Committee on Future Energy Alternatives

Engineering, National Research Council.

CEstimated from refinery throughput.

Projections of the Pureto Rican Economy. Report to the

for Puerto Rico, Energy Engineering Board, Assembly of

See also Table 31.

Table 2.2.3-10 Industrial and Commercial

Electricity Consumption

Subsector

Pharmaceuticals

1978a

(trillions of Btu)

1.7

Oil Refining and Petrochemicals b

Cement

Other Industry

Total

7.97

0.68

6.37

16.75

aJorge F. Freyre. July 1979. Long Term Projections of the Puerto Rican Economy. Report to the

Committee on Future Energy Alternatives for Puerto

Rico, Energy Engineering Board, Assembly of

Engineering, National Research Council. Table 60.

~- 98
refining industry was founded on the basis of the availability of low-cost, foreign oil that could be

processed and sold at higher domestic prices on the island and the mainland. As long as world crude prices

remained below U. S. domestic prices, the high transportation costs resulting from the Jones Act (goods

transported by water between U. S. ports must be in U. S. -registered ships) did not affect the market

competitiveness and profitability of products from Puerto Rico's refineries. The dramatic rise in world oil

prices in 1973 and 1978-79 ended the cost advantage of Puerto Rico.

The petrochemical industry has undergone similar experience, with low-price, foreign-origin

feedstocks and a system of local tax incentives fueling the rapid growth of large, efficient, world-scale

petrochemical uni t s. The upheaval of oil prices and overcapacity, worldwide, of downstream facilities has

had a severe effect on Puerto Rico's petrochemical industry.

To counteract this market penalty, Puerto Rico has been included in the entitlements program (which

equalizes crude oil costs among all mainland U.S. refiners). Imports of najhtha feedstocks are also

included in the program, though it only partially offsets the cost differential. 1

Construction and mining are major components of industrial activity. Data regarding energy consumption directly attributable to the subsectors are lacking. Construction activity has declined significantly

over the past decade and remains in a depressed state. The rapid increase in man~facturing contributed to

an earlier increase in total construction activity. Housing is also a major element of total construction

activi ty, and the current depressed s tate of const ruction can largely be attributed to a falloff in new

housing starts. Highway and public works projects are a third component of construction.

Agriculture

Puerto Rico has been transformed from a traditional agricultural economy into an industrial-oriented

economy. Agriculture is now the smallest sector as measured by contribution to GDP. In 1976, it providecl

employment for only 6% of the work force and received only 5% of the total net income. 19

The energy-consuming activities in agriculture are: crops, dairy products, livestock, fishing and

lumber. The latter two are not significant in terms of energy consumption. Detailed data are not available

for the agriculture sector though a few general observations can be made. Electricity consumption is

primarily for irrigation pumps in crop production and for refrigeration and milking machines in the dairy

industry. Petroleum use is for farm machinery, fishing vessels and crop drying.

2.2.4 Possible Future Energy Demands

The estimation of future energy consumption for an economy as complex and modern as that of Puerto

Rico needs a comprehensive assessment. The future energy demand will be affected by several critical

factors some of which are the changes in the economic structure over the planning period, the availability

of different fuels at different prices, and the extent of the improvement in the efficiency of the energy

end-use devices. The estimated energy demand becomes even more uncertain as the forecasting period is

extended. Some of the energy assessment methodologies have included the development of economy-energy

analysis systems involving complex macro econometric models for the economy and tr.e energy sectors, and the

development of complex ene rgy demand/supply equi librium mode Is (usually having a great deal of end-use

detail). In the absence of such a methodology, a very simplistic approach is followed for this report for

estimating the total energy consumption in Puerto Rico to the year 2020.

2.2.4.1 Methodology

Projections of the energy demand are derived from the National Academy of Science (NAS) report

"Energy in Puerto Rico's Future up to 2000".1 This study provides the projections of energy demands to 2000

under the high and low growth economic scenarios (see Section 2.2.2). The methodology, assumptions and

results are highlighted below.

The total consumption of energy in Puerto Rico was projected to 2020 based on the energy elasticity

in the earlier period of 1985-2000. The energy elasticity is defined as the ratio of the average annual

percentage change in energy consumption to the average annual percentage change in gross product of the

economy. In the first step, the energy elasticity is estimated for the period 1985-2000 based on the NAS

projections of the gross product and the total energy consumption. Next, an assumption was made that the

energy elasticity for the period 1985-2000 would prevail in the subsequent period of 2000-2020. There will

"1.- 99
be two compensating factors influencing the energy intensity in Puerto Rico's economy: (a) the economy is

expected to become even more dominated by the manufacturing sector, which is relatively more energy

intensive, and (b) the trends in energy conservation as observed in most of the developed economies

worldwide (U.S., Japan, etc.) will continue in Puerto Rico. Finally, knowing the growth rates of gross

product between 2000-2020, and the energy elasticity, one can estimate the total energy consumption in

2020. However, the caveats of this type of highly simplified analysis cannot be over-emphasized.

2.2.4.2 Energy Demand Projections

AI. "High Growth" Energy Demand Projections: 1977-2000

Under the "High Growth" economic scenario, the energy demand projections for the residential sector

were based on the demand of energy services such as cooking, lighting, domestic hot water, and household

appliances. To estimate the future energy demand, the number of households in Puerto Rico was projected.

The unit energy demands were mostly unchanged. For selected large appliances, such as air conditioning

uni ts, the federally mandated efficiency improvements were incorporated. The demand for lighting and

miscellaneous small appliances was increased at the assumed rates of increases in personal income under the

scenario, with an adjustment to account for price-induced conservation. Another factor considered in the

analysis was the level of saturation of the appliances. For example, the electric water heater penetration

increases from 65 to 80 percent of all households in the "High Growth" scenario3 •

The fuel consumption in the transportation sector was estimated for automobiles, trucks, public

t'ransportation and aviation categories. Per capita ownership of automobiles is very high for Puerto Rico

relative to its per capita gross product. For this important category, the gasoline requirements were

linked to the projected number of vehicles in the fleet, personal income, and the annual sales of more

energy-efficient cars. The projected gasoline consumption reflected the impact of higher gasoline prices on

its use, the higher fraction of the second cars in the automobile fleet, and the federally mandated gasoline

efficiency for new cars. These factors resulted in a complete break with pre-1977 historical trends of

gasoline use. For estimating energy use in trucks, the growth in freight transportation was linked to the

growth in manufacturing and service sectors. The projections of the energy demand for aviation category was

linked to the number of visitors to the island as most of the jet fuel consumed in Puerto Rico is used by

flights leaving the island. Finally, the public transportation demand was estimated for the categories of

"publicos and taxis" and buses. In the absence of in-depth historical data, certain simplistic assumptions

were made for the increase in the number of passenger miles for publicos and taxis, and the energy use

intensity.

The industrial and commercial sector includes energy used in manufacturing, agriculture.

construction, trade, finance, and government and other services. The consumption of fuels and electricity

in this sector were linked to the level of the activity of the subsectors. The energy projections were

adjusted for any anticipated change in overall energy efficiency. In general, the energy consumption will

grow more slowly than output. The direct fuel demand by the industrial and commercial sector was projected

using one overall growth rate because no detailed breakdown of the data was available. In contrast, the

future de~nd for electricity was estimated on the basis of assumed separate growth rates for manufacturing

industries, refining and petrochemicals, pharmaceuticals, and cement. For other indust ries and for the

commercial sector, one overall growth rate was used. The commercial sector is comprised of trade, financial

services, insurance, real estate, and government categories.

Table 2.2.4-1 summarizes the primary energy consumption under "High Growth" scenario. The total

energy consumption grows from 341.8 trillion Btu in 1977 to 393.6 trillion Btu in 1985, and 588.1 trillion

Btu in 2000. These Puerto Rican energy demands correspond to an average annual growth of 1.8% between 1977

and 1985, and 2.7% between 1985 and 2000.

A2. "High Growth" Energy Demand Projections: 2000-2020 - The total energy consumption in Puerto

Rico is projected to 2020 on the basis of the projected overall energy elasticity in the period of 2000-

2020, and the estimated growth rates of the gross product during 2000-2020. As shown in Table 2.2.4-2, the

real gross product rises at an averal annual growth rate of 3.73% between 1985 and 2000 compared to 2.71%

annual increase in the island's total energy consumption in the same period. This implies that Puerto

Rico's energy elasticity was 0.73 in the period of 1985-2000.

:r_100
Table 2.2.4-1 Projections of Puerto Rican Energy Demands Under

Alternative Scenarios (1977-2000), Trillion Btu

High Growth Case Low Growth Case

1977 1985 2000 1985 2000

Primary Energy Consumption

Total Consumption: 341.8 393.6 588.1 364.8 469.8

Oil to electrici ty 134.7 154.8 257.3 142.2 200.5

Oil to residual 3.5 3.6 4.6 3.5 4.2

Oil to transportation 102.6 111.1 140.9 105.8 122.9

Oil to industrial and 84.6 107.2 159.9 97.6 122.0

commercial

Petroleum for non-energy 16.4 16.9 25.4 15.7 20.2

products

Fuel Consumption

Residential:

Electricity 11.80 15.88 26.75 14.90 21. 14

Cooking 1.37 1. 64 2.26 1.59 2.06

Water heating 3.93 5.09 8.04 4.77 6.19

Air conditioning 1. 23 1.92 3.81 1. 75 2.60

Television, 3.37 4.40 6.99 4.28 6.35

refrigerator

Lighting and 1. 90 2.83 5.65 2.51 3.94

miscellaneous

Petroleum:

Cooking (LPG) 2.02 2.73 4.61 2.65 4.19

Cooking (:~rosene) 1.44 0.91 0.0 0.88 0.0

Transportat~vLl:

Automobile 67.7 64.9 73.0 61.1 61.0

Trucks 14.2 19.1 27.7 17.6 21.7

Public Transportation 6.5 8.8 13.6 8.8 13.6

Aviation 14.2 18.3 26.6 18.3 26.6

Industrial & Co~ercial:

Electricity 25.1 30.56 50.43 27.75 39.01

Petroleum 84.6 107.2 159.9 97.6 122.0

Source: "Energy in Puerto Rico's Future," Energy Engineering Boarc'!,

National Academy of Sciences, Washington, D.C. (1980). T£ble IS,

Table 20, Table 29, Table 35.

As was discussed earlier, Puerto Rico's gross product is projected to rise 'it an average growth rate

of 3,77% between 2000 and 2020. Assuming the same energy elasticity of 0.73 for the period of 2000-2020,

the implied rate of increase of energy consumption is estimated to be 2,75% (.73 x 3.77%). As shown in

Table 2.2.4-3, this translates into Puerto Rico's total energy demand of 1,012 trillion Btu in 2020.

B1. "Low Growth" Energy Demand Projections: 1977-2000 - In order to have a range of plausible

energy demands, an alternative scenario was derived from the National Academy -of Sciences report (Case

B4 ). The energy demands are estimated under the pessimistic outlook of Puerto Rico's economic growth rates

discussed earlier. The alternative energy demands are estimated in a fashion sim:llar to the "High Growth"

energy projections discussed above. The technical assumptions and parameters remain the same between these

two scenarios.

The number of households are

0,115,000 vs 1,226,000 in 20005).

lower under "Low Growth" case compared to the "High Growth" case

Because of lower economic growth, the penetration of electric water

::r, 101
Table 2.2.4-2 Estimated Puerto Rico Energy Consumption

Elasticity Under Alternative Scenarios

High Growth Scenario Low Growth Scenario

1985

Real Gross Product b

(Millions of 1978$) 11,828a

Total Energy Consumptionc 393.6

(Trillions of Btu)

Estimated Energy Use

Elasticitye

aSource: Table 2.2.2-1.

2000

20,496a

588.1

Annual

% Change

1985-2000

2.71

.73

1985

10,880d

364.8

2000

15,806d

469.8

Annual

% Change

1985-2000

2.52 b

1. 70

.68

bReal gross product growth rate is equal to real gross domestic product growth rate

which are sourced from the report: "Energy in Puerto Rico I s Future", National Academy

of Sciences (1980), Table 10 (Case A and Case B)

cSource: "Energy in Pue rto Rico I s Future", National Academy of Sciences (1980),

Table 35 (Case A)

dSource: Table 2.2.2-3.

eEnergy use elasticity = (Annual percent change in energy use)/(Annual percent change

change in real gross product).

Table 2.2.4-3 Projection for Puerto Rico's Energy Demand Under Alternative Scenarios

High Growth Scenario Low Growth Scenario

2020

Annual

% Change

2000-2020 2020

Annual

% Change

2000-2020

Real Gross Product

(Millions of 1978$) 20,496 42,998 b 3.77 15,806 26,131 c 2.55

Energy Consumption Elasticity O.73d 0.68f

Total Energy Consumption

(Trillions of Btu) 588.1 l,Oll.8e 2.75 469.8 662.0e 1. 73

aSource: Table 2.2.2-4

bSource: Table 2.2.2-1

cSource: Table 2.2.2-3

dBased on the assumption that energy consumption elasticity remains same as

0.73 of period 1985-2000 (Table 2.2.4-2).

eEstimated

fBased on the assumption that energy consumption elasticity remains same as

0.68 of period 1985-2000 (Table 2.2.4-2).

r- 102
heaters is less under the "Low Growth" case compared to the "High Growth" case (75% vs 80% in 20006 ).

Furthermore, personal income is lower under the "Low Growth" case reducing the residential electricity

demand. Because of these factors, the residential electricity demand reaches only 14.90 trillion Btu

compared to 21.14 trillion Btu under the "High Growth" case.

The efficiency of automobiles through 2000 almost offsets the lower growth in the automobile fleet.

The transportation energy demand growth rate declines to 1.0% between 1985 and 2000 compared to 1.6% under

the alternative "High Growth" case.

The reduced activity in manufacturing and service sectors under this "Low Growth" scenario also

results in lower industrial energy demand.

The projected energy demands in resident ial, industrial and connnercial, and transportation sectors

are shown on Table 2.2.4-1 and increase from 341.8 trillion Btu in 1977 to 364.8 trillion Btu in 1985, and

469.8 trillion Btu in 2000. This increase in total energy use corresponds to a growth rate of 0.85% between

1977 and 1985 and 1.7% between 1985 and 2000.

B2. "Low Growth" Energy Demand Projections: 2000-2020 - Similar to the "High Growth" scenario,

Puerto Rico's energy demand is projected to 2020 under this pessimistic scenario. In the first step. the

energy elasticity for the period 1985-2000 was estimated to be 0.68 (as average annual increase of gross

product in this period is 2.52% vs 1. 70% for total energy use). Using this elasticity for the period of

2000-2020, the average annual growth rate of energy demand was estimated to be 1.73% as gross product grows

at the rate of 2.55%. This results in total energy demand of 662.0 trillion Btu in 2020. Tables 2.2.4-2

and 2.2.4-3 provide the details of the derivation of the energy demand projections.

Figure 2.2.4-1 shows the total energy demand of Puerto Rico under the alternative scenarios and is

estimated to be in the range of 0.662 to 1.102 quads in 2020. As discussed earlier, these projections must

be considered only as an indication of the future Puerto Rican energy demand. Only a detailed total

energy/economy assessment of the island as discussed earlier can provide reliable projections of energy

demands for planning purposes.

1000

:::I

IID

-0

In 500 l:

0

...

IHigh Growth Scenario

Low Growth Scenario

,...- , ...

....... ""'" ....... ""'" ......."'"

,.......- ....... ...-

----

1970 1980 1990 2000 2010

o --+-------.------,----r----r------,1

2020

Fiscal Years

Fig. 2.2.4-1 Projections of Energy Demand of Puerto Rico

'J> 103
2.2.5 Energy Conservation Possibilities

The opportuni ties open to Puerto Rico to conserve energy are numerous. The specific conserva tion

projects identified by government 1 and private sector 2 sources focus on the high energy-consuming

transportation and industrial sectors, emphasizing improved efficiencies in existing systems as well as

performance goals for future activities. Consideration is also given to conservation in buildings and in

electricity generation by utilities.

Transportation. Transportation energy conservation focuses primarily on reducing gasoline

consumption with a secondary benefit of improved traffic flows and increased use of public transportation.

The specific measures are:

(a) Rationalized Public Transport System

The bus system in Puerto Rico has 47 routes, many overlapping, which have been laid out to serve

every neighborhood from every other without a transfer. A more energy efficient system would consist of a

trunk line with true express buses operating as much as possible on priority lanes in the corridor linking

San Juan, Rio Piedras, and Carolina, with a westward spur to Bayamon. This trunk system would be supported

by a series of feeder lines. Although many trips would then require transfers, the total elapsed time for

most trips would be significantly reduced and the system would become a more attractive alternative to the

automobile. Such a system also should be capable of operating with fewer vehicle miles for a given capacity

and level of service. Also if public transportation is to operate as a true system, the publicos need to be

integrated into the network to serve as feeders in neighborhoods where full-size buses are not warranted.

The problem of limited off-peak service must be addressed if publicos are to be thus integrated into a

revised system.

(b) Park and Ride Lots

Under the park-and-ride lots measure, commuters would leave their cars in parking facilities at

suburban locations and board vans or buses for the commute to work. The schedule for operation of the

vehicles would be fixed during rush hours. Routes would run from the parking facilities to specific

employment centers in the heart of the city. This use of public transportation not only saves gasoline but

also reduces traffic congestion.

(c) Revised Taxi Fare System

The present rate structure for taxis prohibits the collection of multiple fares for the same trip. A

revision of this structure with the implementation of a shared ride system (allowing multiple fares for long

trips) would save fuel.

(d) Fuel-Economy-Based Excise Taxes and Registration Fees

Under present law, new and used passenger cars imported into Puerto Rico are subject to an excise tax

ranging from 14% to '85% of their values, depending on weight and horespower. This tax does not correlate

precisely with fuel economy, nor is it perceived as an efficiency tax. The Office of Energy has prepared a

bill, supported by the Govenor, that would substitute a tax shedule based on the U.S. Environmental

Protection Agency estimates of vehicle efficiency. The bill would substitute a tax varying from 7% (for a

car achieving 30 miles per gallon) to 85% (for a 13-miles-per-gallon car). If adopted, the PROE estimated

it would reduce fuel consumption by about 400,000 barrels per year.

(e) Parking Charges and Enforcement

The price of parking in the San Juan metropolitan area is generally less than $15 per month, significantly below that in comparable metropolitan areas on the mainland. These low prices encourage the use of

automobiles for trips that might otherwise have been made by public transportation. A study of these rates

might reveal the possibility of large gasoline savings from relatively modest rises in rates. If this hypothesis is correct, a gradual removal of controls, or at least a rise in the controlled price, should be considered.

(f) Traffic Engineering Improvements

The traffic engineering improvements measure would save fuel by improving traffic flow through

physical improvements to public roads. Improved traffic flow would, in turn, reduce travel time, idling

time, and the number of stop-go cycles. The provisions of such a measure include widening roadways at

critical locations, adding and improving exits on major roadways, and installing traffic-actuated traffic

lights at intersections.

r - 104
(g) Right Turn on Red

Right-turn-on-red has been in effect in Puerto Rico since 1977. As an energy conservation measure,

it improves traffic flow and thus vehicle efficiency. Fuel savings are realized as a result of reduced

traffic conges tion and idling time. As of 1980, right-turn-on red was permi t ted at 80 percent of

intersections controlled by traffic signals.

(h) Coordination of Government Transportation Activities

Puerto Rico's transporta-tion system is controlled by a number of government agencies. The Department

of Transportation and Public Works is responsible for constructing and maintaining highways and other public

facilities and for administering federal highway and transit funds. The Metropolitan Bus Authority owns and

operates the public transportation system of the San Juan metropolitan area, except for the publicos. The

Public Service Commission regulates publico routes and fares. The Department of Consumer Affairs controls

the rates charged for parking. The Office of Energy is responsible for developing energy policy, including

conservation programs, and for administrating federal and Puerto Rican energy funds. To provide focus on an

energy-efficient system, the Director of the Office of Enp.rgy recently was asked by the Governor to organize

a task force of senior representatives of each of the involved agencies, charged with developing a plan for

transportation. This appears to be a necessary first step in implementing many of the conservation measures

for transportation.

Buildings. Energy consumption in buildings in Puerto Rico is not high by mainland standards. As a

result, conservation efforts may not have a large net effect for the island as a whole but the individual

consumer wi 11 realize a measurable gain. The conservation measures include:

(a) Lighting Efficiency Standards

Efficiency standards for lighting are designed to reduce the use of electric~ty for lighting in both

new and existing buildings. The incorporation of standards as a supplement to the existing building code

makes compliance mandatory for all new construction. The plan would make conformity to lighting standards

in existing buildings mandatory for public buildings in excess of 10,000 sq. feet. It would be voluntary

for all other existing buildings.

(b) Thermal Efficiency Standards

Thermal efficiency standards are directed towards minimizing energy consumption for air conditioning,

primarily in new buildings. In existing buildings a number of measures can be taken to save energy

including installing awnings, interior and exterior shading devices, and insulating roofs.

(c) Energy Audits

Energy audits help to pinpoint sources of energy waste and identify appropriate methods or equipment

to improve efficiency. Audits on government, industrial and commercial establishments have the potential to

save significant amounts of energy.

Industry. The opportunities to conserve energy in industry are broad and can be identified through

energy audits. The most far-reaching effort is cogeneration, an arrangement that pcoduces both electricity

and useful heat from the same primary energy source.

Much of the potential for cogeneration is found in industri.al operations that consume large

quantities of steam generated in boilers on-site. Detailed studies of candidate sites are required to

determine the applicability, since the economic feasilibility of cogeneration is so heavily dependent on

individual circumstances. Petrochemical plants, refineries and sugar mills appear to be likely candidates.

In 1981, an assessment of the cogeneration potential of Puerto Rico was conducted under the auspices

of the Puerto Rico Office of Energy. Three hundred forty-seven (347) individual PREPA customers were

identified as having cogeneration potential, totalling 473 MW considered to be technically attainable. 3 The

itemized cogeneration potential is summarized as:

1. 183 classical cogenerators (184 MW)

2. 56 chiller candidates (cogenerat ion potential based on dri ving chillers to provide ai r

conditioning (139 MW)

1.. 105
3. 6 process industries for which PROE gathered process characterization data (22 MW)

4. 102 candidates analyzed with estimated data (128 MW)

The purpose of the study was to provide order of magnitude cogeneration potential for the Commonwealth as a

whole rather than site or sector-specific potential. The review does however, provide a sound source of

information on which to base decisions regarding the most likely candidate sites for detailed evaluation and

consideration for cogeneration. Cogeneration is also applicable to large resort hotels.

Further opportunities exist for industrial cogeneration by supplying process steam to industry

directly from a utility power station. The location of the industrial facility must be close to that of the

power station. For practical purposes, this alternative applies to future plans and requires coordination

between PREPA and industry.

Education and Information. The success of conservation rests with the consuming public's willingness

to adhere to plans and standards. As such, an information program that explains how conservation benefits

the individual as well as the island as a whole is a necessary first step. Several approaches can be taken

to effect such a program. The alternatives appropriate for Puerto Rico include a public awareness campaign

that relies on the use of multimedia advertising; a public information system made up of a hotline, a

resource center and a series of conferences; and a formal educational program for students in Puerto Rico's

schools. All of them look to instilling an awareness of conservation's value in the public conscience.

Electricity Rate Reform. Electricity rate reform as a means of conserving energy is grounded in the

principle that rates should reflect the costs of producing and distributing electricity. The possible rate

structure changes are discussed later.

Government. The measures identified to conserve energy in government operations are directed towards

two areas -- current use and future efficiency. Actions that can be taken immediately to reduce the use of

energy in government facilitif;!s and buildings include: delamping government buildings, converting street

lighting to use less energy intensive bulbs, and controlling electricity use at off-hours in government

offices, public parks and recreational facilities. Energy efficiency in the future can be supported by

government standards that require the consideration of energy-efficiency of products in making a purchasing

decision. As the government purchases such equipment or automobiles, motorcycles, air conditioners, etc.,

these measures offer the opportunity for significant energy savings.

2.3 THE ENERGY SUPPLY SYSTEM

The discussion of Puerto Rico's energy supply system is divided into two parts.

the existing system and identifies the major issues. The second deals with the future

currently planned and what might be considered as possibilities.

2.3.1 The Current Energy System

The first deals with

system, both what is

The current system includes fossil fuel use, the electric system, and renewable resource

technologies.

2.3.1.1 Fossil Fuels

There appears to be no evidence that any extensive fossil fuel (coal, oil, natural gas) deposits

exist in Puerto Rico. 1 ,2,3 Based on a reconnaisance survey21 by the U.S. Geological Survey, some mangrove

peat deposits may exist in the upland region along the north shore. The potential for the existance of

petroleum in Puerto Rico was summarized in Ref. 4, which forms the basis for the following.

Oil Potential

Oil and gas generally form in sedimentary deposits resulting from the accumulation and burial of

large quantities of organic matter under suitable geologic conditions, which include:

• A suitable source rock containing the necessary organic matter Eor the generation of

hydrocarbons.

I - 106
• A suitable porous reservoir rock.

• A suitable naturally sealed entrapment feature to collect and confine the oil and/or gas.

To be economically attractive, a particular hydrocarbon prospect must be accessibl,! and of sufficient size

and volume to offset exploration and production costs.

To date, only two confirmed reports of natural petroleum are known in Puerto Rico. Petroliferous

limestone concentrations in shale beds near the town of Coamo in the south-central pa~t of the island were

reported by Glover. 5 A seep from oil-impregnated sediments beneath a lake about 8 km northeast of Ponce in

the south-central part of Pue~to Rico was reported by Monroe. 6 Both of these occurrences involved Eocene

age or older rocks and most authorities agree that any petroleum that may have be'~n formed could not have

survived the history of extensive deformation, intrusion and metamorphism of the rocks. Therefore,

substantial quantities of oil and gas are unlikely in the older rocks that occur in the Island's core and

lie beneath its northeast sedimentary deposits. These petroleum occurences, however, confirm the existence

of formative conditions for petroleum in the geologic history of Puerto Rico.

The ~elatively thick mid-tertiary marine sedimentary sequence of the north flank of Puerto Rico is

stratigraphically, structurally, and historically more favorable for the accumulation of hydrocarbons.

In 1944, the Puerto Rico Development Company asked the U.S. Geological Survey to investigate the oil

and gas possibilities of the island. As the coastal plains of Puerto Rico offer the best possibilities, a

team composed of C.R. Thomas, A.D. Zapp, and H.R. Bergquist spent 4 months during the fall and winter 1944-

45 making stratigraphic studies and preparing an overall geologic map of the beltil of the middle Tertiary

rocks on both the north and south coasts of Puerto Rico. From aerial and structural mapping studies and

reconnaisance geophysical surveys in the north-coast mid-tertiar8 sedimentary belt, a variety of prospective

sedimentary sections and structures have been identified. 6,7, ,9 Interfingering limestones and clastic

strata as well as anti-clines, burried hills and ridges, and fault traps both onshore and offsho~e may

provide favorable conduits for the accumulation of hydrocarbons. In general, subsurface conditions on the

north coast are more favorable for st~atigraphic traps, while abundant faults on the south coast are

favorable fo~ structural traps. The reconnaisance survey was pe'rformed on the nO,rlh coast between San Juan

and Aguadil1a by United Geophysical Company, Inc., for both onshore and offshore ar8as.

The first exploratory wells for petroleum were drilled by Kewanee Interamerican Oil Co. in 1959 and

1960. The wells (CPR 1-3) were drilled on the south-central coast between Ponce and Santa Isabel. A fourth

well (CPR 4) was drilled on the north-central coast at Islate. No positivI! evidence of petroleum

hydroca~bons was encountered at any of the four well locations. Information gained from well CPR 4

indicated the presence of a variety of limestones, sandstones, and conglomerates wi th porosi ties and

permeabilities considered suitable for source rocks, reservoir rocks, and continuing layers. However,

Briggs 11 reported that low-grade coal (lignite) was encountered in the San Sebastian formation in test we 11

CPR 4 and in the outcrop.

Between 1968 and 1971 exploration permits for much of the coastal area were g~anted to P.R. Petroleum

Explo~ation Co. (July 14,1968), Weaver Oil and Gas Co. (Aug. 20, 1968), Caribe Sun Oil Co. (September

11,1969) and Oceanic Exploration Co. (September 24, 1971). All of these permi ts have since expired. In

1969, a number of continuous seismic profiles were made offshore on the south coast Muertos shelf using a

13,000-joule sparker. Although some interesting st~uctures were identified, the detail was insufficient to

identify particular areas.

The most promising prospects for oil and gas were identified as a result of extensive geophysical

surveys in 1973 and 1974 by the Western Geophysical Company and Furgo, Inc. 12 for the purpose of site

selection for nuclear power plants. Offshore surveying included the use of magnetometer and nonexplosive

seismic techniques, with the deep penetrating aqua pulse system and a shallow-sparker profiling system.

Coverage was provided for the areas from San Juan west around the island to the southwestern shelf area and

for the area off the southeastern corner of the island. Onshore seismic surveys included the use of the

nonexplosive Vi broseis system on selected roads be tween Dorado and Islote on the north-central coast and

explosi ve surveys in the vicini ty of Islote. From these surveys, potent ia lly large offshore prospects

involving a previously undetected, discontinuous, deep unit designated as formation "R" was identified.

Based on seismic-velocity information, DeGolyer and Mc;"aughton 13 postulated that formation "R" may be upper

cre taceous to Eocene limestones or dolomi te that accumulated on the flanks of acoust ical basement highs in

the vicinity of Manati, Dorado, and San Juan. Reefal limestones of this age are known to produce petroleum

elsewhere in the Caribbean-Gulf of Mexico region. Howeve r, according to DeJ ong

9 formation "R" could also

represent less favorable volcanic rocks.

1. 107
Although the nature of the formation "R" prospects is currently speculative, their size is of

sufficient magnitude to make them economically attractive. The total extent of the prospects is unknown,

especially in the vicinity of and east of San Juan.

The extent of any further drilling or exploration activities within the last 2-3 years is unknown.

An exhaustive search of activities in this field of endeavor was not undertaken.

Gas Potential

Natural gas can be classified as conventional or unconventional. Conventional natural gas is found

with petroleum (associated, free or dissolved gas) or separately (non-associated). Unconventional gas

sources as defined in Ref. 14 includes gas from Devonian shale, geopressured brines, coal seams, and tightgas rese rvoirs. This definition excluded sewage gas, synthetic natural gas and gas from landfills.

Devonian shale gas is found in deposits of black or gray shale horizons. The black shales have a higher gas

content than the gray shales and are generally believed to be the predominant source beds of the natural gas

found in the shales. Some geopressured brine reservoirs, which are underground reservoirs that contain hot

salt water at a pressure gradient greater than 0.465 psi per foot of depth, are known to contain methane

dissolved in the brine. Tight gas is defined as natural gas in either blanket or lenticular formations that

have in-situ effective permeability of less than I millidarcy. Historically, most of these formations have

been uneconomical to produce at prior gas prices due to the low natural flow rates of the gas. Coal-bed gas

is a natural byproduct of coal formation and can be found in varying quantities in coal seams lying below

drainage. Although a large portion of the gas thus formed has escaped to the atmosphere, a portion may have

been trapped and remains in place. Coal-bed gas molecules exhibit a high affinity for their parent

material, which enahles larger volumes of the gas to be stored in coal than in porous media (sandstones,

etc.) at the same conditions. The coal-gas resource is intimately related to the coal resource base itself.

A limited search of accessible literature has failed to find any information related to

of coal fields, Devonian shale, tight gas formations or geopressured brines in Puerto Rico.

assumed that unconventional gas sources do not exist on the Island.

Coal Potential

the existence

Hence, it is

Whereas there is no evidence of extensive coal deposits in Puerto Rico, Monroe l5 states that near

Lares, the upper middle part of the San Sebastian formation contains several thin beds of lignite. In the

section exposed along Highway 111 in the northern part of Lares, five beds of lignite each about 10-cm

thick, are exposed in a sequence of silty carbonaceous clay and fine sand, whose top is 21 m below the base

<It the Lares limestone. Lignite has also been reported in the San Sebastian formation by Briggsll from the

drilling of the test well CPR 4 on the Atlantic coast east of Arecibo.

Federal Energy Incentives and Policies

Due to the lack of any developable indigenous fossil resources, Puerto Rico has been an importer of

petroleum and its products. Governmental incentives led to the development of petroleum refining and

petrochemical industries between 1955 and 1971. 2 Hence, Puerto Rico has become an exporter of refined

petroleum products whose quantities about equal 35% of its total petroleum import volume.

A brief survey of some of the Federal energy policies that impacted the Puerto Rican petroleum and

petrochemical industry follows. Additional details can be found in Ref. 16. Federal energy involvement in

Puerto Rico began in 1959 with the establishment of crude oil import quotas by the Oil Import Administration

of the Interior Department. This mandatory oil-import program (MOIP) was established by Presidential

Proclamation 3279 (~arch 10, 1959), and amended in its entirety by Presidential Proclamation 4210 (April 18,

1979). These MOIP regulations protected high domestic crude oil prices by imposing quotas on the amount of

cheap foreign oil that could be imported into the U.S. It also provided to island refiners, a long-term

allocation (usually 10 years) that permitted specified volumes of crude or unfinished oils to be imported

under a fee-exempt license. On May 1, 1973, the quotas were converted to a fee system of imports, some of

which were fee-exempt and others were fee-paid. Puerto Rican refiners benefited from the long-term

allocation of fee-free licenses and when these licenses expired, they obtained additional exceptions to the

payment of license fees. Consequently the refiners experienced no disadvantage from the license fee program

or any impact from the exemptions.

t_l08
In order to stimulate the local economy and to provide vital employment opportunities in Puerto Rico,

Presidential Proclamation 3693 (Decembe~ 19, 1965) was adopted. This proclamation authorized the import of

cheaper foreign oil and naptha by firms establishing in Puerto Rico. It also granted valuable preferential

treatment to those companies by excluding their ship~ents of oil and oil-derived products to the continental

U.S. from import quotas. These incentives gave the companies a competitive advantage of $1.35 to $1.45 per

barrel over mainland firms. Also, cheaper electricity rates were available from the use of the lower-cost

forei gn oi 1 for electricity generation. In return for these incentives, the industrial firms had to commit

to making certain investments. Such provisions were originally advantageous to both the Island and U.S.

industries. They provided the U. S. fi rms wi th inexpensive petrochemical feedstocks, tax exemptions and

relatively cheap labor; Puerto Rico gained economic advantages in new industries, increased investments and

earnings and employment opportunities for its population.

The price advantage of foreign oil disappeared in the fall of 1973 when the oil embargo and

subsequent sharp increases in oil prices from OPEC countries occured. These actions led to the Emergency

Petroleum Allocation Act (EPAA) in November 1973. This act established ceiling prices on domestic crude oil

and petroleum products to prevent domestic producers from increasing their prices to foreign levels. It

resulted in the average price of domestic crude oil becoming considerably lower than the average price of

foreign oil. These circumstances led to the establishment of the crude oil entitlements program in November

1974. Under the program, refiners utilizing more than the national average amount of price-controlled

domestic crude are required to buy entitlements for each barrel processed above this average from refiners

who use less than average amounts of price-controlled crude. This program, essentially functions as an

income transfer program between refineries so that their average acquisition costs for crude oil are

equivalent. Puerto Rican refiners are included in the entitlements program.

Naphtha, the primary feedstock imported by the Island for use in its petrochemical facilities, was

decontrolled in July 1976, although the price continues to be affected by the entitlements program. In the

continental United States, naphtha is an intermediate product in the refining process, and meets domestic

requirements. The costs of production of domestic naphtha are substantially lower than the prices for

naphtha in the world market. A program which provides entitlements for naphtha feedstock imports for use in

island petrochemical plants was adopted and became effective July 1976. The naphtha entitlements program

was designed to subsidize refiners in Puerto Rico who have no access to lower priced domestic naphtha but

must rely on higher priced imports. While this program has neither completely remedied the cost problems

associated with imported naphtha feedstock nor the competitive position of Puerto Rican firms versus

domestic manufacturers, it has assisted in improving the situation experienced by importers on the island

prior to implementation of the program. Currently, mainland firms do not have a naphtha entitlements

deduction for volumes of petrochemicals exported from the U.S. However, Puerto Rican firms have a naphtha

entitlement deduction for exported petrochemicals and thus are limited in the participation in the export

market. DOE has recognized this inequity and has granted exceptions in the form of additional entitlements

to Puerto Rican refining and petrochemical firms on a case-by-case basis.

To add to the problems experienced by Puerto Rican firms, all exports by water to the U.S. must

travel by U.S. registered ships as required by the Merchant Marine Act of 1920 (Jones Act 46 U.S.C. 883).

These ships typically have relatively high freight charges, which adds another cost disadvantage to the

Island.

Imports of Crude Oil and Refined Products

A unique feature of the Puerto Rican refining and petrochemical industry is its total dependence upon

imported crude oil and naphtha for its feedstocks. Imported quantities of crude oil and refined products by

refiners and wholesalers for the calendar years 1976-1980 as obtained from Ref. 17 are shown in Table

2.3.1.1-1. Imports by wholesalers consisted of all of the aviation fuel and in recent years all of the

gasoline. The average price per barrel for these imports is shown in Table 2.3.1.1-2. The country of

origin for these imports is given in Table 2.3.'1.1-3. In the early seventies, over 70% of imported oil came

from Venezuela. In 1974 this percentage dropped to about 40% and has steadily declined since that time.

Also evident is the drop in the total quantity of "imports in recent years. This decline is a result of poor

world economic conditions and the effects of conservation efforts.

Refining

Puerto Rico has three petroleum refineries with a total capacity of 284,000 barrels per day (bid) as

of January 1, 1982. Capaci ty figures vary somewhat with the year and refe rence cited and the data

1.- 109
Table 2.3.1.1-1 Volume of Imports of Crude Oil and Refined

Products by Refiners and Wholesalers of

Puerto Rico

Volume (106 Barrels)

Product 1976 1977 1978 1979 1980 1981 a

Crude Oil 83.1 77.7 77.3 69.2 59.0 52.5

Naphtha 36.6 42.4 38.4 34.2 32.6 30.1

Motor Gasoline 0.8 0.2 0.3 2.0 2.5 2.3

Aviation Fuel 1.1 1.4 2.1 2.2 1.6 1.6

Other Products 0.4 0.7 0.4 1.6 1.6 10.8

Total 122.0 122.4 118.5 109.2 97.3 97.3

a1981 data is for fiscal year 1981, Source: Ref. 20.

Source: Ref. 17.

Table 2.3.1.1-2 Average Price of Imports of Crude Oil and

Refined Products by Refiners and Wholesalers

of Puerto Rico

Price ($ Per Barrel)

Product 1976 1977 1978 1979 1980 1981 a

Crude Oil 12.48 13.86 13.69 20.28 29.45 32.02

Naphtha 14.21 14.75 15.42 30.80 36.44 37.19

Motor Gasoline 16.53 19.66 19.53 36.13 47.77 47.85

Aviation Fuel 16.95 18.43 19.01 29.29 41.66 42.07

a1981 data is for fiscal year 1981, Source: Ref. 20.

Source: Ref. 17.

presented in this report is from Ref. 18 and is based on calendar days. (Calendar-day figures are the

average volume a refinery unit processes each day including down time used for turnarounds. This is the

actual volume for the year divided by 365. Stream-day figures represent the amount a unit can process when

running full capacity for short periods.) The three refineries are: Commonwealth Oil Refining Co. (CORCO),

located on the south coast at Penuelas, Yabucoa Sun Oil Co., located on the south coast at Yabucoa, and

Caribbean Gulf Refining Corp. located on the north coast at Bayamon (San Juan metropolitan area). In

addition, there is an aromatics plant owned by Phillips Puerto Rico Corp., Inc. which is located on the

south coast at Guayama and converts naphtha into gasoline and aromatics (benzene, toluene, xylene, etc.).

There is also a small operation by Peerless Petrochemicals for which no information is currently

available. Table 2.3.1.1-4 contains information on charge and production capacity of the three refineries.

Details on these refineries are limited. CORCO is the largest refinery with 57% of the total

refining capacity in Puerto Rico. Its principal products are liquefied petroleum gas (LPG), aviation fuel,

kerosene, motor gasoline, naphtha, residual fuels and intermediate distillates. Yabucoa Sun Oil, owned by

Sun Oil Co. of the U.S. has 30% of the Island refining capacity. It is basically a lubricating oil

facility but also produces naphtha, distillate and residual fuel oils. Essentially, all lubes and about

half of the other products are shipped to the east coast of the U.S. The remaining products from the Sun

Oil Co. are consumed on the Island. The residual fuel oil is sold to the authority's Aquirre station on the

south coast and also as boiler fuel for ships. Caribbean Gulf Refining Corp., owned by Gulf Oil Corp. of

the U.S., with the remaining 13% of the refining capacity produces about 25% gasoline, 25% middle

distillates. and 50% residual oil. All of these products are consumed on the Island, except for small

amounts of distillates shipped to the east coast of the U.S.

]: _ 110
Table 2.3.1.1-3 Country of Origin of Imported Crude Oil by Puerto Rican Refiners

1976 1977 1978 1979 1980 1981a

106 Barrels 106 Barrels % 106 Barrels 106 Barrels 106 Barrels 10 Country 6 Barrels

[nlted States 1.9 2.3 0.5 0.7 13.1 16.9 21.0 30.4 25.7 43.6 23.5 44.6

Venezuela 35.1 42.2 31.4 40.4 26.2 33,9 25.6 37.0 12.9 21.8 14.1 26.9

Middle East 15.4 18.5 22.7 29.2 1l.3 14.6 5.8 8.0 8,8 15.0 6.0 1l.5

Other Countries 30.7 37.0 23.0 29.6 26.7 34.6 16.8 11.~ ~.~ ....!!.:!

Total 83.1 100.0 77.7 100.0 77.3 100.0 69.2 100.0 5~,u Lvv.v 52.5 100.0

Source: Ref. 17.

a 1981 data is for fiscal year 1981. Source: Ref. 20.

