1. JICA ’s Cooperation for Energy Sector in Pacific Island Countries “Hybrid Islands Program – Smart Energy Integration for Resilient Islands” KENJI OKAMURA (Deputy Director, Team 1, Energy and Mining Group, Industrial Development and Public Policy Department) TADAYUKI OGAWA (Senior Advisor) Japan International Cooperation Agency (JICA) Pacific Power Association 25 th Annual Conference August 4, 2016

2. AGENDA 1 1. Japan’s Cooperation in PICs 2. View on the Current Challenges 3. New Program: “Hybrid Islands Program” 4. Smart Integration of RE with DEG 5. Sample Case study

3. 1. Japan’s Cooperation 2  Work together in various cooperation program including T/A and grants  Utilize knowledge/experiences from island regions such as Okinawa The preliminary study for private sector investment of Renewable Energy (2013-15) Solomon & Tonga Master Plan Survey for Renewable Energy Resources (2013-15) Fiji Master Plan Survey for Self- Sufficient Energy Supply (2013-15) Marshall Training for Fuel-Reduced Operation of DEG and Promotion of Renewable Energy in Micro Grid (2013-15) All

4. 1. Japan’s Cooperation 3 Japan’s Past Grant Aid for Diesel Engine Generator and Renewable Energy

5. 4 2. View on the Current Challenges  High dependency on imported fossil fuel ⇒ High tariff, and fluctuation risk of oil prices ⇒ Low energy security  Excessive integration of variable RE ⇒ Unstable outputs associated with weather conditions, disaster risks, and adverse impact on existing generators ⇒ Unreliable power supply Critical: Ensure the “Energy Security” with reliable power supply CHALLENGE

6. POSSIBLE SOLUTION - Hybrid Grid System - 2. View on the Current Challenges Development of Renewable Energy (RE) Solid Effect on Fuel Reduction  Unstable Power Output ↓ “Optimal Development of RE” Efficient Diesel Engine Generator (DEG) Cost-Effective Method Important Role as Base Load Power ↓ “Appropriate and Economical O&M on DEG” 5

7. Knowledge and Experience of JAPAN 2. View on the Current Challenges (Resource) Okinawa Electric Power Company Knowledge and experience from Okinawa related to small grid operation with both DEG and Renewable Energy, have been particularly utilized in recent JICA Projects. More than 160 small islands 6

8. 2. View on the Current Challenges - Training Program in Okinawa - 7 Training for Fuel-Reduced Operation of DEG and Promotion of Renewable Energy in Micro Grid  Theory and methodology of economic operation in Micro Grid  Economic load dispatch among multiple DEGs  Identification of necessary conditions to promote PV penetration  Preliminary plan of hybrid grid system

9. 3. New Program : “Hybrid Islands Program” - Fukushima Iwaki Declaration” (PALM7) - (Resource) Website of Ministry of Foreign Affairs of Japan “Recognizing that dependence on fossil fuels for meeting energy needs has been a major constraint to sustainable development in the Pacific region, the Leaders stressed the importance of transition to a sustainable energy future. --------- Prime Minister Abe expressed Japan’s intention to cooperate with Pacific countries for the reduction of fossil fuels consumption with the aim of improving their energy security and contributing to reduction of greenhouse gases (GHG). “ (Part of Article 30) 8

10. 3. New Program: “Hybrid Islands Program” Goal 7. Ensure access to affordable, reliable, sustainable and modern energy for all JICA’s Hybrid Islands Program 9

11. 3. New Program : “Hybrid Islands Program” Demand Optimization for Reliable, Sustainable and Affordable Grid Micro Grid Training Regional T/A on Diesel O&M Grant Project for Grid Stabilization (incl. DG, Micro Grid) Master Plan Study on RE Introduction JICA’s possible collaboration Smart Energy Integration for Resilient Islands Optimized Diesel Wind Grid Stabilizer (Output restriction, Battery, EMS, etc.) + Appropriate & Economical O&M Renewable Energy PV 1 1 2 2 3 3 10

12. 11 3. New Program: “Hybrid Islands Program” JICA’s Technical Cooperation Project  The Project for the Introduction of Hybrid Power Generation System (Fiji, Kiribati, Tuvalu, FSM, Marshall) (Nov.2016 - Oct.2021) Purpose 1.Appropriate and economical system for O&M of Diesel Generators (DEGs) 2.Methodology for appropriate planning and O&M of renewable energy (RE) 3.Optimization of hybrid grid system List of Japanese Experts (Tentative) A)Hybrid Power Generation System B)Operation & Maintenance of DEG C)Economic operation of DEG D)O&M of RE energy E)Integration of Renewable Energy  The Project for Study of Upgrading and Maintenance of the National Electrical Power Grid (Palau) Purpose Master Plan Survey including following components. 1.Upgrading of National Grid 2.Optimal Development of Renewable Energy

13. 12 3. New Program: “Hybrid Islands Program” Japan’s Grant Aid  The Project for Power Sector Improvement for the State of Kosrae (FSM)  Diesel Generator (600kW x 2)  Preparation for construction  The Wind Power Generation System Development Project (Tonga)  Wind Generator (1.3MW)  B/D study (Jun.2016 - Feb.2017)  The Project for PV Power Generation System in Ebeye Island (Marshall)  PV (600kW with/without battery)  B/D study (Jun.2016 - Mar.2017)

14. 13 Challenges of Integrating RE with DEG Short-term fluctuation of power output by RE  Frequency of power system is disturbed Long-term fluctuation of power output by RE  Excessive power supply during low-demand period  DEGs are damaged due to continuous low-demand operation  Economy of fuel consumption by DEGs may be deteriorated Energy storage system (e.g. battery) will be necessary beyond certain penetration of RE  Increasing cost of energy supply 4. Smart Integration of RE with DEG

15. 14 Short-term fluctuations: small Time Frequency Frequency management value Base power 0:0012:0024:0018:006:00 Demand Generator minimum output Middle power Peak power PV Long-term fluctuations: small Short-term fluctuation Long-term fluctuation Governor free Control output for peak & middle capacity No need for additional grid stabilization system 4. Smart Integration of RE with DEG - Small Penetration of PV into DEG supply -

16. 15 Base power 0:0012:0024:0018:006:00 Power demand Generator minimum output