Table 2.3.1.1-4 Puerto Rico Refining Capacities

Company and Refinery

Location

Charge Capacity (bled)

Vacuum ThenDal Catalytic Cat Cat hydroCrude Diati1lation Operations Cracking RefonDing Cracking

Production capacity (bled)

Ca t hydro- Alky. Aromatieal Hydrog en

treating Poly. Iaomerization Lubea MMcfd

Caribbean Qllf Re- 38.000 20,000 12,000 6,000 6,000 1,000

fining Corp-Bayamon

Commonwealth 011 Re- 161,000 65,000 20,000 40,000 70,000

fining CI-Penue1aa

Yabucoa Sun 011 Co.- 85,000 42,500 15,600

Yabueoa

Total 284,000 127,500 20,000 52,000 76,000 15,600

Source: Ref. 18.

70,000

16,000

103,000

4,500

2,400

7,900

44,000

6,400

3,400

53,800 6,500 18.0

CORCO is a privately owned firm that filed for bankruptcy in March, 1978, as a result of losses from

some fixed-price contracts and the escalation of oil prices after 1973. In 1979, an agreement in principle

between CORCO and Arabian Sea Oil Corp. for investments and crude oil supply was arranged. At that time,

the agreement would form the basis of a plan for CORCO's emerging from bankruptcy. CORCO supplies about 69%

of the Island's petroleum products; 30% of their products were shipped to the U.S. and the remainder to

foreign markets. The major recipients of the internal sales were other major oil companies, the Puerto Rico

Water Resources Authority for electricity generation, and CORCO's petrochemical operations.

CORCO has transported significant amounts of the crude oil and naphtha feedstocks it purchases in its

chartered oil tankers. The company also transports significant amounts of its refined petroleum products

and its petrochemical products in ships or barges that it either owns or charters. Due to a significant

decrease in cargo rates resulting from worldwide excess capacity and a reduction in the level of utilization

of vessels by the company as a result of a decline in business activity, CORCO has been incurring

significant losses from its tanker operation.

The production 17 of petroleum products by Puerto Rican refiners is given in Table 2.3.1.1-5 for the

calendar years 1976-1980 and fiscal year 1981. For the same time span, the amount of products sold locally

and exported by the refiners are listed in Table 2.3.1.1-6. Over 90% of the exported products go to the

U.S.

As of June, 1981, Puerto Rico had 177 storage tanks 19 for petroleum feedstock and refined products

for a total design capacity (capacity of tanks if completely filled; working capacity is about 81% less than

design capacity) of 17,200,700 barrels. A breakdown of this capacity is given in Ref. 19.

1>111
Table 2.3.1.1-5 Refinery Production of Petroleum

Products in Puerto Rico

Volume (106 Barrels)

Product 1976 1977 1978 1979 1980

Product

Naphtha

Motor Gasoline

Aviation Fuel

Middle Distillates

Refined Gas

Residual Fuel

011s

Aromatics

Pitch and

Asphalt

Other

Total

-- -_. -- - - ...- ---.--. -.-

Naphtha 4.7 5.6 4.8 5.1 4.3 3.4

Refined Gas 5.3 5.1 4.7 4.7 4.4 4.1

Middle Distillates 23.9 20.8 20.3 17. 7 18.1 15.0

Residual Fuel Oil 30.1 30.4 30.4 27.6 22.4 19.4

Motor Gasoline 27.4 32.0 30.2 28.2 25.2 24.8

Aviation Fuel 1. 1 1.2 1.0 1.2 1.1 0.9

Lubricants 1.3 1.9 1.6 2.0 2.0 1.9

Aromatics 9.2 8.8 8.6 7.6 7.5 7.0

Other PrOducts 0.9 0.7 1.1 0.7 1.0 0.8

Total 103.8 106.5 102.9 95.0 85.9 77.2

a1981 data is for fiscal year 1981. Source: Ref. 20.

Source: Ref. 17.

Table 2.3.1.1-6 Quantity of Petroleum Products Sold Locally

and Exported by Puerto Rican Refiners

Volume (10 6 barrels)

1976 1977 1978 1979 1980 1981

Local Export Local Export Local Export Local Export Local Export Local Export

16.7 16.4 15.5 15.8 14.3 13.2

13.8 14.0 13.8 18.2 15.0 16.1 12.2 16.0 10.6 14.1 26.2 14.3

1.1 1.1 0.9 0.8 0.8 3.0

6.6 12.4 6.3 13.6 7.8 12.2 5.5 12.1 6.3 11. 7.8 35.5

2.2 2.2 1.8 1.9 1.9 3.9

22.7 6.8 25.8 3.4 25.4 2.7 25.0 3.2 18.9 3.2 18.7 2.5

1.8 6.4 2.9 5.4 4.2 4.5 3.6 4.2 3.8 3.4 3.8 3.1

0.3 0.1 0.2 0.2 0.3 0.3

3.1 6.4 4.6 3.1 3.7 0.3 2.8

65.2 42.7 68.6 47.0 70.7 40.0 65.1 38.5 56.9 35.6 77.3 30.9

a1981 data are for fiscal year 1981. Source: Ref. 20.

Source: Ref. 17.

Petrochemical Industry

The petrochemical industry in Puerto Rico was founded upon the basis of the ready availability of

low-cost, foreign-origin feedstocks and a system of local incentives with emphasis on industrial tax exemption. However, the worldwide upheaval of oil prices during 1974-1977 eliminated many of the economic

advantages of producing petrochemicals in Puerto Rico. These feedstock price changes occured before the

Island's petrochemical complex had attained an optimum structure, and coincided with the 1974-1975 worldwide

recession which caused a slump in demand for petrochemicals. In addition, the cost of electricity escalated

well above that of the mainland. These events discouraged further investment in downstream petrochemical

facilities and caused a number of the plants to close.

:t_112
Naphtha is the basic feedstock for all petrochemical production on the Island. It is either imported

or produced in local refineries from imported crude oil. There are no published statistical data on petrochemical production, consumption, and exports on a weight basis because this information would reveal individual company operations. The petrochemical products are classified as basic or intermediate, and are

almost totally shipped to the mainland for further processing into finished goods. Figures 2.3.1.1-1 and

2.3.1.1-2 are schematic diagrams of the Island's refinery and petrochemical industries as initially

structured.

The major petrochemical core facilities are owned by Union Carbide, Inc., CORCO, Phillips Petroleum

Co., and PPG Industries. The Puerto Rico petroleum refineries and petrochemical plants are highly

interdependent, and in a few cases, operations are vertically integrated. In general, the refineries

provide naphtha, gas oil, process fuels, and residual fuels for the petrochemical units. The latter in turn

supply fuel-producing operating with aromatics, fuel gases, raffinate and raw materials for alkylate.

CORCO represents the largest industrial complex in Puerto Rico. It has joint ventures with the Herco

Chemical Corp., Puerto Rico Olefins Corp., and Oxchem Enterprises. Herco Chemical Corp. is jointly owned by

CORCO and Hercofina (a joint venture 75% owned by Hercules and "the remainder by American Petrofina, Inc.)

and produces paraxylene, which is a vital component in the manufacture of polyester fibers and polyester

film. Xylene feedstocks are purchased from CORCO's aromatics and ethylbenzene plants and the paraxylene is

sold to Hercofina. Due to a new and more efficient catalyst, certain plant facilities of Herco have been

shut down since January, 1977.

Puerto Rico Olefins Corp. (PRO) is a joint venture by CORCO and PPG Industries, Inc. to produce

ethylene, propylene, and butadiene. The ethylene was sold to PPG and Union Carbide for further downtream

processing in Puerto Rico. The propylene is sold to Oxochem Enterprise as a feedstock for manufacturing

oxoalcohols for use in plastic products. The butadiene is sold mainly to Firestone Rubber Co., as a raw

market for making synthetic rubber. PRO operated at a loss since it began operations in mid-1972. It had

numerous shutdowns and technical difficulties and never operated at full capacity because of a lack of

market for its ethylene. PRO terminated operations in November 1978.

U.SIC PICOJCI:a1 Slil-rl'I~II(D PlCDltIS

RIIIDCl.l 'iii OIL flO. I.P'O~I[O

1 "'~""" }

Ulllll.l1 tITL >eIllJ[ ""I 1 "'" I R(fIUIICS Lilli PilUS lCRT lI[ 1I1C111Uil0 [..,_I 1 LlCl:UlIS r---LP; '(IROCtn.leAl 101 Il!IlIlI~'l.l '-,URflUl[ ,lUiIIC lOr I---Jllrum IIl1U101l1[ t'OIlflOU 1 .lIIll'" r--- 1\/'lO1l! P1tO!lJCIS '0 IIlC.Il Ull PllQWC IIll' CTClDH[UI(-----..j luel SoILT '1101 uu CII;ll O! COolCO I---IUllU., 11:10

IU.O! I---SIUUI .ill..ill!!l~ IIllM

~uU r--- OIU:IIilfll'JIIIUTCI UHIU PIlliu"m

PI[.LIII I--- ClSIlII["LOCl.l1 [llllll '''STlCIIlII I'Clr_n~ I'Cllrqrn[1I

r---,.-I IlIr.S }WO-' 'ISJJI IIIW I--- ~IIILLAII 1m OIL • 11PH£ll fag;llOCILU

;;- ClJlm PIIc.1;lClIl

"/lIHI

_.m .. ,mJL

" U1~' ClI~D1

::: • PIIILIP!> a:Rf "1I01[ :;i .. ..."c,mot.l. DIOCHU 111",11011

1'l00umli m Ol[f1.IIHNTlIIE. PICPll[J1"lLll~['E. C mil." fTC I

~II COllc:lClCLOh'Il", [[.11[1( CUCOl

S111lOC1li1 C3Q.ca lAOlUTtS ISU!UI. 13lUI'I[ Inlll[S.(IC I OI'[lrtlClllI

PlClHlIS '-lltol' PI OiUIltAL.

""LliPS cm Itl en )fICO~ mCOl[IN[11

UlIOI CAUIO( Cnllll!lOPlU( 'LIPliliE 1 IRQur, SIlIlITI MUll; IIHTDilO(

P1IRlISS

[I'lL[I(OIl;(\

I Itill !!Illl{

~:IOI IIIIOC[l 1;0111[1[ All \11101 cuml Il I l~ 'Iooum omlI DlClCLOPUTlDl[1I

!THllE I[ ,-mln[1I IIIIlJ "1I10!

~OflA~Ul1 CtltO~At o.lOil.ALlAll ~LQ:lll[

f'Il,lI~l.ItllOI ~~~\WlU.ill£!... ["trir- CUIYLO PlUIKIIPI r.u.r ~;~IIOCI - 11T[III~lIlS '"'' CHUllIilII 1010.(1 llCO "'(IICll I"lLIVlln_1II I

PPC DICHIORO! Iml" IIOIIOIA PllI1ElI IILI I '"111;\ CIIILOill( pp;

Fig. 2.3.1.1-1 Puerto Rico Refining and Petrochemical Industry:

Imported Materials to Finished Products

J> 113
211 .... ..[ ...,NC.

N BUIANOl

ISO .UIAHO~

OWIIWfollSOfI".'"

....,EllrOPIICOOll!fll'..S ~""""OI~'''''ColfllOUS,TAIES !IO!IO

()I:CICJoIE .. ·COM"C*WI"~''''OL,*AGII.CEIIO.KI;

IoIEACOPI COW"CNIII1lI'(ALI"'Ol~/I"IEACO"I~A·'llIll/~1

CAAIMrSQ;llllENI! "'1"'OI'IIEQllIII'M1TSIJ8ISMI'~Al''''OO~I~',.''',

II.COQolEII.(Jl.L 'OfI..... II\ASJ.Cl" 'Iaa,aAlLO'lllIlgl

·JC)I"I'Il"'UAE~",Ao..LIESAJCl""''''C.&NN1'~.IIlI''

OI:OALCXlMCJl,.S

fT ...i~ENE Ollot:;G~"COI.

M1IAlXo1N

fUE~S

__ FEEDSJClCaSJIII'ArXluCTS

Fig. 2.3.1.1-2 Puerto Rican Petrochemical Complex: Fuels, Utilities, Feedstocks,

and Products

Oxochem Enterprise is a joint venture between CORCO and W.R. Grace and Co. to produce oxoalcohols.

The principal product is 2-ethyl-hexanol, which was purchased by the Hatco Division of Grace. CORCO sold

the propylene feedstock to Oxochem under a long-term contract significantly below its cost, and as a result

incurred substantial losses. When PPG terminated operation of PRO in November, 1978, Oxochem's primary

source of feedstock was eliminated and Oxochem also suspended operations in early December 1978.

Union Carbide Cari be, Inc. has 13 plants in Puerto Rico and can produce the following selected

products annually: butadiene (185 million lbs), ethylene (1 billion lbs), ethylene-glycol (700 million lbs),

ethylene oxide (650 million lbs), phenol (200 million lbs), low-density polyethylene (310 million lbs) and

propylene (500 million lbs).

The annual production capacity of the Phillips Puerto Rico Corp ••

benzene (126 mi llion gallons), cyclohexene (98 million gallons), toluene

xylenes (108 million gallons), orthoxylene (250 million lbs), and paraxylene

Inc. petrochemical complex is:

(110 million gallons), mixed

(470 million lbs).

In addition to Puerto Rico Ole fins and Oxochem, other plants that are currently shut down are the PPG

Industries Caribe, Cari be Isoprene. and Air Products. The PPG Industries Cari be chloronali plant produced

chlorine and caustic soda and its viability was based on low-cost electric power that existed prior to 1974.

The petrochemicals manufactured in Puerto Rico have become an important component of the total U.S.

refining and petrochemical industry during the past two decades as evidencen by the data in Table 2.3.1.1-7

from Ref. 16. CORCO is the largest benzene plant. CORCO's petrochemical operations produce more aromatic

chemicals than any other facility in the world.

2.3.1.2 Electric Sector

The Puerto Rican Electric Power Authority (PREPA), formerly known as the Puerto Rican Water Resources

Authority is responsible for over 99% of the production, transmission, and distribution of electricity on

the island of Puerto Rico. The remaining electric power is generated by certain industries for their own

use and by the town of Cayey. PREPA is a public corporation and an instrumentality of the Commonwealth of

Puerto Rico.

r _114
Table 2.3.1.1-7 Production Capacity for Selected Petrochemicals Manufactured in Puerto Rico in 1978

----------------------------

Product

Benzene

Cyclohexane

Paraxylene

Orthoxylene

Ethylene

Ethylene Glycol

Vinyl Chloride Monomer

----------------

Annua1 6Ca pacity

10 Ibs

355a

137

1170

437

1800

1075

500

pp.rcentage of

U.S. Capacity

15.7

28.4

20.4

32.2

5.1

15.8

6.0

aMillions of gallons per year.

The PREPA system is almost totally dependent upon oil for generation of electricity. Oil-fired steam

units, combustion turbines, and diesel units account for 98% (4104 MW) of the generating capacity with

hydroelectric power comprising most of the rest (95.4 MW). An experimental 200 kW wind turbine, built with

U.S. DOE assistance, was put in service in July 1978 on the offshore island of Culebra.

Load Profile

Puerto Rico has experienced a tremendous growth rate in electrical demand for most of the last 47

years. Figure 2.3.1.2-1 illustrates this trend. From 1935-1973, annual electric production in Puerto Rico

grew almost 14%/yr. However, since the first oil embargo, load demand growth has dropped sharply to just

3%/yr. The all-time peak demand of 2057 MW occurred in 1978. This sluggish growth rate is expected to

continue over at least the next few years. The average annual load factor is 76%, with the daily load

factor during the average weekday goin~ as high as 89%. This unusually high load factor is due mainly to

the use of air conditioners at night. There is also little seasonal variation since Dxmthly peak loads

vary by no more than 13% during the year. Figure 2.3.1.2-2 shows the hourly load variations for several

days during the week. Two peaks occur during the average weekday; one at noon and a second, slightly higher

one, at 8 p.m. The nighttime "valleys" in the daily load demand are smaller than in typical systems on the

U.S. mainland. 2 This, coupled with the uniformity in weekly and yearly load variations, results in problems

peculiar to the PREPA system regarding reserve capacity requirements, maintenance schedules, etc. The lower

nighttime "valleys" may also affect pumped storage capacity requirements if this technology is considered as

a future option.

System Configuration

Table 2.3.1.2-1 shows the plant composition of the PREPA system. The large units in the system

consist of two 300 MW combined cycle units, two 410 MW steam turbines, and two 450 MW steam turbines. All

of these plants came on line within the last 10 years in anticipation of the 14%/yr growth rate of the 1960s

and early 1970s continuing. Because peak demand is around 2000 MW, PREPArs reserve margin is approximately

100%. A large reserve margin for an isolated system such as Puerto Rico is not uncommon, but the system

still encounters problems and customers experience recurring service interruptions. There are several

reasons for these service problems. First, six of PREPA's steam turbines are between 300 - 450 MW. When

one of these units fails, about 20% of the peak demand is out of service and hence system reliability is

difficult to maintain. Second, maintenance of existing units has been difficult to keep up. PREPA is in

the position of having to use a "component overhaul." The result is that every large unit is shut down for

some time each year as work is done on individual portions of the unit. Hence, units spend more time in

maintenance under this schedule than if each was overhauled completely every few years. Finally, the large

system load factors present a special problem for maintenace scheduling.

The combination of large load factor and relatively constant monthly peak loads does not permit PREPA

to perform preventative maintenance during periods of low demand, which is common practice on the U.S.

mainland. Although PREPA has a large reserve, scheduling maintenance can be quite difficult.

PREPA's transmission system consists of 230/114 kV primary and 38 kV secondary transmission voltages.

Primary distribution is 13 kV and secondary voltage is 4.16 kV. Transmission and distribution losses

I- 115
0.1

-1:--I

- --- - _oj

- I

--j

--!- oj

j:-l1--=l_._: 'I -

i

-1---- ------ -- --

. !

2

"

10.0 -I'

; -~- --~ -:-J ::~ ~-~ r~-~~>; - I ' 6 --- - --T----- -- ,-- I ; 5 --- -----1 ---- --- -,

i

u

......

0::

IU

L.LJ

....J

L.LJ

....J

<C

:::;)

Z

z

<C

::I:

z

o

......

....J

....J

......

cc

z

o

......

IU

:::;)

Cl

& 1.0 c..

. i -

i -

I ----l---- ---0------1 ..... - ..._-_.__ ...

,

--1I

,

PRWRA ELECTRIC SYSTEM

ANNUAL ELECTRIC PRODUCTION

1935-1980

0.0l.L-.- --L... --L .L....- -L-- ---L. .L....- ....

1930 1940 1950

YEAR

1960 1970 1980

SOURCE: RE F 2

Fig. 2.3.1.2-1 Annual Electricity Production (1935-1980)

I- 116
2,000

1,800

1,6\.l0

</}

lIe:(

1,400 I.LJ

:::::

1,200

1,000

.......... ........ .... .. ......

---- 1 - PEAK DAY --------- 2 - AVERAGE WEEKDAY -.-. - 3 - SATURDAY .............·4 - SU~DAY

LOAD FACTOR IN AVERAGE WEEKDAY 0.89

80012 M

SOURCE: REF 2

4

A.r~.

8 12 N 4

P.M.

8 12 M

Fig. 2.3.1.2-2 Projected Hourly Load Variations (week in June 1977)

Table 2.3.1.2-1 Plant Composition by Type for the PREPA

Electrical System (December 1978)

Plant Type

Oil-Fired Steam Plants

Gas Turbines

Hydroelec t ri c

Diesel Units

Wind Turbine

Total

Capac!ty (MW)

3858

243

95.4

2.9

0.2

4199.5

Percent of Total System

92

6

2

100

Source: Economic Study of Puerto Rico, Vol II. U.S. Dept of

Commerce. Washington, D.C. December 1979.

7- 117
from 1972-1978 have amounted to 9-11% of the power transmitted, which is about the same as that which U.S.

mainland utilities experience. 3 PREPA has also recently begun building a power control center. The

minicomputer-equipped center will alert officials of problems that arise so that repair crews can be

dispatched immediately. The in-service date of this center has not been set. 4

Rural electrification is being carried out under a program called Guaranteed Minimum Consumption.

When a customer agrees to a guaranteed minimum consumption, PREPA covers all installation costs and grants

the customer five years to amortize the materials and cost of the installation. 4

Since the 1973 oil embargo, electric energy sold to residential customers increased from 2.6e/kWh in

1972 to 10. 43e/kWh in 1985. 5 In the commercial and industrial sectors electric rates also increased

dramatically. Presently, most of PREPA' s cus tomers are charged on declining block structures. That is,

each increment of electricity to a given consumer is charged at a lower rate than the last. Also, about 70%

of residential customers receive the benefits of the subsidized electric rate for consumers who use less

than 425 kWh of electricity per month.'

Short Term Steps

Several short-term remedies have been advanced in order to increase the reliability of the present

system and also decrease overall operating costs through savings on fuel. First, improved system

maintenance can be achieved by altering current maintenance practices. The practice of "component overhaul"

can be replaced by "unit overhaul." Units will not be on maintenance as much if a complete overhaul is done

every few years rather than servicing a part of a unit every year. 1 If continued, the "component overhaul"

maintenance approach may impair system reliability as reserve margins are reduced in the future. 1 It has

also been suggested that PREPA consider doing disassembly work on a schedule of three shifts per day, ,seven

days a week, whenever a unit is shut down for overhaul, so that the size of the overhaul job can be assessed

quickly. Disassembly work done in this manner can reduce opening time for a steam turbine generator from

3-4 weeks on a straight-time basis to within seven days.

Second, changing the system operation so that more quick-response capability is available could

improve the reliability by lessening the impact of forced outages on the system. This can be achieved by

operating nearly all steam units at below full capacity. This would allow them to respond quickly to

emergency demands and should reduce their maintenance requirements. No major capital expenditure would be

needed since most steam units are equipped with load frequency controls that automatically maintain constant

generator speed under varying load conditions. Also, refurbishing some of the fast-starting gas-turbine

generating units can help assure that lost capacity could be more smoothly and rapidly replaced. 1

Furthermore, the installation of fast-acting under-frequency relays throughout the system would permit

shedding selected loads immediately in case of generation losses. Noncritical customer loads could be

dropped almost instantly, so that priority service could be given to users for whom a loss of load would

have severe economic or safety consequences. Mos t U. S. mainland uti lities protect vital services such as

hospitals and certain industrial processes that require very reliable service in this manner. 1

Third, changing the electic rate structure may cause customers to conserve or transfer peak time

usage to off-peak hours. Inverted rates, that charge customers more for each incremental block of

electricity used rather than the present practice of charging less, are one possibility. Also, time-of-dar

rates may help provide signals to consumers to shift their usage of electricity to off-peak hours.

Finally, opportunities for cogeneration of electricity with industrial steam producers can be explored. 1

It should be noted that construction of the next gnerating units means PREPA will have to borrow

about $300 million each year for several years in the early 1980s. To do this at a reasonable cost means

PREPA will have to raise its revenues substantially, primarily by raising rates. 1

2.3.1.3 Renewable Energy Resources

Although Puerto Rico is endowed with several indigenous renewable energy resources, as far as the

composition of current energy supply system is concerned, renewable forms of energy contribute a very small

share of the total energy supply. Puerto Rico is in the process of determining the quantity and quality of

the energy available for each resource; evaluating the commercial technologies available for harnessing

energy from each form of renewable resource, their costs, engineeri~g details, and performance

characteristics; estimating the economic viability of each renewable resource when compared to the economics

of energy from conventional sources; and evaluating demonstration units operating in Puerto Rico to provide

1, - 118
field data on the operation, maintenance and problems associated with each conversion device. Reference

is a compilation of available information. The following is a summary of the demonstration efforts.

Wind. A pilot 200 kW wind-electric system was installed on Culebra Island and began operation as

part of the PREPA system in February 1979. 2 Modified blades were installed after 600 hours and the unit was

back in service in February 1980. Operating results through the end of 1980 showed some weeks with capacity

factors as high as 54%. If the weeks with extensive down time are excluded, the average weekly capacity

factor was 22%. The installed cost of the demonstration unit was $1 million, representing a cost of

$5000/kW, which is very high. It must be remembered, however, that this is a demonstration unit, not a

commercial system. It is expected that the cost of wind electric system will decrease with increased

production of these units. Presently, the wind electric system can satisfy roughly one-fourth of Culebra's

electric demand.

Multipurpose and Small Scale Hydroelectric System. Since the available catchment area for collecting

and channeling rainwater in Puerto Rico is small, the number of sites for developing hydroelectric power is

limited. Puerto Rico has 17 reservoirs, 13 of which are used to feed the various hydroelectric stations.

Energy from hydroelectric stations provides roughly 1% of the national electric demand. Since the

individual outputs of the hydroelectric situations is less than 5 MW, the hydroelect ric sites available in

Puerto Rico might be termed small-scale rather than large-scale, multipurpose systems.

Of the 13 reservoirs that supply water to the hydroelectric stations, severa I reservoirs are nonproductive due to silting that has resulted in a reduction of their reservoir capacity. PREPA has initiated

a study on the feasibility of reactivating and rehabilitating the reservoirs. Findings of the study will be

useful to increasing the energy generation capability from hydropower sites in Puerto Rico. A recently

completed study on the redevelopment potential at 13 existing sites conducted by the Puerto Rico Office of

Energy indicates favorable cost benefits for development. 1

Biomass. Puerto Rico's climate facilitates year-round agricultural activity. Agriculture was, at

one time, the major economic activity on the island. Industrialization has since received the major

emphasis and agriculture has declined as a component of the economy. The result is that biomass, in its

various forms including agricultural material (plant and animal), industrial waste, and urban waste,

currently is not utilized extensively in Puerto Rico. Table 2.3.1.3-1, from Reference I, shows an estimate

of current biomass production and its energy potential.

The PROE is in the process of funding several small projects to assess and quantify specific biomass

sources. Plans are being formulated for an islandwide systems analysis to evaluate the bioenergy potential

and to identify steps that can be taken.

Solar Hot Water Systems. It is estimated that about 17,000 residential solar water heating systems

have been installed in Puerto Rico. Manufacture and installation of solar hot water systems stsrted in 1976

in response to local demand for these units. Considerable incentives to potential buyers of solar hot water

systems, such as a deduction of up to 30% of the cost from taxable income and exemption from the 5% excise

tax, provided the necessary boost for switching to solar hot water systems.

Several industries have installed flat plate collectors to provide low temperature hot water for

industrial applications. The largest of these is at Johnson and Johnson Co. in Las Piedras. The India beer

brewery at Mayaguez also has an operational solar water heating system.

Other Systems. Apart from the wind, hydro, biomass, and solar water heating systems mentioned above,

there is currently no other renewable resource use in Puerto Rico.

2.3.2 The Future Energy System

The nature of the future energy supply system in Puerto Rico is dependent on a wide variety of

variables. Economic growth patterns, technology developments, oil prices, and a number of other parameters

will have an influence on the structure of the supply system. Instead of making predictions of what will

happen out to the year 2020, the following section deals with what could conceivably happen under a

particular set of conditions. Where possible, a range of outcomes for the supply system is described. The

discussion is again divided into the fossil fuel system, the electric sector, and renewable resources.

]:.. 119
Table 2.3.1.3-1 Estimated Potential of Currently Available Biomass

Resource Amount of Waste

Potential Energy

(Heat Value) Methodology

Municipal Solid Waste 1 Residential' 1.510 Thousand ton/yr

Commercial at for 1980

Landfills

6,000 8tu/lb

of dry aolids

Direct Combustion:

methane generation

Sewage Sludge2 Waste water

treatment

47.82 dry TPD (tons

per day)

Digested Primary Sludge

7,600 Btu/lb

dry solids

Digested Primary Methane genera-

& Secondary Sludge tion

8.500 Btu/lb dry

solids

Slaughterhouse Waste 3 Cattle & Hog

Agricultural Waste4- 5 Animal Wsste

Biomass

References:

8.741 ton/yr for 1980 3.85 x 1010 Btu/yr

4,350 ton/day (liq. 3.01 x 1010 Btu/yr of liq. waste

waste)

760 ton/day (dry waste) 5.27 x 109 Btu/yr of dry waste

for 1980 Animal Waste

83-110 ton/acre/year 4.5 x 108 Btu/acre/year

Methane generation

Agriculture

Methane generation

Direct combustion

1. Solid Waste MBnagement Authority. Ialandwide Resource Recovery Plan. Brown

& Caldwell Assoc. - April 1982 - Preliminaty copy.

2. Ibid.

3. Ibid.

4. Environmental Quality Board. Data on Agricultural Waste. 1980.

5. Alexsnder. Alex C•• UPR!CEER. Rio Piedras, The Energy Cane Alternative,

UPADI 1982.

Source: Ref. 1.

2.3.2.1 Future Fossil Fuel System Configuration

As previously described, Pureto Rico already has a sizable fossil fuel supply system and major

petrochemicals facilities. In addressing future configurations of this supply system several items must be

considered. First, the existing facilities represent a major capital investment that cannot be discarded

wi thout economic consequences. Second, in any transition to alterna ti ve energy sources, petroleum will

continue to play a significant role in the energy system for an extended period of time. It is important to

recognize that adequate attention must be paid to the need to provide fossil fuels in an efficient and costeffective manner for the forseeable future. Third, petroleum imports will be a continuing issue for Puerto

Rico. The procuring of secure supplies at reasonable costs must be a major area of emphasis. All of these

factors will influence the future direction of the fossil energy supply system. Some of these

considerations are discussed in References 1-5.

Sources of Petroleum

There are several sources of petroleum for the future in Puerto Rico. The existence of indigeneous

reserves has never been completely established. As only limited exploratory drilling has been done to date,

the extent of any reserves is unknown. Future efforts in this area will need to focus on the most promising

areas and will need to expand the amount of drilling information available.

In a normal supply/demand situation, Puerto Rico should be able to secure its imported oil

requirements on the world market with no difficulty. With diminishing oil production, the Island may find

itself competing with the mainland U.S. or other oil-importing countries elsewhere in the world. Almost all

countries that export crude oil are promoting downstream integration into refining and petrochemical

production. In the future, many of these countries may refuse to export crude alone. Oil production in the

Caribbean Basin and Mexico is insufficient to supply the existing refinery capacity of the region. For

example, in 1977, crude oil production was about 3.6 million barrels per day while refining capacity was

about 6 million .barrels per day.4 The situation has further deteriorated today. Hence, the dependence of

the region on oil supplies from Eastern Hemisphere sources is extensive. Another factor is that production

from traditional sources for Puerto Rico, such as Venezuela, has been declining. Also, production is more

frequently in the form of heavier crudes with high sulfur contents. These will require modifications to the

existing refinery equipment.

J:. _120
Coal Use Potential

Considering the cost and supply, problems of petroleum, an alternative fossil fuel for use in large

industrial or utility boilers is coal. The fuel is readily available from the U.S. and possibly from large

reserves in Columbia. The Columbian reserves are high in quality and well suited for export markets. Coal

preparation, handling and combustion is a well-developed technology, but Puerto Rico currently has no

infrastructure for coal use. The necessary coal ports, handling equipment, and transportation facilities

represent a major capital investment. An integrated coal feasibility study, considering utility and

industrial use as well as infrastructure requirements is needed to define the economic viability of coal•

. The utilization of coal-water slurries is being developed and could potentially be adaptable to the

existing oil-fired boilers on the Island. The coal-water slurry could be prepared in the coal-producing

country and shipped to Puerto Rico in tankers as oil is. It could be handled and stored with modified oil

equipment. If feasible, such a fuel would eliminate some of the problems associated with coal usage.

Developments in this technology need to be watched and an assessment of the use of this fuel needs to be

made.

Gas Use Potential

There is no gas use in Puerto Rico apart from bottled LPG delivered for cooking purposes. The

existence of any natural gas reserves, either conventional or unconventional, might make this a viable fuel

alternative.

Lacking any indigenous gas reserves the only other alternative for the future is liquified natural

gas (LNG) imports. There are very large gas-handling facility requirements that would make this a very

capital-intensive alternative. It is not clear that the market for L~G in Puerto Rico is large enough to

justify this type of investment.

Another consideration affecting both possible indigenous gas use and LNG is the required gas

distribution system. Since no such system is currently in place there would need to be a very large

investment in infrastructure to support such fuel use.

Petroleum Products

The Puerto Rican refiners must remain competive as foreign refiners can compete in both the Island

and U.S. mainland markets. A list, adapted from Ref. 7, of refineries and their capacity in the Caribbean

Basin and Mexico is given in Table 2.3.2.1-1. Note that Puerto Rico's capacity is only about 5% of the

total. If the Island refineries can secure crude oil at prices equivalent to their competition and maintain

comparable processing efficiencies, then they will continue to be a viable supplier of refined products to

the mainland. The effect of higher transport costs imposed by the Jones Act requirements has been addressed

in References 1, 3, and 9 and ha~ been somewhat offset by a differential tariff on refined products. The

National Academy of Science Study states that the best way to solve the transport cost problem would be to

exempt transportation of oil products refined in Puerto Rico from the Jones Act.

One encouraging factor in the future of CORCO is that it is one of the largest producers of aromatics

that are used in the production of unleaded gasoline. The demand for unleaded gas is growing, so a

favorable market for CORCO should result.

With the diminishing availability of light sweet crudes, the refineries of Puerto Rico need to

consider equipment modifications to process the heavier crudes and those with high sulfur contents.

Refinery expansion and modification plans need to consider a number of issues. Reference 4 states that the

Island has no cost advantages that would warrant expansion of refining capacity for the purpose of

increasing exports to the mainland. They expect that any growth in demand for refined products on the

Island will absorb some of the present export flow, and possibly use more of the existing capacity, but it

will not support major increases in refining capacity.

Petrochemicals

As mentioned previously, the petrochemical industry in Puerto Rico never developed to an optimum or

balanced system and part of it has actually been shut down. One major problem is that there are ~ot enough

users in Puerto Rico for all the ethylene their facilities were designed to produce. A recent petrochemical

., - 121
Table 2.3.2.1-1 Refining Capacity in the Caribbean Basin as of January I, 1982

Chstxe Capacity, bIFid Product ton Capacity, b/sd

No. Crude. V8.('.uum Themal Cat al)'t Ie Catalyt.lc Cat Hydro- CRt Hydro- CHt Hydro- Alkyla- Aromat IeY- Hydrogen Cok.e

Count ry Plant A bled Distillation Operations Cracking Reforming Cracking kelining Treating tioo luomerlzRtion Lubes Asphalt (HKcfd) (tid)

Bahamsfi I 500,000 94,UUO

Barbados 1 ],000 -- -- -- -- -- -- -- -- -- -- 4UU

CalaDbia 6 198,50U 110 ,000 41,000 77,OUU 6,000 -- -- ]],7UO 5,2]U 4,86U 2,OUU 2,10U 17.5

Costa Rica 1 15,000 700 -- -- 1,500 -- -- ],8UO -- -- -- 66 -- Dominican kepuhlic 2 48,UOO -- -- -- 9,5UO -- -- 22,2 \] -- -- -- -- 0.4

~l Salvador I 16,300 1,900 -- -- 2,8UO -- 12,100 -- Guatemala 1 16,000 -- -- -- ] ,000 -- -- 5,000

Honduras I 14,000 -- -- -- 1,800 -- -- 4,800

JSlDJlica I 22,OOU 1,800 -- -- ],5UO -- -- 20,00 -- -- -- 900

Martinique I II,OUU -- -- -- 2,500 -- ],500 4.',00 -- -- -- -- Henco 10 1,470,000 594,200 82,00 297,OUU 141,000 18,OUO -- 561,600 6,6UU -- -- 9,000 70.U 300

Netherlands

Ant 1111 es 2 782,000 230,OUU 260,000 42,UUO 15,OUO -- 196,000 95,000 1,500 -- -- -- 75.0

Nicaragua 1 14,400 1,900 -- -- 2,850 -- -- 11,130 -- -- 30U 750

PanolD./] I 10U,UOO 14,000 -- -- 7,500 -- -- 30,UUO -- -- -- 5,OOU

Puerto Rico ] 284,000 127,500 20 ,000 52,OOU 76,OUO 15,6UO -- 10] ,OOU 7,9UU 53,800 6,500 -- 18.0

Venezuela 8 1,323,06U 525,810 74,520 114,200 6,5UO -- 3U4,800 -- 28,25U -- 6,2UU 336.1

Virgin Islands I 640,000 140,OUO -- -- 70,000 -- 150,UUO

N 'l'otal 42 5,457,26U 1,841,UIO 491,320 593,60U 350,250 33,6UU 666,40U 894,643 49,48U 58,660 15,OUO 18,810 517 .0 3UO

.....

IV Source: Kef. 7. N
report 8 by the Oil and Gas Journal stated that during the first quarter of 1982, an estimated 25% of the

U.S. ethylene capacity was not operating. On-stream units were running at reduced rates in an attempt to

work off inventories. Polyethylene and styrene production appear to be the best technical possibilities for

downstream expansion to absorb ethylene. However Reference 8 reports that serious differences exist among

predictions on the future of polyethylene in both the U.S. and worldwide. There is a consensus that U.S.

exports will decline significantly during the 1980s, but domestic growth is expected to be vigorous. As of

October 1981, there were 77 polyethylene and 50 ethylene plants planned, proposed or under construction

worldwide.

The PPG Industries Caribe chloralkali and vinyl chloride plants in Puerto Rico depended upon low cost

electricity. The cost of electrical power meant that such an operation could not become viable under

forseeable circumstances. The closing of the ch10ra1ka1i plant eliminated the vinyl chloride feedstock to

the Rico chemicals plant for the production of polyvinyl chloride. No current information is available on

the operational status of this plant or its alternate feedstock source.

The principal market for petrochemicals produced in Puerto Rico is the mainland U. S. Their main

competition is from the plants located on the Gulf Coast and in the eastern states. The U.S. market may not

be immune to foreign competition. There is an excess petrochemical capacity worldwide as a result of the

building boom that was prompted by high growth-rate predictions of the early 1970s. Petrochemical producers

are struggling to regain or improve profitability through feedstock flexibility, better process efficiency,

plant closings, or conversion of existing facilities to other uses. Looming in the future are new

facilities in the Asia Pacific area, the Middle East, Africa and Mexico. Saudi Arabia in particular has a

mu1t1-billion-dollar petrochemical plan now being implemented that the Saudis expect will lend to the

capture of 4 to 5% of the worldwide petrochemical market in the late 1980s. Mexico expects to be turning

out about 9 million tons/year of petrochemicals when its La Congrejera complex is fully on-stream. Four

more market production centers are scheduled in order to establish the country's petrochemical selfsufficiency. On the other hand. in Western Europe petrochemical overcapacity is severe.

Overall. the petrochemical industry's outlook is still cloudy. but according to Reference 8. the

majority of producers think the future will be better. Reduced new plant construction. coupled with

significant rationalization of existing capacity, should bring supply and demand more into balance. Hence,

Puerto Rico should share in an improved market provided they maintain sufficient process efficiencies and

are able to secure competive1y priced feedstocks. Many olefin producers are giving light-feed flexibility

to plants that were originally designed only for heavier feedstocks such as naphtha or gas oil. Union

Carbide completed a $28 million feedstock flexibility project at Ponce, Puerto Rico, early in 1982, that

will allow its of1efin unit to use either LPG or naphtha. In addition, major new investments in downstream

operations can be sought to ensure a market for existing excess products.

2.3.2.2 Future Electric Sector Configuration

For Puerto Rico, a low cost. reliable future electric system is necessary in order to attract new

industry, stimulate the economy, and maintain or raise the standard of living. Because of its large reserve

margin. the present PREPA system should be able to handle the short-term load growth if several

modifications are made. As noted in Sec. 2.3.1. 2. these modifications included improving maintenance

operations and changing the system operation so that more quick-response capability is available. However,

a comprehensive long-term plan is needed to reduce PREPA's dependence upon oil, increase overall system

reliability, and lower the costs of electricity generation. Currently PREPA does short-term planning.

typically less than 10 years. Long-term plans are needed because lead times for the construction of new

generating plants alone are on the order of 7 to 10 years. Consequently, the remainder of this section will

detail the considerations in performing generation planning studies. compare the results of a generation

planning study performed by the Center for Energy and Environmental Research (CEER) with PREPA's own plans,

and briefly discuss both the conventional and alternative technologies for electric power generation and how

these may apply to the Puerto Rico situation.

Long Range Generation Planning

Because of ever increasing fuel prices and the long lead times required for constructing new electric

power plants, generation planning has become especially important. System planners must also deal with many

uncertainties among which are future load growth, load management, cost and availability of fuels.

construction time. and costs plus utility rate sturctures. If careful studies have not been made, the

constraints of time may require costly gas turbine and diesel peaking units to be constructed in order to

1- 123
satisfy a projected load demand even though base load capacity may have actually been called for. In a

situation like Puerto Rico's where fuel costs are already very high because of almost total dependence upon

oil, this type of short term solution is very costly.

The heart of any system planning effort is the load forecast. This is an estimate of the total

energy that must be generated and the peak demands that must be served reliably during the study period.

Many diverse factors can influence load growth. Among them are population growth, economic growth, tourist

activity, projected energy-intensive industrial growth, etc. Consequently, communication among officials

from PREPA, the Puerto Rico Energy Office, and other governmental and industrial representatives involved in

planning is necessary so that input from all sectors can be taken into account. Also, several scenarios

should be decided upon in order to test the sensitivity of the future system to changes in sectoral growth

assumptions.

In a recent PREPA generation planning study2, system peak loads are forecasted to grow at a compound

annual rate of 3.5% through fiscal year 2000. This projection was based partly on estimated socio-economic

indicators for Puerto Rico prepared by the Planning Board of Puerto Rico. The indicators included

government and personal consumption expenditures, gross national product, population, exports, and personal

disposable income. It also takes into consideration the current reduction in industrial demand in Puert 0

Rico (due mainly to the closing of PPG Industries, Inc.), federal and local energy conservation measures,

and expected reductions in the previously projected growth rates of the U. S. mainland and Puerto Rican

economies. 3 Based on this projected load growth, PREPA believes that 900 MW of additional capacity would be

required through 1990, with 300 MW plants coming on line in fiscal 1986, fiscal 1987, and fiscal 1989. A

final decision on construction of these facilities or the financing thereof has not yet been reached. Since

minimum lead times for the construction of new generating facilities is six to seven years, these in-service

dates may be delayed.

More recent discussions with PREPA planning authorities have indicated that a growth rate of

3.5%/year may be too high. Expectations now are that a growth rate of less than 2%/year may be more likely

for the next 10 years. These new load projections can be input to the system planning model PREPA uses to

study the effect this new load projection has on the planned capacity additions to the electric system.

Projections beyond 1990 can also be made and analyzed.

4 Another generation planning study of the PREPA system was performed by CEER. In this study, load

projections were made by statistically analyzing historical data. It was discovered that a power

correlation with GNP was the variable that fit the historical data quite well. Based upon this correlation,

it was found that the average electric growth rate for 1985 to 2000 was 4%/year and for 2000 to 2020 the

average growth rate fell slightly to 3.7%/year. This growth rate is about twice the more recent rate

projected by PREPA out to the year 2000. It appears that the CEER fore~ast may be somewhat optimistic as to

the continued growth of the GNP. To satisfy the future electric demand, it was felt in the CEER study that

a strategy that maximized the use of renE-wable resources was the best program to follow. The renewable

resource technologies that could make the greatest contribution to the generation of electric power were

biomass, OTEC, photovoltaic& ld wind turbines. Appropriate R&D programs and funding requirements would

need to be developed in order L lchieve the following goals as expressed in the CEER study:

1) the operation of the first biomass power plant (300-450 MW) by 1986;

2) the operation of a pilot OTEC power plant (40 MW) by 1985 and a cOlIIID.ercial plant (250

MW) by 1991;

3) the operation of a demonstration photovoltaic plant by 1993;

4) the operation of a wind power turbine farm (12.5 MW total) by 1988.

Table 2.3.2.2-1 shows the projected in-service dates and capacities of electric power plants out to 2000 for

this scenario from the study.

Regardless of the electric generation expansion option chosen, there are several considerations

unique to the PREPA system that must be taken into account. The first is the high annual load factor, which

is currently 76% and expected to remain the same in the future. This means that a greater share of the

generating capacity be devoted to base load generation than is norll\8lly done in a U.S. mainland utility.

Second, because Puerto Rico is an isolated system, a much larger reserve margin is needed than for a utility

system that has interconnections. Currently, PREPA has a 100% reserve margin, but this is necessary because

four of the plants have a capacity in excess of 400 MW, each of which is more than 20% of the system peak

J:- 124
Table 2.3.2.2-1 Schedule of Operation Dates and

'Capacities of Electric Power

Plants (CEER Study)

Year Biomass OTEC Photovoltaic Wind Coal

1985 1-40MW 1-300MW

1986 1-300MW

1987 1-300MW

1988 12.5MW

1989 1-400MW

1990 1-400MW

1991 1-250MW

1992 1-250MW

1993 1-250MW

1994 1-250MW

1995 1-250MW

1996

1997

1998 1-S00MW

1999 I-S00MW

2000

Source: Ref. 4.

load. More capacity is needed in order to have enough reserve when one of this units is out of service.

When the system loads grow enough to acommodate these units, a reserve margin of 50-60% will be required.

Finally, the specified loss-of-load probability (LOLP) planning criteria should be reevaluated. The

current LOLP used by PREPA is 1.5 days in 10 years. This figure was chosen based upon the 1 day in 10

years LOLP used by IIIOst U.S. mainland utilities. However, these planning guidelines are too demanding

economically and the LOLP may need to be readjusted to a more cost effective figure. 5

Future Conventional Technologies

In order to reduce Puerto Rico's dependence upon oil-fired generating capacity, several conventional

technologies have been advanced as alternatives. Among them are coal, hydro and pumped storage, and

nuclear. This section will briefly describe how each of these technologies may fit into the Puerto Rican

electric sector.

Coal. Coal-fired plants can be an attractive, low risk alternative to oil. PREPA's next large

addition to base load generating capacity might best be fired with coal. Competition among coal suppliers

on the U.S. mainland and in several foreign countries could make the price of coal very attractive. It has

been suggested that PREPA convert some of the existing oil-fired capacity to coal; however, none of the oilfired plants were designed for coal burning. Neither their boilers nor plant layouts are currently

adaptable to the use of coal. 6 Special coal handling and ash disposal facilities are required. New

operating and maintenance skills are needed also in order to handle the relative complexity of coal

:1- 125
plants. Furthermore, the environmental impact of coal-fired plants needs to be studied. The possibility of

using coal/water mixtures has also been discussed.

Hydro and Pumped Hydro-Storage. Puerto Rico has potential for further development of hydroelectric

power, but the possibilities are limited. A recent study by the U.S. Army Corps of Engineers estimates that

about 106 MW are available from the 19 existing and potential sites ~valuated.7 Low head hydro

installations were not included in this study, but their potential will be discussed in Sec. 2.3.2.3.

Pumped hydro-storage is currently not attractive because all of the base-load plants are oil-fired and hence

there is no cost advantage. When a switch is made to coal or other less expensive fuels for base-load

generation, this situation may change. Also, because the load during the night does not drop as much as on

the U.S. mainland, the effect this has on the pumped storage capacity requirements needs to be studied. 3

Nuclear. Nuclear power is also a low cost possibility for future generation. However, because of

the large size of the reactors currently being installed (about 800-1000 MWe), it would take about 20 years

before the electric sector could accommodate a reactor of this size comfortably.6 Small reactors (200 MWe)

are currently under development by several European and Japanese corporations and, depending on the

economies of these plants, could provide Puerto Rico with low cost reliable electric power. Other technical

and economic questions need to be addressed, though, before making a commitment to nuclear power. These

issues include providing for a regulatory framework for siting and licensing plants, ensuring safety. and

providing for spent fuel management and waste disposal.

Future Alternative Technologies. Because of the high cost of electricity in Puerto Rico and the

tropical climate. renewable resources have a good oportunity to provide significant amounts of electric

power to the grid. The potential for solar, wind, OTEC, biomass, urban waste, and small scale hydro

contributing to the electric sector will be discussed in the following sections.

2.3.2.3 Future Renewable Resource Use

As renewable resources are not now a major component of the energy supply system in Puerto Rico,

there is a great deal of potential that can be tapped. Each of the possibilities is addressed in terms of

resource base, the technology system available, the system performance, costs, potential users, potential

oil use reduction, and implementation factors.

SOLAR

The use of direct solar energy to provide heat or to generate electricity is one of the most

promising renewable resource systems for Puerto Rico.

Resource Base. Data collected thus far indicate that the level of solar insolation in Puerto Rico,

on the average, is one of the highest in the world, year around. 1 ,2,3 The geographical and temporal

distribution of insolation has been measured at six sites1• Figure 2.3.2.3-1 shows the cities where the

measurements were made. Table 2.3.2.3-1 shows average daily insolation at each measuring station. Figures

2.3.2.3-2 and 2.3.2.3-3, respectively, show average daily insolation on a horizontal plane for each month of

the year. Significant differences of insolation among sites have been found; however, the insolation

remains fairly constant throughout the year at a given site. Annual rainfall varies from 80 cm to 400 cm in

Puerto Rico and the level of solar insolation decreases as the annual amount of rainfall increases.

The average daily insolation (for years 1952-1975)2 at San Juan was measured to be 18.6 mJ/m2•

This is very close in value to that measured in Reference 1 for Catano. Insolation measured by Lof and

others 3 showed average insolation values between 16.2 mJ/m2 and 25 mJ/m2 for Caribbean Islands during the

years. These measurements are consistent wi th those reported in Reference 1 and are among the highest in

the world.

Technologies. Direct solar energy has been utilized two ways:

electricity.

J _126

to produce heat and to produce
67.0· W 66.0· W

Fig. 2.3.2.3-1 CEER Stations in Puerto Rico

Table 2.3.2.3-1 Average Daily Insolation on a Horizontal Plane

Station Component Dates Insolation (mJ/m3)

Mayaguez Global Jan 1976-Present 16.0

Diffuse June 1977-Present 6.9

Rio Piedras Global June 1978-Present 16.6

Diffuse July 1978-Present 7.7

Ponce Global Mar 1978-Present 19.3

Catano Global July 1978-June 1979 18.1

Diffuse July 1978-June 1979 7.9

Manati Global Sept 1979-Feb 1981 18.6

Cabo Rojo Global Apr 1980-Present 19.9

Source: Dr. A Lopez and Dr. K. Soderstrom, CEER, 1982.

Some of the major technologies4 developed to produce heat include single and double glazed flat plate

collectors (using either liquid or gases as heat transfer media), low-cost or innovative flat plate collectors, shallow and salt-gradient solar ponds, evacuated collectors, stationary concentrating collectors,

north-south, east-west and polar axis parabolic troughs, parabolic dishes and point focus central

receivers. The technologies mentioned above are at various stages of development. Flat plate collectors

have reached the highest level of commercialization around the world; nevertheless their experience in mass

production remains limited.

Both the heat-producing and electricity-producing technologies are candidates for application in

Puerto Rico. Studies must be made to determine the best alternatives for implementation.

Converting solar radiation directly to electricity by photovoltaics relies on the solid-state

properties of the semiconductor used. Photovoltaic modules are connected electrically to form an array to

1- 127
15

....

5

o

IS

.... .- 5

o PONCE

to HAYAGUEZ

o RIO PIEDRAS

2 3 1 5 6 7 e 9 Ie 11 12

MONTH

Fig. 2.3.2.3-2 Average Daily Insolation on a Horizontal

Plane vs. )tonth

N- 2S

:E

"-

"")

E

-

z 15 0

....-

e

-'

0

en 18 Z

o CATANO

>- OHFINATI -'

-

e to CABO RCUl

Q 5

1 2 3 1 5 6 7 e 9 Ie 11 12

MONTH

Fig. 2.3.2.3-3 Average Daily Insolation on a Horizontal Plane

vs. Month

]:. - 128
provide large quantities of power. This technology is not yet cost competitive with electricity from

conventional generating sources. However, much is being done to improve the efficiency and reduce the

cost 6 • A detailed discussion of photovoltaic technology is found in Ref. 4.

Performance. For simplicity and clarity, the technologies converting solar energy directly to heat

have been divided into five areas. Photovoltaics are treated separately.

Flat plate collector technology has reached maturity. Typically, a reliable, high performance

collector is capable of delivering working fluid temperatures up to 100°C, weighs approximately 40 kg/m2 and

costs about $350 m2 to install. Reference 7 summarizes the performance of some 22 flat plate collectors

tested at the Florida Solar Energy Center.

Evacuated collectors (concentrating) are still in various stages of development. Often, the

evacuated tubes are used with the assistance of a reflector that provides some concentration of radiation

without tracking the sun. Performance, measured by the Florida Solar Energy Center, of the evacuated tubes

manufactured by three companies are given in Reference 7. In the present state of development, a typical

evacuated collector is capable of delivering working fluid temperatures of 150°C, weighs less than 40 kg/m2

and costs about $400/m2 to install. Improved fluid temperatures up to 300°C have been achieved in the

laboratory,

Parabolic troughs (line focus technology), both tracking and non-tracking, are essential technologies

to meet the demand for higher working fluid temperatures. Typically, a temperature of 300°C is produced. A

tracking collector (north-south, east-west or polar axis) is more efficient than the non-tracking types

because it always faces the sun. Although not widely used, collectors based on this technology are being

marketed by several commercial concerns. A series of tests have been conducted in 1980 on these

collectors. Results were reported in a set of reports 8 and are summarized in Reference 5. The efficiency

of the tracking parabolic trough is one of the highest among all collectors. Maintenance requirements are

also higher for these collectors.

Central receivers, including parabolic dishes and point focus control receivers, are technologies

used for large scale systems. Seven control receivers are operating5 ranging from a small unit consisting

of 85 heliostats for a small power system of 2.38 MWt, to a large unit consisting of 7505 heliostats for a

large central power system of 195 MWt. Field efficiencies for the small system range as high as 74% for the

small unit and 68% for the large unit.

Solar ponds are of the shallow type or salt gradient type. The shallow pond is technically simpler

to construct and less capital intensive. A typical shallow pond uses a blackened plastic envelope filled

with a few centimeters of water. The water, after heating, would be drained and stored. This principle is

simple and easy to implement; however, the temperatures reached are generally below 100°C depending on

insulation between the envelope and the earth as well as the re-radiation of the heated envelope. A salt

gradient solar pond is a body of water with a salt gradient in the upper part of the pond. As salinity

increases with depth, the density of water will increase with depth and will prevent convection in the pond

and reduce heat loss. The highest temperature ever recorded in a solar pond is 227°F, set in the summer of

1980 at the University of New Mexico, Albuquerque. Depending on location, water clarity, and temperature,

the solar pond can capture 10 to 20% of the solar radiation hitting its surface; hence, each square meter of

pond surface can supply one-half to two gigajoules of thermal energy per year at temperatures from 100°F to

200°F9• Several good reviews on solar pond have been written10 ,II. Experience indicates that solar ponds

are most suitable in areas where salt and land cost are low, low-salinity water supply is available (sea

water is acceptable) and there is no moving ground water. At Ein Bokek, Israel, a large salt gradient pond

provides the national power grid with an average of 35 kW of electricity in summer, 15 kW in winter, enough

to power a large residential complex or office building.

Photovoltaic electrical power has been demonstrated to be reliable in space applications and in some

rural water pumping applications. Sponsored research by U.S. DOE has concentrated on low cost production

processes. Typically a single crystal silicon cell of 12% efficiency4 would generate a DC power of 12

mW/cm2 of cell area at an insolation of 100 mW/cm2 and a cell temperature of 28°C. Solar cells are

interconnected to form a cell panel bonded to supporting substrates and encapsulated with transparent

materials to provide environmental protection. Solar cells are arranged in flat-panel arrays or at the

receiving end of a concentrator. The latter arrangement intensifies the incoming light incident on a

relatively small cell target with increased efficiency. Until the cost becomes competetive, its use in

Puerto Rico may be limited.

r. - 129
Cost

The cost of a solar system is a function of many factors. Figure 2.3.2.3-4 from Reference 13 shows

collector costs through distributor mark-up in 1980 $/ft 2 00 ft 2/m2 ) as a function of annual collector

production starting at a 20,000 unit annual rate. Table 2.3.2.3-2 from Reference 5 shows preliminary

capi tal cost estimates for flat plate collectors. evacuated collectors, parabolic trough collectors and

central receivers.

Costs of $35/m2 have been quoted for the Miamisburg salt gradient solar pond and $73/m2 for Argonne

pond9• These estimates must be used carefully because R&D cos ts are included and difficult to separate.

The cost of the pond varies and depends on the cost of salt and the need for water pipe lines. For large

solar pond systems on an average site, Reference 9 estimates a cost of $6.22/gigaj oule for thermal energy

and $26/gigajoule for electricity generation. For thermal energy application, solar ponds seem

competitive. For electricity, solar ponds maybe competitive only for off-grid applications.

• MODERATE LEARNING CURVE EFFECT

• MAJOR REDUCTION AT VOLUMES OVER 150·250,000 UNITS/VR

• CONSERVATIVE ESTIMATE - 9S/FP (11 $/FTZ INSTAllEDI

• OPTIMISTIC ESTIMATE - 5.50S/FP (7.00S/FP INSTALLEDI

20.000 500,000

g~ 12 \

o co \$16/FP $10.60/FP a:~ ...... :: . 10 '_ /

E --~ $9/FP $8/FP

~~ 8 $71FP %

6 " ~.~'1T:~~A':UATED TUBE COLLECTOR

' ......__ $4.50/Ff!~ -----a$5.50/FT2

4 "':.~ ~~~':OST PLASTIC COLLECTOR

u 2 ----o$2/FTz

100.000 200.000 300,000 400.000

ANNUAL COLLECTOR PRODUCTION

Fig. 2.3.2.3-4 Estimated Cost of Three Types of Collectors

Table 2.3.2.3-2 Cost Estimates for Various Solar Collectors

1981 $/m2

1981 1990-2000 1985

Base Projected Cost Estimate

Flat Plate Collectors

Evacuated Collectors

Parabolic Trough Collectors

Central Receiver

270-304

334-538

468-615

473

172-202

172-262

117-195

71-174

270-279

219-405

300-615

276-473

Source: Ref. 5.
The use of direct solar energy for heating water is one of the most promising near

of energy for Puerto Rico. This use could apply to all sections of Puerto Rico's

U.S. DOE has made substantial progress in reducing the cost of the photovoltaic solar collectors6 •

Collector research and development is dealing with the development of materials, processes, and manufacturing techniques for flat-plate and concentrator collectors that have the potential for achievement of less

than 70t per peak watt (1980 dollars) and long life expectancy (20 years or greater). Technology

feasibility of $2.80/per peak watt has been achieved. Table 2.3.2.3-3 shows the cost targets for

photovoltaic systems.

Potential Users.

term renewable sources

economy.

Market penetration of residential solar hot water is well documented. 16 ,17,18,19 A survey by PREPA19

indicates that the average residential consumption of the electrical energy for water heating in the San

Juan metropolitan area amounts to 200 kWh per month. PREPA also estimated that between 365,000 to 479,000

electric water heating systems were installed. This is the approximate market for solar systems. Reference

24 estimates that at the current rate of installation, approximately 188,000 solar hot water systems will be

installed by 2000. Industrial and commercial uses are another potential market for solar systems,

especially the more sophisticated units, in Puerto Rico. Levels of penetration depend in the long run on

the cost and the reliability of the solar equipment. Reference 24 gives some penetration estimates for

solar ponds and photovoltaics in Puerto Rico.

Potential Oil Use Reduction. Solar water heating systems now used in commercial and institutional

buildings are estimated to displace about 4 million kWh of electricity per year 16 Reference 16 also

suggests that solar water heating can displace perhaps 1% of the Island's projected electricity production

by the year 2000, and about 2% of the projected industrial and commercial fuel use. This would amount to

annual oil savings of about 1 million barrels or $30 million with oil at $30/barrel.

Reference 24 estimates oil savings in the year 2000 of 630,000 barrels for solar water heate~s,

1,150,000 barrels for solar ponds and industrial process heat, and 1,550,000 barrels for photovoltaics.

Implementation. The biggest factor influencing the implementation of solar systems is cost. If the

costs can be brought down then there will be ample incentive to use these systems.

Table 2.3.2.3-3 Photovoltaic Technology Feasibility Cost Targets

Application and Year

Remote Stand-Alone

1982

Residential

1986

Intermediate Load

Center

1986

Central Station

Collector Cost (FOB)

($/Wp)

<2.80b

<0.70

<0.70

0.15-0.40

System Costa

($/Wp)

6.13

1.60-2.20

1.60-2.60

1.10-1.80

Production Scale

(MWp/year)

100-1000

100-1000

500-2500

aSystem cost correlates with production scale

bAll figures are quoted in 1980 dollars.

Source: Ref. 6.

1-131
A positive aspect of the implementation issue is that extensive use of solar technologies can create

a new industry in Puerto Rico. Even the more sophisticated systems are well within the manufacturing

expertise of the highly developed Puerto Rican industry.

WIND

Studies carried out to date indicate wind power has the potential to make a contribution to the

energy supply of Puerto Rico. This section reviews major issues facing wind energy applications in Puerto

Rico.

Resource Base. Puerto Rico is exposed to relatively consistent trade winds out of the northeast.

These prevailing trade winds are significantly affected by the mountainous interior of Puerto Rico and by

the sea breeze created by the land-sea interface 1• Estimates of the potential wind resources for Puerto

Rico have been carried out with limited data from only a few sites in the coastal plains ringing the

perimeter of the main island. 1- 7 ,16

The most complete description of he wind conditions and data in Puerto Rico is contained in the Wind

Energy Resource Atlas for Puerto Rico. 1 This report indicates that only a few of the limited recording

stations in Puerto Rico are well-exposed to the prevailing trade winds. Furthermore, the interior has no

recording stations at favorable mountain locations and is virtually void of data. The most favorable sites

typically would be expected at exposed coastal sites and at crests of ridges. The authors of the wind atlas

have used the available data and generally accepted extrapolation methods to estimate the wind speed and

power density profiles for Puerto Rico.

The distribution of wind power in power density classes is given in Table 2.3.2.3-4 and is shown

geographically in Fig. 2.3.2.3-5. Most of the promising areas for wind energy are indicated by a class 3 or

greater wind power on the annual power map. The exposed coastal locations near Cape San Juan, on the

northeastern corner of Puerto Rico, are the primary locations estimated to have class 4 annual average wind

power. Good exposure to the trade winds and reinforcement by the sea breeze tend to result in persistent

moderate winds. There may be other sites along the northern and eastern coasts where good exposure and

terrain enhancement combine to produce class 4 conditions. Most of the northern and eastern coastal regions

are class 3, as are exposed mountain peaks and ridge summits in the interior. The blocking effects and the

interference of the sea breeze tend to make poor wind conditions in the west and south. 1

The Puerto Rico Office of Energy16 has several activities underway to help in wind resource assesment

including an anemometer loan program for individuals interested in measuring wind characteristics at particular sites, and the design and implementation of the Wind Resource Assessment Program. The Wind Resource

Table 2.3.2.3-4 Distribution of Wind Power Classes in Puerto Rico

Percentage

Wind Wind Wind Land Land

Power Power Speed Area Area

Class Density Corresponding Equal Equal

(Watts/M2) To Upper Or Or

Limit Of Exceeding Exceeding

Power Power Power

Density Class Class

MiS (mph) (km2)

1 0-100 4.4 (9.8) 8,764 100.0

2 100-150 5.1 (11. 5) 2,193 25.1

3 150-200 5.6 (12.5) 373 4.3

4 200-250 6.0 (13.4) 11 0.1

5 250-300 6.4 (14.3) 5 0.1

Source: Ref. 1

1-- 132
: 2 2: t· ! "- ..,.

j ' , jT' : , , '

••• "100:

.

.. !""

·: 3'

.. ~~

, ., .j. 1 3 ..

~j1 ' !

i ..··18°

....... \.....

.. j.

2 2 :2 A·......····+·.. 2·'

f

,.... ...

_~1

18o .,....LW

01:::1=._'0=:=-1Ii2i:0===3jO 40===li:i'0.._ ..8i::0==::::J70..__8i:0===9.0__..'00 MILES o RIDGE CREST ESTIMATES

0r-::=__2i:0:::==-_.4.0==__IIi::0===="iO..__.'.OO KILOMfTERS '.. ....LJIU .......... U

Fig. 2.3.2.3-5 Annual Average Wind Power in Puerto Rico

(See Table 2.3.2.3-4 for explanation of density classes)

Assessment Program is a joint effort between Meridian Corporation and the Office of Energy to augment the

data in the Wind Energy Resource Atlas 1, to provide data on wind characteristics from the mountainous

interior and to provide a basic guide to siting and sizing all potential applications of wind turbines. As

part of this program two sets of instruments will be deployed to measure wind characteristics: four fixed

meteorological towers and two mobile towers. Additional details on this program are in Reference 16.

There is seasonal variation in wind availability, with summer being the season of maximum wind

availability and autumn the season of least availability. This characteristic will not help the economic

competitiveness of wind for electric utility applications, as current monthly peak loads do not vary by more

than 13% during the year.

A significant diurnal variation in wind has been reported at most recording stations. Wind speeds

reach a maximum during the late morning and early afternoon and reach a minimum in the early morning hours

in all the seasons. This characteristic matches reasonably well with variations in electric load although

daily loads currently do not exhibit large fluctuations. Wind speeds at some sites reach levels greater

than 6 mls (seasonally averaged) at the peak hours, while early morning wind speeds may be as low as 2

m/s. Since wind power varies as the cube of the wind speed, the power obtainable at times when the electric

utility has the greatest need is relatively high. Of course, the actual power obtainable also depends on

the characeristics of the wind turbine (e.g., cut-in speed and rated speed).

The General Electric study6 also identified potentially favorable wind sites along the northern coast

and on inland peaks or ridges with clear access to the prevailing trade winds. A subsequent study2

indicated that perhaps half of the mountain sites were inaccessible without special road construction.

Technologies. The wind turbines considered to date are primarily of the large variety (greater than

100 kWe) for electric power generation. There is some potential for small wind turbines (1-45 kWe) for the

residential and agricultural market and it is possible some of the 100-200 kWe machines could be used for

irrigation and crop processing on large farms. 2 ,a However, the greatest potential in terms of total energy

use appears to be electrical generation from machines rated from 500 to 2500 kWe.

I-l33
The typical wind turbine for electrical generation has a horizontal axis and has two large'

blades. 9- 13 The 200 kWe machine (DOE MOD-OA) already installed and feeding into the grid on Culebra Island

has a blade diameter of 125 fee t. The cut-in speed at which power generation begins is only 6.9 mph

measured at a height of 30 feet (approximately 10 meters). The wind speed at which this machine reaches

full power (200 kWe) is 18.3 mph. ,At wind speeds higher than 34.2 mph the wind turbine automatically turns

out of the wind to avoid damage. In contrast to the 200 kWe wind turbine, a promising 2,500 kWe design (DOE

MOD-2) is being tested in the state of Washington. This machine has a blade diameter of 300 fee~ and higher

cut-in (8.6 mph) and rated (20.1 mph) speeds than MOD-OA (and therefore lower expected capacity factor), but

it also is expected to have a capital cost that is significantly less than MOD-OA if both machines reached

13 the mature industry level. The basic tradeoff is capital cost and maintenance cost per unit capacity

(highest for the smaller machines) versus energy produced per unit of capacity (also highest for the smaller

machines). These issues are yet to be resolved, but the large machines appear to be favored at this time.

Small machines have similar general characteristics, often with relatively low cut-in speeds.

Vertical axis systems and horizontal axis designs with more than two blades are also available. Dedicated

energy storage systems are generally not considered as part of the wind system because they usually result

in a large economic penalty. If the machines are connected to the grid then storage is provided only in

light of overall grid economic considerations.

A special technical issue for Puerto Rico is the difficulty that may be experienced in obtaining land

for the sites, especially in the coastal areas. If land availability becomes a problem, the larger machines

have an advantage. Typically, minimum spacing to avoid interference is assumed to be in the range of 10 to

20 blade diameters. Therefore, since the MOD-2 offers 12.5 times as much rated power as MOD-oA with a blade

diameter that is only 2.4 times as large, the MOD-2 can produce significantly more energy per unit of land

area.

Sys tem Performance. The gerformance of wind turbines wi thin an electri cal generating system is a

complex problem to analyze. 7 ,13,l The characteristics of the wind turbines themselves, such as mechanical

forced outage rate, are not yet well known. One study estima ted that a 2,500 kWe wind turbine loca ted at

favorable sites in Puerto Rico would have an average capacity factor of 20%.2

Wind turbines are usually justified strictly on the basis of their fuel (oil) saving capability.

That is, the cost savings from displaced oil'is the only cost savings used to compare with the cost of

energy from the wind turbine. Basically, this operational mode means that PREPA would have no reduction in

new capacity needs as a result of installation of wind turbines. However, in recent years some studies have . 13 14 pointed out that wind turbines may also have some capacity value in addition to the fuel saving value. '

Generally, if the system loss-of-Ioad probability is improved by installation of wind turbines, some

capacity "credit" may be in order. Such considerations can help in the analysis of cost competitiveness for

wind turbines. Wind turbines of smaller size, in the range of 200-500 kWe, may be competitive with the

larger wind turbines because of their ability to produce more power at low wind speeds and therefore to

contribute more to the reliability of the generating system. However, given Puerto Rico's current large

reserve margin, the capacity credits would be small in the near future. In the long term they may be more

significant economic factors.

Costs. Wind turbine costs for a mature industry are highly uncertain. Costs for a research unit

such as the Culebra system are known but are generally considered substantially higher than for the same

unit produced by a mature industry. The associated reduction in unit capital cost with increased production

is analyzed by estimating different rates of reduction, or learning. Another large uncertainty for wind

turbines is the economy of scale over the size range of interest. Finally, an important additional

consideration may be the fixed operation and maintenance (O&M) costs. The fixed O&M costs in 1978$ have

been estimated to be 60-90 $/kWe-yr for a 100 kWe machine, 20-30 $/kWe-yr for a 500 kWe machine, and

approximately 12 $/kWe-yr for a 2,500 kWe machine. lO ,13 Thus, economy of scale in maintenance cost could be

a hindrance to implementation of the smaller wind turbines.

An energy analysis by CEER3 found electricity generated by wind to be cheaper than oil-fired

generation but to be more expensive than coal-fired generation. The study concluded that wind was therefore

suitable for fuel oil displacement but not for the base-load energy system. However, this study did not

consider the system reliability effects of wind turbines or the possible effect of limited wind turbine

installation on the optimum expansion pattern for the system. That is, wind installations could reduce the

required additions of coal capacity somewhat. Wind and coal, however, may not be direct competitors when

performing a system optimization. The CEER study estimated 1979 capital costs for a 500 kWe machine to be

T-134
2840 $/kWe and for a 1,500 kWe machine to be 1265 $/kWe. Land costs amounted to an additional 1200 $/kWe

for the 500 kWe unit and an additional 400 $/kWe for the 1,500 kWe unit. Levelized costs (5%/yr inflation)

were estimated to be approximately 200 mills/kWh in 1985, significantly less than the estimated 300

mills/kWh for the oil-fired generation fuel cost.

The Electric Power Research Institute estimates the capital cost (Dec. 1980$) for 25 of the 2,500 kWe

wind turbines would be 970 $/kWe. 15 The fixed O&M cost is also estimated to be 9 $/kWe-yr.

Potential Users. As mentioned earlier, electrical generation appears to have the greatest potential

for wind to make a significant contri bution to Puerto Rico's energy supply. However, the possi bili ty of

using smaller wind turbines for agricultural purposes and pumping water does exist. If the latter

represents the major application of wind in Puerto Rico, the overall contribution of wind will be small.

Several studies have made estimates of potential market penetration. In spite of the conclusion that

wind was not competitive with coal or some other less developed renewable energy sources, CEER estimated

that a wind farm totaling 12,500 kWe (25 wind turbines rated at 500 kWe each) would be installed by 1988.

If some of the assumptions concerning biomass, OTEC, and photovoltaic costs proved to be optimistic, this

study could be used to consider additional wind installations after 1988.

The Committee on Future Energy Alternatives for Puerto Ric02 estimated nearly 300 MWe of wind

capacity as the ultimate contribution based on complete development C'f highly favorable sites (maxilIIUm

technical market). Of the 300 MWe potential, the installation of large (2.500 kWe) machines account for 95%

of the total capacity. Approximately 200 MWe would be located at 75 favorable sites on peaks or ridges

exposed to the northeasterly winds. Additional large machines were assumed to be located along the northern

coast at sites with access to the trade winds. In addition, 50 of the 200 kWe machines were assumed to be

installed on large farms for irrigation and crop processing. If Puerto Rico were to pursue an aggressive

development program by installing a limited number of test machines to gain construction and operation

experience, it might be possible under the most favorable circumstances to install one-third of the total

potential capacity (approximately 100 MWe that would produce about 170 million kWh per year) by 1990.

Continuing the assumption of most favorable circumstances would allow the additional 200 MWe (80 wind

turbines of 2,500 kWe each) to be installed by 2000. The electrical production from the 300 MWe would be

approximately 500 million kWh per year. Such an optimistic installation schedule requires a strong economic

incentive that has not yet been shown with any certainty to exist. A more likely implementation rate would

reach the 300 MWe level well after the turn of the century. A brief discussion of a few practical problems

facing a rapid implementation program is presented later in this section.

The Office of Energy also prepared estimates of potential implementation for both small and large

wind machines. 16 The small machines (2-50kWe) are considered marginally cost-effective at this time;

however, tax incentives and anticipated rate increases will help commercialization. The Office of Enery~

estimated the potential implementation at 7500 units by the year 2000 for an annual savings of 1.35 x 10

Btu/yr (Table 2.3.2.3-5).

1988.

1995.

x 1012

The implementation rate for the large machines was assumed to be in blocks of 40 MWe, starting in

The second 40 MWe block was assumed to become operational in 1991, and 80 MWe more was assumed for

The total installed capacity by 1995 is 160 MWe. The associated energy savings is approximately 3.8

Btu/yr by 1995 (Table 2.3.2.3-5).

Potential Oil Use Reduction. The potential displacement of oil depends on the capacity installed and

the expected average capacity factor for the wind turbines. The capacity factor depends on the wind turbine

characteristics and the wind availability at the site. However, assuming one barrel of oil produces

approximately 600 kWh, the estimate for the year 2000 of 300 MWe installed wind capacity at 19% capacity

factor would displace nearly 850,000 barrels of oil per year, or $25.5 million with oil at $30/barrel. If

100 MWe could be installed by 1990, the savings would amount to approximately 280,000 barrels in that

year. The Office of Energy projection also results in a savings of 850,000 barrels in the year 2000,

although only 75% is from the large wind machines. 16

Implementation. Land use appears to be a potential barrier to significant implementation of wind

turbines along the coastal areas. Other potential concerns include noise, interference with television, 12 radio, and other communications, and aesthetics.

:t.- 135
Table 2.3.2.3-5 Office of Energy Estimates of Wind

Turbine Implementation

Energy Savingsa (1012Btu!yr)

Fiscal

Year Small ~chines Large Machines

Total Oil

Sgvings

(10 Bbl/yr)

1980 0 Ob 0

1984 0.1 0 0.02

1988 0.7 0.9 0.27

1992 0.9 1.9 0.47

1996 1.1 3.8 0.82

2000 1.3 3.8 0.85

aFossil-fuel equivalent.

bSmall savings occurred from the 200 kWe MOD-OA on

Cirlebra Island

Source: Energy savings, Ref. 16.

In order for wind to make a contribution as large as 160-300 MWe by the year 2000, a number of

favorable events must occur. These include successful demonstrations (reliability, construction, and cost)

with the early commercial machines on the mainland U.S. and in Puerto Rico, detailed wind survey work in

Puerto Rico, studies by PREPA that indicate the overall value of wind power to the utility is great, land

must be made available at not too great a cost, the public must be in favor of such an aggressive program,

the markets for small wind machines must be developed, utility interface policies must be developed,

conventional fuel prices must increase in real terms, other renewable sources must not provide too much

competition, and, perhaps most importantly, financing of a large capital intensive program must be possible

(wind turbines have no fuel cost and relatively low maintenance cost, especially for the very large

machines, but have higher capital costs). Therefore, if wind continues to look promising and most of the

above conditions hold, a likely approach would be to install small groups of machines of different sizes at

a relatively slow rate in order to benefit from the operating experience that is being accrued. This could

result in a total installed capacity in the year 2000 as low as 20 to 30 MWe 2,or only 7-10% of the 300 MWe

estimated to be the maximum potential.

Installation of 300 ~e would result in annual generation of about 500 million kWh. This represents

only a few percent of current generation. Therefore, by the year 2000 it is unlikely that wind will be able

to provide more than a very small part of total generation. However, for the longer term, the technologies

may improve and conditions may be such that additional wind resources can be tapped at other less favorable

sites. From a utility system perspective, the maximum desirable contribution from wind power in a system

having no storage depends on wind resource availability and wind turbine characteristics but is probably 13 less than 15% of total capacity.

BIOMASS

Biomass is both a direct (combustion) and an indirect (synthetic fuel manufacturing) source of

fuel. Biomass resources include crop and forest residues, specially grown energy crops, and animal and

urban wastes.

Puerto Rico is ideally suited for biomass technology development 1 since out of the 10 soil orders in

the world's tropics, nine are found in Puerto Rico. 1 There are 27 suborders, 37 great groups, 54 families

and 63 soil series. There are seven discrete ecological life zones superimposed over these resources.

Principal candidates for cultivation as energy crops evaluated by CEER include napier grass, sorghum,

sundangrass hybrids and sugarcane (referred to as energy cane when managed for energy production). Research

with energy cane indicates that the 70,000 acres set aside for" sugarcane by the government of the Commonwealth of Puerto Rico could provide as much as 17% of the Island's energy needs (358 Trillion Btu's in 1979)

and 100% of its molasses needs. Eucalyptus robusta, albizia and lecalha and water hyacinth are also being

studied. 5

.7-136
Biomass technologies are classified into three basic categories: direct combustion, thermochemical

conversion and biochemical conversion •. Table 2.3.2.3-6 from Reference 3 presents a good summary of the uses

of different types of biomass and the conversion process involved. A detailed discussion is presented in

Reference 8.

Direct combustion or burning of biomass for heat had been the only use of biomass until the be8inning

of this century. In 1981 10 x 10 12 Btu's were generated in Puerto Rico from the combustion of bagasse. 2

Crop residues and some municipal solid waste can also be burned directly. Much work has been done to

improve the efficiency of biomass combustion and to reduce its environmental impacts.

Thermochemical conversion processes are either gasification (including pyrolysis) or direct and

indirect liquefaction. Biomass gasifiers are available in several forms depending on the heat input form

(air, oxygen, or pyrolytic); gas-solid contact method (up-draf t, downdraf t, fluidized bed or suspended

flow); feedstock form (residues, pellets, providers); gasification temperature (dry ash or slagging);

product (low or medium energy gas, char, or pyrolysis oil); heating rate; and residence time (slow and fast

pyrolysis). An excellent description of the principle and current technology and research has been given in

Reference 4. Direct liquefaction is not well understood and commercialization in the near future is

unlikely. However indirect thermochemical liquefaction has achieved some success. Indirect liquefaction is

accomplished by using two steps -- gasification to produce synthesis gas (CO and H2 ) followed by a catalytic

conversion route to produce liquid products such as methanol or hydrocarbon mixtures. The products do not

require extensive upgrading, and their characteristics are independent of feedstock. Yields and

compositions are predictable and controllable.

Biochemical conversion processes consist of either fermentation (includes acid, hydrolysis) or

anaerobic digestion. Fermentation processes to produce ethanol from sugar and starch-rich biomass have been

used in many countries. 8 The current challenge is to reduce the cost of production. The production of fuel

ethanol from fermentation of sugar cane or food stock (Le., corn) is in progress in several countries

6 including Brazil and the U.s. Accelerated production of ethanol raises environmental concerns. Suggestions on the use of sugar cane for ethanol production in Puerto Rico have been documented. 7 Although

questions of the net energy balance of ethanol production produced much debate in early 1979,

computations12,13 indicated that the output to input energy ratio is 2 to 1. Sponsored research on

alternative feedstocks to produce ethanol has been in progress in many universities (i.e. Purdue, MIT), but

commercialization has not yet been achieved. Biogas production using anaerobic digesters on animal or urban

waste has been used allover the world. Presently, the Peoples Republic of China is attempting to use

digesters to produce methane as well as reduce waste. 9 A good discussion on biogas and alcohol fuel

production is presented in Ref. 10.

Cost for biomass systems are extremely difficult to project since the cost of the feed is highly

variable and is a major component of the total cost. CEER reported 5 production costs of energy cane in

Puerto Rico at $25.46/oven-dry ton or $1. 70/million Btu as an oil substitute. This includes delivery

charge. SRI International had performed an up-to-date economics study11 on biomass feedstock as well as

biomass conversion technologies in the mainland U.S.

Reference 7 assumed that 20,000 acres could be converted to energy crops by the year 1990 in Puerto

Rico. The energy produced would contribute about 600 million kWh or 3% of the electricity demand and 17

mi llion gallons of ethanol. If 90,000 acres could be used, the 3% would grow to 10% and 17 million to 78

million gallons of ethanol. 7 Reference 2 estimated biomass displacement of oil to be 541 mi llion barrels

from bagasse combustion and 1.24 million barrels from the use of municipal solid waste.

Land availability is the biggest issue affecting biomass use. Energy crops would compete with food

crops for the land. Experiences of similar projects in countries facing similar land use problems need to

be explored. Reference 3 gives a good account of some these experiences.

OCEAN THERMAL ENERGY CONVERSION

Ocean Thermal Energy Conversion (OTEC) is a concept for utilizing the temperature difference between

the warm surface waters of tropical oceans and the deep cold waters in a thermodynamic cycle to produce

electrical energy. In the open-cycle concept, the warm waters are flashed at low pressure, expanded through

a turbine, and then condensed against cold water; this cycle can produce fresh water as a byproduct. In the

closed-cycle concept, a working fluid such as a=onia is used in the traditional Rankine cycle. The open

cycle was tested by Georges Claude in Cuba in 1930: it produced electricity, but not enough to run the

equipment. 1 The closed cycle, using ammonia as the working fluid, was successfully tested off Hawaii in

7_ 137
Table 2.3.2.3-6 Classification and Uses of Biomass Energy

~'Uf"l Tyllt:!

Sol1d Fuels -----

Charcoal

Fuclwood

Bar,al:ll:le

Dpv(" 1opment

Conversion Enp.r~y Contt'nt Keg10n Rl:!lated StRttlS ot

Source Pt"ucel::ls (Btu/lb) Primarily URf"d Primary Uaee lRF.llleS Technology

--. ----

wood fil"st rucLlve 11,500 global cooking/he.1tln~

distillation well dp.:vP 1opl'd,

eucalyptus direct combul:lLlon 5,700s troptc..:al/eub- c.ook1 ng/hl'8 t tog/ erosion practical for

tropical R[PAm cook.ing and

kOR haolt> direct combu~t1on 5,700B hoUle/SF. Asi. proceRA hf'RtfRtp.R.m heating

(L.f'IICRPIlCI )

hardwoods dtrecl combuotlon ~. 7RO' global prUCeBY heall dcforeRtRtton

. steam

contfel"Y direct combustion 5,400a tempe rate to prOCl::'8l:l heat I use of mill waHte

8 1ub• 1 !'Itt-81D

8ugarrill1P direct combustion b ,bOOR troptC"RI produce l'iteam/ water quality, increasingly

electricity alternative prRrttcal for

hy-products electricity

Liquid fliP 1R

Methllnol wood pyroly!=ltR 8,600 U. S. /Rurope transportation high impact

tUf'l. industrial environment

raW' ma.ter1alB

solid waste pyrolysis

methane ratRlytit: oKidation

\--\ Ethanol wood cellulose acid hydro! ysi. b / 12 ,000 U.S./Brazl!/N.Z.! traneportRt t on food VB. fuci available.

\ fermentation Amuralta/eLc. fuel increasingly

I-' practical W

(Xl

sUKar crops ff'TmentaLion transportation low impact on

fuel envi ron~nt

starr.h crupl:l enzymatiC' F1ac- tnlllsportation

chari ficat ion/ fuel

fennentation

Organic addFi solid wastes flash pyrolysis 10,500 U.S. (not C'ommon) fuel oil MSW control

G;:UH.- uu l:I Fue.l..!-

"UiOgRR .. organic snacrobic 12,900 India/Chins/ direct burn1 ng waste/pollution veIl develope-d.

(primarily re~idues digestion Korca./Ce rmRny heat ing/ cookt ng control. con- low impact on

methane) 0.5. venience factor environment.

organir: pyrolysis/ 8,000-9,2000 f'll"ctrical Tf's1due as ferti- practical

residucs hydroKasificat ion generatton lizcr. H5W control

form veht ele fuel

Wood gal:l wood deat ructi ve 7,000-8,000 8 1ob• l rep lace natural gos

dil:ltl1liltlon

Producer wood/cellulosc hydropyrolitic 5,000-6,000 Europe/U. S. replace nRtllra 1 gas well devcloped.

(synthesis) convpreion practical

g.Y

aF.nergy values tor fuelwood and bagRRFle bl:l~ed on 20% H20.

bAcld hydrolysis is a pret reatment.

Sour,=e: Ref. 3~ Figures laken from U.S~D.A., "Fuel Value of Wood," Technical Note 98 (Madison, Wis.: Forest Products Lab. 19S6)j

James L~ Brubaker. "Leuco1ena Biomass Productl vity Stlld1 E'S," paper prcAented at 20th Annual H..'1wa t 1 Forestry Confcrp.nce. Kona. Hawaii.

Sept. 22. 1978; .John R. Benemann. Btofuels: A Survp.y (Palo Alto. Ca.: Klf'ctrtc Power RcsearC'h lnattLute. 1978); Richard Merrill H.nr1

Thomas Gagc. Energy Primer (New York: [)PII Publishing Co~. 1978); and G.M. Fair and E.W. Moore, "Heat and EnerKY Relations in the

Digestion of Sewage Solids 1. The Fuel Valuc of SewaRe Solids", Sewage Works Journo1l. (1980).
1979 by the Mini-OTEC project. producing net electrical power for the first time in an OTEC plant and

demonstrating the feasibility of the concept. 2

Resource Base. An ideal OTEC site would meet the following criteria: (a) high thermal differences

between the surface and deep water (generally taken to mean a difference of 20°C to a depth of 1000 meters);

(b) nearness to the market for the OTEC product; (c) absence of storms; and (d) low-velocity ocean

currents. l Puerto Rico is acknowledged to meet the first two conditions off the southeast coast where deep 1 678 . water can be found within a few miles of shore. • •• The other two criten.a are more important for

floating OTEC platforms moored in deep water than for shore-based or tower-mounted OTEC plants that could be

built in Puerto Rico. For example. the suitability of the Punta Tuna site is evidenced by the fact that two

of eight proposals for OTEC pilot plants submitted to DOE3 •4 •5 were based upon tower-mounted facilities at

this 10cation. 9 •10

Technologies. A considerable technology base for OTEC exists because of the work done in the past

decade in the United States and elsewhere. Although this technology base is not now adequate to justify the

construction of the large plants (250 to 400 MW) that are believed to necessary to be competitive in most

markets at today's energy prices .11 it may well be adequate for small plants in the range of 10 to 40

~.12 This is especially true for locations (such as at Punta Tuna) where the plant can be placed on shore

or put on a shelf-mounted tower platform.

Historically. major emphasis in OTEC research and development has been placed on heat-exchanger

design and on the means for prevention of biofouling and corrosion. Because of the research done to date.

several promising heat-exchanger concepts have been developed, and effective biofouling control techniques

have been selected for long-term testing at the Seacoast Test Facility in Hawaii. At the present time. the

major technical uncertainties are believed to be (in order) in the designs of the riser power cable. the

cold-water pipe, and the ocean platform. 13 However. these are mainly problems for floating OTEC platforms

moored in deep water. and can be largely avoided by a shore- or shelf-based plant. 14 It is probably

significant that most of the pilot-plant proposals were shore or tower installations; although probably less

efficient than floating plants. they entail substantially less technical risk.

System Performance. The efficiency of an OTEC plant is inherently low because of the small

difference between the temperatures of the heat source and the heat sink. For seawater temperatures of 40°F

and 80°F (figures commonly used in OTEC examples). the ideal Carnot cycle efficiency is only 7.4%. For

large OTEC plants, overall efficiencies of the order of 2.5% are expected; this compares with efficiencies

approaching 40% for large fossil-fueled plants. Efficiencies of shore-based plants would be lower because

of the longer pipe runs and (probably) lower temperature differences. 12 Although these low efficiencies do

not impact on energy cost (the energy source. of course. is free). they do have a major bearing on capital

cost and require that parasitic losses (e.g., the power required to pump the large quantities of water) be

kept to a minimum.

OTEC has an important advantage over other solar energy systems in that it is essentially

uninterruptible. The energy-storage capacity of the oceans is so great that there is no difference between

day and night operation. and only a slight variation over the year. Therefore. OTEC is suited for base-load

operation. an important consideration in a system with high capital costs and low operating costs.

Maintainability and durability of OTEC systems have not been demonstrated. For the shelf-mounted

plants proposed for Puerto Rico. the main uncertainties would appear to be in the lifetimes of the coldwater pipe and heat exchangers, and in the clean-ability of the latter. Major risk elements for heat

exchangers have been minimized by some designers through choice of materials (e.g., titanium) and geometries

(e.g•• configurations that can be easily cleaned). The cold-water pipe presents a more difficult problem.

at least in the larger sizes. For a shore-based 10 MW plant. however. fabrication and deployment of cold12 water pipes with an expected lifetime of 30 years are believed to be within the state of the art.

Reliability of a fully-operational OTEC plant should be as good or better than for a conventional

power plant. Heat exchangers would be modular (for fabrication reasons). permitting serial shutdown for

cleaning or other maintenance. The other mechanical equipment is typical of that found in conventional

power plants. There is no reason to believe that operations would necessarily by interrupted by adverse

weather (e.g •• hurricanes). In this regard there is encouragement from the experience of the OTEC-l oceangoing test platform.· which continued operations during a Pacific storm of a magnitude which the designers

had expected to require the jettisoning of the cold-water pipe. 4 Moreover, tower platforms are commonly

used in the Caribbean for oil exploration.

I - 139
Costs. OTEC, like all solar-energy concepts, is capital intensive because it requires large amounts

of equipment to take advantage of the low-intensity energy source. Since the energy source is free (and

assuming other operating costs are comparable to those for conventional plants), the economics of OTEC is

reduced to comparing the savings in fuel costs against the cost of amortizing the construction expense over

the lifetime of the plant.

Cost estimates for OTEC plants are site-specific and design-specific, and depend to a large extent

upon the size of the ~lant assumed. A wide range of estimates can be found in the

literature. 8 ,ll,12,14,15,16,1 For the purpose of this report, it is sufficient to note that the cost of a

40 MW OTEC plant is of the order of $5000/kW, with larger and smaller plants being less or more expensive,

respectively. This compares to generally quoted figures of $1000/kW for oil-fired plants and $2000/kW for

coal and nuclear plants. 8 Using a plant amortization charge of 18%/yr and a plant availability factor of

80% (both figures are typical of those found in OTEC studies), the incremental cost of the OTEC plant over

the oil-fired plant represents a busbar power cost of about 10f/kWh. By comparison, the current fuel cost

for electricity generation in Puerto Rico is about 8f/kWh and the average price charged consumers is 11-

13f/kWh. Clearly, small OTEC plants are not competitive with oil at current interest rates and current

world prices for petroleum. Conversely, OTEC becomes relatively more attractive as interest rates come down

and the price of imported petroleum goes up. For all practical purposes, therefore, a commitment to OTEC is

a hedge against the prospect that the world price of oil will increase at a rate which exceeds the long-term

interest rate. This certainly has been the case during most of the past decade; it is not true at present

and may not be true for the next several years. 18 In any event, predictions of this sort are difficult to

make and have proved to be unreliable in the past.

Potential Users. The OTEC plants that have been proposed for Puerto Rico would be used exclusively

for the production of electrical power. OTEC can be used to produce power-intensive products or fresh

water, but neither of these applications have appeared attractive for Puerto Rican locations.

Potential Oil Use Reduction. Since OTEC would be used for generation of base-load power, it would be

a direct substitute for power produced in oil-fired plants. Using the figures presented above, and assuming

a heat rate of about 10,000 Btu/kWh for an oil-fired plant, substitution of OTEC for oil would result in a

yearly savings (in the cost of purchased oil) of about $400 per year per installed kilowatt of OTEC

capacity. Thus, for the 40 MW plant, the savings in avoided oil purchases would pay the incremental cost of

the OTEC plant (over that of the oil-fired plant) in ten years. Although this in itself does not provide

economic justification for constructing an OTEC plant, it can be an important consideration if it is desired

to reduce dependence upon imported energy resources, or if it is desired to preserve foreign-exchange

currency that would otherwise be spent on petroleum imports.

Reference 21 indicates that 40 MW of OTEC may be on-line by 1994 with an additional 80 MW added in

1998. The savings in imported oil were estimated to be 1.86 million barrels in 2000.

Implementation. The major barriers to the implementation of an OTEC strategy for Puerto Rico are

those related to technology and financing. Environmental impacts and land-usage issues should not be major

problems. Although the United States OTEC program has been directed at the technology required to build

very large plants, there has been recent recognition of the possibility that initial commercialization of

OTEC may occur in island markets dependent on imported oil, and where smaller plants in the range of 5 to 40

MW may be more appropriate. 8 ,19 A 10 MW OTEC plant can be built with existing technology but may not be

economically viable except as a hedge against an oil embargo or a rapid escalation in the price of

petroleum. A 40 MW OTEC plant is potentially attractive for economic conditions that may exist within this

decade, but requires some extrapolations of existing technologies. The large plants (250 to 400 MW) that

are believed to be competitive under today's conditions require major technological extrapolations that will

take years to achieve.

Financing of OTEC plants will be a major problem because of the large amounts of capital required in

comparison with conventional power plants. Financing must come from either private sources or from various

government agencies.

Land use is not an issue because little land is required for an OTEC installation. OTEC plants are

either located on floating platforms far out to sea, or on shelf-mounted towers as proposed for a few

favored locations such as Punta Tuna. Shore-based plants have been proposed, but these would be little

larger than a conventional power plant.

..r _140
Environmental impacts from OTEC plants are not expected to be a hindrance to their use. There is

some mixing of deep water and surface water, but this can be controlled so as not to produce undesirable

effects. The most promising anti-biofouling system requires intermittent chlorination, but at levels that

do not exceed EPA standards. Some working fluids (e~g., ammonia) impose environmental risks if accidentally

released in large quantities, but the risks can be minimized by careful design and operation. Overall, the

environmental impacts from OTEC-produced power are probably less harmful than those associated with

conventional sources.

COMBINATION SOLAR POND/OTEC ALTERNATIVE

A scoping study has recently been completed for a 5 MWe power plant combining two developmental

technologies - solar ponds (SP) and ocean thermal energy conversion (OTEC) - into a hybrid system that

offers potential advantages over either pure SP or pure OTEe systems for production of electrical power. 19

Although this study was based upon a Hawaiian location, the concept is applicable to any tropical location

with a near-shore source of deep ocean water and an on-shore topography suitable for construction of solar

ponds. Puerto Rico fits into this category.

In the SP/OTEC combination, a salt-gradient solar pond replaces the warm surface water of the ocean

for the collection and storage of solar energy. Solar radiation is absorbed and stored in the water at the

lower levels of the pond. The water temperature at the lower levels can be scalding hot while the surface

temperature remains very close to the ambient air temperature. Convection is prevented by the presence of a

salt gradient that develops naturally in the pond causing the salt concentration to vary from near seawater

concentration at the surface to over 20% at the bottom. Because of this salt gradient, the fluid density at

the lower levels is higher than that at the surface, thus preventing the hotter fluid at the lower levels of

the pond from moving upward. The concept of collecting and storing solar energy by means of salt-gradient

solar ponds was derived from studies of various natural lakes that have salt concentration gradients. A

salt gradient solar pond normally consists of three zones: a thin convective zone at the surface, a nonconvective gradient zone in the middle that provides thermal insulation, and a convective storage zone at

the bottom. A typical pond would be about 10 feet deep and require 30 or more acres per megawatt of net

power production.

The resource-base requirements for the SP/OTEC combination are more restrictive than for a pure OTEC

or a pure solar-pond system. As with OTEC, a tropical location is required: the Hawaiian study was based

upon a mean annual solar insolation value of 280 W/m2 , with a lower practical limit of perhaps 200W/m2• The

source of deep, cold water must be very near the shore. The on-shore topography must be suitable for the

construction of the large pond complex. Finally, there must be available an inexpensive source of salt, or

at least the means of producing the salt from seawater. The Punta Tuna site meets the first two

requirements. There is no record of studies covering the second two requirements.

Although small solar-pond and OTEC plants have been built, the combination has never been tried. In

locations where the requirements of both systems are met, the SP/OTEC hybrid is potentially superior to

either. Using deep, cold ocean water in combination with a tropically located solar pond results in a

substantial increase in the thermal efficiency of a pure solar pond power plant and a significant decrease

in the size of the pond required. Conversely, using a solar pond as a source of warm water for an OTEC

plant provides a many-fold increase in efficiency over that of a pure OTEC system. In the 5 MW SP/OTEC

plant, for example, the Carnot efficiency would be about 21.5% and the net realizable cycle efficiency about

11. 7% (compared to 7.4% and 2.5%, respectively, for OTEC alone.). In addition, using a solar pond in

conjunction with OTEC eliminates the need for the warm-water and mixed-discharge pipes, and permits a manyfold decrease in the size of the cold-water pipe and heat exchangers. For example, the cold-water pipe - a

major risk item in a pure OTEC installation - would have a diameter of only 5 feet in a 5MW SP/OTEC

combination (compared to 12.5 feet for a 5 MW pure OTEC plant) and would entail significantly fewer

uncertainties in its deployment and expected useful life. The other side of the trade-off is, of course,

the solar pond itself, which becomes the major cost item and which has uncertainties of its own.

As the result of theoretical and experimental work done in the Cnited States and Israel, the thermal

and hydrodynamic behavior of solar ponds are sufficiently well understood for conceptual design purposes.

Major technical unknowns remain in the areas of wave formation and suppression (believed to be site-specific

problems requiring site-specific solutions), and in the design and installation of a suitable pond liner to

prevent leakage of water. Other areas requiring careful attention are the construction of the ponds

themselves and the accumulation of the extensive salt inventory; the costs for these items are high and very

site-specific. ~oreover, becau'se large solar ponds have not yet been built and tested, the first SP/OTEC

plants would probably consist of many ponds of a few acres each rather than a few large ponds. On balance,
however, the risks· due to uncertainties may be less for the hybrid than for a pure OTEC plant of the same

capacity.

The cost of the 5 MW Hawaiian SP/OTEC plant was estimated to be about $5000/kW, which makes it

competitive with the 40 MW pure OTEC plant discussed above. This makes it potentially attractive within

this decade, and because of its smaller size, much more affordable in terms of initial capital outlays. The

primary use would be for the production of electrical power. A major difference from pure OTEC is that the

SP/OTEC combination is also suitable for peaking operations; the energy-storage capacity of the ponds -

unlike that of the oceans - is not unlimited. In addition, the hot water from the ponds could also be used

in flash evaporators for the desalination of seawater, an application that could be important in water-short

locations. The savings in oil use would be the same as for OTEC: about $400 per year per installed kW of

baseload capacity.

A major barrier to implementation could be in finding enough suitable land. The 5 MW plant discussed

here would require about 160 acres of contiguous, relatively flat land at a shore location near a source of

cold water, with a 40 MW plant requiring about two square miles. An initial step would be to survey

potential sites to see if these criteria can be met. Another potential problem could be the environmental

effect of leakage of brine through the pond liner into the soil. Factors tending to encourage

implementation are the smaller size, the smaller capital investment, and the fact that the technology for

the OTEC portion is sufficiently advanced to justify plants of this size.

HYDROPOWER

As stated in Ref. 1, the potential for hydropower in Puerto Rico has not been fully evaluated.

Recent estimates by the U. S. Corps of Engineers suggest that at least a total capacity of 106 MW are

available from 19 existing and potential sites that were evaluated. This potential, which does not include

all possibilities, almost doubles the existing installed hydroelectric capacity for the island.

A recent reconnaissance study2 focussing on the possibility of rehabilitating existing dams and

hydroelectric power plants that are in disrepair evaluated thirteen dams and hydroelectric sites. Brief

reports were prepared on 10 of the 13: three did not have sufficient information. All but one of the 10

sites showed that the development of hydropower was financially feasible. A summary of the evaluations is

contained in Ref. 1.

The economic analysis for the rehabilitation was based on critera that considered that PREPA has

excess generating capacity and additional capacity is not needed in the near future. The value of

additional power from hydroelectric was compared to the savings in operation and maintenance to the utility

(i.e., comparable to roughly 8~/kWh and not the 11-13~/kWh that is the price to consumers).3 An alternative

analysis based on the cost of delivered electricity might further enhance the financial viability of the

rehabilitation program.

With respect to new hydroelectric sites, the Corps of Engineers developed an extensive body of

information on the potential for additional base-load capacity using hydroelectric facilities. 4 The study

concluded that it does not appear many hydroelectric sites or systems can be economically developed to

provide new base-load. By restricting the study to base load generation, opportunities for identifying

intermediate and peak load hydroelectric generating capability were not evaluated.

The Puerto Rico Office of Energy estimated that hydroelectric stations could provide 200 MW of power

by the mid- to late-1990s. Oil savings are estimated to be 3.28 x 106 bbls per year in 2000. 5

2.4 THE ENERGY PROGRAM

The energy program for Puerto Rico focuses on five major areas. These are:

1. Fossil Fuels,

2. Electricity,

3. Energy Conservation,

4. Renewable Resource Use, and

5. Energy Planning

I-l42
In each of these areas three components of the program can be identified:

a. Issues these are the major factors in each area. The previous discussions have

provided the basis for the identification of these issues.

b. Approach - the fundamental premise that can guide the development of specific actions.

c. Specific Actions - based on the premises above, the steps that can be taken to address

the issues. These actions include both policy measures (e. g. regulations, incentives,

etc.) and projects (studies as well as hardware installations).

The energy program in each of the five areas will be described in terms of the three components.

2.4.1 Fossil Fuels

The fossil fuels area covers the use of petroleum products, the refining and petrochemical

industries, and the potential for alternative fossil fuel use.

Issues. The issues involving fossil fuels in Puerto Rico can be summarized as the following:

1. Puerto Rico is almost totally dependent on imported petroleum for all of its energy

supply. The demand sectors (industry, agriculture, residential, commercial, and

transportation) and the domestic supply system (refineries, electricity generation)

trace virtually all of their needs to imported oil. The economic growth and development

of the island, therefore, is highly vulnerable to the uncertainties of the oil market.

2. The refining and petrochemical industries, major components of the Puerto Rican economy,

are suffering from poor competitive positions in their major market, the mainland U.S.

These disadvantages include higher costs for imported crude than mainland operations,

higher product transportation costs due to the requirement to use U.S. flag shipping,

higher prices for naphtha feedstock than mainland operations, and competition from other

Caribbean refining operations.

3. Puerto Rico has difficulties with regard to its sources of crude oiL Venezuelan crude

is decreasing both in absolute and relative quantities as a component of imports. U.S.

crude is increasing measurably in relative terms but only slightly in absolute terms.

Puerto Rico is competing with other countries, including the mainland U.S., for

international oil supplies.

4. Puerto Rico is in a complex position with regard to oil entitlements, quotas, and price

controls. Various federal regulations and controls worked to Puerto Rico's advantage in

the pre-1973 period. The rapid rise in the price of foreign oil has changed this.

S. Alternative fossil fuels (coal and natural gas) are not now in use in Puerto Rico. To

utilize these fuels would require extensive investment in infrastructure (e.g., coal

ports, LNG facilities, etc.) and careful evaluation of environmental and safety issues.

6. A definitive evaluation of the potential for oil and/or gas reserves in Puerto Rico

(including off-shore) is not available. Preliminary indications have been negative but

no extensive evaluation has been done.

Approach. The following is a synopsis of some of the key premises on the basis of which specific

actions are suggested:

1. It is important to determine as soon as possible the existence of oil and/or natural gas

in Puerto Rico.

2. Steps should be taken to identify, evaluate, and implement technologies that can serve

as substitutes for petroleum. These steps include (a) providing adequate legal and

1, 143
institutional frameworks, (b) encouraging industry participation, (c) continuing

interaction with the Federal Government, (d) considering the provision of matching

funds, (e) establishing priorities and cri teria for new technologies, and (f) using

scientific resources available in Puerto Rico to study issues.

3. The refining and petrochemical industries continue to represent a major component of the

economy. The corollary industries that can use the raw petrochemicals and produce

finished consumer products can be a significant feature of growth and development for

Puerto Rico. Efforts should be made to improve the crude oil supply situation, to

improve the competitive position of the refining and petrochemical industries, and to

secure appropriate consideration under various federal oil entit lements, quotas. and

price controls.

Specific Actions. The specific actions suggested for the fossil fuels area include the following:

1. Evaluate the need for additional exploratory drilling for oil and/or gas. The available

geologica 1 information needs to be rf'!viewed in detail to det ermine if an extensive

exploratory drilling program is warranted. The existing geological reports, drilling

logs, soundings, and other evidence needs to be compiled into a complete documentation

and evaluated on a consistent basis. A follow-up exploration program, if warranted,

should then be prepared.

Schedule: The review can probably be completed over a 6-month period.

Resources: The review and program preparation, if necessary, should cost in

the range of $40,000-$60,000.

2. Conduct a comprehensive feasibility study on the potential for coal use. The potential

for coal use in electricity generation and for industrial applications needs to be

evaluated in a comprehensive fashion. The possible uses should be identifed (e.g.,

utility boilers, industrial boilers, furnaces, etc.), the infrastructure requirements

should be identified (e. g.. coal ports, inland transportation, handling equipment, ash

disposal, etc.), alternative configurations should be identified (e.g., coal/water

mixtures, coal/oil mixtures, etc.), and a cost estimate should be made for each portion

of the coal fuel cycle. Estimates should be made of the potential penetration of coal

into the market and comparisons should be made to continued oil use.

Schedule: Approximately 12-18 months

Resources: Approximately $250,000-$400,000

3. Identify policy measures to deal with the existing refining and petrochemical indus-

~. The steps that can be taken to improve the position of the existing industries

need to be identified, evaluated, and implemented. Puerto Rico government, federal

government, and private sector groups need to work together to out line specific steps

(including investment incentives, entitlement options, crude oil supply agreements,

etc.) that can be taken. The existing industry and the potential for new downstream

operations need to be addressed and appropriate measures need to be recommended.

Schedule: This activity should be completed in 6-9 months.

Resources: Effort for this should come from the various Puerto Rico, federal,

and private sector organizations involved.

2.4.2 Electricity

The electricity area includes all aspects of the generation, transmission, and distribution of

electricity.

:t:. - 144
Issues.

follows:

The major issues involving the electrical system in Puerto Rico can be enumerated as

1. The electrical generation system is almost exclusively dependent on petroleum.

amounts of hydropower are the only non-petroleum generation source.

Small

2. The electrical system experiences significant reliability problems based on its isolation

(and inability to connect to a supporting grid), the large size of several units relative

to total system size (4 units with capacity in excess of 400 MW each in a system of peak

load in the range of 2000 MW), limited quick response capability (e.g., spinning

reserves, quick-start units, selective load shedding capability, etc.) and maintenance

problems (maintenance scheduling, repair work).

3. Electricity costs are high. Since the generation is almost exclusively from oil, fuel

costs are high and must be passed on to consumers. Also, the rate structure favors large

block users with the result that residential customers are bearing a larger portion of

the cost of system operation. Substantial financing will be required to meet system

expansion plans.

4. New generating capacity will be needed by PREPA despite the current existence of a large

reserve margin. Load growth and increased system reliability requirements will dictate

the new capacity required. Puerto Rico faces unusual and complex problems in planning

for new capacity. The isolation of the system, the cost of alternative base load units

(e.g., oil vs coal), the current sluggish economic growth, the difficult financing

environment, and other factors contribute a great deal of uncertainty and risk to the

timing, size, and type of new units to be purchased.

Approach. The approach with respect to electricity consists of the following premises:

1. Improving the system reliability through appropriate operation and maintenance procedures

is a high priority.

2. Efforts need to be made to improve the system efficiency through operational procedures,

conservation measures, and the consideration of cogeneration systems.

3. Rate structures need to be continually evaluated and revised as necessary.

mechanisms, such as peak load pricing, can be considered.

New rate

4. Generating

including

systems •

units that offer an alternative to oil need to be given special consideration

conventional (coal, gas, nuclear) and renewable (wind, solar, OTEC, etc.)

5. As oil will be a major part of the electrical system for some time to come, enhancement

of Puerto Rico's position in the market for petroleum fuels would be economically

advantageous.

Specific Actions. The specific actions in the electric sector include the following:

1. Expand training for PREPA personnel in operation and maintenance techniques. On a

continuing basis PREPA staff need to have expanded and advanced training in the latest

techniques for operation and maintenance of the system. The training should include

current employees (i.e., on a continuing education basis) as well as new employees.

Training can be via formal courses or on-the-job training (e.g., by attaching staff to

mainland electric utilities to observe practices).

Schedule: Intensive training should be for 2-4 weeks per year.

Resources: About 5-7 people per year should receive training.

budget of $20,000-$30,000 per year is estimated.

J:- 145

A training
2. Implement repair and overhaul program. Numerous recommendations have been made regarding the needed maintenance of the current system. A prioritization scheme is needed

to determine the highest priority projects. The overhauls then need to be performed.

Schedule: The priorities can be established within a 3-6 month period.

Resources: The cost of the overhaul program depends on the maintenance to be

done.

3. Perform rate structure study. A detailed analysis of the rate structure needs to be

carried out to determine the potential benefits of changing the existing structure.

Alternative structures need to be identified (e.g., inverted block, time-of-day, etc.),

the potential impact on reducing load needs to be computed, the mechanisms for implementing the changes need to be evaluated, and the selected scheme needs to be implemented.

Schedule: The study should be completed in 9-12 months. Recommended changes

can be implemented thereafter.

Resources: The study is estimated to cost $75,000-$125,000.

4. Peform long-range generation planning study. A long-term (20-30 year) analysis of the

generation system needs to be conducted. This would include the development of a longterm load forecast and the application of state-of-the-art planning tools to determine

the optimum system expansion plan.

Schedule: The planning can be done in a 9-12 month period.

Resources: Approximately $100,000-$150,000 would be required.

2.4.3 Energy Conservation

The energy conservation areas cover efforts to improve the efficiency of energy use by the various

end use demand sectors. Efficiency improvements in the supply sectors (petroleum refining and electricity)

are covered elsewhere.

Issues. The energy conservation issues include both general considerations affecting all sectors and

specific considerations for individual sectors:

1. With the exception of electricity, virtually all of the energy consumed by the demand

sectors is in the form of petroleum products. Since electric generation is almost all

oil-fired, the dependence on oil is total.

2. Puerto Rico has a high rate of energy consumption per unit of personal income. It ranks

11th among the u.S. states. l Energy use per unit of GDP is also high.

3. The transportation system is a major energy consumer with private automobiles accounting

for most of the consumption. Incentives are needed to enhance the penetration of more

fuel-efficient automobiles into the fleet.

4. The residential sector constitutes a small component of energy demand because of the

lack of space heating requirements and the limited market penetration of appliances

compared to the mainland. Nevertheless, the high cost of electricity has a sil1;flificant

impact on the individual consumers.

5. The commercial sector (including offices, hotels, public buildings, government

installations) has a large stock of buildings that were not designed with energy

considerations in mind. Lighting and air conditioning systems designed to minimize

electricity requirements have not been installed to any great degree. Other energy

conservation measures (e.g., site design, thermal insulation, reflective window glazing,

etc.) have not been implemented to any great extent.

J;. _146
6. The industrial sector is the largest energy consumer. Reductions in industrial energy

consumption are primarily the responsibility of individual industrial firms to evaluate

in light of their special circumstances.

Approach. The approach to an energy conservation program is necessarily complex because of the

multi-faceted aspects of the problem:

1. Energy conservation measures to be implemented in Puerto Rico should consider economic

development impacts and should be designed to complement growth programs. For each

measure considered, emphasis should be placed on reviewing the capital cost

requirements, employment effects, environmental impacts, use of local resources, and the

oil savings potential.

2. Energy conservation measures require the involvement and cooperation of all elements of

society and the economy. Emphasis should be placed on programs to inform and educate

industrial operators, farmers, building owners, and the general public on the need for

conservation.

3. In the transportation sector two basic strategies must be used in concert: improvement

in the public transportation system and incentives to reduce the inefficient use of

private automobiles. Both of these could be carried out through a combination of

regulatory measures and capital improvement projects.

4. For buildings, both residential and commercial, energy conservation can be effected by

retrofit of existing buildings and improved energy performance of new buildings. As

this sector is not a major energy consumer, changes will be driven more by energy cost

considerations than by concerted regulatory action. There is, nevertheless, a role for

a program to improve the awareness of what can be done to conserve energy and to make

energy efficiency improvements more attractive.

5. In the industrial sector, the private sector is the primary implementer of energy

conservation efforts. Programs can be developed to educate industrial plant personnel

as to what conservation measures are available, to promote consideration of new

approaches (e.g., cogeneration), to provide incentives to industry to implement energy

conserving systems and to remove any unnecessary barriers to the use of more efficient

equipment and processes.

6. Government operations could serve as a model for energy efficiency. For the facilities

that are operated by the government (buildings, vehicles, etc.), cost-effective energy

conservation measures can be applied to demonstrate the energy and cost savings

potential.

Specific Actions. The specific actions that can be part of an energy conservation program include

the following:

1. Revise the island's energy conservation plan. Puerto Rico's energy conservation program

needs continued review. A methodology needs to be established to monitor the

effectiveness of the various measures that are implemented. A continuing identification

of new measures needs to be carried out.

Schedule: The energy conservation program should be reviewed and updated

approximately every two years.

Resources: The review will cost approximately $100,000-$150,000 each time it

is done.

2. Implement the conservation measures. There are a variety of

measures in Puerto Rico's energy conservation plan. These

prioritized and implemented as resource become available.

1:- 147 -'"

energy conservation

measures should be
2.4.4 Renewable Resources

Renewable resources include a variety of technologies including solar, wind, biomass. urban was te.

ocean systems, and hydropower.

Issues. The issues regarding renewable resources include considerations that affect all renewable

resource uses and considerations regarding individual technologies:

1. Apart from some hydroelectric facilities and some small demonstration and pilot plant

units, there is currently almost no use of renewable resources in Puerto Rico.

2. Being in a tropical region, the renewable resource potential is large for Puerto Rico.

There are many different technologies that can be considered for implementation. With a

large number of alternatives available, a major concern is the allocation of limited

financial and manpower resources. It will not be possible to develop all renewable

resources systems simultaneously. Priorities should be established and choices made.

•

3. Cost is a major factor affecting the implementation of

technologies. The higher initial capital cost of most systems

implementation. For these technologies to make any significant

series of incentives will have to be developed •

renewable resource

acts as a barrier to

market penetration a

considered for Puerto Rico are

operating experience with many of

in incorporating them into the

technologies being

As there is limited

of risk involved

Many of the renewable resource

designed to generate electricity.

these systems, there is a degree

integrated grid system.

4.

5. Some of the renewable resource technologies (particularly biomass, large centralized

solar installations, and solar ponds) will compete with other activities for limited

land area. Of special concern is potential competition for agricultural land.

Approach. The general approach to be taken in dealing with renewable resources can be summarized as

follows:

The choice of which renewable resource

of the impacts on overall economic

complementary to these goals can be the

technologies to pursue should be made in light

development goals. Those systems that are

target of various incentive programs.

2. Efforts should continue to investigate the potential for all renewable resource

technologies. These efforts should include estimation of the resource base, evaluation

of the performance of the various technologies, evaluation of the economics of the

systems, and review of the implementation issues. No technology should be elimina ted

from consideration until it has been clearly determined to be inappropriate. Priorities

for the continued development and implementation of specific technologies and systems

should be developed.

3. Appropriate procedures for comparing the economic performance of renewable resource

technologies to conventional systems should be developed and applied.

4. Where appropriate, incentive

guarantees, price supports,

technologies to penetrate the

progra~s (e.g., tax credits, pilot plant financing, loan

etc.) nhould be ~eveloped to assist renewable resource

market.

Specific Actions. Since some renewable resource technologi--es involve the long range

development activities, it is not possible to specify a definitive set of long term actions.

"emphasis is on what is most needed at this point in time.

research and

Instead. the

1. Expand the evaluation of the renewable resource base. The data available on the extent

of renewable resources needs to be expanded. Field data collection needs to be done for

solar insolation, wind potential, biomass generation, ocean thermal profiles, and

I- 148
hydropower potential. The .data presented here are limited and need to be reinforced.

The Wind Assessment Program is an example of the type of expanded effort needed in all

areas. An integrated program plan outlining the information requirements needs to be

prepared and implemented.

Schedule: Data collection for most renewables needs to be assembled over an

annual cycle and preferably should be collected continuously.

Resources: The cost of the program will depend on the extent of the data

gathering effort decided upon.

2. Establish a renewable resource technology data base. A complete set of current information on various renewable resource technologies needs to be assembled. The data should

include technology configurations available, performance, and costs. The information

can be in the form of a report library or a computerized data retrieval system. The

data should be made available to energy planners, researchers, private industry and the

general public as a means of increasing the awareness of renewable technology potential.

Schedule: The first set of information should be compiled for use in a 6-9

month period.

Resources: A budget of approximately $25,000 would be necessary.

3. Conduct a study on the integration of renewable resource technologies into the PREPA

system. An integrated study to determine the role that renewable resource electricity

systems can play needs to be carried out. The perspective needs to be that of the

electric system planner and should consider issues such as capital and operating costs,

effects on system reliability, rate structures for renewable technologies, etc.

Schedule: The study can be completed in approximately 12-18 months.

Resources: The study cost is estimated at $75,000 to $150,000.

4. Implement pilot scale demonstrations. The most attractive renewable technologies need

to have field demonstrations to gain experience on their operation. An integrated

prog~am plan should be prepared that outlines which technologies should be given

priority. The plan should then be implemented as sufficient resources are available.

Schedule: The plan can be prepared in a 6-9 month period.

Resources: The costs depend on the demonstrations to be carried out.

5. Evaluate institutiona I structures influencing renewable resources. The institutional

issues affecting the use of renewable resources need to be evaluated. Energy pricing,

tax incentives, permit requirements, financing opportunities, and other items need to be

add~essed. Appropriate policy measures to deal with potential barriers to renewable

resource use need to be identified and evaluated.

Schedule: The review can be done in approximately one year.

Resources: The costs are estimated at $75,000-$100,000.

2.4.5 Energy Planning

This area covers overall energy planning and its integration with economic planning and analysis.

Issues. The major issues in the planning area are as follows:

1. There has been no comprehensive, integ~ated analysis of the energy/economy system in

Puerto Rico. There have been some attempts at dealing with portions of the problem but

no complete analysis has been conducted.

I- 149
2. The data for carrying out a detailed energy/economy analysis are not complete. In some

areas there is insufficient information for all but a cursory analysis. In other areas

the data are quite good and complete.

3. The available analytical tools to carry out integrated energy studies have not been

applied. Economic models for Puerto Rico exist but have not been used to drive a

detailed energy system analysis. Energy sector models exist but have not been coupled

into a consistent framework.

Approach. The approach toward energy planning is a recognition that there is a need for this type of

integrated effort in order to make more informed energy decisions. The necessary resources (funds, effort;,

time) will have to be made available to implement an energy planning program. It is also recognized that

the planning activity is an ongoing iterative process that must be updated periodically.

Specific Actions. The specific energy planning activities include:

1. Develop an integrated energy planning system

For continuing energy planning efforts, a comprehensive energy planning system needs to

be developed. The system should consist of a complete energy data base and a set of

analytical tools that can be used to develop decision-making information. The data base

should build on existing PROE systems used to compile energy statistics. The data base

should be extended to include detailed information on useful energy demand pattern in

each sector. It should be based on regular surveys and samples in each sector and should

be updated at least annually. The data base should also include information about the

energy supply system (e. g. outputs, efficiency, cost of production, etc.). New energy

technologies should be included as well as existing systems.

The analytical tools needed for energy planning include a macroeconomic model (for

economic analyses), a complete energy sector model that deals with the entire energy

system in an integrated fashion to construct supply/demand balances, and a set of

specialized energy sector models to deal with individual elements of the energy system

(e.g., electric sector, refinery sector, etc.). A battery of tools is needed rather than

a single tool in order to address different aspects of the process. Some of these tools

exist already in PROE and CEER.

Schedule: The data base can be compi led over approximately a 1-11;2 year

period. The analytical tools can be designed and implemented

concurrently.

Resources: The cost of the data base assembly is dependent on the level of

detail desired. For planning purposes, an estimate of $150,000

to $300,000 is reasonable. The development of the analytical

tools would cost about $100,000 to $200,000 depending on what

existing procedures could be used.

2. Conduct Updated Energy Planning Effect

An effort to improve and update the results of this work should be carried out as a step

toward a regular energy planning exercise. New data and improved analytical procedures

should be applied, Revisions to the energy program should be made in light of new

information.

Schedule:

Resources:

The energy planning effort should be updated at least every two to three

years.

With new data collected as part of a routine information gathering program,

the update activity would cost approximately $100,000-150,000 each time it

is carried ou t.

I- 150
3 UNITED STATES VIRGIN ISLANDS

3.1 DESCRIPTIO~ OF THE ISLANDS

The United States Virgin Islands are situated at the eastern end of the Lesser Antilles, about 40

miles east of Puerto Rico in the Caribbean Sea. The Virgin Islands consist of three main islands (St.

Thomas, St. John, and St. Croix) and about 50 smaller islands (mostly uninhabited) (see Fig. 3-1).

The Islands have a population of about 95,000 (1980 census) and a land area of 136 square miles. The

populations and land areas for each of the main islands are: St. Thomas - 44,500 people on 32 square miles;

St. John - 2,500 people on 20 square miles; and St. Croix - 49,000 people on 84 square miles.

The Government of the U.S. Virgin Islands is organized under the provisions of the Organic Act of the

Virgin Islands, passed by the Congress of the United States in 1936 and revised in 1954. Subsequent

amendments provided for the election of a non-voting Virgin Islands delegate to the U.S. House of

Representatives, and the popular election of a Governor of the Virgin Islands in 1970. Executive power is

vested in the Governor who appoints, with the advice and consent of the Legislature, the heads of the

executive departments, and may also appoint administrative assistants as his representatives on St. John and

St. Croix. Legislative power is vested in the Legislature of the Virgin Islands, a unicameral body composed

of fifteen Senators elected by popular vote. Legislation is subject to the approval of the Governor. All

residents of the Islands who are citizens of the United States and aged over 18 have the right to vote in

local elections, but not in national elections. In 1976, the Virgin Islands were granted the right to draft

their own constitution, subject to the approval of the U.S. President and Congress. A constitution

permitting greater autonomy was drafted in 1978 and gained the necessary approval, but was rejected by the

people of the Virgin Islands in a referendum in March 1979. The Virgin Islands Fourth Constitutional

Convention completed a revised draft constitution in July 1980.

3. 2 THE ECONOMY

The following sections discuss the economy of the Virgin Islands and the energy requirements of the

economic structure.

3.2.1 Current Situation

The economy of the United States Virgin Islands is a mixed economy dominated by tourism, raw material

processing and government services. The relative strength of the Virgin Islands' economy can be measured by

its per capita income 1 which stood at $4,743 in 1977, which was 68% of the U.S. mainland value of $7,019.

The economy of the Virgin Islands has gone through several growth phases. In 1950, the economic

activity was equally dominated by agriculture, tourism and government activities as each sector utilized

approximately 20% of the labor force. 2 The slow economic growth pattern observed after World War II

continued in the early 1950s. In 1954 a revised Organic Act was passed by the U.S. Congress. Under this

act the U.S. internal revenue taxes collected on Virgin Island products were to be paid to the Virgin

Islands Government. The Organic Act also modified the internal revenue code so that the taxpayers in the

Virgin Islands could satisfy their federal tax obligation by paying their income taxes to the Virgin Islands

Government. The revised Organic Act marked the beginning of a rapid development of the Virgin Islands

economy. Table 3.2.1-1 shows the key economic indicators depicting the growth rate over the last 20 years.

The growth was concentrated primarily in three sectors: tourism, manufacturing and government services.

3.2.1.1 Employment and Unemployment Rate

There is a general lack of economic data for analyzing the macro-economic changes in the Virgin

Islands. No official figures are available on such key indicators as gross product and its compositions,

prices such as consumer price index, personal income, industrial production, etc. Faced with this difficult

situation, employment statistics along with sectoral indicators are used as surrogate for describing and

analyzing the economic growth. The changes in employment usually do not parallel the changes in the real

output because of such factors as productivity, sectoral shifts, etc. Nevertheless, it remains a critical

indicator to measure the overall economic performance.

:c-151
II' IJ

,<1 T LAN TIC 0 CE A N

CARIBBEAN SEA

It"[;J -

Ssint Croix

1--,........._-..., '-,__...,ju.......

I!lK""".•••

U JJ

Fig. 3-1 The United States Virgin Islands

Table 3.2.1-1 shows the demographic, employment and earnings data beginning in 1960. The total

employment (nonagriculture wage and salary employees) increased from 10,846 jobs in 1960 to 30,446 in

1970. This sharp threefold increase in the employment came as a result of: (1) a dramatic increase in the

number of tourists from 210,000 in 1960 to 1,100,000 in 1970, (2) an increase in government spending from

$7.1 million (curre~t dollars) in 1960 to $64.9 million in 1970, and (3) a boost in exports from $8.3

million in 1960 to $262.0 million in 1970, primarily of petroleum products. After the Cuban crisis in the

early 1960s, the Virgin Islands attracted many more tourists, resulting in an average annual growth rate of

18.0% between 1960 and 1970.

In the decade of the 1970s the total employment fell to a g;owth rate of 2.1% annually compared to

its 10.9% growth rate in the 1960s. The total employment in the economy stood at 37,320 in 1980. The

latest data from the Virgin Islands Department of Commerce3 indicate that 1981 was a stagnant year as the

:r- -152
Table 3.2.1-1 Key Economic Growth Indicators of the Virgin Islandsa

% Change

\-\,

......

In

W

1960

Demographics and Employment

Population

Total Labor Force

Nonagriculture Wage & Salary

Employment

Unemployment Rate (%)

Prices and Wages

Nonagriculture Wage & Salary

Empoyment

- Annual Average Gross Pay

United States GNP Price Deflatorb

(1972 = 100.0)

Trade

Total Exports ($ million)

Petroleum Products

Total Imports ($ million)

Petroleum Products

Tourism

Total Visitor Expenditure

($ million)

No. of Tourists (1,000)

Other Key Measures

Total Government Operating

Budget ($ million)

Per C~pita Income c ($)

1970

32,099

11,228

10,846

3.4

NA

68.7

8.3

NA

42.2

NA

2/~. 8

210d

7.1

NA

1975

75,151

35,580

30,446

1.3

NA

91.4

262.0

1,846

400.6

159.6

129.6

l, lOOd

64.9

2,584

1980

85,830

36,142

33,070

8.0

NA

125.6

1,934.5

1,819.7

2,196.3

1,823.0

165.7

1,025d

122.1

4,458

1981

96,569

43,130

37,320

6.0

$11,285

177. 4

4,315.1

4,123.1

4,919.5

4,134.9

304.3

1,306e

174.1

1960-70

98,307

43,210

37,340

6.5

$12,639

193.6

5,068.2

4,830.4

5,013.6

4,110.2

317.5

223.8

1970-80

8.9

12.2

10.9

NA

2.9

12.2

25.2

18.0

18.0

24.8

1980-81

2.5

1.9

2.1

NA

6.9

32.3

36.4

28.5

38.5

8.9

1.7

10.3

1.8

0.2

0.1

NA

12.0

9.1

17.5

17.2

1.9

-0.6

4.3

28.6

aSource: "U.S. Virgin islands Growth Statistics", U. S. V.L Dept. of Commerce.

bSource: "U.S. Long-Term Review: Winter 1981-82", Data Resources, Inc.

cSource: "The Economy of the U.S. Virgin Island", Office of Territorial Affairs, U.S. Dept of the Interior, p. 53 June 1979).

dSource: Virgin Islands Trade Study, Federal Maritime Commission (October 1979), p. 11-4.

eSource: Office of Policy, Planning and Research, VI Department of Commerce.
employment increased only by 0.1% over 1980. This performance has resulted from the decline in tourist

activity (as characterized by the drop in visitor air arrivals from 526,000 in 1980 to 475,000 in 19813 ),

and the continued weak performance of the U.S. economy. The U.S. GNP declined by -0.4% in 1980 and had a

weak rebound of 1.9% in 1981. 4 With yet another recession in the U.S. economy, the short-run problems in

the Virgin Islands' economy are expected to prevail.

Table 3.2.1-2 shows the historical unemployment rate of the Virgin Islands. There was hardly any

unemployment in the Virgin Islands by 1970 as employment increased threefold along with the labor force.

The unemployment rate dropped from 3.4% in 1960 to 1.3% in 1970. However, the situation worsened in the

early 19705 when the U.S. economy went into a recession in the 1974-75 period. (The visitor air arrivals

fell from 573,000 in 1970 to 456,000 in 1975.) With the continued increase in population and labor force

shown in Table 3.2.1-1, the unemployment rate increased to 8.0% in 1975. Subsequently, it has remained in

the range of 5.6 to 10.8% between 1975 and 1981. In 1981 the unemployment rate stood at 6.5%. Even though

not very high compared to other places, the unemployment is high compared to the past standards.

3.2.1.2 Inflation

As noted earlier, the official figures on any price index are not available. However, in an earlier

study done by the U.S. Department of the Interior,l a partial consumer price index (including 56% of the

typical consumer market basket as defined by the U.S. Bureau of Labor Index) is provided. This Virgin

Island Consumer Price Index (1972 = 100) was 170.9 in 1977 compared to the U.S. Consumer Price Index (1972 = 100) of 156.1. It points out that the price escalation in Virgin Islands over the long run has not been too

far from the rate in the United States even though year to year changes have been quite different. Table

3.2.1-3 provides this annual comparison.

3.2.1.3 Composition of the Economy

Based on data from the Virgin Islands Department of Commerce, Table 3.2.1-4 provides the distribution

of the total employment by major sectors. 3 The total employment breakdown prior to 1970 was not available

to identify the shifts in the economy. However, as mentioned earlier, the increase in tourism, government

expenditure, and the processing of petroleum products were responsible for the upsurge in total employment

from 10,846 in 1960 to 30,446 in 1970. The 1970 employment share was 28.4% for territorial government;

18.2% for wholesale and retail trade; 16.8% for construction; 9.2% for hotel and other lodging places;

8.5% for manufacturing; 6.6% for other services; 6.5% for transportation; 4.6% for financial, real estate

and insurance; and 1.2% for Federal Government.

The structural shifts have not been dramatic

compared to a growth rate of 2.1% annually in total

wholesale and retail trade (3.0%), other services

in the decade of the 70s.

employment, the growth was

(4.3%), Federal Government

Between 1970 and 1980,

higher in the sectors of

(6.1%), and territorial

Table 3.2.1-2 Unemployment Rate in

the Virgin Islands

Year

1960

1970

1975

1976

1977

1978

1979

1980

1981

Source:

% Unemployment

3.4

1.3

8.0

10.8

7.9

6.4

5.6

6.0

6.5

U.S. Virgin Islands Growth

Statistics, U.S.V.I. Dept.

of Comme rce.

I -154
Table 3.2.1-3 Inflation in the Virgin Islands

Consumer Price Index (CPI) CPI Annual Charge, %

Virgin Mainland Virgin Mainland

Year Islands U.S. Islands U.S.

1970 100.0 100.0 5.9

1971 106.5 104.3 6.5 4.3

1972 118.8 107.7 11.5 3.3

1973 132.2 114.4 11.3 6.2

1974 148.7 127.0 12.5 11.0

1975 160.9 138.6 8.1 9.1

1976 163.0 146.6 1.3 5.8

1977 170.9 156.1 4.8 6.5

Source: "The Economy of the U.S. Virgin Islands", U. S.

Department of the Interior, p. 53.

Table 3.2.1-4 U.S. Virgin Islands Employment by Major Industry Sector

% Change

Industry 1970 1975 1980 1981 1970-80 1980-81

Manufacturing 2,585 3,060 3,190 3,050 2.1 -4.4

Construction &Mining 5,128 4,480 3,480 3,580 -3.8 2.9

Transportation and Public

Utility 1,965 1,740 2,060 2,070 .5 0.5

Wholesale and Retail Trade 5,528 6,290 7,460 7,550 3.0 1.2

Finance, Insurance, Real

Estate 1,403 1,340 1,580 1,630 1.2 3.2

Hotels & Other Lodging

Places 2,816 2,060 3,040 2,710 .8 -10.9

Other Services 2,013 2,400 3,070 3,090 4.3 0.7

Federal Government 359 500 650 650 6.1 0.0

Territorial Government 8,649 11,200 12,790 13,010 4.0 1.7

Total Employment . 30,446 33,070 37,320 37,340 2.1 0.1

Source: "U.S. Virgin Islands Growth Statistics", Office of Policy, Planning and Research, U.S.

Virgin Islands Department of Commerce, St. Thomas, U.S. Virgin Islands.

government (4.0%). In contrast, the growth in employment was below total employment average rate of 2.1%

annually in the sectors of construction and mining (-3.8%); transportation and public utility (0.5%);

finance, insurance and real estate 0.2%); and hotels and other lodging places (0.8%). For manufacturing

employment, the growth rate was 2.1% annually in this period of 1970-80.

Total employment changed very little between 1980 and 1981 (37,320 vs 37,340). Some minor shifts in

sectoral employment occurred. The significant shifts have occurred in the sectors of territorial government

(34.3% share of employment in 1981 vs 28.4% in 1970) and construction (9.6% in 1981 vs 16.8% in 1970).

3.2.1.4 Miscellaneous

Besides the importance of government services and tourism to the islands' economy, the importance of

two companies which are located on the islands cannot be ignored. First, Amerada Hess Company operates one

of the world's largest oil refineries. The company provides about 1,900 jObs5 or about 5% of the total

I- 155
labor force of 40,000 persons. Furthermore, as most of the refinery output is exported, the local economy

earns much needed export dollars. For example, the petroleum products exports were $4.83 billion in 1981 as

compared to imports of petroleum products of $4.11 billion. These export dollars were largely responsible

for a favorable balance of trade ($5.07 billion total exports vs $5.01 billion total imports). The local

economy must import food and manufactured goods to sustain its improved standard of living.

The other important company contributing to the local economy is Martin Marietta which processes

bauxi te into alumina. According to a Federal Mari time Commission report, 6 Martin Mariet ta is the second

largest employer in the Virgin Islands and provided employment to 700 people in 1978 or about 1.8% of the

total labor work force.

The other industries that are important include (l) the rum indust ry, providing $24.5 million as

excise tax return from the Federal Government in 1978;7 (2) the watch industry providing jobs to 715 persons

in 1978;8 and (3) the textile industry exporting $7 million in 1978. 9

3.2.2 Prospects for Growth

Having established the Virgin Islands' long-run economic trends, the projections of future economic

growth must be developed in order to estimate the energy demand in the future period. This section

describes the economic growth scenarios.

3.2.2.1 Development Policy and Goals

Over the years, the Virgin Islands' development has come about as a result of a combination of the

free market process, tax incentives, and other inducements offered by the local government. During the last

twenty years, economic planning seems to have been focused on the job opportunities. In 1979, the Virgin

Islands Department of Commerce prepared economic development policy guidelines providing goals, objectives

and recommendations. 1

The cooperative approach between the government and the private sector is expected to continue in the

future as tremendous progress has been made in the development of the economy over the last 30 years. In

1981, the unemployment rate was only 6.5% and the average annual gross pay of an employee was $12,639 2•

3.2.2.2 Macroeconomic Development Scenarios

As with any long-range projections, there is uncertainty as to how the Virgin Islands economy will

develop between now and 2020. For the purpose of this report, a scenario prepared by James Pobicki,

Director of the Office of Policy, Planning and Research of the Virgin Islands Department of Commerce provides the basis of projections to year 1990. 3 The economic data has been extended for the period 1990-2020.

U.S. Virgin Islands Outlook for 1980s. Employment projections by industry are shown in Table

3.2.2-1. These projections show the increase in employment by industry that would meet the basic needs of

the economy for growth and diversification. These projections recognized the presence of highly cyclical

tourism sector, the lack of broad economic diversification, and the difficulties of the economy in keeping

up with the increase in the labor work force. In the 1970s, most of the new jobs (95%) were created in the

public sector. The private sector must grow and diversify to meet these needs. Based on these goals, the

projections estimated that about 1,100 jobs per year will be needed to meet the need of the emerging labor

force in the 1980s. These projections reflect the assumptions that the private sector provides seven new

jobs for each new job in the public sector.

The total employment needs to increase from 39,770 in 1980 to 51,000 in 1990. This is equivalent to

an average annual growth rate of 2.5% in the period 1980-1990. All sectors of the economy grow in this

period. The above-average growth comes in tourism (2.7%), manufacturing (5.7%), construction (3.6%), local

trade (3.1%), local services (3.5%), and total private (3.2%). The below-average growth is seen for the

sectors of local transportation and utilities (1.3%), and the government (1.0%) during this period of 1980-

1990.

"High Growth" Economic Projections: 1980-2020. In the recent history of the Virgin Islands, the

total employment increased at an average annual rate of 1.3% between 1970 and 1980 (Table 3.2.2-1). If the

1_ 156
Table 3.2.2-1 Projections of Virgin Islands Employment by Industry, 1980-1990a

Average Annual Change

1980 1990b 1980/1990c

Industry No. % No. % No. %

Tourism 10,210 25.7 13,150 25.8 2940 +2.7

Manufacturing 3,240 8.1 5,650 11.1 2410 +5.7

Construction 3,160 8.0 4,520 9.8 1360 +3.6

Local Trade 3,670 9.2 4,980 8.6 1310 +3.1

Local Services 3,130 7.9 4,400 8.6 1270 +3.5

Local Trans. &

Utilities 1,400 3.5 1,600 3.1 200 +1.3

Fin. Ins., Real

Estate 1,520 3.8 1,850 3.6 330 +2.0

Total Private 26,330 66.2 36,150 70.9 9820 +3.2

Government 13,440 33.8 14,850 29.1 1410 +1.0

Total Employment 39,770 100.0 51,000 100.0 1,123 +2.5

aSource: "Poblicki, J., Director of the 30ffice of Policy, Planning and Research, U.S. Virgin

Islands Department of Commerce •

b1990 projections are an illustration depicting minimum growth necessary to absorb potential

increases in the resident labor force.

CAverage annual compound growth rates.

outlook of the Virgin Islands Department of Commerce (including 2.7% annual growth rate in employment) were

to be realized, this would be an extremely satisfactory performance. The economy in the 1980s would have to

grow twice as fast as that of the 1970s as characterized by the growth rate in the employment. Kee~ing in

view the poor performance during 1981 (when nonagriculture payroll employment increased by only 0.1% ), and

the current severe recession in the U. S. economy, this performance of the Virgin Islands economy would be

quite optimistic. Therefore, these projections can serve as the high growth scenario.

Beyond 1990, there is very little information and analysis available. For the purpose of this

report, it is assumed that the Virgin Islands economy would grow at an average annual rate of 2.5% between

1990 and 2020. As shown in Table 3.2.2-2, the total employment in the economy will increase from 39,770 in

1980 to 51,000 in 1990, 65,280 in 2000, 83,570 in 2010, and 107,000 in 2020.

"Low Growth" Economic Projections: 1980-2020. Under this alternative outlook for the Virgin Islands

economy, it is assumed that the actions outlined under the high growth scenario will not take place. The

effort to diversify the economy and new investment in the private sector is assumed not to materialize. The

economy continues to have the kind of growth as achieved in the 1970s. The total employment grew at an

average annual rate of 1.3% between 1970 and 1980. 4 The economy of the Virgin Islands is assumed to

continue to be affected by the conditions in the mainland and to remain cyclical. For the low growth

scenario it is assumed that the Virgin Islands economy will only grow at a 1.3% average annual increase in

total employment. Thereby the total employment increases from 39,770 in 1980 to 47,100 in 1990, 55,700 in

2000, 675,900 in 2010 and 78,000 in 2020 as shown in Table 3.2.2-2.

These economic projections are very simplistic as

analysis. However, they give an indication of the possible

provide employment for 78,000-107,000 people by 2020 •

.:r- 157

they are not based on a detailed economic

size of the Virgin Islands economy that could
Table 3.2.2-2 Projections of Total Employment in the Virgin Islands

Annual % Change

High Growth Scenario

Low Growth Scenario

1970

35,118

35,118

1975

33,250

33,250

1980

39,770

39,770

1990

51,000

47,000

2020

107,000

78,000

1970-80

1.3

1.3

1980-90

2.5

1.3

1990-2020

2.5

1.3

3.2.3 Energy Demands of the Economy

The economy of the Virgin Islands experienced a rapid , expansive growth in the 1960s, which leveled

off during the 1970s and remains at lower levels in the 1980s. This growth occurred primarily in three

sectors -- government, tourism and manufacturing -- and they continue to be the most significant activities

in terms of income, labor and output. Concomitant to this sectoral development has been a rapid increase in

population (much a result of migration from outer islands) from 32,000 in 1960 to 92,000 in 1975. 1

Increased demands for energy are linked directly to the growth in the number of households,

industrial establishments, government and public services and tourist facilities. The Virgin Islands uses

less energy per capita than the U.S. mainland as a whole because it has little heavy (energy-intensive)

industry and no space heating (an end-use that accounts for nearly 15% of demand in the United States as a

whole). The form that increases in future energy demand takes (electricity for air conditioning in hotels,

gasoline for automobiles, fuel oil for industrial boilers) will determine the Virgin Island's ability to

meet that demand and also define what alternatives to imported oil are available.

Currently, the primary sectors of the economy (residential, tourism/commercial, industry,

agriculture, and transportation) rely either directly or indirectly on imported oil for nearly 100% of their

energy requirements. Energy consumed in the Virgin Islands is either in the form of petroleum products or

electric power, which is produced almost exclusively by oil-fired generators. Industry accounts for the

major share of energy consumption, electricity and petroleum products alike, with residential, and

tourism/commercial being a distant second and third in terms of total energy consumption. It is important

to note that the major energy-consumers in the Virgin Islands are Hess Oil Virgin Islands Corporation

(HOVIC) and Martin Marietta Alumina. Combined they account for over 90% of consumption. However, as selfsufficient entities with their own power-generating and water supply facilities, they do not draw on the

services of the Water and Power Authority. Therefore, statistics regarding energy consumption measured by

sales of electricity to certain classes of customers do not include the significant amounts of electricity

generated by and consumed in these two plants.

2 The major form of energy consumed in the Virgin Islands is electrical energy -- 65% of the total.

The remaining 35% is almost entirely direct use of petroleum products. Solar water heating is used to a

very limited extent, but detailed data have not been collected to present even a rough estimate of its

contribution.

The energy consumption patterns characteristic of each of the sectors are varied. Energy consumption

in the residential sector is primarily electricity (accounting for 40% of sales in FY 80).3 Of this amount,

35% went to heat water, 2% for refrigeration and 10% for cooking, with lighting and appliance use accounting

for the remaining percentage. 4 There are limited demands for direct petroleum use in the form of LPG for

cooking. The tourism/commercial sector is also highly dependent on electricity to meet energy demands (15%

of electricity sales in FY 80)5 for air conditioning, cooking, refrigeration, laundry, water heating,

lighting and appliance and equipment use. In contrast, the transportation sector consumes petroleum

products, almost exclusively, in the form of gasoline, jet fuel, aviation gas and limited amounts of diesel

fuel. Private automobiles and freight transport account for the major consumption.

The industrial sector accounts for consumption of significant amounts of electricity and petroleum

products. The energy intensity of industry in the Virgin Islands (excluding HOVIC and Martin Marietta

Alumina) is relatively low since there is primarily light industry. Industry is credited with 42% of

electricity sales in FY 806 and also accounts for consumption of relatively large shares of diesel fuel.

J--158
type.

of the

Table 3.2.3-1 presents statistics in energy consumption for 1978-80

Since electricity (with a 65% share of total energy consumption) is

Virgin Islands on oil is total.

for the Virgin Islands by fuel

petroleum-derived, the reliance

The following sector-by-sector discussions provide details regarding the composition of each economic

sector, the major energy-consuming activities, and the sectoral issues that bear on the Virgin Island's

energy future.

Residential. In the Virgin Islands, nearly all residential energy consumpion is in the form of

electricity. A small amount of LPG is used in cooking and water heating and as a fuel for small electric

generators. LPG is supplied by Antelles, Protane and Caribe Gas Companies.

Major end-uses in the residential sector include water heating, cooking, refrigeration, lighting and

appliances. Virtually all households have stoves (gas and electric), water heaters, lights, and such basic

appliances such as refrigerators and radios. There are no requirements for space heating due to the

temperate climate, and few, if any. private residences are air conditioned. Increased standards of living

may lead to additions to the electrical appliance stock, thereby adding to the demand for electricity in the

residential sector.

Tourism/Commercial. The Tourism/Commerical sector is extremely diverse and one of 'vital importance

to the Virgin Islands economy. It includes such public facilities as schools, hospitals and communication

services as well as private hotels, shops, restaurants, and other service establishments. The diversity of

the sector is reflected in the diversity of energy-consuming end uses, including space conditioning,

cooking, water .heating, nonsubstitutable electric, stationary motors, pumps and backup electrical

generation. Detailed data are not available regarding energy consumption, but several observations can be

made using information known regarding energy use patterns in hotels in other islands. The major form of

energy used to meet demand is electricity (63% of total) with fuel and diesel oil accounting for

approximately 28% and LPG making up the difference. 7 The end uses to which each of the direct fuel sources

are put are as follows: LPG -- water heating, cooking and laundry drying; and diesel and fuel oil --

majority of water heating, steam generation (for water heating, central air conditioning systems, emergency

backup generators, emergency lighting, elevators).8

Table 3.2.3-1 Energy Consumption Statistics for the United States Virgin Islands

Consumption Total (In Gals. Except kWh for Electricity)

1978 1979 1980

Energy Amt Bty Amt Bty AmI:: Bty

Source (x10~) (x10 2) % (x10~) (x10 2) % (x10;) (x10 2) %

Diesel Fuel 110 13.8 20. 141 17.6 24 17.3 21.6 28

Gasoline 25.4 3.3 4.8 25.6 3.3 4.5 25.9 3.4 4.4

Propane Gas 3.22 0.3 0.4 3.59 0.3 0.4 4.0 0.37 0.5

Jet Fuel 13.0 1.7 2.5 14.2 1.9 2.6 11.1 1.4 1.8

Aviation Gas 2.40 0.3 0.4 2.38 0.3 0.4 2.2 0.3 0.4

Electricitya 539 49 72 445 49.6 68 443 49.4 65

Total 68.4 100 73 100 76.5 100

Conversion Factors: Diesel - 125,000 Btu/Gal, Gasoline - 130,000 Btu/Gal, Propane - 92,000

Btu/Gal., Jet Fuel - 130,000 Btu/Gal, Aviation Gas - 130,500 Btu Gal. ,

Electricity - 11,150 Btu/kWh.

aDoes not include figures from Hess Oil and Martin Marietta who generate their own

electricity.

Source: Ref. 2

-:1- 159
Transportation. The transportation sector is entirely dependent on petroleum fuels. Most of the

fuels are purchased through local distributors who are supplied by the Hess Oil refinery or imported

products. Gasoline consumption for transportation accounts for approximately 5 percent of total energy

consumption in the Virgin Islands 9 and has remained relatively constant despite increases in population and

the number of private automobiles. The major end-uses of energy in the transportation sector include:

passenger transport via automobile, taxi, bus, ferry and airplane; freight transport via truck, ship, barge

and airplane; and service vehicles operated by such agencies as the Department of Public Works. Public

Safety, and Property and Procurement, the PAT Authority, WAPA and VITELCO. The large number of cruise ships

that stop in the Virgin Islands do not refuel, consequently they do not affect energy consumption in the

transportation sector. The short distances for on-island and inter-island trips make them particularly

energy-intensive. 10

Agriculture/Fishing. Current activity in food and lumber production in the Virgin Islands is not

significant relative to other energy-consuming sectors, with approximately 90% of current food-stuff

consumed in the Vi rgin Islands being imported. The three maj or activities in the sector are agriculture,

fishing and lumber. Agriculture includes vegetable crops, feed crops (such as sorghum) and feedstock

(primarily for cattle). Production is geared for local consumption, but is very limited. A relatively

small amount of land is currently zoned for agriculture -- approximately 465 acres (0.73 sq. m1.) in St.

Thomas and 12,000 acres (18.75 sq. mi.) on St. Croix for crops and cattle grazing. The government leases an

addi tional 120 acres in 5-acre t racks for agriculture. No detailed energy consumption data for the

agricultural sector are available. However, it can be assumed that petroleum products are used for farm

machinery (primarily tractors) and crop drying and electricity for irrigation pumps and refrigeration.

Fishing vessels (both commercial and sport) are of relatively small tonnage. Energy consumption is in the

form of gasoline and diesel fuels. Lumber production in the Virgin Islands is fairly small. There are

approximately 2,000 acres of land in St. Croix dedicated to the forestry program. Current lumber production

is primarily as a raw material for charcoal. The lumber and fishing activities are not significant in terms

of their total energy consumption.

Industry. Aside from the Hess Oil and Martin Marietta industrial activities, industry in the Virgin

Islands is currently geared towards fairly small operations classified as light industry, producing products

for local consumption. The notable exceptions are the rum and watch industries that do rely on export

markets. Currently the Virgin Islands imports, on the average, 98 percent of finished goods demand.

Table 3.2.3-2 presents a breakdown of industries in the Virgin Islands by SIC code. The most

significant to the economy and to the energy situation are Food and Kindred Products (Rum Industry),

Instruments and Related Products (Watch Assembly), Chemicals and Allied Products (includes Martin Marietta)

and Petroleum and Coal Products (Hess Oil Virgin Islands Corporation). In addition, the construction

industry is a significant energy-consuming subsector.

Energy-consuming end-uses in the Food and Kindred Products industries include boilers for steam

production, bakery ovens, blending or mixing operations and refrigeration units for cold storage -- the

latter two using primarily electricity. The rum industry is of particular importance within this subsector,

both because of its level of energy and potable water consumption and its significance as a product export

activity. Though fuel and electricity costs are not major components of the total materials costs within

the industry (assuming a similarity between Virgin Islands and Puerto Rican industries, fuels and

electricity accounted for 1.7 percent of total costs 11 ), the portion of industrial electricity consumption

is significant.

The major industrial activity within the Instruments and Related Products group is watch assembly,

totaling 15 of the 17 establishments in the 1981 survey. Energy consumption is primarily electricity for

electric-motor-driven devices, lighting and possibly air conditioning. Limited amounts of gasoline are also

used for transportation of raw materials and finished products. In terms of energy intensity, this

industrial group is quite low; an expansion of activity would not significantly increase energy demands in

the Virgin Islands.

Energy-consuming activities in construction are primarily in the form of trucks for material hauling,

front-end loaders, cranes, etc. Construction materials such as asphalt are an important petroleum item used

for non-energy purposes. The production of gravel, asphalt, cement and concrete blocks are energy-intensive

activities demanding direct use of petroleum products and electricity. Consequently, the level of

construction activity and domestic production of construction materials has a direct and significant effect

on the energy demands of the economy.

-;;..- 160
Table 3.2.3-2 Manufacturing Establishments in the u.s.

Virgin Islands, 1981

SIC Classification

Food and Kindred Products

Rum Distilleries

Textile Mill Products

Apparel and Other Textile Products

Lumber and Wood Products

Furniture and Fixtures

Printing and Publishing

Chemicals and Allied Products

Petroleum and Coal Products

Rubber and Plastics Products

Leather and Leather Products

Stone, Clay and Glass Products

Fabricated Metals Products

Transportation Equipment

Instruments and Related Products

Miscellaneous

Total

Number of Establishments

15

6

8

1

2

14

12

1

3

2

6

3

1

17

5

96

Source: Directory of U.S. Virgin Islands ~nufacturing

Establishments, Office of Policy, Planning and

Research, Virgin Islands Department of Commerce,

1981.

Crude oil supplies and energy consumption in the Virgin Islands are completely dominated by the fuel

requirements of the Hess Oil Virgin Islands Corporation (HOVIC) and Martin Marietta Alumina plants in St.

Croix. Both plants are, however, completely self sufficient units as far as energy and water needs are

concerned. HOVIC has a 125 MW electric generation capacity and desalination plants supplying two million

gallons of water per day. Martin Marietta has 18 MW capacity and desalination plants supplying all its

water needs .12 Since the two industries are self-sufficient, their energy demands do not currently affect

the overall energy situation in the Islands. The existence of the refinery on St. Croix provides a locally

available supply of petroleum products, primarily gasoline and diesel fuel. However, the maj ority of

refinery output is exported to the mainland.

3.2.4 Possible Future Demands

The estimation of energy consumption over the next four decades needs a comprehensive assessment.

The energy demand will be affected by several critical factors, some of which are the. changes in the

economic structure, the availability of different fuels at different prices, and the extent of the

improvement in the efficiency of the energy use devices. The estimation of energy demand becomes even more

uncertain as the forecasting period is extended to 2020. In the absence of a comprehensive methodology, a

simplistic approach is used to estimate the future energy demands of the Virgin Islands.

3.2.4.1 Methodology

As the data on gross product of the Virgin Islands is

possible to use the energy-elasticity-based methodology.

utilized. Under this methodology, the total energy demands

total employment under alternative scenarios.

:J - 161

not available from official sources, it is not

Therefore, an even simpler approach must be

are projected on the basis of growth rates in
3.2.4.2 Energy Demand Projections

Two sets of projections are made corresponding to the high growth and low growth economic scenarios.

"High Growth" Energy Demand Projections: 1980-2020. The future course of the economy is assumed to

be characterized by the high growth economic scenario discussed in Section 3.2.2. As was shown in Table

3.2.2-2, the total employment increased at an average annual growth rate of 2.5% between 1980 and 2020.

There will be compensating factors from the energy demand perspective. First, the economy is expected to

become more energy-intensive as above-average growth occurs in manufacturing and construction sectors.

Second, the trends in energy conservation as observed in most of the developed economies worldwide are

assumed to continue. Some of the improvement s in energy efficiency are envisioned in higher mileage from

automobiles, higher energy efficiency in household appliances, and improved industrial equipment. To

determine the extent of the improved usage of primary energy in the economy is a difficult and tedious task

beyond the scope of this report. Therefore, a simple assumption was made that the two above compensating

factors will tend to offset each other. In surmnary, the needs of greater energy demand for the growth in

energy-intensive industries will be compensated for by the improved utilization of primary energy resources

throughout the economy.

It was, therefore, assumed that the energy demand in the Virgin Islands will grow at the rate of

growth (of employment) of the economy. Consequently, the Virgin Island total energy consumption grows at

the projected rate of 2.5% annually between 1980 and 2020. This translates into Virgin Island total energy

demand increasing from 76.5 trillion Btu in 19801 to 97.9 trillion Btu in 1990, 125.3 trillion Btu in 2000,

160.5 trillion Btu in 2010, and 205.4 trillion Btu in 2020 as shown in Table 3.2.4-1.

"Low Growth" Energy Demand Projections: 1980-2000. In order to have a range of possible energy

demands, an alternative scenario including the low growth economic projection was used. This is a

pessimistic view of the Virgin Islands economy over the next four decades. The energy demands under this

scenario are estimated in a fashion similar to the High Growth Case. The sectoral shift towards more

manufacturing and construction industries are assumed not to occur under this outlook. The composition of

employment is assumed to remain more or less as it was in 1980 (see Table 3.2.2-1). The energy intensity of

the economy will decrease moderately as some conservation trends continue. However, as new investments are

limited (because the economy is growing only at 1.3% rate annually), the extent of this improvement will be

limited. In the absence of data, no detailed analysis is possible. It is again assumed that the total

energy consumption will grow at the pace of the economy (characterized by the employment growth).

Consequent ly, the total energy demand grows from 76.5 trillion Btu in 1980 to 87.0 trillion Btu in 2020

(Table 3.2.4-1).

As discussed earlier, these projections (128.2 to 205.4 trillion Btu in 2020) must be considered as

only a rough indication of the future Virgin Islands energy demand. Only a detailed total energy assessment

of the economy can provide reliable projections of energy demands.

Table 3.2.4-1 Energy Demand Projections for Virgin Islands

Annual % Change

High Growth Scenario

Low Growth Scenario

68.4

68.4

73.0

73.0

76.5

76.5

1990

97.9

87.0

2020

205.4

128.2

1978-80

5.8

5.8

1980-2020

2.5

1.3

aSource: Territorial Assessment of the United States Virgin Islands

Virgin Islands Energy Office, p.9, 1982.

I -162
3.2.5 Energy Conservation Possibilities

In principle, the types of conservation projects that can be implemented in the Virgin Islands are

similar to those appropriate to an island economy that enjoys a mild climate. There are, however, unique

circumstances in the Virgin Islands. Two privately-owned, major industrial complexes combined account for

more than 90% of energy inputs and consumption -- Hess Oil Virgin Islands Corporation and Martin Marietta

Alumina plant. Energy savings in these facili ties can be realized primarily through mechanical changes to

processes -- many of which are considered trade secrets. l The effects of a conservation effort for these

facilities must, therefore. be distinguished from conservation activities in other areas. It is in these

other areas where conservation strategies need attention.

The Virgin Islands Energy Office has outlined a plan for energy conservation in the sectors under its

purview. 2 The primary focus is on measures that reduce energy consumption without hindering future economic

growth or reducing the standard of living. Conservation savings are directed towards reduced consumption of

electricity and of petroleum products used for transportation. Both goals have the net effect of reducing

reliance on imported oil. The estimated energy savings realized through the application of specific

conservation measures are detailed in Table 3.2.5-1.

The sections that follow identify conservation measures currently in effect and proposed for the

various energy demand sectors of the Virgin Islands' economy. They are drawn from the Virgin Islands Energy

Conservation plan (Ref. 1) that was prepared in 1978. Some additional analysis on these measures was done

and included in Ref. 2. These are noted as appropriate.

3.2.5.1 Residential/Commericial

Residential/commercial energy demand in the Virgin Islands is low by U.S. standards, primarily due to

the absence of space heating and the limitation of air conditioning demand to commercial establishments.

The conservation measures focus on new and renovated buildings and efficiency of new appliance acquisitions.

Thermal Efficiency Standard. Thermal efficiency standards for new and renovated building

construction specify efficiency requirements for air conditioning and lighting. They are implemented by

inclusion in the building code, thereby assuring compliance for new construction. It is proposed to

emphasize the promotion of architectural designs and standards that take advantage of natural air

ventilation and discourage the use of air conditioning and other energy-intensive building techniques.

Modifications to older buildings through such methods as roof insulation and application of thermal window

frames will help to reduce the air-conditioning load.

Lighting Efficiency Standards. Efficiency standards for lighting are designed to reduce the use of

electricity for lighting in both new and existing buildings. The incorporation of such standards as a

Table 3.2.5-1 Estimated Savings for 1981 Virgin Islands

Energy Program

Program Measure

Thermal Efficiency Standard

Installation of Window Films

Insulation

Procurement

Carpooling/Vanpooling

Left Turn on Red

Emergency Building Temperature

Restriction Program

Industrial

Estimated Savings (in Btus)

0.08 x 109

3.0 x 109

0.75 x 10;

2.3 x

288 x 109

3.99 x 109

38 x 109

44,667 x 109

Source: "Territorial Energy Assessment for the United

States Virgin Islands", 1982

I- 163
supplement to the existing building codes makes compliance mandatory for all new construction. The

definition of standards appropriate to the Virgin Islands requires a survey of current use patterns.

followed by an evaluation of the survey results to determine reasonable goals applicable to the particular

circumstances prevailing on the Islands.

Energy Audits. The energy audit program consists of efforts to perform energy audits of office

buildings, industrial plants and residential buiIdings throughout the Islands. Energy audits provide the

detailed data on energy use and efficiency of use in buildings that pinpoint waste and opportunities for

conservation. Energy conservation measures identified through an audit as applicable for a given building

include, but are not limited to, weatherstripping and caulking; wall, ceiling and floor insulation; use of

renewable resources; measures for ventilating, air conditioning, water heating, lighting and electrical

systems. Energy audits in industry and large commerical buildings may well be carried out by governmenthired auditors. A public education program that encourages households and small business owners to

undertake their own audits using workbooks devised by the Government will have a twofold result: (1) it

raises the public consciousness of the energy situation emphasizing both national and personal benefits; and

(2) it contributes direct ly to reduced consumption of electricity through the implementation of actions

identified as appropriate in the audit.

3.2.5.2 Transportation

As would be expected, transportation accounts for the major share of direct fuel use (gasoline)

outside of the industrial sector. Faced with rising gasoline prices, consumers in the Virgin Islands have

followed the obvious trends similar to their mainland counterparts -- such as purchase of energy-efficient,

small cars. Transportation conservation efforts on which the Government has focused are directed towards

reduced consumption of gasoline and improved traffic flows.

Shared Rides (Carpooling and Vanpooling). The Virgin Islands Energy Office reports that the private

transportation system in the Islands is characterized by an informal, pervasive practice of "hitching a

ride". In fact, several unofficial "stops" exist throughout the Virgin Islands, with most pedestrians being

successful in obtaining the desired transportation. As a result, the Energy Office is of the opinion that

such shared ride systems as vanpools and carpools as defined by mainland standards may not be directly

applicable to the Virgin Islands social system. 2 Increased emphasis on the informal hitching practice as a

modified form of carpooling and vanpooling will have the same net result as the formal systems that have

proven successful on the mainland but will be more in tune with the social milieu of the Islands.

Improvement of Public Transportation. Little detail is available regarding the use and efficiency of

the Virgin Islands bus system. The Energy Office has identified the development of maintenance regulations

for bus companies and the expansion of bus routes as two of the means available to improve public

transportation and thereby encourage increased use of the system, improve intensities and load factors.

Further analysis is warranted and necesary to determine the real contribution that modification to the

current system of public transportation can make to conservation of energy in the Virgin Islands.

Left-Turn on Red. The left-hand traffic patterns in the Virgin Islands call for the modification of

standard mainland conservation efforts based on right-turn on red. In all, there are 15 intersections

controlled by signals in St. Thomas, four in St. Croix and none in St. John. Therefore, the number of

intersections is small, making the likely savings very limited. It is the intent of the Government to

initiate left turns on red formally at all appropriate locations, a determination of which must be made

following a review of traffic and pedestrian patterns at each intersection.

Car Care Clinics. Car Care Clinics are intended to demonstrate energy conservation techniques in

automobile maintenance and to emphasize the relationship between good maintenance and driving practices and

conservation. Motorists are encouraged towards these practices for the primary purpose of reducing total

consumption of gasoline.

-L _164
3.2.5.3 Agriculture

It is planned that seminars in energy management in agriculture be conducted for all of the Islands'

farmers who work with mechanical equipment. It ~s expected that 70% of the farmers who attend will make

changes in their farm eqipment and adopt practices that would result in greater energy efficiency on the

farm. By using such techniques as proper maintenance of tires and carburetors and replacement of parts worn

by friction, the farmer will be able to reduce fuel consumption and operational costs.

3.2.5.4 Industry

The predominance of the Hess Oil Virgin Islands Corporation and Martin-Marietta Alumina, Inc. in the

industrial sector and the economy as a whole has been emphasized. A conservation effort of any consequence

in the industrial sector demands the close cooperation of these industries with the Government. The tack

taken by the Government in formulating and approach for industrial conservation is based on two premises:

(1) the two companies are already very energy conscious and have to remain that way in order to be

competitive; and (2) they have energy-efficient trade secrets that they need to protect. To accommodate

these circumstances, the Virgin Islands Energy Office has decided to proceed with the following steps:

1. Employment of an industrial energy coordinator to establish a liaison with these

companies and identify a mutually beneficial program for data collection and new program

identification;

2. Participation of industrial employees in seminars and workshops sponsored by the Virgin

Islands Energy Office;

3. Collection of regular fuel consumption data from the plants by the industrial

coordinator;

4. Relate any changes in monthly fuel consumption levels to changes within the plants,

drawing parallels between fuel reductions to documented energy savings measures and

increases in fuel consumption to a need fcr a corrective plan; and

5. Description of benefits of energy conservation measures such as cogeneration, improved

maintenance, heat recovery, improved boiler efficiency and add-on equipment.

This approach allows the Virgin Islands Energy Office to contri~ute significantly to the national energy

program and not violate the companies operations or trade secrets.

The savings that can be realized in other industries is primarily through efficiency of energy use in

buildings and process improvements identifiable through energy audits conducted on a site-by-site basis.

3.2.5.5 Water Supply

The provision of potable water to the Islands is an energy-intensive activity. The merits and

technical feasibility of interconnecting HOVIC and Martin Marietta Alumina with the Water and Power

Authority is under investigation. The interconnection would be mutually beneficial as the St. Croix

Division of the Department of Public Works has a critical need for surplus water from the two plants.

3.2.5.6 Public Education

Public Education measures are directed towards increasing public awareness as to the need for

conservation, the substance of the Government program and the benefits that accrue to the individual as well

as the public at large as a result of energy conservation. This is effected through use of the media

(television, newspapers and radio), distribution of pamphlets, and the conduct of seminar courses.

3.2.5.7 Government Procurement

The intent of this measure is to institute procurement standards in Government offices that are

supportive of energy conservation, specifically: buying less energy-intensive manufactured items, buying

:r- 165
items that consume less energy in use for a given functional output, and buying fewer energy-consuming

items. To comp lement this, specifications and guidelines for all energy-intensive equipment is requi red.

Specification should cover (but not be limited to) equipment and supplies such as air-conditioners, cars and

trucks, busses, refrigerators and freezers, electrical tooling machines, and high volume consumables (paper,

gasoline and oils, detergents). The moni toring and review of current practices provides the basis for

establishing the technical criteria to be used as procedural guidance in developing procurement requests.

The responsibility for such a program should rest with a single coordinator, who transfers the information

to all departments and monitors energy consumption reductions realized through the program's implementation.

3.3 THE ENERGY SUPPLY SYSTEM

The energy supply sys tem in the Virign Islands is descri bed in two following sections. The first

addresses the current system and outlines the major issues. The second deals with prospects for the future.

3.3.1 The Current Energy System

The discussion of the current system is divided into considerations of the fossil fuel supply system,

the electric sector (including water supply), and renewable resource use.

3.3.1.1 Fossil Fuels

The Virgin Islands has no known domestic reserves of oil, natural gas or coa1. 1 ,2 No detailed

geological surveys to determine the existence of any fossil fuel resources have been documented. Based on

conditions in nearby Puerto Rico there has been some speculation on the existence of unconventional natural

gas deposits in the Virgin Islands. Unconventional gas sources includes gas from Devonian shale,

geopressured brines, coal seams, and tight-gas reservoirs. This definition excludes sewage gas, synthetic

natural gas and gas from landfills. A search of accessible literature has failed to find any information

related to the existance of any of the appropriate geological formations for unconventional gas deposits.

It must therefore be assumed that unconventional gas sources do not exist on the Islands.

Wi th no developable fossi 1 resources, the Virgin Islands derives about 99% of its energy from

imported oil, most of it from foreign sources. In the early 1960's the Virgin Islands Government sought to

attract new industry in order to provide employment. Special incentives were offered to industries willing

to locate on the St. Croix where unemployment was greatest and where level land was available for heavy

industry. On Sept. I, 1965, an agreement was made between the Virgin Island~ Government and Hess Oil Virgin

Islands Corp. (HOVlC) for the construction of a major refinery on St. Croix.~ Hess was granted an exemption

from all Virgin Island taxes for a period of 16 years from approval of the agreement. In addition Hess

would receive a rebate (technically a subsidy) of import duties on raw materials and equipment during the

same period. This rebate was equal to 75% of income taxes paid the V.I. Government by Hess or its resident

stockholders for 16 years from the date of completion of the refinery. No land was provided to Hess by the

government, although various permits and rights of way were assured in the agreement. In return, Hess made

certain employment agreements. Information on these agreements and other favorable concessions to Hess in

ensuing years is presented in Reference 4.

Capacity of the HOVIC refinery is given as about 700,000 barrels per day (bid) in Ref. 4, as 730,000

bid in Ref. 1, as the third largest oil refinery in the world w.ith a capacity of approximately 750,000 bid

in Ref. 5, and in Ref. 6 for Jan. I, 1982, as 640,000 barrels per calendar day or b/cd. (This is the total

volume for the year divided by 365. It is the average volume a unit processes each day including downtime

used for turnarounds. Capacity based on a stream day represents the volume a unit can process when running

at full capacity for short periods.) Reference 6 also lists the following charge capacities: vacuum

distillation (140,000 b/cd), catalytic reforming (70,000 b/cd) and catalytic hydro treatin~ (150,000

b/cd). The HOVIC refinery began operation in 1967, and employs about 825 people. It states that all

operational data is privileged; therefore, its product slate, yearly production, efficiency, crude type,

crude source and costs are not available. Host of the refined products are exported to the U.S. mainland

(Ref. 1,5). Therefore, the only advantage derived from having a local refinery, apart from the jobs

created, is that fuel is more readily available and transportation problems are eliminated. 5 The

distributors of fuel on the islands are ESSO, Shell and Texaco, all of whom purchase products from HOVIC.

The Hess refinery is also a major distributor of diesel fuel to various industries, e.g., the Cruzan and

Brugal Rum Distilleries, construction companies, the V.I. Water and Power Authority, and Martin Marietta

Alumina. HOVlC also supplies fuel to U.S. naval ships on annual fueling contracts and it may be assumed

that visiting tankers are also refueled.

r - 166
Reference 2 provides estimated data on the quantity of refined products for the years 1970-1976.

These data are based on imports of crude oil and petroleum products as reported by the Customs Service of

the U. S. Treasury Department and are presented in Table 3.3.1. 1-1. Simi lar data from Ref. 7 for 1976-1981

are shown in Table 3.3.1.1-2.

The units of the two tables are different and in some cases conversions can only be approximate. For

convenience, conversion factors are listed in Table 3.3.1.1-3. Some statistical data from the Virgin

Islands Energy Office Iist imports of crude oi 1 as 203,665,487 barrels in 1977 and 203,492,590 barrels in

1978.

Gross refinery output of products from Ref. 7 is presented in Table 3.3.1.1-4. From these data and

the refining capacity data the refinery utilization factor is 75%, 73%, 69%, 64%, 64% and 55% for the years

1976-1981 respectively. The quantity of refined products exported (from Ref. 7) is given in Table 3.3.1.1-

5. From these data and the total refinery product output from Table 3.3.1.1-4, the percentage of production

being exported is 84%, 83%, 81%, 84%, 73%, and 70% for the years 1976-1981 respectively. The quantity of

energy consumed by HOVIC is estimated2 as 79.3% of the Islands' total consumption. However, the plant is

completely self-sufficient with regard to water and energy. 1

3.3.1.2 Electric Sector

The generation and distribution of electric power and the production of fresh water through

desalination is handled by the Water and Power Authority (WAPA). Created in 1964, WAPA is an autonomous

public corporation and an element of the Virgin Islands Government. Although some industries generate their

own water and power, most notably the Hess Oil Virgin Islands Co., the Martin~~arietta Alumina plant, and

the Frenchman's Reef Hotel, WAPA is the only producer and distributor of electric power ~nd water for the

remainder of the domestic, commercial, industrial, and governmental users. WAPA itself accounts for nearly

one-third of all non-industrial energy consumption in the Virgin Islands. mostly through the operation of

water desalination plants. 1 Water produced by these plants is then' sold to the Department of Public Works

(DPW) for distribution on the islands. Because fresh water is such a scarce commodity and is so intimately

tied in with the production of electric power by WAPA, this section will be divided into a discussion on the

current electric power production system and on the current fresh water production system.

Electric Power Production

Two separate electric systems provide power for the Virgin Islands. The physical separation and the

depth of the water between St. Thomas and St. Croix make interconnection currently infeasible. An

underwater electric power cable from St. Thomas provides power to St. John and a small diesel generator

located on St. John provides backup power. The electric system is also totally depedent on imported oil for

fuel; fuel oil #6 is used in the steam units and fuel oil #2 is used in the gas turbines and diesels. All

the steam units have extraction turbines where steam is diverted for use in the desalination plants, thereby

decreasing the overall efficiency of the steam plants.

The diffuse nature of the population and the very hilly terrain lead to high electric distribution

costs. This, coupled with the total dependence upon im~orted oil results in consumer electric energy costs

of 21~/kWh which is 2-3 times the U.S. mainland average.

Table 3.3.1.1-1 U.S. Virgin Islands Imports of Crude Oil and Petroleum Products from 1970-1976

Product 1970 1971 1972 1973 1974 1975 1976

Crude Oil, 106 barrels 103.32 130.21 136.92 185.41 180.77 172.69 167.53

Crude Oil, 10 12 Btu 619.91 781.29 821.50 1,112.46 1,084.63 1,036.15 1,005.18

Distillate Fuel Oil, 1012 Btu 7.02 7.60 7.19 7.01 11.71 14.14

Jet Fuel, 1012 Btu 1. 63 1.01 1.11 0.46 0.02 0.19

Kerosene~ 1012 Btu 0.02 0.02 0.03 0.01

LPG, 101 Btu 0.04 0.02 0.02 0.01 0.01 0.01

Source Ref. 2.

1>167
Table 3.3.1.1-2 U.S. Virgin Islands Imports of Crude Oil

and Petroleum Products From 1976 - 1981

103 tonnes

Product 1976 1977 1978 1979 1980 1981

Crude Oil 27,302 28,261 29,624 26,949 25,500 21,300

Aviation Gasoli~e 15a 5a 5a 3a 2a 2a

Motor Gasoline 21 30 35 58 17 25a

Kerosene 0 0 0 0 2 5a

Gas-Diesel Oils 227a 50a 6 6a 6 lOa

Residual Fuel Oil 0 0 46 150a 268a 200a

LPG 0 0 0 0 1 1a

Bitumen/Asphalt 8 4 4 Oa Oa Oa

Lubricants 3 3 3 3a 4a 4a

aEstimated

Source: Ref. 7.

Table 3.3.1.1-3 Conversion Factors

Gross Heating Value

Product

Crude Oil (30 0 API)

#6 Fuel Oil (Residual)

Diesel

Kerosene

Motor Gasoline

LPG (Butane)

LPG (Propane)

Weight lb/gal.

7.3

8.0

6.8

6.5

6.1

4.9a

4.2a

Btu/lb

19,590

18,126

19,110

19,750

20,190

21,190

21,554

Btu/gal

143,000

153,120

129,948

128,375

123,361

108,047

91,044

auquid

1 barrel = 42 u.S. gallons

1 tonne = 2205 lb.

Table 3.3.1.2-1 is a list of the generating units for the St. Thomas and St. Croix systems. The

table gives three different ratings for the units; the design gross rating, the design net rating after

subtracting auxiliary loads, and the present operating net rating. The unit net rating is more widely used

in the industry in order to make valid comparisons among systems having different auxiliary load requirements, such as coal- versus oil-fired units. Furthermore, the net rating reflects the capacity available to

meet future customer loads; only future customer loads are forecasted and not auxiliary loads. The table

also shows that on St. Thomas, Unit 1113 is operating below its maximum design rating which is caused by

superheater problems. Unit fl10 has boiler control problems and has been inoperable for most of the last

five years. Currently there are no plans to upgrade this unit. On St. Croix, Unit fill is presently

undergoing a major overhaul. 3 Units #13 and #7 are not operable at present and will require major repair

work to restore their operability. No decision has been made to repair either of these units at this time. 3

Like all isolated systems, WAPA has a rather large reserve margin. On St. Thomas for fiscal

1980/1981 the peak load (customer load plus line losses) was 39.5 MW while on St. Croix it was 29.0 MW.

This amounts to a reserve margin of 180% (using the generator net design ratings) on St. Thomas and 202% on

St. Croix. Even with this extremely large reserve margin, the system has reliability problems. Periods of

2-3 day rotating power outages have been experienced throughout the year. 4 The loss of load probability

(LOLP), which is the number of days per year the system capacity will be insufficient to meet the daily peak

~_ 168
Table 3.3.1.1-4 HOVIC Refinery Capacity and Product Output for 1976-1981

10 3 tonne

Product 1976 1977 1978 1979 1980 1981

Refinery Capacity 36,400 39,100 40,800 41,250 39,750 38,925a

Motor Gasoline 3,350a 3,859a 3,882 3,478 3,125a 2,600a

Jet Fuel 500a 985a l,075a 845a 915a 550a

Kerosene 417a 860a 581 517 550a 450a

Gas-Diesel Oils 4,670a 6,050a 6,568 5,806 6,000a 4,600a

Residual Fuel Oil 18,138a 15,572a 14,565 14,664 13,500a 12,000a

LPG 30a 30a 36a 40a 40a 35a

Other Petroleum

Products 150a l,339a 1,300a 1,200a 1,150a 1,100a

Total 27,255 28,695 28,007 26,550 25,280 21,335

aEstimated

Source: Ref. 7.

Table 3.3.1.1-5 Hovrc Refinery Exports For 1976-1981

103 tonne

Product 1976 1977 1978 1979 1980 1981

Aviation Gasoline 15a 5a 5a 3a 2a 2a

Motor Gasoline 3,256 3,752 3,734 3,401 3,038 2,500a

Jet Fuel 463 946 1,030 799 667 500a

Kerosene 395 794 449 301 423 350

Gas-Diesel Oil 4,212 5,322 5,245 4,948 4,800a 3,500a

Residual Fuel Oil 14,623a 12,850 12,132 12,790 9,600a 8,000a

Total 22,964 23,669 22,595 22,242 18,530 14,852

aEstimated

Source: Ref. 7

load, is 5.29 days/yr. for the present St. Thomas system and 6.96 days/yr. for the present St. Croix

system. 3 This is to be compared to the U.S. mainland LOLP planning standard of 0.1 days/yr. Maintenance

problems have been the main cause of the lack of system reliability. Table 3.3.1.2-1 shows that many units

are derated or totally out of service. It has not been possible to institute a systematic maintenance

program for removing major units from service for extended periods for repair and overhaul. The result is

that units are often run continuously and removed from service only when absolutely necessary due to

failure. WAPA has been repairing units as funds become available. A short term plan is needed that will

identify the priority in which these units should be repaired, based on the savings realized from the repair

work and improvements in system reliability.3

System dispatch is another area where improvements are being worked out. Average heat rates for each

unit currently are determined based on monthly (or yearly) electric output and fuel consumption. Since heat

rates are known only in a very general way, it is difficult to determine the optimum loading regimen. WAPA

officials have estimated that 62% of total operating costs are represented by fuel costs. Another

consideration is that the thermal efficiency of steam units is reduced because of the need to extract steam

for use in the desalination plants. The needs of the desalination plants need to be taken into

consideration when dispatching the steam units.

I- 169
Table 3.3.1.2-1 Generating Units for St. Thomas and St. Croix Systems

Original Design Ratings (MW)

Unit Unit Year Present Operating

Number Typea Installed Gross Net Net Rating (MW)

St. Thomas

13 Steam 1974 35.0 35.0 26

11 Steam 1968 18.0 14.0 1~ 10 Steam 1966 7.5 6.5 0

15 Gas Turb. 1981 20.0 20.0 21

14 Gas Turb. 1971 15.0 15.0 12.5

12 Gas Turb. 1970 15.0 15.0 13

9 Diesel 1960 3.0 3.0 3

7 Diesel b 1966 2.0 2.0 1.7

115.5 110.5 9T:2

St. Croix

11 Steam 1970 18.0 18.0 18.0

10 Steam 1967 7.5 7.5 7.5

16 Gas Turb. 1981 21.0 21.0 21.0

14 Gas Turb. 1972 15.0 15.0 15.0

13 Gas Turb. 1971 15.0 15.0 Oc

12 Diesel 1968 4.5 4.5 4.0

7 Diesel 1962 2.2 2.2 OC

6 Diesel 1969 4.5 4.5 4.0

B7:7 "8'1:T 6D

aAll units are oil-fired.

bInstalled on St. John as a standby unit, not included in daily unit

dispatch.

cInoperable - needs repair work.

Source: Adapted from Refs. 8 and 3.

Table 3.3.1.2-2 shows a list,of historical gross peak loads and estimated customer peak loads for the

St. Thomas and St. John systems. Customer peak loads were obtained by subtracting calculated auxiliary

station loads from the gross peak load. Values of 3 MW and 1.5 MW were used for auxiliary station loads on

St. Thomas and St. John, respectively. It is necessary to use past customer peak loads as a basis when

making future load forecasts, since the use of gross peak loads would project the auxiliary system loads to

grow at the same rate as customer loads. However, auxiliary system loads are a function of type and size of

installed generation and not a function of customer load growth. Also, the system load factor is distorted

when using gross peak loads. In fiscal year 1980/1981 the system load factors were 65% and 69% on St.

ThorJas and St. John, respectively. This is higher than the 59-60% load factors cornmon to U.S. mainland

utilities. Scheduling maintenance can be difficult because of the relatively little variability in daily

system peak loads. Table 3.3.1.2-2 also shows that customer loads on St. Thomas grew an average of 8% per

year between 1970 and 1973, leveled off or decreased slightly from 1973 to 1976 and then grew again an

average of 5.5% per year from 1976 to 1980. On St. Croix customer peak loads grew an average of 11.6% per

year from 1970-1973 before holding steady or decreasing slightly since then.

Several short-term remedies have been advanced in order to increase the reliability of the present

system and also decrease overall operating costs through savings on fuel. The first is to identify the

priority in which inoperable or derated units should be repaired based on the savings realized from the

repair work and improvements in system reliability. EBASCO has recently done a study3 for WAPA identifying

possible repair scenarios and their effect upon system operating cost and reliability. On St. Thomas it was

found that by dispatching diesel #9 in the daily schedule, overhauling unit #13 to increase its net rating

to 33 MW, improving the availability of Unit #11 to 86%, and converting gas turbine #15 to fuel oil #6 would

result in a production cost savings of over $2 million per year and a reduction in LOLP from 5.29 days per

I.-170
Table 3.3.1.2-2 Historical Gross Peak Loads and Estimated

Customer Peak Loads

St. Thomas/St. John St. Croix

Fiscal Gross Peakb Customer Peakc Gross Peakb Customer Peakc

Yeara (MW) (MW) (MW) (MW)

1970 26.0 26.0 22.5 21.0

1971 28.3 28.3 25.8 24.3

1972 30.8 30.8 28.6 27.1

1973 35.2 32.2 30.7 29.2

1974 34.1 31.1 31.5 30.0

1975 33.2 30.2 30.6 29.6

1976 34.7 31.7 32.0 30.5

1977 36.2 33.2 30.6 29.1

1978 39.0 36.0 30.3 28.8

1979 40.6 37.6 31.2 29.7

1980 42.5 39.5 30.5 29.0

aThe fiscal year starts July 1 of the year shown.

bFor the years 1970 to 1978, the gross peak loads are taken from a

study done by WAPA entitled "Ten Year Load Forecast for Water and

Power Authority" prepared by Hatem Abdallah, May I, 1979. The gross

peak loads for 1979 and 1980 are taken from WAPA's Production

Analysis Sheets.

cCustomer peak loads are obtained by subtracting 3 MW and 1.5 MW from

the gross peak loads shown for St. Thomas and St. Croix, respectively.

Source: Adapted from Ref. 3

year to 1. 52 days per year. The cost, excluding the cost of improving the availability of unit /111, is

about $2.5 million meaning these improvements will yield a payback in just over a year. Likewise, on St.

Croix, converting gas turbine //16 to fuel oil 1/6, repairing diesel In and dispatching it daily, and

repairing gas turbine #13, to be used as a reserve unit would result in a production cost savings of almost

$1 million per year and a reduction in LOLP from 6.90 days per year to 1 day per year. Excluding the cost

of repairing diesel #7 and gas turbine #13, the improvements would cost about $800,000 and be paid for in

the first year's production cost savings.

Second, improved utilization of equipment through better maintenance planning, improved maintenance

operations, and increased effectiveness of maintenance personnel through training would help keep the system

in peak operating performance and thereby reduce ccsts and increase reliability.

Third, data on heat rates at various loading levels for each unit should be gathered so that the

system can be dispatched optimally, consequently reducing system operating costs.

Transmission and distribution on the Virgin Islands consists of one substation on St. Thomas at Krum

Bay and one on St. Croix at North Shore. At Krum Bay there are five 13.2kV and three 4.16kV overhead

feeders. A 34.5 kW substation is partially constructed but no decision has been made to complete the

substation at this time. Distribution line losses on St. Thomas were nearly 21% in fiscal 1978/1979 and 18%

in fiscal 1979/1980. This is substantially greater than the 9-10% distribution losses for utilities on the

U.S. mainland particularly in view of the relatively small area that is served. WAPA has conducted a study5

of the Krum Bay substation and recommended several modifications. Long-term needs also need to be addressed

before making any modifications. 3 In particular, information on distribution feeder parameters and loadings

are currently unavailable. This information is needed so the adequacy of the system for future needs can be

evaluated by calculating voltage drop and feeder losses and the costs and benefits of converting the

existing radial system into a primary loop system.

At North Shore there are five 13.2kV and two 24.9kV feeders.

were nearly 19% in fiscal 1978/1979 but only 9.2% in fiscal 1979/1980.

J:.- 171

Distribution line losses on St. Croix

No explaination is available for the
improvement in the efficiency of the distribution system. A WAPA internal study6 of this substation

indicates specific modifications. The remainder of the distribution system also needs to be addressed along

with the impacts future load growth and new unit additions will have on the entire distribution system. As

on St. Thomas, data on the distribution feeders should be collected in order to evaluate the adequacy of the

system for future needs.

Water Supply

High cost and limited availability of potable water for domestic, industrial, and tourist-related

activities are major problems. Since the Islands' catchment area is small and the rainfall seasonal, there

are no perennial rivers or lakes to draw fresh water from. Of a yearly rainfall of 40", 35" is lost to

evaporation and transpiration by vegetation, 3" becomes runoff or streamflow and 2" moves into the deep

subsurface to replenish and recharge underground water reservoirs. Recharge is not possible over large

areas because of the rocky terrain. Also, the terrains in St. Thomas and St. John are such that the

rainfall quickly drains into the sea without replenishing underground reservoirs. There is a need to

evaluate the potential yield of ground water as existing data are out of date. There are underground water

reservoirs; however, their storage capacity, particularly in St. Thomas and St. John, is small. Diffusion

of sea water into the existing underground reservoirs is a problem in St. Thomas. Subpotable ground water

is used in some cases to carry out household chores that do not require potable water. For example,

seawater is used for sanitary flushing and firefighting.

Through a network of cisterns in each household for collecting rainwater, many individual homes

gather potable water for domestic use. Some water is pumped from existing aquifers and water is also

transported in barges from Puerto Rico and distributed by trucks. The bulk of the potable water supply in

St. Thomas and St. Croix is produced by desalination plants. Table 3.3.1.2-3 lists the desalination units

of WAPA and their design capacity. In the past, the Baldwin-Lima Hamilton and Envirogenics units on St.

Thomas have not been very reliable and have been out of service thereby creating water shortages. The

desalination plants use steam from the electric power plants to produce potable water. Linking the

desalination plants to the electricity generation plants promotes cogeneration and opportunities for the

efficient utilization of energy. Unfortunately, it also introduces reliability problems. When the electric

generation plants are down for repair or maintenance, water must be trucked to users, since the desalination

units and the electric pumps in the water distribution network will not function.

Distribution of water is handled by the Department of Public Works (DPW). On St. Thomas the hilly

terrain limits the distribution of water by pipelines and hence some water is distributed to customers by

Table 3.3.1.2-3 Desalination Units of WAPA

Unit

Baldwin-Lima Hamilton

Envi rogenics

IDE Number

IDE Number 2

Stearns-Rogers

Envirogenics

IDE Number 1

Year Installed

1968

1975

1981

1981

1967

1975

1981

Design Capacity (MGPD)

St. Thomas

2.50

2.25

1. 25

1. 25

St. Croix

1.0

2.25

1. 25

Source: Adapted from Ref. 2.

I_ 172
truck. Also, water for St. John is baFged from St. Thomas and distributed to residents by truck. The two

major towns on St. Croix, Christiansted and Frederiksted, and the mid-island area are served by a common

pressurized distribution system. The pipeline ~istribution system is obsolete and needs substantial

upgrading. More than 50% of the potable water that enters the public distribution system cannot be

2 accounted for with much of the water lost because of leaks. Furthermore, a few water storage tanks cannot

be filled to capacity because of leaks.

The possibility of supplying St. Thomas with water via an undersea pipeline from Puerto Rico has been

considered. A Puerto Rico to Vieques pipeline has been built demonstrating the feasibility of such a

project from an engineering and construction standpoint. However, long term export arrangements between

Puerto Rico and the Virgin Islands need to be worked out. Finally, since St. Croix has a large amount of

flat land, it has been estimated that there is a tremendous potential for the development of an economical

ground water program. More study and exploration is needed.

3.3.1.3 Renewable Energy Resources

Although the Virgin Islands are ideally located in the tropical belt where abundant quantities of

solar-based renewable forms of energy are available, only very small amounts of energy are currently derived

from these resources.

The only commercial solar energy cooling system installed and operating is at the 400-room

Frenchman's Reef Hotel in St. Thomas. It is believed to be the largest of its kind in the world. The

system incorporates 13,400 sq. ft. of evacuated tube solar collectors that produce a peak output of 2 x 106

Btu/hr. at 230°F for approximately 6 hrs/day to power a 200-ton absorption chiller. The chilled water is

circulated through a central system to the restaurants, shops, halls and the lobby of the hotel. The solar

system is capable of driving the chiller from 10:00 a.m. to 4:00 p.m. on an average day.

In 1979, the Ministry of Agriculture for the Virgin Islands ordered a wind-power-driven reciprocating

pump to pump water from fresh water springs in St. Thomas to storage tanks located at higher elevations.

The water was to be used for drinking and agricultural needs in the Island. 2

The Ministry of Agriculture also reported that a forestry program exists in the Islands for producing

charcoal for cooking purposes. The charcoal would be produced from a thorny tree ("Casia") that will be

grown and harvested on a regular basis. 2

Apart from these systems, there is little other use of renewable resource energy in the Virgin

Islands.

3.3.2 The Future Energy System

The structure of the future energy supply system in the Virgin Islands will depend on a number of

parameters. The following sections describe some of the options that are available. The section is again

divided into discussions of the fossil energy system, the electric sector, and renewable resource use.

3.3.2.1 Future Fossil Fuel System Configuration

The Virgin Islands will have a continued reliance on petroleum in the foreseeable future, even as

alternative energy sources begin to penetrate the market. In this light, continued efforts must be made to

insure a reliable, cost-effective source of petroleum products.

The Hess Oil Virgin Island Company refinery is large enough to provide virtually all of the Island's

need for products. The critical issue is competitiveness of the HOVIC operation in relation to mainland

U.S. operations and other Caribbean refineries. In order for the refinery to continue as a profitable

operation (and thereby continue to meet the needs of the Virgin Islands) it must secure adequate crude oil

supplies at competitive prices, must operate at acceptable efficiency and productivity levels, and must

compete effectively in the markets for its products.

An alternative fossil fuel for use in large industrial or utility boilers is coal. . This fuel is

available from the U.S. and potentially from large proved reserves in Columbia. The Columbian reserves are

high in quality and well suited for export markets. Coal preparation handling and combustion is a welldeveloped technology, but the Virgin Islands currently has no infrastructure for coal usage. Reference 1

I- 173
reports that coal-fired generation of electricity will be difficult for the Water and Power Authority (WAPA)

in the Virgin Islands. The delivered price. of coal has become volatile and capital investment in equipment

by WAPA might be prohibitive. The use of coal-fired power plants might face some disapproval from the

tourist industry. Compliance with air pollution emission standards might be difficult to achieve at

acceptable costs, and the disposal of ash and sludge would be a particularly demanding problem to solve in

view of the limited land area. In spite of the problems associated with coal usage, Martin Marietta Co. on

St. Croix has begun construction of a 15 MW coal-fired plant 2• Some of the bauxite handling facilities will

be used for the coal. Martin Marietta, like HOVIC, is self-sufficient in their power and water

requirements.

Both References 2 and 3 recommend that future electrical generating capacity in the islands have dual

firing capabilities (i.e., oil and coal). Recommendations from Ref. 3 include the installation of a 55-MW

generating plant on St. Thomas and a 44-MW plant for St. Croix. The Government of the Virgin Islands and

Martin Marietta may be able to combine their power planning so that installations may be beneficial to

both. No reference was found on the cost and requirements for developing an infrastructure for coal usage.

The technology for using coal-water slurries in existing oil-fired boilers is rapidly being

developed. Such a slurry could be made in the coal-producing country and then shipped to the Virgin Islands

where it would be handled and stored with modified oil equipment. If the use of this fuel is found to be

feasible. then it would eliminate some of the problems associated with coal. Developments in this

technology need to be watched and an assessment, made on the potential for its usage.

3.3.2.2 Future Electric Sector Configuration

Because the production of electric power in the Virgin Islands is so closely tied in with production

of potable water, future electric sector planning efforts must also address the fresh water needs of the

islands. As mentioned previously, short-term electric and water needs can be handled by the present system

after modifications are made. These modifications include repairing certain units that are currently out of

service, overhauling units in order to increase their output capacity, and improving maintenance

operations. However, in order to supply reliable electric power and fresh water for the least cost over the

long term, a comprehensive generation planning effort should be initiated. At the present time, WAPA does

not have any long-term generation plans for the Virgin Islands. Consequently, the remainder of this section

will detail the considerations in performing generation planning studies as well as briefly discussing both

the conventional and alternative technologies for electric power generation and fresh water production and

how these may apply to the Virgin Islands situation.

Long Range Generation Planning

Because of ever increasing fuel price increases and the long lead times required for constructing new

electric power plants, generation planning has become especially important. System planners must also deal

with many uncertainties among which are future load growth, load management, cost and availability of fuels,

construction time, and costs plus utility rate structures. If careful studies have not been made, the

constraints of time may require that costly gas turbine and diesel peaking units be constructed in order to

satisfy a projected load demand even though base load capacity may have actually been called for. In a

situation like the Virgin Islands where a significant portion of the operation and maintenance costs go for

the cost of fuel, this type of short term solution can be very costly.

The heart of any system planning effort is the load forecast. This is an estimate of the total

energy that must be generated and the peak demands that must be served reliably during the study period.

Many diverse factors can influence load growth. Among them are population growth, economic growth, tourist

activity, projected energy-intensive industrial growth, etc. Consequently, officials from WAPA, the Virgin

Islands Energy Office, the Office of Policy Planning and Research, and other representatives of the

industrial and tourism sectors should meet to discuss the future development of the Virgin Islands and its

effect upon the growth in electric energy. Also, several scenarios should be decided upon in order to test

the sensitivity of the future system to changes in sectorial growth assumptions. A similar strategy should

be used to forecast future fresh water needs.

A load growth study was performed recently for the St. Thomas/St. John system by EBASCO Services. 1

The load forecasting model developed was based upon the past load growth patterns in the Virgin Islands.

The GNP of the U.S. and the Virgin Islands population were chosen as the parameters affecting customer peak

load demand. The U.S. GNP was chosen because it was felt to be a good indicator of U.S. tourist activity in

I. -174
the Virgin Islands. The model forecasted that the St. Thomas/St. John system would grow at a rate of 3.24%

from 1980 to 1990 and then drop to 1.6% from 1990 to 2000. The abrupt change in load growth was due largely

to the forecasted drop in population growth. However, this is just one forecast of the expected load growth

in the electric sector. More input from other government and private agencies is needed so that a range of

possible forecasts can be studied.

It may also be beneficial for WAPA to study the extent to which rate structure changes can reduce

system peak demands and thereby effect a change in load forecasts. Current WAPA rates for all customers are

not structured to provide price signals that reflect the costs of serving the customer nor to encourage

conservation during peak periods of the day. Possible changes to the rate structure include time-of-day

(TOO) rates, interruptible rates, and inverted rates. TOD rates may help improve daily load factor and

reduce slstem peak load by providing signals to customers to shift consumption from peak to off-peak

periods. Interruptible rates can provide similar benefits since the utility reserves the right to interrupt all or a portion of a customer's load a maximum number of times, with a maximum length of time per

interruption, within a given time period. 2 Inverted rates establish lower rates for initial blocks of power

to a customer, and higher rates for subsequent blocks which can lower system energy costs by reducing

kilowatt -hour consumption and provide rate relief to small customers without eroding aggregate utility

revenues. 2

The second part of any system planning activity is to explore the options available for gererating

the required electricity. Conventional technologies, such as coal, oil, hydro, and nuclear need to be

studied with respect to cost parameters, siting and environmental restrictions, and other socio-economic

criteria to decide whether or not they are appropriate to the Virgin Islands. Likewise, alternative

technologies such as solar, wind, OTEC, biomass, etc., should be studied to determine the extent each may

penetrate the market and what the economic and environmental costs may be. All possible future technologies

should also be evaluated as to their ability to be integrated into the potable water production system.

Several technologies for the production of fresh water in the future are available including the

present method of distillation using steam. Other technologies include reverse osmosis, and OTEC.

Reverse osmosis is the newest commercial desalination process and uses semipermiable membranes through which

pure water is forced by extended application of pressure on saline water on the opposite side of the

membrane. Membranes are expected to last between three to six years depending upon whether seawater or

brackish water is used. The strategy using OTEC will be discussed later in this section.

Future Conventional Technologies

A number of conventional technologies are candidates for new generation units.

Oil - Although the Virgin Islands is at present totally dependent upon oil for all electric power

generation, low-speed diesel engines should be considered for peak power generation. Low-speed diesel

engines are extremely efficient, burn low-cost residual oil, and low temperature turbines can convert heat

from exhaust gases into electricity or steam without burning additional fuel. 2

Coal - Coal-fired plants can be an extremely attractive, low risk alternative to oil. Conventional

coal handling and burner technology are well established and ample coal supplies are available through the

U.S. and foreign sources. However, because WAPA is a small utility, coal-fired generation has several

drawbacks. Coal prices are volatile and the investment in coal ports, handling facilities, ash removal

systems, etc., may be prohibitive. Furthermore, coal would present problems in air and water pollution and

solid waste disposal and would require additional training of maintenance personnel. 3 However, steam from

the plant could easily be used to desalinate water. Hence, these questions concerning coal use need to be

addressed before any committment is made.

Hydro and pumped hydro-storage - Because there are no natural rivers or large waterfalls on the

Virgin Islands, hydroelectric power potential is virtually nonexistent. The few potential hydropower sites

are old and undeveloped and the potential would vary with seasonal rainfall. 3 The high elevation regions

and proximity of the ocean would appear to make St. Thomas an attractive site for pumped hydro-storage

facilities. However, the use of salt water poses the potential problem of salt water intrusion into the

fresh water system. Furthermore, because the system is already plagued by frequent power outages and has

problems meeting peak demand, pumped hydro-storage is not expected to become a significant portion of the

future electric system.
Nuclear - Nuclear power reactors pose special problems because of the social and technical issues

involved. The current poli tical, regulatory, and social climate is not condusi ve to the construction of

nuclear power plants. Also, the lack of technical personnel on the islands presents a problem. 3 Finally,

although several European and Japanese corporations have plans to develop small reactors for market to

developing nations, the smallest proposed plant of 200 MWe 3 already exceeds all current and projected

electric load demands until after the year 2010.

Future Alternative Technologies

Because of the high cost of electricity on the Virgin Islands and the tropical climate, renewable

resources have a good opportunity to provide significant amounts of electric power to the grid. The

potential for solar, wind, OTEG, biomass, and urban waste contributing power to the electric sector will be

discussed in following sections.

Of all the renewable technologies listed above, only OTEG also produces fresh water as a byproduct of

its normal operation and should therefore be examined carefully. A feasibility study done by Westinghouse4

for the U.S. Maritime Administration analyzed the economics of two OTEG designs for use in the Virgin

Islands. Although both strategies were for the production of water only (the power produced was used solely

to power the plant equipment), it would not be difficult to enlarge the system and produce both fresh water

and electric power. The open cycle OTEC design had a .capacity of 15 MGPD and a deployment date of 2005.

The hybrid OTEC system would have a capacity of 5 MGPD and a deployment date of 1990. Both systems were

projected to be located about 1.1 nautical miles from the St. Croix coast and the fresh water would be

pumped to shore via pipeline. The capital cost of the open cycle system would be $200 million (1979

dollars). The considerably lower cost and earlier deployment date of hybrid system would probably be

attractive to a private investor considering the attractive selling price of water in the Virgin Islands.

On the other hand, Federal government assistance and involvement in constructing the open cycle plant with

private enterprise could bring the project to reality. Both projects would also help attract industry and

therefore employment opportunities to the Virgin Islands by assuring a good supply of fresh water.

Finally, a program to utilize commercially available cold storage (ice) systems to reduce peak loads

on the WAPA grid should be initiated. Storage systems for both residential and commercial applications

should be considered. This will help shift electrical demand from peak to off-peak hours. Past studies

have shown that payback periods are on the order of 2-5 years. 2

3.3.2.3 Future Renewable Resource Use

Renewable resources offer a major opportunity for the Virgin Islands to enhance its energy supply

system. The possible technologies are described in the following sections in terms of resource base,

technological configurations that can be considered, performance of the systems, cost, potential users, oil

use reductions, and implementation factors.

SOLAR

Solar energy is one of the promising alternative technologies that can be used in the Virgin Islands.

Resource Base. Solar insolation data for the Virgin Islands, from recording stations located in the

Islands, are extremely limited. Also, there are noticeable variations in the data that are available. The

level of solar radiation in the Caribbean region is on the order of 2000 kWh/m2/year. 1 Martin Marietta at

St. Croix has conducted some meteorological and solar insolation measurements. Unfortunately, the data were

not gathered for a long enough period to determine if they are reproducible. The Martin Marietta study

shows that approximately seven hours of direct sunshine above the threshold level of 65-70 watts/ft 2 are

available in the islands. 2 A significant micro-meteorological factor that affects solar irradiance is the

"spinal" cloud. The cloud develops almost daily between 3 to 6 p. m. and covers the land mass above an

elevation of 800 ft with a thick layer of moisture.

One of the immediate needs for the islands is a set of solar data gathering stations appropriately

located in the Islands with a central station for gathering, recording, and publishing the solar insolation,

temperature, and wind data.

T _ 176
Technologies and Cos ts. Reference 5 has considered the following solar energy technologies as

possible sources of alternate energy g~neration in the islands:

Solar Thermal Power Tower (electricity)

Photovoltaics (electricity and water pumping)

Solar Pond (electricity and heat)

Solar Hot Water Systems (thermal energy)

The solar thermal power tower technology to generate electricity requires considerable land area,

roughly two square miles of reasonably flat land for every 100 MW capacity. Also, the capital cost of a 100

MW solar thermal power tower in 1982 dollars is estimated at $2200/kW. 3 This technology is not expected to

be commercially available before the year 1997.

Because of the high production costs, photovoltaics may not be able to compete with conventional

forms of electricity generation for the Islands. Without a breakthrough in the manufacture of solar cells,

it is unlikely that photovoltaics can serve as an alternative to conventional forms of elctricity generation

in the Virgin Islands except in the long term as indicated in Reference 5.

Solar pond technology provides another renewable resource opportunity to generate electricity or

provide heat. However, Reference 5 considered and rejected this technology for application in the Virgin

Islands since it requires a considerable area of sheltered flat land for the solar pond per MW of electric

generating capacity and a sizeable quantity of fresh water to replenish water lost through evaporation.

Availabi 11 ty of fresh water in the Virgin Islands is a serious limiting factor. The possibi lity of

combining a solar pond with an OTEC system is discussed later.

Reference 5 estimates that 1.4 x 10 9 Btu of energy were saved in 1981 by hot water systems that used

solar instead of electricity to heat the water for domestic use. Providing domestic hot water represents

the largest share (35%) of electricity consumption in the residential sector followed by refrigeration

(20%), and cooking (10%). Hence, it seems logical that solar hot water systems should penetrate the most

among the renewable energy technologies in the Virgin Islands. This opportunity requires further

analysis. As indicated in Fig. 3.3.2.3-1,4 cash purchase (with a 40% tax credit) of a solar hot water

system to provide 50% of the hot water needs in the Virgin Islands yields a return on the investment of

33.6%. It should be pointed out that cash purchases of solar hot water systems might be beyond the

capability of many residents. Therefore, if solar hot water systems are to penetrate rapidly, substantial

cost reductions and financing mechanisms will be necessary.

~ew housing in the Virgin Islands seems an attractive candidate for installing solar hot water

systems. Unfortunately, the low level of annual housing starts (100/yr) in the Virgin Islands restricts

this opportunity.

Implementation. The biggest factors influencing the implementation of solar technologies in the

Virgin Islands are cost and land area. The cost of current systems, although competitive with the high

electricity prices, is still too high to have a significant penetration level. Innovative schemes for

financing solar systems are necessary.

The solar technologies requiring extensive land area face a major barrier. The limited flat land

available may hinder extensive use of these systems.

WIND

Studies of potential wind use in the Virgin Islands have shown promise not only because wind

resources are reasonably good but also because existing electricity costs are very high by U.S. mainland

standards. This gives wind systems the opportunity to compete on a favorable basis. This section reviews

the major issues facing wind energy applications in the Virgin Islands.

Resource Base. The Virgin Islands are exposed to relatively consistent trade winds out of the

northeast. The wind characteristics are affected by the rugged topography of St. Thomas and St. John. St.

Croix is the only one of the three islands having a large portion of flat land. 1 St. Thomas has steep

slopes leading from the 470 m 0,550 it) summit of Crown Mountain to the coasts. St. John's to'pography is

similar to St. Thomas, but the highest peak, Bordeaux Mountain (400 m, 1,300 ft) as well as the othe r

hilltops are somewhat lower than those on St. Thomas.

:I_ 177
9.2

20.7 6.3

Solar System Cost

Annua' Ene,,, Req.

(lola' e'ecl,.c, In kWIIl) - 8.3

$3000

'400

..:::::::::;:::::::::::::::~:~:c;:"<it~:w:.::::::::::;:::::;:::::::::::;:::::

8.6 $2500

1700

$1500

'000

-::::------:::::!'IIoo.-..... ...- Q

{' C:::::;>.:- PR - 26. 1

o VI - 33.6

ASSUMPTIONS I Return on Investment. First Year Electricity savings. . Solar System Cost, Less Tax Credlts

Solar System provides 50 percent of hot water requirements

Source: Assessment of the PotentiaZ for Ren~~abZe E~£r~d Sources in the Southern United States,

Puerto Rico and the Virgin IsZands by Graves and Bonnet, ~ov. 1980, p. 30.

Fig. 3.3.2.3-1

Potential for

and

Solar Hot Water Return on Investment (%) (Source: Assessment

Renewable Energy Sources in the Southern United States, Puerto

the Virgin Islands by Graves and Bonnet, ~ov. 1980, p. 30)

of the

Rico,

Unfortunately, wind data for the Virgin Islands is sparse and mostly from relatively poor sites for

wind turbines. The major source of data for St. Thomas is from the Harry S. Truman Airport, on the

southwestern (leeward) coast- 1,2 A few months of data are also available from marine coastal surface

weather observations. 2 No source of wind data are available for St. John. The only wind data for St.

Croix, other than the sparse marine coastal surface weather observations, are from the Alexander Hamilton

Airport on the south coast.

Using the limited data, generally accepted extrapolation methods, and knowledge of topographic

features, two groups have characterized the wind resources for the islands. 1,2 The distri but ion of wind

power in power density classes is given in Table 3.3.2.3-1 and is shown graphically on Fig. 3.3.2.3-2. Most

of the promising areas are indicated by a class 3 or greater wind power on the annual power map. Only sites

at exposed coastal locations, or at higher elevations, are expected to experience class 3 or greater wind

power. Such locations include well-exposed sites on the central ridges, and all but the west coasts of the

three islands. 1

Vukovich, et al.,2 have constructed isotachs (lines of constant wind speed) for the three islands in

order to pinpoint areas of high wind energy potential. The results of that analysis included the

identification of several potential sites for each of the main islands. The specific criteria used for

selecting sites included the degree of windward exposure reasonably free of turbulence; the elevation of the

site; the enhancement potential of the terrain; and the proximity of the site to a roadway which was assumed

to have a commercial power line running along it. Generally, elevated sites near windward shorelines were

chosen over locations further inland or on lee shores. Five sites were identified on both St. Croix and St.

John, and six sites were selected for St. Thomas.

X,- 178
Table 3.3.2.3-1 Distribution of Wind Power

Classes in the U.S. Virgin Islands

Wind

Power

Class

Wind Power

Densit2 (Watts/M )

Wind Speed

Corresponding

to Upper Limit

of Power

Density

M/S (mph)

Land

Area Equal

or Exceeding

Power Clas~

Class (km )

Percentage Land

Area Equal

or Exceeding

Power Class

1 0-100 4.4 (9.8)

2 100-150 5.1 (11.5)

3 150-200 5.6 (12.5)

4 200-250 6.0 (13.4)

Source: Ref. 1.

65°

344

115

2.5

o

100.0

33.4

7.3

0.0

.......................+ _ + -t + ti) j') ..

.: ,: ~:-

~l-.O.t:' : -i. ~: : (;) : .,.. :. .. .: .JI3 l '. UNITED KINGDOM ·3 : 31) ~: ,.,....: .

• : ",3 3: '-·_._.9 _ ; t'l ...............2 ......21 ••••..3·......··3..····3..•••• 3~3'··..•••....··':'....•••..•••....cr"'l;l ... 3 4 4>"'~ 2 1. ..··3. lcottJ

/J2 1~. : • 3 2 1 4 1 3\ ... :

1 23~i~' .-2 »2 . w.s3 a. 23!: 3 : I :

........................,·........·....·......~+··......·....·......t........·......··..~+· ..·....·......·....··

._ r··..·..··..·· ·· ·!········..····..·..··..··j"········..·········..·..t······..········ ··

I I 3 i 3l

1 3 ,3. ;3 ..............._+ ; 2 2 '3· ••• 17°45'

1::.':: 3

3 i

65°

K{·j RIDGE CREST ESTIMATES

O"__=====':i0"_-=====52P MILES

O..-===='.O_-==2JiO 3i[0===:::::i 40 ~!H?M~JERS

Fig. 3.3.2.3-2 Annual Average Wind Power in the U.S. Virgin Islands

I - 179
power.

less.

The wind exhibits a seasonal variation on the Virgin Islands. Summer is the season of maximum wind

Based on the exposed sites, winter has the next highest average wind, with spring being somewhat

Autumn has significantly less wind power than the other seasons. 1

The diurnal variations are quite regular on the islands, with the maximum wind speed generally

occurring about 1: 00 p. m. local time for all seasons. Minimum wind speeds typically occur in the early

morning hours. Such predictable variation should be taken into account when analyzing wind power potential

to match electrical generation loads.

Technologies. The wind turbines considered for electric utility operation have been primarily of the

large variety with capacities greater than 100 kWe. 3- 5 Some analyses of small wind turbines (1-25 kWe) have

been carried out for residential and commercial applications. 2 ,6 Another option identified in one study was

a system of wind turbines driving reciprocating pumps that raise water from potable water tanks at sea level

to water distribution tanks located in nearby hills. 3

The typical wind turbine for electrical generation has a horizontal axis and has two large

blades. 5,7,9 A 200 kWe machine (DOE MOD-OA) already installed and operating in Puerto Rico has a blade

diameter of 125 feet. The cut-in speed at which power generation begins is only 6.9 mph lIEasured at a

height of 30 feet (approximately 10 meters). The wind speed at which this machine reaches full power (200

kWe) is 18.3 mph. At wind speeds higher than 34.2 mph the wind turbine automatically turns out of the wind

to avoid damage. In contrast to the 200 kWe wind turbine, a promising 2,500 kWe design (DOE MOD-2) is being

tested in the state of Washington. This machine has a blade diameter of 300 feet and higher cut-in (8.6

mph) and rated (20.1 mph) speeds than MOD-OA (and therefore lower expected capacity factor), but it also is

expected to have a capital cost that is significantly less than MOD-OA if both machines reached the mature

industry level. 8 The basic tradeoff is capital cost and maintenance cost per unit capacity (also highest

for the smaller machines). These issues are yet to be resolved, but the large machines appear to be favored

at this time. Since peak loads a~e less than 50 MWe on each of the two grids on St. Thomas/St. John and St.

Croix, the MOD-2 at 2.5 MWe may be too large for the early applications.

An additional possibility for electrical generation is the vertical axis, Darrieus machine. A 500

kWe vertical axis machine was used as the basis for an economic feasibility study for the Virgin Islands. 2

Some advantages of the vertical axis machines over horizontal axis machines are that electrical generating

and control components can be located close to the ground and no machine rotation is necessary because of

wind direction. Some disadvantages are that vertical axis machines have lower efficiencies, are typically

not self-starting, and have blades that are difficult to manufacture. 8

Small wind machines of 1-25 kWe capacity generally have lower cut-in and rated speeds than the large

machines. Therefore, the small machines can attain higher capacity factors than the large machines. The

tradeoff is that capital costs and maintenance costs for the small machines can be high. 2

System Performance. The performance of wind turbines in an electrical system is a difficult problem

for analysis. 9,IO The characteristics of the wind turbines, such as forced outage rates, are not yet wellknown. Expected capacity factors are a key parameter for economic analysis. One study of wind turbine

economics for the Virgin Islands estimated capacity factors of approximately 25-27% for wind turbines in the

1-25 kWe size range and a capacity factor of only 10% for a 500 kWe wind turbine. 2

Wind turbines may be justified strictly on the basis of their fuel (oil) saving capacity. That is,

the cost savings from displaced oil is the only cost savings to compare with the cost of energy from the

wind turbine. Considering the very high electricity rates prevalent in the islands (approximately 18-

21~/kWh2,4) and the reasonable wind resources, wind power should be competitive in the Virgin Islands before

it is competitive in most other areas of the U.S.

An additional consideration for wind system performance is whether the wind turbines improve the

system reliability, as measured by an index such as the loss-of-load probability. In recent years some

studies have pointed out that wind turbines may also have SOlIE capacity value in addition to the fuel saving

value. 9 ,10 Considering the significant diurnal variation in wind speed, and. to a lesser extent, the

seasonal variation, the capacity credit attributable to wind may not be a negligible factor at some sites on

the Virgin Islands. If this were a significant factor, the econones of the small wind turbines would be

helped the most because of their higher expected capacity factors.

1. _180
Costs. Wind turbine costs for a mature industry are highly uncertain. Costs for a research unit are

known but are generally considered substantially higher than for the same unit produced by a mature

industry. The associated reduction in unit capital cost with increased production is analyzed by estimating

different rates of reduction, or "learning curves." Another large uncertainty for wind turbines is the

economy of scale over the size range of interest. Finally, an important additional consideration may be the

fixed operation and maintenance (O&M) costs. The. fixed 0&.'1 costs in 1978$ have been estimated to be

approximately 60 $/kWe-yr for a 100 kWe machine, 30 $/kWe-yr for a 500 kWe machine, and approximately 12

$ /kWe-yr for a 2,500 kWe machine. 9 Thus, economy of scale in maintenance cost could be a hindrance to

implementation of the smaller wind turbines. A study of economic feasibility for the Virgin Islands used

capital costs (1981) of $8500/kWe for a 1 kWe machine, $8000/kWe for a 1.5 kWe machine, $6000/kWe for a 2

kWe machine, and $1200/kWe for both a 25 kWe and a 500 kWe machine. 2 (The cost figures for the last two

machines appear inconsistent; normally, one would expect the capital costs for the 500 kWe to substantially

less per unit capacity than the 25 kWe unit.) Operation and maintenance costs were assumed to be 5% of the

total capital cost on an annual basis. The results of this study indicated the commercial and electric

utility applications had reasonable economic incentives.

The recent Phase II of the Territorial Energy

to be $2500/kWe currently.4 Costs by the year 2005

wind highly competitive with other energy sources.

remains uncertain.

Assessment estimated capital costs for large machines

were estimated to drop to $700/kWe, which would make

Whether or not such mature industry costs will occur

Potential Users. Electrical generation by large wind turbines appears to have the best chance to

make a significant contribution to energy supply in the Virgin Islands. However, if electricity prices

continue to be very high, some penetration in the commercial and residential markets, (Le., user-owned

small machines) could occur. Four major factors affect the economic feasibility of wind energy use in the

Virgin Islands. 2 They are wind turbine generation, system sizing and load match, installed system cost, and

the Water and Power Authority interconnection policies (retail and buyback rates, and interconnection

regulations).

The Governor's Water and Power Task Force 5 estimated that three wind turbines were suitable for both

St. Croix and St. Thomas. The Phase II Territorial Energy Assessment 4 estimated 5-10 MWe of wind capacity

for each island by the year 2005 would be possible. These applications assume installation of the large

wind turbines for electric utility use. Assuming a 15% capacity factor and an eventual installed capacity

of 10 MWe implies an annual wind generation of approximately 13 million kWh.

Potential Oil Use Reduction. The potential displacement of oil depends on the capacity installed and

the expected average capacity factor for the wind machines. The capacity factor depends on the wind turbine

characte-ristics and the wind availability at the site. However, assuming 1 barrel of oil produces

approximately 450 kWh, the estimate of 10 MWe installed capacity at 15% capacity factor would displace

nearly 30,000 barrels per year by the year 2005. A more realistic estimate for the near term would be an

installed capacity of 500-1000 kWe and an oil displacement of approximately 1500-3000 barrels per year.

Implementation. Land use could be a potential problem along coastal areas. Other potential concerns

include access roads for remote sites, noise, interference with television, radio, and other communications,

aesthetics, bird kills, and safety.4,8 Visual impacts will be present unless remote siting is utilized in

4 the National Park on St. John, neighboring uninhabited islands, or on St. Thomas. Another important

barrier to wind power is the financial impact of the large capital cost to be paid before the unit begins

generation. This barrier probably affects the residential and commercial potential most. Whatever wind

implementation occurs, financing of a large capital intensive program must be possible.

A factor in wind's favor is the relatively short lead time required between the decision to buy and

installation (approximately 3 years). Also, wind is available to add to capacity in small increments,

thereby allowing the WAPA to minimize problems of over- or under-capacity.

In order for wind to make a significant contribution to the energy supply of the Virgin Islands in

the next 20 years, several favorable circumstances for wind must either continue or develop: (1) the price

of alternative generation must stay high, (2) the research, development, and commercialization program for

wind power in the U.S. lIlUSt succeed with successful demonstrations (reliability, construction, and cost),

(3) land must be available for siting, and (4) financing must be available. Since it is unlikely that all

of these factors will be very favorable to wind power at the same time, the most likely implementation plan

I- 181
for the Virgin Islands is one or two turbines of the large variety for electrical utility application and,

perhaps, a few of the smaller wind turbines for other applications. If, in fact, the favorable

circumstances did occur, then the maximum penetration to be expected would be less than 20% of installed

capacity because of reliability considerations. 4 ,9 The major incentive for wind at this time is the

extremely high electricity prices; if wind is competitive anywhere in the U.S., it should have a good chance

in the Virgin Islands.

BIOMASS

Biomass resources, including crop residues, urban waste, and specially grown energy crops are

candidates for the energy supply system in the Virgin Islands. The potential for biomass use is, however,

limited by the lack of land for extensive cultivation of biomass crops. St. Croix is the only island with

sufficient land to consider such a system.

Bagasse, wood chips, coconut shells,

most likely to be used to provide energy.1

be fired individually or mixed with oil.

cropping. It has been estimated that 2000

cutting cycle. 1 There are problems with

earlier colonial days. It may be difficult

and municipal waste are the biomass materials considered as the

They would all be used in a direct combustion process and would

Bagasse has been considered as a candidate for special· energy

acres in St. Croix could be used for this purpose with a 2-year

the growing of sugar cane that stem from adverse reaction to

to get sufficient farm labor to harvest sugar cane.

Municipal waste has been suggested as a source of fuel although there are varying opinions as to

whether it could be economically justified. 2 ,3 The quantity of solid waste generated and collected in the

Virgin Islands may not be sufficient to support an urban waste energy system. The use of industrial and

agricultural waste in combination with urban waste may be more attractive.

The production of liquid fuels (primarily ethanol) from biomass has also been suggested. 1 The

problems of land use and acceptability of sugar harvesting are the same as mentioned before.

Reference 1 states that the competition for biomass sources from non-energy uses will require "a

drastic shift in market values or government incentives" to result in a major biomass energy program.

OCEAN THERMAL ENERGY CONVERSION

Ocean Thermal Energy Conversion (OTEC) is a concept for utilizing the temperature difference between

the warm surface waters of tropical oceans and the deep cold waters in a thermodynamic cycle to produce

electrical energy. In the open-cycle concept, the warm waters are flashed at low pressure, expanded through

a turbine, and then condensed against cold water; this cycle can produce fresh water as a by-product. In

the closed-cycle concept, a working fluid such as ammonia is used in the traditional Rankine cycle. The

open cycle was tested by Georges Claude in Cuba in 1930: it produced electricity, but not enough to run the

equipment. 1 The closed cycle, using ammonia as the working fluid, was successfully tested off Hawaii in

1979 by the Mini-OTEC project, producing net electrical power for the first time in an OTEC plant and

demonstrating the feasibility of the concept. 2

Resource Base. An ideal OTEC site would meet the following criteria: (a) high thermal differences

between the surface and deep water (generally taken to mean a difference of 20°C to a depth of 1000 meters);

(b) nearness to the market for the OTEC products; (c) absence of storms; and (d) low-velocity ocean

currents. 1 St. Croix is acknowledged to meet the first two conditions off the southeast coast where deep

water can be found within a few miles of shore. 1 ,6,7,8 Moreover, the other two criteria are more important

for floating OTEC platforms moored in deep water than for shore-based or tower-mounted OTEC plants that

could be built in the Virgin Islands. For example, the suitability of a St. Croix site is evidenced by the

fact that two proposals for orEC plants have been based upon facilities at this 10cation. 9 ,10,ll

Technologies. A considerable technology base for OTEC exists because of the work done in the past

decade in the United States and elsewhere. Although this technology base is not now adequate to justify the

construction of the large plants (250 to 400 MW) that are believed to be necessary to be competitive in most

markets at today I s energy prices ,12 it may well be adequate for small plants in the range of 10 to 40

MW. 13 This is especially true for locations (such as St. Croix) where the plant can be placed on shore or

put on a shelf-mounted tower platform.

L -182
Historically, major emphasis in OTEG research and development has been placed on heat-exchanger

design and on the means for prevention of biofouling and corrosion. Because of the research done to date,

several promising heat-exchanger concepts have been developed, and effective biofouling control techniques

have been selected for long-term testing at the Seacoast Test Facility in Hawaii. At the present time, the

major technical uncertainties are believed to be (in order) in the designs of the riser power cable, the

cold-water pipe, and the ocean platform. 14 However, these are mainly problems for floating OTEG platforms

moored in deep water, and can be largely avoided by a shore- or shelf-based plant. IS It is probably

significant that most of the pilot-plant proposals were shore or tower installations; although probably less

efficient than floating plants, they entail substantially less technical risk.

Although most effort has been directed toward the generation of electrical power, OTEG can also be

used for the production of fresh water. which is a critical problem in the Virgin Islands. In the hybrid

cycle 9 ,10 a fraction of the power produced in a closed-cycle system can be used for desalination of ocean

water in a reverse-osmosis process. In the closed-cycle process,l1 potable water is produced directly

through the flashing (under low pressure) of the warm seawater. The salt-free water vapor is expanded

through a large-diameter turbine driving a generator; if the turbine exhaust is condensed against the cold

water in a surface condenser (instead of being directly mixed with the cold water), the run-off will be

potable. The open-cycle concept has not been proven by experiment, and requires more development than the

closed-cycle concept.

System Performance. The efficiency of an DTEG plant is inherently low because of the small

difference between the temperatures of the heat source and heat sink. For seawater temperatures of 40°F and

SO°F (figures commonly used in DTEG examples), the ideal Garnot cycle efficiency is only 7.4%. For large

DTEC plants, overall efficiencies of the order of 2.5% are expected; this compares with efficiencies

approaching 40% for large fossil-fueled plants. Efficiencies of shore-based plants would be lower because

of the longer pipe runs and (probably) lower temperature differences. 13 Although these low efficiencies do

not impact on energy cost (the energy source, of course, is free), they do have a major bearing on capital

cost and require that parasitic losses (e.g., the power required to pump large quantities of water) be kept

to a minimum.

DTEC has an important advantage over other solar energy systems in that it is essentially

uninterruptible. The energy-storage capacity of the oceans is so great that there is no difference between

day and night operation, and only a slight variation over the year. Therefore, DTEC is suited for base-load

operation, an important consideration in a system with high capital costs and low operating costs.

Maintainability and durability of OTEC systems have not been demonstrated. For the shelf--mounted

plants proposed for St. Croix, the main uncertainties would appear to be in the lifetimes of the cold-water

pipe and heat exchangers, and in the cleanability of the latter. Major risk elements for heat exchangers

have been minimized by some designers through the choice of materials (e.g., titanium) and geometries (e.g.,

configurations that can be easily cleaned). The cold-water pipe presents a more difficult problem, at least

in the large sizes. For a shore-based 10 MW plant, however, fabrication and deployment of cold water pipes

with expected lifetimes of 30 years are believed to be within the state of the art.

Reliability of a fully-operational DTEC plant should be as good or better than that for a

conventional power plant. Heat exchangers would be modular (for fabrication reasons), permitting serial

shutdown for cleaning or other maintenance. The other mechanical equipment is typical of that found in

conventional power plants. There is no reason to believe that operations would necessarily be interrupted

by adverse weather (e.g., hurricanes). In this regard there is encouragement from the experience of the

OTEC-I ocean-going test platform, which continued operations during a Pacific storm of a magnitude which the

designers had expected to require the jettisoning of the cold-water pipe. 4 Moreover, tower platforms are

commonly used in the Caribbean for oil exploration.

Costs. OTEC, like all solar-energy concepts, is capital intensive because it requires large amounts

of equipment to take advantage of the low-intensity energy sources. Since the energy source is free (and

assuming other operating costs are comparable to those for conventional plants), the economics of DTEC is

reduced to comparing the savings in fuel costs against the cost of amortizing the construction expense over

the lifetime of the plant.

Cost estimates for DTEC plants are

upon the size of the plant assumed.

ture. 8 ,12,13,15,16,17,18 For the purpose

site-specific and design-specific, and depend to a large extent

A wide range of estimates can be found in the literaof this report, it is sufficient to note that the estimated unit

1> 183
cost of a 40 MW OTEC plant is of the order of $5000/kW, with unit costs of 4 MW and second-generation 400 MW

plants being roughly twice as much and half as much, respectively. This compares to generally quoted

figures of $lOOO/kW for oil-fired plants and $2000/kW for coal and nuclear plants. 8 Using a plant

amortization charge of 18%/yr and a plant availability factor of 80% (both figures are typical of those

found in OTEC studies), the incremental cost of the OTEC plant over the oil-fired plant represents a busbar

power cost of about 1°f/kWh. By comparison, current electricity prices in the Virgin Islands are 18-

21 f /kWh. 2,4 Thus, if the estimates of OTEC electri city production cos ts turn out to be valid, it could

compete against current systems. OTEC becomes relatively more attractive as interest rates come down and

the price of imported petroleum goes up. For all practical purposes, therefore, a commitment to OTEC is a

hedge against the prospect that the world price of oil will increase at a rate which exceeds the long-term

interest rate. This certainly has been the case during most of the past decade, although it is not true at

present and may not be true for the next several years.18 In any event, predictions of this sort are

difficult to make and have proved to be unreliable in the past.

Potential Users. OTEC plants for the Virgin Islands could be designed to produce electrical power,

fresh water, or both. The TRW proposa1 9 ,10 for the pilot plant would have produced 10 MW of net power plus

5 million gallons per day of fresh water using a hybrid cycle. The Westinghouse study11 envisioned an opencycle plant that would produce 15 million gallons of fresh water per day with no net power to the grid.

Additional supplies of both fresh water and electrical power are needed to assure the growth of the Islands.

Potential Oil Use Reduction. OTEC used for generation of base-load power would be a direct

substitute for power produced in oil-fired plants. Using the figures presented above, and assuming a heat

rate of about 10,000 Btu/kWh for an oil-fired plant, substitution of OTEC for oil would result in a yearly

savings (in the cost of purchased oil) of about $400 per year per installed kilowatt of DTEC capacity. In a

like manner, fresh water produced by OTEC could substitute for that produced in oil-fired flash

evaporators. Thus, for the 40 MW plant, the savings in avoided oil purchases would pay the incremental cost

of the OTEC plant (over that of the oil-fired plant) in ten years. Although this in itself does not provide

economic justification for constructing an DTEC plant, it can be an important consideration if it is desired

to reduce dependence upon imported energy resources or if i1: is desired to preserve foreign-exchange

currency that would otherwise be spent on petroleum imports.

Implementation. The major barriers to the implementation of an OTEC strategy for the Virgin Islands

are those related to technology and financing. Environmental impacts and land-usage issues should not be

maj or pro blems.

Although the United States OTEC program has been directed at the technology required to build very

large plants, there has been recent recognition of the possibility that initial commercialization of OTEC

may occur in island markets dependent on imported oil, and where smaller plants in the range of 5 to 40 MW

may be more appropriate. 8,20 A 10 MW OTEC plant can be built with existing technology but may not be

economically viable except as a hedge against an oil embargo or a rapid escalation in the price of

petroleum. A 40 MW OTEC plant is potentially attractive for economic conditions that may exist within this

decade but requires some extrapolations of existing technologies. The large plants (250 to 400 MW) that are

believed to be competi tive under today's conditions require major technological ext rapolations that wi 11

take years to achieve. The Virgin Islands Energy Office estimates 21 that 10MW of OTEC capacity can be

installed in St. Croix by the year 2005. This appears to be conservative if the present economic and

technical projections for OTEC are borne out.

Land use is not an issue because little land is required for an OTEC installation. DTEC plants are

either located on floating platforms far out to sea, or on shelf-mounted towers as proposed for a few

favored locations such as St. Croix. Shore-based plants have been proposed, but these would be little

larger than a conventional power plant.

Environmental impacts from OTEC plants are not expected to be a hinderance to their use. There is

some mixing of deep water and surface water, but this can be controlled so as not to produce undesirable

effects. The most promising anti-biofouling system requires intermittent chlorination, but at levels that

do not exceed EPA standards. Some working fluids (e.g., ammonia) impose environmental risks if accidentally

released in large quantities, but the risks can be minimized by careful design and operation. Overall, the

environmental impacts from DTEC-produced power are probably less harmful than those associated with

conventional sources.

T-184
COMBINATION SOLAR POND/OTEC ALTERNATIVE

A scoping study has recently been completed 'for a 5 MWe power plant combining two developmental

technologies - solar ponds (SP) and ocean thermal energy conversion (OTEC) - into a hybrid system that

offers potential advantages over either pure SP or pure OTEC systems for production of electrical power. 19

Although this study was based upon a Hawaiian location, the concept is applicable to any tropical location

with a near~shore source of deep ocean water and an on-shore topography suitable for construction of solar

ponds. The Virgin Islands, particularly St. Croix, fits into this category.

In the SP/OTEC combination, a salt-gradient solar pond replaces the warm surface water of the ocean

for the collection and storage of solar energy. Solar radiation is absorbed and stored in the water at the

lower levels of the pond. The water temperature at the lower levels can be scalding hot while the surface

temperature remains very close to the ambient air temperature. Convection is prevented by the presence of a

salt gradient that develops naturally in the pond causing the salt concentration to vary from near seawater

concentration at the surface to over 20% at the bottom. Because of this salt gradient, the fluid density at

the lower levels is higher than that at the surface, thus preventing the hotter fluid at the lower levels of

the pond from moving upward. The concept of collecting and storing solar energy by means of salt-gradient

solar ponds was derived from studies of various natural lakes that have salt concentration gradients. A

salt gradient solar pond normally consists of three zones: a thin convective zone at the surface, a nonconvective gradient zone in the middle that provides thermal insulation, and a convective storage zone at

the bottom. A typical pond would be about 10 feet deep and require 30 or more acres per megawatt of net

power production.

The resource-base requirements for the SP/OTEC combination are more restrictive than for a pure OTEC

or a pure solar-pond system. As with OTEC, a tropical location is required. The Hawaiian study was based

upon a mean annual solar insolation value of 280 W/m2 , with a lower practical limit of perhaps 200 W/m2•

The source of deep, cold water must be very near the shore. The on-shore topography must be suitable for

the construction of the large pond complex. Finally, there must be available an inexpensive source of salt,

or at least the means of producing the salt from seawater. The St. Croix site meets the first two requirements. The Virgin Islands Energy Office reports 21 the existence of natural salt ponds in the Islands, but

notes that limited land area may preclude the widespread use of this technology.

Although small solar-pond and OTEC plants have been built, the combination has never been tried. In

locations where the requirements of both systems are met, the SP/OTEC hybrid is potentially superior to

either. Using deep, cold ocean water in combination with a tropically located solar pond results in a

substantial increase in the thermal efficiency of a pure solar pond power plant and a significant decrease

in the size of the pond required. Conversely, using a solar pond as a source of warm water for an OTEC

plant provides a many-fold increase in efficiency over that of a pure OTEC system. In the 5 MW SP/OTEC

plant, for example, the Carnot efficiency would be about 21.5% and the net realizable cycle efficiency about

11.7% (compared to 7.4% and 2.5%, respectively, for OTEC alone.). In addition, using a solar pond in

conjunction with OTEC eliminates the need for the warm-water and mixed-discharge pipes, and permits a manyfold decrease in the size of the cold-water pipe and heat exchangers. For example, the cold-water pipe - a

major risk item in a pure OTEC installation - would have a diameter of only 5 feet in a 5MW SP/OTEC

combination (compared to 12.5 feet f or a 5 MW pure OTEC plant) and would entail significantly fewer

uncertainties in its deployment and expected useful life. The other side of the trade-off is, of course,

the solar pond itself, which becomes the major cost item and which has uncertainties of its own.

As the result of theoretical and experimental work done in the United States and Israel, the thermal

and hydrodynamic behavior of solar ponds are sufficiently well understood for conceptual design

purposes. 23 Major technical unknowns remain in the areas of wave formation and suppression (believed to be

site-specific problems requiring site-specific solutions) and in the design and installation of a suitable

pond liner to prevent leakage of water. Other areas requiring careful attention are the construction of the

ponds themselves and the accumulation of the extensive salt inventory; the costs for these items are high

and very site-specific. Moreover, because large solar ponds have not yet been built and tested, the first

SP/OTEC plants would probably consist of many ponds of a few acres each rather than a few large ponds. On

balance, however, the risks due to uncertainties may be less for the hybrid than for a pure OTEC plant of

the same capacity.

The cost of the 5 MW Hawaiian SP/OTEC plant was estimated to be about $5000/kW, which makes it

competitive with the 40 MW pure OTEC plant discussed above. This makes it potentially attractive within

this decade, and because of its smaller size, much more affordable in terms of initial capital outlays. The

primary use would be for the production of electrical power. A major difference from pure OTEC is that the

SP/OTEC combination is also suitable for peaking operations; the energy-storage capacity of the ponds -

J.- 185
unlike that of the oceans - is.not unlimited. In addition, the hot water from the ponds could also be used

in flash evaporators for the desalination of seawater, an application that could be important in water-short

locations such as the Virgin Islands. The s~vings in oil use would be the same as for OTEC: about $400 per

year per installed kW of baseload capacity.

A major barrier to implementation could be in finding enough suitable land. The 5 MW plant discussed

here would require about 160 acres of contiguous, relatively flat land at a shore location near a source of

cold water, with a 40 MW plant requiring about two square miles. An initial step would be to survey

potential sites to see if these criteria can be met. Another potential problem could be the environmental

effect of leakage of brine through the pond liner into the soil. Factors tending to encourage implementation are the smaller size, the smaller capital investment, and the fact that the technology for the OTEC

portion is sufficiently advanced to justify plants of this size.

3.4 THE ENERGY PROGRAM

The energy program for the Virgin Islands focuses on six major areas. These are:

1. Electricity

2. Water Supply

3. Fossil Fuels

4. Renewable Resource Use

5. Energy Conservation, and

6. Energy Planning

In each of these areas three components of the program can be identified:

a. Issues - these are the major factors in each area. The previous discussions have

provided the basis for the identification of these issues.

b. Approach - the fundamental premise that can guide the development of specific actions.

c. Specific Actions - based on the premises above. the steps that can be taken to address

the issues. These actions include both policy measures (e. g., regulations, incentives,

etc.) and projects (studies as well as hardware installations).

The energy program in each of the six areas will be described in terms of the three components.

3.4.1 Electricity

The electricity area includes generation, transmission, and distribution.

Issues. The issues involving electricity in the Virgin Islands may be enumerated as follows:

1. The electricity generation system is exclusively dependent on imported petroleum. All

of the units are fired by either #6 or #2 fuel oil.

2. Electricity is the largest component of energy consumption, accounting for 65% of the

total in 1980.

3. Electricity costs are very high (18-21f!kWh, 2-3 times mainland costs) because of the

total oil dependence, the relatively small size (and high heat rate) of the generating

units making up the system, and the unavailability of detailed performance data that can

be used to dispatch the various units economically.

I -186
4. The electrical system has reliability problems due to the isolation of both the St.

Thomas/St. John and the St. Croix systems, the small variation in daily system peak

loads (and hence the difficulty in working out proper unit maintenance schedules) and

maintenance and operational procedures in general.

Approach. The approach to be taken with respect to electricity is as follows:

1. The primary immediate emphasis for the electrical system is operation and maintenance of

existing equipment including major overhaul and/or replacement of units that are in need

of repair. New generating capacity is not a focus of immediate attention.

2. Measures that reduce the peak load on the system (e.g., rate structure changes, thermal

storage, etc.) need to be identified, evaluated, and implemented.

3. Alternative renewable resource technologies for the generation of electricity (e. g. ,

wind, OTEC, etc.) need to be tested and carefully evaluated. Only then can commitments

be made to full-scale implementation.

Specific Actions. The specific actions in the electric sector are as follows:

1. Implement system repair and overhaul recommendations. A number of recommendations have

been advanced on the repair and overhaul of the current electrical system. These need

to be prioritized and implemented.

Schedule: The priorities can be established in a 3-6 month period.

Resources: The cost of the overhaul program depends on the maintenance to be

done.

2. Provide advanced training to WAPA personnel in operation and maintenance techniques. A

program to increase the skills of the WAPA personnel in the area of system maintenance

and operation needs to be conducted on a periodic basis for both current snd new

staff. The latest techniques for system repair, maintenance, dispatching, and fuel

conservation need to be covered. Personnel can be trained in formal sessions or at onthe-job sessions (perhaps in a mainland utility).

Schedule: Intensive training should be for 2-4 weeks per year.

Resources: About 3-5 people per year should receive training.

budget of $15,000-$20,000 per year is estimated.

A training

3. Perform long range generation planning study. A long term (20-30 year) analysis of the

generation requirements needs to be made. This would include the development of a load

forecast and the application of appropriate analysis techniques to determine the optimum

generator mix.

Schedule: The planning can be done in a 9-12 month period.

Resources: ApprOXimately $75,000-$100,000 would be required.

3.4.2 Water Supply

Water supply is among the major energy areas since it is intimately connected to the energy supply

situation.

.I- 187
Issues. The major issues in water supply are:

1. Potable water supply is a major problem for the Virgin Islands because of rapid run-off

of rainfall, evaporation due to trade winds and high temperatures, and lack of ground

water supplies.

2. Water supply is heavily dependent on the energy supply system as there is need for

energy-intensive desalination equipment and water transport methods (Le., barge, tank

truck) •

3. There are opportunities for developing integrated energy/water supply systems that will

provide water with efficient energy use (e.g., cogeneration systems, renewable-resourcedriven desalination units, etc.).

Approach. The approach to the water supply issues is that water supply systems will be evaluated as

an integrated component of the energy system with advantage to be taken of energy (and oil) savings

potentiaL

Specific Actions. The specific actions to be taken in the water supply area are:

1. ImpleQent a water supply system overhaul. A number of recommendations have been made to

upgrade the water supply system. These include repairs to the distribution piping and

storage, upgrading of the desalination units, and development of more effective water

catchment basins. These need to be prioritized and implemented.

Schedule: The priorities can be developed in a 3-6 month period.

Resources: The cost of the upgrading depends on what measures are chosen.

2. Study the groundwater potential in St. Croix. Tests need to be made to determine the

amount of groundwater available in St. Croix and the costs of utilizing it.

Schedule: Approximately 9-15 months.

Resources: Approximately $75,000-$150,000.

3.4.3 Fossil Fuels

The fossil fuels area covers the use of petroleum products, the Hess refinery, and the potential for

alternative fossil fuel use.

Issues. The issues involving fossil fuel use in the Virgin Islands are as follows:

1. The Virgin Islands are almost exclusively dependent on

source. This applies to the demand sectors as well as

(petroleum refining and electricity).

imported oil as an energy

the energy-producing sectors

2. The Hess Oil Refinery (third largest in the world) and the Martin-Marietta alumina plant

are the largest energy consumers on the islands accounting for about 90% of total

consumption. These operations are entirely self-sufficient with respect to energy and

water requirements.

3. Diesel fuel represents the largest component of petroleum demand at 28% of total energy

consumption. Gasoline is next at 4.4%. The only other products of significance are

propane gas, je t fuel, and aviation gas, which together.' are only 2.7 % of consumpt ion.

(The balance of consumption is electricity.)

I -188
4. Other fossil fuels (coal an!! gas) are not now in use in the Virgin Islands. Martin

Marietta is in the process of installing a 15 MW coal-fired plant. The economics are

favorable partially as a result of the l;ompany's ability to use a portion of the orehandling system already in place.

Approach. The approach taken in the fossil fuel area is:

1. The potential for displacing fossil fuels for use in electricity generation (i.e., using

renewable resources, coal, etc.) should be thoroughly evaluated.

2. The displacement of gasoline use with biomass-based alcohol should be studied.

3. Energy conservation efforts to enhance the efficiency of electricity and fuel use and

thus reduce the demand should be undertaken.

Specific Actions. The specific actions in the fossil fuel use area include:

1. Establish a program of data collection on petroleum product use. The existing data set

needs to be supplemented with additional information on the import, production, and

distribution of petroleum products on the Islands. The data can be useful to determining

where substitutes for petroleum can be employed.

Schedule: The data collection process can be designed in a 6-9 month period

and the first set of information collected 6-9 months later.

Resources: The design of the process and its first implementation would cost

$75,000-$100,000.

2. Determine feasibility of extended coal use. In cooperation with the Martin Marietta

project to install a coal-fired unit, a feaSibility study should be undertaken to

determine if the experience and the facility designs used on the project can be extended

to other potential coal users. The economic and technical viabi lity of broadening the

use of coal to other facilities in the Virgin Islands needs to be studied.

Schedule: The study should coincide with the completion of the Martin

Marietta unit.

Resources: The study should cost approximately $75,000-$100,000.

3.4.4 Renewable Resource Use

Renewable resources include solar, wind, biomass, and ocean systems.

Issues. The renewable resources issues in the Virgin Islands are:

1. There is current 1y very little use of renewable resources except for some individual

solar systems and other demonstration units.

2. Land availability is a major concern for the implementation of any renewable resource

system requiring extensive commitments of land. Other environmental impacts must also be

considered.

3. The tropical climate of the Virgin Islands is especially suitable to a wide range of

renewa ble resource technologies. Appropriate priorities wi 11 have to be developed to

efficiently allocate available resources (money, staff) to the development of the best

systems.

4. Cost is a major factor in the implementation of the renewable resource technologies. The

high price of electricity in the Virgin Islands may enhance the penetration of various

systems into the market.

I-' 189
5. Renewable resource technologies are being considered for incorporation into the electric

generating system (e.g., wind, OTEC, etc.). There is little operating experience with

some of the new technologies and system reliability will have to be carefully monitored.

Approach. The approach for dealing with renewable resource technologies is:

1. The full range of renewable resource systems will be investigated and considered for

implementation.

2. All of the renewable resource technologies to be implemented are likely to need some

government backing to carry them to full implementation.

Specific Actions. The specific actions to be taken in the renewable resource area are:

1. Expand the evaluation of the renewable resource base. The data available on the extent

of renewable resources needs to be expanded. Field data collection needs to be done for

solar insolation and wind potential especially. The data presented here are limited and

need to be reinforced. An integrated program plan outlining the information requirements

needs to be prepared and implemented.

Schedule: Data collection for most renewables needs to be assembled over an

annual cycle and preferably should be collected continuously.

Resources: The cost of the program will depend on the extent of the nata

gathering effort decided upon.

2. Establish a renewable resource technology data base. A complete set of current

information on various renewable resource technologies needs to be assembled. The data

should include technology configurations available, performance, and costs. The

information can be in the form of a report library or a computerized data retrieval

system. The data should be made available to energy planners, researchers, private

industry and the general public as a means of increasing the awareness of renewable

technology potential.

Schedule: The first set of information should be compiled for use in a 6-9

month period.

Resources: A budget of approximately $25,000 would be necessary.

3. Conduct a study on the integration of renewable resource technologies into the WAPA

system. An integrated study to determine the role that renewable resource electricity

systems can play needs to be carried out. The perspective needs to be that of the

electric system planner and should consider issues such as capital and operating costs,

effects on system reliability, rate structures for renewable technologies, etc.

Schedule: The study can be completed in approximately 9-12 months.

Resources: The study cost is estimated at $75,000 to $100,000.

4. Implement pilot scale demonstrations. The most attractive renewable technologies need to

have field demonstrations to gain experience on their operation. An integrated program

plan should be prepared that outlines which technologies should be given priority. The

plan should then be implemented as sufficient resources are available.

Schedule: The plan can be prepared in a 6-9 month period.

Resources: The costs depend on the demonstrations to be carried out.

5. Evaluate institutional structures influencing renewable resources.

issues affecting the use of renewable resources need to be evaluated.

I-l9O

The institutional

Energy pricing,
tax incentives, permit requirements, financing opportunities, and other items need to be

addressed. Appropriate policy measures to deal with potential barriers to renewable

resource use need to be identified and evaluated.

Schedule: The review can be done in approximately 9-12 months.

Resources: The costs are estimated at $50,000-$75,000.

3.4.5 Energy Conservation

The energy conservation areas cover efforts to improve the efficiency of energy use by the various

end-use demand sectors.

Issues. The energy conservation issues are:

1. The major areas where energy conservation efforts can be expected to have an impact are

in electricity consumption and personal transportation.

2. In the residential sector, the la rges t electricity uses are water heating (35%) and

refrigeration (20%). Both are amenable to significant efficiency improvements.

3. Commercial facilities (offices, hotels, hospitals) use about one-third of the electricity

on the Islands; air-conditioning is the largest use. These facilities are also amenable

to significant efficiency improvements.

4. Transportation energy consumption is most affected by gasoline prices, which are

generally higher in the Virgin Islands than on the mainland.

5. Energy conservation efforts in the Hess refinery and the Martin-Marrietta alumina plant

are implemented by the companies themselves.

Approach. The approach taken in energy conservation is as follows:

sectors

(e.g. ,

1. For the residential and commercial

encourage more efficient energy use

insulation, solar water heating, etc.).

a series of programs is implemented to

thermal efficiency building codes, roof

2. For the transportation sector, a series of measures is employed to reduce the number of

vehicle-miles-traveled (e. g., carpooling/vanpooling) and to increase the efficiency of

traffic flow (e.g., left turn on red).

3. The industrial sector improvements as carried out by Hess and Martin-Marrietta are

monitored by VIEO for their resultant oil savings.

Specific Actions. The specific actions in energy conservation include:

1. Revise the Island's energy conservation plan. The energy conservation program needs

constant review and revision as appropriate. A methodology needs to be established to

monitor the effectiveness of the various measures. New measures need to be identified

and evaluated.

Schedule: The energy conservation program should be reviewed and updated

approximately every two years.

Resources: The review will cost approximately $75,000-$100,000 each time it

is done.

2. Implement the conservation measures. A variety of conservation measures have been

I- 191
identifed for the Virgin Islands.

effectiveness.

3.4.6 Energy Planning

These need to be implemented and monitored for

This area covers overall energy planning in general and electric utility planning in specific.

Issues. The issues in energy planning are:

1. There is no comprehensive integrated energy/economy analysis for the Virgin Islands.

2. The data and the analytical tools are not complete for the conduct of such an analysis.

3. Electric system expansion planning will be needed once the current

rehabilitated. A complete expansion planning program (including load

reliability analysis, cost comparisons, etc.) needs to be conducted.

system is

forecasts,

Approach. The approach toward energy planning is a recognition that there is a need for this type of

integrated effort in order to make more informed energy decisions. The necessary resources (funds, effort,

time) will have to be made available to implement such a program. It is also recognized that the planning

activity is an ongoing iterative process that must be updated periodically.

Specific Actions. The specific energy planning activities are:

1. Develop an Energy Planning System. An energy planning system suitable for use in the

Virgin Islands needs to be developed. The system should include a data base and a set of

analytical tools to conduct appropriate analyses. The data base needs to be designed to

suit VIEO needs. Data on energy consumption by sector needs to be compiled on a regular

basis. Additional computer hardware and/or software may need to be added to existing

equipment.

Energy planning tools (e.g., computer models) need to be developed especially to suit the

Virgin Islands situation. Procedures used by many states in the U.S. mainland can be

modified appropriately.

Schedule: The data base can be compiled in approximately 1-1-1/2 years. The

analytical tools can be designed and implemented concurrently.

Resources: Cost of the activity is in the range of $150,000-$250,000.

Computer equipment would be extra.

3. Conduct Updated Energy Planning Effort. The next iteration to improve upon this work

should be initiated. This should be part of an on-going effort to revise and update the

energy program periodically.

Schedule: The energy analysis should be carried out at least every 2-3

years.

Resources: With new data collected periodically, the update should cost

$50,000-75,000 each time it is done.
REFERENCES

Section 1

1. Itepy!ative Energy Resource Assessment for Puerto Rico, Puerto Rico Office of Energy, Office of the

Governor, Santurce, Puerto Rico (November 1982).

2. Phase II TerritoriaL Energy Assessment for the United States Virgin IsLands, Virgin Islands Energy

Office. Frederiksted, St. Croix and Charlotte Amalie, St. Thomas (November 1982).

3. Territorial Energy Assessment, Phase I, U.S. Department of Energy, San Francisco Operations Office and

Savannah River Operations Office (July 1981).

Section 2.2.1

1. Econol''1ic Report to the Govepy!or: 1980-1981, Area of Economi c Research and Evaluation, Puerto Rico

Planning Board; San Juan, Puerto Rico, p. A-I.

2. Ibid, p. A-27.

3. Puerto Rico's Political Future: A Devisive Issue with Many Dimensions, The Comptroller General Report

to the Congress of the United States, u.S. General Accounting Office, Report No. GGD-8-48, p. 25 (March

2, 1981).

4. Puerto Rico Business Review, Government Development Bank for Puerto Rico, Vol. 7, No. 10, p. 3 (October

1982).

S. Economic Report to the Govepy!or, p. A-26.

6. Energy in Puerto Rico's Future, Energy Engineering Board, National Academy of Sciences, Washington,

D.C., p. 13 (1980).

7. E~onomic Report to the Govepy!or, p. A-5.

8. Ibid, p. A-18.

9. Ibid, p. A-22.

Section 2.2.2

1. Energy in Puerto Flico s Future, Energy Engineering Board, National Academy of Science s, Washington,

D.C. (1980).

2. Ibid, pp. 29-38.

3. U.S. Long-Term Review, Data Resources, Inc., Lexington, Massachusetts, pp. 11.2-11.3, (Winter 1981-82).

4. Energy i'1 Puerto :l?i~o's Future, p. 33.

5. Ibid, p. 34.

6. Eco'1ornic Report to the Govepy!or: 1.QaO-81, Area of Economic Research and Evaluation, Puerto Rico

Planning Board, San Juan, Puerto Rico, p. A-S.

7. Ibid, p. A-6.

8. Energy in Puerto Rico's Future, pp. 35-36.

I - 193
Section 2.2.3

1. Enepgy in Puepto Rico's Futupe, Energy Engineering Board, National Academy of Sciences, p. 16 (1980).

2. The Enerogy Policy of Puepto Rico: A Fipst Step, Office of the Governor of Puerto Rico, Puerto Rico

Energy Office, p. A-13 (1979).

3. Estadisticas Enepgeticas AnuaLes, Oficina de Energia, Puerto Rico, p. 20 (1981).

4. Enepgy in Puepto Rico's Futupe, p. 68.

5. Estadisticas Enepgeticas AnuaLes, p. 20.

6. Economic Study of Puerto Rico, U.S. Department of Commerce (December 1979).

7. Enerogy in Puerto Rico's Future, p. 46.

8. Enepgy Consepvation in Transpoptation in Pueroto Rico: A Policy Study, Jaro Mayda, Center for Energy

and Environment Research, University of Puerto Rico - U.S. Dept. of Energy, pp. 18-19 (September 1978).

9. Ibid. p. 20.

10. Ibid, p. 22.

11. Ibid, p. 22

12. Ibid, p. 26.

13. Ibid, p. 26.

14. Enepgy in Pueroto Rico's Futupe, p. 248.

15. Enepgy Consepvation in Tpanspoptation in P.R., p. 29.

16. Enepgy in Puepto Rico's Future, p. 61.

17. Economic Study fop Puerto Rico, p. 35.

18. Enerogy in Puepto Rico's Futul"e, p. 8.

19. Economic Study fol" Puepto Rico, p. 294.

Section 2.2.4: Future Energy Demand

1. Energy in Puerto Rico's Futupe,

D.C. , pp. 40-72 (1980).

2. Ibid, pp. 29-39.

3. Ibid, p. 44.

4. Ibid, pp. 40-70.

5. Ibid, Table 15.

6. Ibid, p. 44.

Energy Enginee ring Board, National Academy of Sciences, Washington,

I .. 194
Section 2.2.5: Conservation

1. The Energy PoLiey of Puerto Rieo: A First Step, Office of the Governor of Puerto Rico, Puerto Rico

Energy Office (undated).

2. Energy in ~~erto Rieo's Future, Energy Engineering Board (1980).

3. Cogeneration PotentiaL in Puerto Rico's CommereiaL and IndustriaL Seetors, Energy Research and

Applications, p. 12 (December 1981).

Section 2.3.1.1: Current Fossil

1. TerritoriaL Energy Assessment, Phase I, U. S. Department of Energy, San Francisco Operat ions Office,

Savannah Operations Office (July 1981).

2. The F:nergy PoLicy of Puerto Rieo, Office of the Governor of Puerto Rico, Puerto Rico Energy Office

(1979).

3. F:nergy in Puerto Rieo's Future, National Academy of Sciences, Washington, D.C. (1980).

4. Draft EnvironmentaL Impact Statement: ExpLoratory DriLLing for PetroLeum, Ri De LaPLata Region, Puerto

Rico, Dames and Moore, San Juan, Puerto Rico (May 1980).

5. Glover, L., III, OeeurI'ence of Free OiL in Limestone Concretion in Puerto Rico, Bull. Amer. Assn. of

Petroleum Geologists, 41, No. 3:565-566 (1957).

6. Monroe, W.H. StratographicaL PetroLeum PossibiLities of MiddLe Tertiary Roe1<s in Puerto Rieo, Bull.

Amer. Assn. of Petroleum Geologists 57, No. 6:1086-1099 (1973). Discussion: H.A. Meyerhoff 59 No.1,

p. 169-172 (1975), M.T. Moussa and G.A. Seiglie, p. 163-168, Reply: W. Monroe, p. 172-175.

7. Myers, W.H., Reeonnaisance Survey for PossibLe OiL Structures ALong the North CoastaL Region of Puerto

Rieo with the Seismograph, United Geophysical Exploration Company, Inc. (1947) in Preliminary Results

of Geophysical Exploration for Gas and Oil on the North Coast of Puerto Rico, Puerto Rico Div.

Minerology and Geology, Bull No. 1 (July 1955).

8. Zapp, A.D., H.R. Bergquist, and C.R. Thomas, Tertiary GeoLogy of the CoastaL pLains Of Puerto Rieo,

u.s. Giological Survey, Oil and Gas Investigations, Preliminary Map 85 (1948).

9. DeJong, A., EvaLuation of Hydroearbon Prospects of the IsLand of Puerto Rieo, Projeet B, Western

Geophysical Co. for Puerto Rico Water Resources Authority (1975).

10. Denning, W.H., Seismic Survey of Puerto Rieo with PrincipLe Reference to the South CoastaL Area, United

Geophysical Co. (1948) in Preliminary Result of Geophysical Exploration for Gas and Oil on the South

Coast of Puerto Rico, Puerto Rico Div. Minerology, Bull. 2, 17 p (July 1979).

11. Briggs, R.P., GeoLogy of Kewanee Interameriean OiL Company Test WeLL No. CPR 4, Northern Puerto Rico,

in Oil and Gas Possibilities of Puerto Rico, Puerto Rico Mining Commission, pp. 1-23, San Juan, Puerto

Rico (1961).

12. GeoLogicaL GeophysieaL Reconnaisance of Puerto Rico for Siting of NucLear Power PLants, Western

Geophysical Company and Fugro, Inc., Project No. 73-058-E6 for Puerto Rico Water Resources Authority,

San Juan, Puerto Rico.

13. De Golyer and McNaughton, A GeophysieaL and GeoLogicaL AppraisaL of Portions of Northern Offshore

Puerto Rieo, prepared for Puerto Rico Water Resources Authority (1975).

14. UnconventionaL Gas Sources, Executive Summary, National Petroleum Council, Washington, D.C., DOE/ITC11417 (Dec. 1980).

15. Monroe, W.H., GeoLogy of the MiddLe Tertiary Formations of Puerto Rico, U.S. Geological Survey

Professional Paper No. 953 (1980).

:£~ 195
Section 2.3.1.1: Current Fossil (Cont'd)

16. EcoY/.omic Study of Puerto Rico, VoL II, U. S. Dept. of Commerce (Dec. 1979).

17. Statistics OY/. Petroleum aY/.d Petroleum roducts, Calendar Year 1980, Office of the Governor of Puerto

Rico.

18. Cantrell, A., WOY'ld~)ide Refini>1g, Oil and Gas Journal, p. 148 (Dec. 28, 1981).

19. McClintock, G., A Survey of Petroleurrz Storage Facil.ities in Puerto Rico, June 1981, Office of Energy,

Puerto Rico (June 5, 1981).

20. Estadisticas Energetica~ ~Y/.uales, 1981, Puerto Rico Office of Energy.

21. Telephone conversation, Cornelia C. Cameron; U.S. Geological Survey; Reston, Virginia (November 1982).

Section 2.3.1. 2

1. Energy in Puerto Rico's Future, National Academy of Sciences (1980).

2. National Hydroel.ectric Power Resources Study, Regional- Report: Volume XVI, Southeastern El.ectY'ic

Reliability Council. aYld PueY'to Rico, U.S. Army Corps of Engineers (August 1980).

3. Economic Study of Puerto Rico, Volume II, U.S. Department of Commerce (December 1979).

4. Annual Report 1978/1979, Puerto Rico Water Resources Authority.

5. Estadisticas EneY'geticas Anuales, Puerto Rico Office of Energy (1981).

Section 2.3.1.3 Current Renewable Resources

1. Al.ternative EneY'gy Resource - Assessment foY' Puerto Rico, Puerto Rico Office of Energy (November 1982).

Section 2.3.2.1 Future Fossil

1. The Impact of National Energy Policy on ~~erto Rico, Commonwealth of Puerto Rico, Energy Office, Office

of the Governor (October 1977).

2. The Energy Pol.icy of Puerto Rico. A First Step, Office of the Governor of Puerto Rico, Puerto Rico

Energy Office (1979).

3. Economic Study of Puerto Rico, Vol II U.S. Department of Commerce (Dec. 1979).

4. Energy in Puerto Rico's Future, National Academy of Sciences, Washington D.C. (1980).

5. Territorial. EY/.ergy AssessmeY/.t. Phase I, U. S. Department of Energy, San Francisco Operations Office,

Savannah River Operations Office (July 31, 1981).

6. ALternative Energy Resource Assessment for Puerto Rico, Puerto Rico Office of Energy, Office of the

Governor (1982).

7. Survey of Operating Refineries Worl.d~ide (Capacities as of JaY/. 1, 1982), Oil & Gas Journal, pp. 144-145

(Dec 28, 1981).

8. Wett, T., Picture Brightens for Petrochemical-s, Oil & Gas Journal, pp. 81-84 (March 29, 1982).

]:-196
Section 2.3.2.2 Future Electricity

1. Personal communications between Leslie Poch and Eng. Elias Orta, Planning Office, PREPA (June 1981).

2. Puerto Rico Electric Power Authority, A Generation Expansion Plan for Puerto Rico (Sept. 1979).

3. u.S. Army Corps of Engineers, Regional Report: Volume XVI Southeastern Electric ReliabiLity Council and

Puerto Rico (August 1980).

4. lriarto, Modesto and Rafael H. Sardina, Energy Analysis and Socioeconomic ConsideI'ations fol' Puel'to

Rico, Center for Energy and Environmental Research (May 1980).

S. United States Department of Commerce, Economic Study of Puerto Rico. Volume II (December 1979).

6. National Academy of Sciences, Energy in Puerto Rico's Future (1980).

7. Puerto Rico Office of Energy, Alternative rnergy Resource Assessment for Puerto Rico, no date.

Section 2.3.2.3 Solar

1. Lopez Berrios, Angel, et al., The availability of Insolation in Puel'to Rico, CEER-UPR (1982).

2. SERl, Insolation Data Manual, NTIS 061-000-00489-1.

3. G.O.G. Lof, J.A. Duffi, and C.O. Smith, World Distribution of Solar-Radiation, Report 21 of the Solar

Energy Laboratory at the University of Wisconsin.

4. Solar Energy Technology Handboo<, Part A: Engineering Fundamentals, and Part B: Application, Systems

Design, and Economics, edited by William C. Dickinson and Paul N. Chere Missinhoff.

S. Centl'al Sol.ar Heating Plants with Seasonal Stoage Basic Cost and PeI'formance Data for the Sol.ar

Coll.ector Subsystem, Communication with Charles A. Bankston, U.S.A. (1982).

6. Photovoltaic Energy Systems, program summary (Jan. 1982). DOE/CE-0033 Dist. Category UC-63 prepared

for U.S. DOE Assistant Secretary, Cons. and Renewable Energy.

7. Beach, C., A Sol.ar Col.lector Testing Program. Pal't I: Efficiency and ExposuI'e Tests, Final Report EG

77-G-OS-SS61, Florida Solar Energy Center (May 1979).

8. Harrison, T.C., Midtemperature Sol.ar System Test Facil.ity Predictions fol' Thermal Performance Based on

Test Data - Sol.ar Kinetics T ~oo Solar Collector with Glass Reflector SUI'faces, SA~ 80-1964/7, First

of Series (March 1981).

9. Edesess, M., On Sol.ar Ponds: Salty Fare for the World's Energy Appetite, Nov.-Dev. (1982) Technology

Review.

10. Tabor, R" and Z. Weinberger, Sol.ar Energy Handbook, Non Connecting Solar Ponds, Chapter 10, edited by

J.F. Kuester and F.K. Reith, McGraw Hill (1981).

11. Tabor, H., Sol.ar Ponds, Solar Energy 27, 181-194 (1981).

12. Hull, J.R., Y.S. Cha, and W.T. Sha, Major Design. Construction and Operational. Considerations of SaltGradient SolaI' Ponds, UPADI 82 San Juan, Puerto Rico (Aug. 1-7, 1982).

13. Cost Effectiveness Comparison of Solar Col. lector Candidates for the Solar Util.ity, Spectral Eng. Ltd

for Canada Mortgage and Housing (September 1981).

14. Territorial. Energy Assessment: Phase I, U.S. DOE, (July 31,1981).

15. Costing Thermal Electric Power Plants, S. Baron, Ph.D. (Senior Vice Pres. Burns and Roe, Inc.)

Mechanical Engineering (Oct. 1982).

I-197
Section 2.3.2.3: Solar (Cont'd)

16. Energy in Puerto Ri~o's Future, Final Report of the Committee on Future Energy Alternatives for Puerto

Rico. Energy Engineering Board Assembly of Engineering National Academy of Sciences, Washington, D.C.

(1980).

17. Enrique Garcia Associates, Impa~t of Solar Water Heaters on the E~onomy of Puerto Ri~o, report prepared

for the comm. on Future Energy Alternatives for Puerto Rico, Energy Engineering Board, Assembly of

Engineering, Natl. Research Council (Sept. 1979).

18. Barton Associates, Final Report on the Economi~ Feasibility of Solar Cooling and the Manufacture of

Solar Components in Puerto Rico, prepared for the Puerto Rico Industrial Development Company, San Juan,

U.S. Dept. of Commerce (Grant 99-06-09393) (June 1978).

19. Donovan, Hamester, and Rattien, Inc., Energy Data for Puerto Rico, Report prepared for the Committee on

Future Energy Alternatives for Puerto Rico, Energy Engineering Board, Assembly of Engineering, National

Research Council (April 1979).

20. Puerto Rico Law No. 185 (July 26, 1979) provides that a person buying a solar water heating system can

claim an income tax deduction of 30% of the cost to a maximum of $500.

21. Puerto Rico Law No.8 (September 25, 1979) exempts solar installations from the 5% excise tax.

22. The Energy Policy of Puerto Rico, A First Step, Office of the Governor of Puerto Rico, Puerto Rico

Energy Office (1979).

23. Energy Analysis and Socioeconomic Considerations for Puerto Rico, CCER (May 1980).

24. AZternative Energy Resource Assessment for Puerto Hico, Puerto Rico Office of Energy, Office of the

Governor.

Section 2.3.2.3 Wind

1. Wegley, H. L., D. L. Elliot, W. R. Barchet, and R. L. George, Wind Energy Resource AtZas: Vo1.ume 12 -

Puerto Rico and u.s. Virgin Islands, Pacific Northwest Laboratory Report PNL-3195 WERA-12 , Richland,

Washington (Jan. 1981).

2. Energy in ~~erto Rico's Future, Final Report of the Committee on Future Energy Alternatives for Puerto

Rico, Energy Engineering Board, Assembly of Engineering, National Academy of Sciences, Washington, D.C.

(1980) •

3. Iriarte, Modesto, and Rafael H. Sardina, Energy Analysis and Socioeconomic Considerations for Puerto

Rico, Center for Energy and Environmental Research, University of Puerto Rico (May 1980). Also

Appendix H of this report: Lopez, Dr. Raul Er1ando, Feasibility Study for the Use of Large Windpower

~enerators in Puerto Rico.

4. Graves, G. Barry, and Juan A. Bonnet, Jr., Assessment of the Potential for Renewable Energy Sources in

Southern UY!ited States, ~~erto Ric'), aY!d the Virgin Islands, Southern Solar Energy Center Report

SSEC/TP-1l173, Atlanta, Georgia (Nov. 1980).

5. Vukovich, Fred M., Walter D. Bach, Jr., John L. Warren, and Robert M. Burger, Direct Solar, Wind, and

Ocean Thermal Energy Resource Assessnent and Research Applications for the Southeast, Research Triangle

Institute Report Prepared for Southern Solar Energy Planning Project, Atlanta, Georgia (June 1978).

6. General Electric Company, A Wind Energy Assessment for the Commonwealth of Puerto Rico, report prepared

for the Committee on Future Energy Alternatives for Puerto Rico, Energy Engineering Board, Assembly of

Engineering, National Research Council (Sept. 1979).

7. Garate, John (program manager), Wind Energy Mission Analysis, General Electric Company report for

Energy Research and Development Administration, COQ-2578-1/3, Washington, D.C. (Feb. 1977).

I. -198
Section 2.3.2.3: Wind (Cont'd)

8. U.S. Department of Energy, San Francisco and Savannah River Operations Offices, Territorial. Energy

Assessment: Phase I, (July 1981).

9. Office of the Governor of Puerto Rico. Puerto Rico Energy Office, The Energy PoLicy of ~~erto Rico: A

First Step (1979).

10. Vachon, W.A., principal investigator, Large Wind Turbine Generator Performance Assessment, Arthur D.

Little, Inc., reports prepared for the Electric Power Research Institute, Technology Status Report No.

1, EPRI AP-1317 (Jan 1980), Technology Status Report No.2, EPRI AP-1641 (Dec. 1980) and Technology

Status Report No.3, EPRI AP-1959 (July 1981), Palo Alto, California.

11. Miller, G., Systems Descriptions and Engineering Costs for SoLar-.'teLated TeahnoLogies, Vol.. VI, Wind

Energy Conversion Systems, MITRE Corporation report MTR-7485 (Vol. VI), prepared for the Energy

Research and Development Administration, ERHQ/2322-77/1-Vol. VI, Washington, D.C. (June 1977).

12. Meier, R.W., and T.J. Merson, TechnoLogy Assessment of Wind Energy Conversion Systems, Los Alamos

Scientific Laboratory report prepared for U.S. Department of Energy, DOE/EV-Ol03, Washington, D.C.

(Sept. 1980).

13. VanKuiken, J.C., W.A. Buehring, C.C. Huber, and K.A. Hub, ReLiabiLity, Energy, and Cost Effects of

Wind-Powered Generation Integrated with a ConventionaL Generating System, Argonne National Laboratory

report ANL/AA-17, Argonne, Illinois (Jan. 1980).

14. Kahn, Edward, The CompatibiLity of Wind and SoLar TechnoLogy With ConventionaL Energy Systems, Annual

Review of Energy, 4:313-352 (1979).

15. Electric Power Research Institute, TechnicaL Assessment Guide, EPRI P-2410-SR, Palo Alto, California

(May 1982).

16. Puerto Rico Office of Energy, ALtePnative Energy Resource Assessment for Puerto Rico, Santurce, Puerto

Rico (Nov. 1982).

Section 2.3.3.3 Biomass

1. TropicaL Biomass Research and DeveLopment CapabiLities at CEER-UPR, Terrestrial Biomass Division, San

Juan, Puerto Rico.

2. AUe1'Y/.ative Energy Resource Assessment for Puerto Rico, Puerto Rico Qffice of Energy, Office of

Governor.

3. Biomass Energy Projects, Planning and Management, Louis J. Goodman and Ralph N. Loue, (eds), Pergamon

Press (1981).

4. A Survey of Biomass Gasification, Vols. I, II, and III, SERI/TR-33-239, Task No. 3322 (July 1979).

5. Production of Sugar Cane and TropicaL Grasses as a RenewabLe Energy Source, University of Puerto Rico

CEER DOE Contract No. DE-AS05-78 ET 2000 71.

6. Chang, H., et al., Environmental. ImpLication of AcceLerated Gasohol. Production, ANL/ES-91 (1979).

7. Energy In Puerto Rico's Future, Final Report of the Committee by Future Energy Alternatives for Puerto

Rico, Energy Engineering Board Assembly of Engineering, National Academy of Science, Washington, D.C.

(1980).

8. Energy from BioLogicaL Processes, Vols. I and II, Office of Technology Assessment, Congress of the

United States.

9. Biogas Programs in China, Proceedings of BioEnergy '80 World Congress and Exposition (1980).

r- 199
Section 2.3.3.3 Biomass (Cont'd)

10. Biogas ';!''1d Al.cohoL FueLs Production, Proceedings of a Seminar on Biomass Energy for City, Farm, and

Industry.

11. Biomass Energy: A Busi'1ess Opportunity Program. VoLs. I. II. and III, SRI International, Menlo Park,

CA 94025, A private Multiclient Study.

12. Smith, L., E'1ergy AnaZyses: Production of Sugar Cane i'1 Puerto Rico for Energy and High-Test MoLasses,

unpublished manuscript to University of Puerto Rico (Jan. 1980).

13. Hopkins, C.S., and J.W. Day, Next Energy AnaLysis of ALcohoL Product from Sugar Cane (1980).

Section 2.3.2.3 OTEC

1. RenewabLe Oce,;!."! E'1ergy Sources Part I Ocea'1 ThermaL Energy Conversion, Office of Technology

Assessment, Congress of the United States (May 1978).

2. Owens, W.L., and L.C. Trimble, Mini-OTEC Operation';!'? ResuLts, Journal of Solar Energy Engineering, Vol.

103/233 (August 1981).

3. Recent DeveLopments i'1 Ocean ThermaL Energy - a TechnicaL Memorandum, Office of Technology Assessment,

Congress of the United States (April 1980).

4. Statement

Department

Committee,

of Frank DeGeorge, Acting Assistant Secretary for Conservation and Renewable Energy,

of Energy, during the FY 1982 appropriations hearings before the House Appropriations

Subcommittee on Energy and Water Development (March 10, 1981).

5. SoLar Ocean E'1ergy Liasion, Vol. 6, Nos. 1 and 2, (February/March 1982), 1303 South Michigan Avenue,

Chicago, IL 60605.

6. The Energy PoLicy of Puerto Rico

Energy Office (1979).

A First Step, Office of the Governor of Puerto Rico, Puerto Rico

7. Energy in Puerto Rico's Future, National Academy of Sciences, Washington, D.C. (1980).

8. Ocea'1 ThermaL Energy CO'1versiO'1 (OTEC) Market PotentiaL Survey - Final. Report, Solar America, Inc.,

1001 Connecticut Avenue, N.W., Washington, D.C. (January 1982).

9. Proposal of Westinghouse Electric Corporation in response to Program Opportunity Notice for Closed

Cycle Ocean Thermal Energy Conversion Pilot Plant, U.S. Department of Energy Solicitation No. DE-PN01-

80CS80000 (September 22, 1980).

10. Proposal of Sea Solar Power, Inc., in response to Program Opportunity Notice for Closed Cycle Ocean

Thermal Energy Conversion Pilot Plant, U. S. Department of Energy Solicitation No. DE-PNOl-80CS80000

(September 22, 1980).

11. Coffay, B. (Westinghouse Electric Corporation), Eco'1omics of OTEC, 8th Energy Technology Conference.

12. Hillis, D.L., et. al., ConceptuaL Desig'1s of SmaU OTEC Power PLants, Argonne National Laboratory

internal report (April 1, 1982).

13. Giannotti, J.C., and J.R. Vadus, Ocean ThermaL Energy CO'1version (OTEC): Ocean E'1gineering TechnoLogy

DeveLopment, Oceans 81 Conference Record Volume Two, Boston MA (September 16-18, 1981).

14. Hillis, D.L., A Review of the TechnicaL and Economic FeasibiLity of OTEC, Argonne National Laboratory

internal report (September 1981).

15. Energy AnaLysis and Socioeconomic Considerations for Puerto Rico, CEER-X-72, Center for Energy and

Environmental Research, University of Puerto Rico.

1.- 200
Section 2.3.2.3: OTECT (Cont'd)

16. OTEC Reference Manual - Draft, R-4017, PRC Systems Services (August 1981).

17. A Quantitave Evaluation of Closed-eycle OTEC Technology in Central Station Applications, RAND

Corporation Report R-2S95-DOE (May 1980).

18. Solar Energy I"lteHigence Report, p 339, (October 18, 1982), SEIR, 9S1 Pershing Drive, Silver Spring,

MD 20910.

19. Dunbar, L.E., and B. Coffay, Mark.et Potential for OTEC in Developing Ilations - Cal'ibbean Area, 4th

Miami International Conference on Alternative Energy Sources, Miami Beach, FL (December 14-16, 1981).

20. Hillis, D.L. et. al., Scoping Study for a Combination Solar Pond/GTEC Plant for Generation of

Electrical EmJer, Argonne National Laboratory Internal Report (July 1, 1982).

21. Alternative Energy Resource Assessment for Puerto Rico, Puerto Rico Office of Energy (November 1982).

Section 2.3.2.3 Small Scale Hydropower

1. Alternate f.nergy Resource Assessment for Puerto Rico, Puerto Rico Office of Energy, p. 26 (no date).

2. Thomas G. Gebhard, Brief Recon~iaissance Studies for the Addition of Hydropower in Puerto Rico (October

1982).

3. Alternate Energy Resource Assessment for Puerto Pico, Puerto Rico Office of Energy, p. 34 (no date).

4. Thomas G. Gebhard, Brief Reconnaissance Studies for the Addition of Hydl'opower in Puel'to Rico, p. 1-3

(October 1982).

S. Alternate E>iel'gy ltesource Assessl?lent for Puerto Rico, Puerto Rico Office of Energy, p. 37.

Section 3.2.1 V.I. Current Economy

1. The Economy of the u.S. Virgin Islands, Office of Territorial Affairs, U.S. Department of the Interior,

p. S3 (June 1979).

2. Territorial Energy Assessment for the United States Virgin Islands, The Savannah River Operations

Office, U.S. Department of Energy (July 1981).

3. U.S. Virgin Islands Growth Statistics, Office of Policy, Planning and Research, U.S. Virgin Islands

Department of Commerce, St. Thomas, V.I. (1981).

4. The Review of the U.s. Economy, Data Resources, Inc.; Lexington, Massachusetts (October 1982).

S. Virgi>J Islands Trade Study:

6. Ibid, p. II-28.

7. Ibid, p. II-34.

8. Ibid, p. II-40.

9. Ibid, p. 1I-41.

An Econol?lic Analysis, Federal Maritime Commission, p. 11-2 (Oct. 1979).

Section 3.2.2 V.I. Growth

1. Eco"lomic Development PoHcy Guidelines, Policy Planning and Research, U. S. Vi rgin Island Commerce

Department (Jan. 1979).

I. - 201
Section 3.2.2 V.I. Growth (Cont'd)

2. U.S. Virgin IsLands Growth Statistics, Office of Poli cy Planning and Resea rch, U. S. Virgin Islands

Department of Commerce, St. Thomas, U.'S. Virgin Islands (1981).

3. Pobicki, J., U.S. Virgin IsLands Economy - A Review of the 1970's and outLook for the 1980's, Office of

Policy Planning and Research, U.S. Virgin Islands Department of Commerce, St. Thomas, U.S. Virgin

Islands., pp. 3-18.

4. Ibid, p. 5.

Section 3.2.3 V.I. Energy Demands of the Economy

1. E:conomiJ of the U.S. Virgi'1. Isla'1.ds, U.S. Department of the Interior, Office of Territorial Affairs, p.

10 (1979).

2. Territorial Energy Assessment for the United States Virgin Islands, The Vir~in Islands Energy Office,

p. 23 (1982).

3. Production Analysis, for WAPA (June 1980).

4. Territorial Energy Assessment p. 23.

5. Production Analysis (June 1980).

6. Ibid.

7. Energy Sector Survey of the Tourist Sector, Government of Jamaica, p. III-I.

8. Ibid.

9. Territorial Energy Assessment for the United States Virgin Islands, p. 8.

10. The Virgin Islands Energy Conservation Plan, U.S. Virgin Islands Energy Office, p. 5 (1979).

11. Economic Study of Puerto Rico, U.S. Department of Commerce, p. 185, (December 1979).

12. Donald C. Francois, Director, Natural Resources Management, Department of Conservation and Cultural

Affairs.

Section 3.2.4.1

1. TerritoriaL Energy Assessment for the U'1.ited States Virgin Islands, The Virgin Islands Energy Office,

p. 9 (1982).

Section 3.2.5 V.I. Energy Conservation

1. TerritoriaL ~nergy Assessnent for the U'1.ited States Virgin IsLands, Virgin Islands Energy Office, p. 25

(1982).

2. The Virgi"l IsLands Energy Conservation PLa'1., U.S. Virgin Islands Energy Office, p. 74 (1978).

3. Ibid, p. 94.

I - 202
Section 3.3.1.1 V.I. Current Fossil

1. TerritoriaL Energy Assessment. Phase I, U. S. Department of Energy, San Francisco Operations Office,

Savannah River Operations Office (July 31, 1981).

2. E:nergy C'onsel'vaHon PLan. GoveT'Ytment of the Virgin IsLar:.ds of the Ur:.i ted States, U. S. Virgin Islands

Energy Office (Nov. 1979).

3. Uncor:.ver:.tior:.al Gas Sources, Executive Summary, National Petroleum Council, Washington, D.C., DOE/TIC11417 (Dec. 1980).

4. The Ecor:.omy of the u.S. Virgin IsLar:.ds, United States Department of the Interior, Office of Territorial

Affairs (June 1979).

5. Phase II TerritoriaL Energy Assessment For The United States Virgin Islands, Prepared by Royal Energy

Management for the Virgin Islands Energy Office (1982).

6. Cantrell, A., WorLdwide Refining, Oil & Gas J. p. 193 (Dec. 28, 1981).

7. Yearbook of worLd Energy Statistics, United Nations.

Section 3.3.1.2 Electric Sector

1. Canoy, M.J., and Kirsten, Energy Budget and Conservation Recommendations for the U.S. Virgin Islands

(May 1977).

2. Governor's Water and Power Task Force, Water and Power Plan for the United States Virgin Islands (April

1981).

3. EBASCO study.

4. 1980 WAPA Annual Report.

5. Prince, K.W., Fault Investigation Study - St. Thomas Generating Station (April 1981).

6. Prince, K.W., St. Croix System Study - Generating Station and Substation (September 1981).

7. Personal communication between Leslie Poch and WAPA official (June 1981).

8. Phase II Territorial Er:ergy Assessment for the United States Virgin IsLands, Virgin Islands Energy

Office (November 1982).

Section 3.3.1.3-VI Renewable Resources

1. Wind Er:ergy FeasibiZity Assessment for the U.S. Virgin IsLands, by Southern Solar Energy Center,

SSEC/TP-31262, Report B, p. 20 (Sept. 1981).

2. Discussions with Mr. John A. Bernier and Mr. Rudolf Shulterbrandt of the Ministry of Agriculture at the

Virgin Islands Energy Office, St. Thomas (June 1981).

Section 3.3.2.1 Future Fossil

1. Phase II Territorial Energy Assessment for the United States Virgin 13Lands, prepared by Royal Energy

Management for the Virgin Islands Energy Office (1982).

2. Francois, D., Pros and Cons on the Use of CoaL As Ar: ALteT'Ytative Source of FueL in the Virgin IsLands,

Government of the Vi rgin Islands, Department of Conservation, Division of Natural Resources (March

1981) •
Section 3.3.2.1 Future Fossil (Cont'd)

3. Francois, D., FeasibiLity of Coal, Fired BoiLers, by WAPA Government of the Virgin Islands, Department

of Conservation, Division of Natural Resources (April 1981).

4. Energy in Puerto Rico's Future, Kational Academy of Sciences, Washington, D.C. (1980).

Section 3.3.2.2 V.I. Future Electric

1. EBASCO study.

2. Governor's Water and Power Task Force, Water and Power PLan for the United States Virgin IsLands (April

1981).

3. Royal Energy Management, Territorial, Energy Assessment for the United States Virgin IsLands (no date).

4. Westinghouse Electric Corporation, A Study to Determine the CommerciaLization PotentiaL of Open CycLe

OTEC Water PLants (July 1980).

Section 3.3.2.3 Wind

1. Wegley, H.L., D.L. Elliot, W.R. Barchet, R.L. George, Wind Energy Resource AtLas:

Rico and U.S. Virgin IsLands, Pacific Northwest Laboratory Report prepared for

Energy, PNL-3195 WERA-12, Richland, Washington (Jan. 1981).

VoLume 12 - PUerto

U.S. Department of

2. Ball, David E., Wind Energy FeasibiLity Assessment for the U.S. Virgin IsLands, Southern Solar Energy

Center Report for U.S. Department of Energy, SSEC/TP-31262, Atlanta, Georgia (Sept. 1981). This

document consists of three reports: (1) Vukovich, F.M., W.J. King, and D.H. Abbott, The Virgin IsLands

Wind Energy Siting Report, Research Triangle Institute, Research Triangle Park, North Carolina (Feb.

1981), (2) Ball, David E., David M. Boyd, Stephen C. Nelson, and Laurie E. Smith, Economic FeasibiLity

of Wind Energy for the U.S. Virgin IsLands, Southern Solar Energy Center, Atlanta, Georgia (June 1981),

and (3) Vukovich, F.M., Project PLan for FinaLizing Wind Ener~y Site SeLection on the USVI, Research

Triangle Institute, Research Triangle Park, North Carolina (July 1981).

3. U.S. Department of Energy, San Francisco and Savannah River Operations Offices, TerritoriaL Energy

Assessment, Phase I (July 1981).

4. Royal Energy Management, Phase II TerritoriaL Energy Assessment for the United States Virgin IsLands,

prepared for the Virgin Islands Energy Office and U.S. Department of Energy - Savannah River Operations

Office (l';ov. 1982).

5. Governor's Water and Power Task Force, Water and Power Plan for the United States Virgin IsLands (April

1981) •

6. Graves, G. Barry, and Juan A. Bonnet, Jr., Assessment of the PotentiaL for RenewabLe Energy Sources in

the Southern United States, Puerto Rico, and the Virgin IsLands, Southern Solar Energy Center report

prepared for U.S. Department of Energy, SSEC/TP-11173, Atlanta, Georgia (Nov. 1980).

7. Miller, G., Systems Descriptions and Engineering Costs for SoLar-ReLated TechnoLogies, VoL. VI, Wind

Energy Conversion Systems, MITRE Corporation report MTR-7485 (Vol VI), prepared for the Energy Research

and Development Administration, ERHO/2322-77!1-Vol. VI, Washington. D.C. (June 1977).

8. Meier, R.W., and T.J. Merson, TechnoLogy Assessment of Wind Energy Conversion Systems, Los Alamos

Scientific Laboratory report prepared for U.S. Department of Energy, DOE!EV-0103, Washington, D.C.

(Sept. 1980).

.'

9. VanKuiken, J.C., W.A. Buehring, C.C. Huber, and K.A. Hub, Reliability, Energy, and Cost Effects of

Wind-Powered Generation Integrated with a ConventionaL Generating System, Argonne National Laboratory

report ANL/AA-17 (Jan. 1980).

r. - 204
Section 3.3.2.3 Wind (Cont'd)

10. Kahn, Edward. The Compatibility of Wind and Solar Technol.ogy With Conventional. Energy Systems, Annual

Review of Energy, 4:313-352 (1979).

Section 3.3.2.3 V.I. Biomass

1. Phase II Territorial. Energy Assessment .for the United States Virgin 1 sl.a'1.ds, Virgin Islands Energy

Office (November 1982).

2. Solid waste study.

3. WAPA study.

Section 3.3.2.3 OTEC/SPOTEC

1. Henewabl.e Ocea>, Ener(J?f 80urces Part I Ocea'1. Therma'L >:nergy CO'1.version, Office of Technology

Assessment, Congress of the United States (May 1978).

2. Owens, W.L. and L.C. Trimble, Mini-OlEC Operational. Resul.ts, Journal of Solar Energy Engineering, Vol.

103/233 (August 1981).

3. Recent Developments in Ocean Thermal. Energy - a Technical. Memorandum, Office of Technology Assessment,

Congress of the United States (April 1980).

4. Statement

Department

Committee,

of Frank DeGeorge, Acting Assistant Secretary for Conservation and Renewable Energy,

of Energy, during the FY 1982 appropriations hearings before the House Appropriations

Subcommittee on Energy and Water Development (~arch 10, 1981).

5. Sol.ar Ocean S>lergy :'iaisO'1., Vol. 6, Nos. 1 and 2, (February/March 1982), Chicago, IL 60605.

6. Munier, R.S.C., et. al., Observations of Water ~1ass Structure and Variabil.ity North of St. Croix, U.S.

Virgin Islands for OTEC Assessment, Proc. 6th OTEC Conference, Washington, D.C. (June 1979).

7. Dunbar, L.E., Potential. for Ocean Thermal. Energy Conversion i" Developing NatiO'1.s, United Nations

Conference on New and Renewable Sources of Energy, Nairobi, Kenya (August 1981).

8. ::Jcean ThepmaL EYiepgJj Conveps"Zo1'1

Washington, D. C. (January 1982).

(OTEC) Market Pote"tiaZ Survey l:' • 1 - L t.rza" Report, Solar America, Inc.,

9. Proposal of TRW in response to Program Opportunity Notice for Closed Cycle Ocean Thermal Energy

Conversion Pilot Plant, U.S. Department of Energy Solicitation No. DE-PNOl-80CS80000 (September 22,

1980)•

10. Prince, F.R., Virgin Isl.ands OTEC Strategy, 1980 OTEC Workshop, St. Croix, Virgin Islands.

11. Coffay, Brian, A Study to DeteY',mne the CO''''''1eY'c'Zal.izat-i.on Pote>;tial. of Open Cycl.e OTEC Water Fl.ants,

Westinghouse Electric Corporation Power Systems Company, Lester PA (July 1980).

12. Coffay, B. (Westinghouse Electric Corporation), ECO'1.orrrics ~f OlEC, 8th Energy Technology Conference.

13. Hillis, D.L., et. a1., Conceptual. Designs of Sr'1aH (J['EC Po~)er Plants, Argonne National Laboratory

internal report (April 1,1982).

14. Giannotti, J.C., and J.R. Vadus, Ocean Thermal EYter(JY Conversion :OTEC): Ocean Engi"!eering Tech'1010gy

Devel.opment, Oceans 81 Conference Record Volume Two, Boston, MA (September 16-18, 1981).

15. Hillis, D.L., A Review of the Techdcal and E:co'1.ol''1ic F'easibi'l-ity of OTEC, Argonne National Laboratory

internal report (September 1981).

I- 205
Section 3.3.2.3 OTEC/SPOTEC (Cont'd)

16. E:neY'gy Ana1.ysis and Socioeeonomic ConsideY'ations foY' Puel'to Rico, CEER-X-72, Center for Energy and

Environmental Research, University of ~uerto Rico.

17. OTEC RefeY'ence Manua1. - Draft, R-4017, PRC Systems Services (August 1981).

18. A, Quantitive E:va1.uation of C1.osei-eycZe OTE:C Techno1.ogy in CentY'a1. Station App1.ications, RAND

Corporation Report R-2595-DOE (May 1980).

19. So1.aY' EneY'gy Inte1.1.igence Rep0Y't, Silver Spring, MD, p. 339, (October 18, 1982).

20. Dunbar, 1.E., and B. Coffay, MaY'ket Potentia? foY' OTE:C in Deve1.oping Nations - CaY'ibbean AY'ea, 4th

Miami International Conference on Alternative Energy Sources, Miami Beach FL (December 14-16, 1981).

21. TeY'Y'itoY'ia1. EneY'gy Assessment foY' the United States ViY'gin Is1.ands - Phase II, Virgin Islands Energy

Office (1982).

22. Hi 11is. D. L. et. al., Scoping Study foY' a Combin.ation So1.aY' Pond/OTEC Hant foY' CeneY'ation of

E1.ectY'ica1. PoweY', Argonne National Laboratory Internal Report (July 1, 1982).

23. Lin, E.I,H., A Review of the Sa1.t-GY'adient So1.aY' Pond Techno1.ogy, Jet Propulsion Laboratory Report No.

N82-19675 (January 1982).

Section 3.3.2.3 Hydropower

1. WateY' and PoweY' F1.an foY' the U.S. ViY'gin Is1.ands, prepared by Frank R. Prince, Ph.D., Chairman of Water

and Power Task Force and Director of V.I. Energy Office (April 1981).

2. TeY'Y'itoY'ia1. IIneY'gy Assessment foY' the U.s. ViY'gin Is1.ands, Phase II, p. 18 (November 1982).

3. M. J. Canoy, Techno1.ogy Assessment of A1.teY'nate E:neY'gy SouY'ces foY' the ViY'gin I stands, Caribbean

Research Institute, College of the Virgin Islands (no date).

Section 3.3.2.3 Solar

1. Graves, Barry. and Juan Bonnet, Assessme'lt of the Potential foY' ,"?e"lewable E:neY'gy SouY'ces in the

Souther>n UYiited States, PueY'to .'?ico, and the ViY'gin Islands, prepared under U.S. DOE Contract by

Southern Solar Energy Center, Atlanta, Ga., p. 12 (Nov. 1980).

2. Canoy, M.J., Techno1.ogy Assessment of A1.teFnate E:neY'gy SouY'ces foY' the ViY'gin Islands, Cari bbean

Research Institute, p. 26 (no date).

3. Technical Assessment Guide, Electric Power Research Institute Ref. EPRI P-241 O-SR, App. B-91 (May

1982).

4. Graves. Barry, and Juan Bonnet, Assessment of the Potential foY' Rene1Uable Enel'gy SouY'ces in the

SoutheT'n United States, PueY'to Rico, and the ViY'giYi Is1.ands, p. 30 (Nov. 1980).

5. Phase II, TeY'Y'itOY'ial EneY'gy Assessment foY' the United States-ViY'gin Islands, Virgin Islands Energy

Office (Nov. 1982).

2- 206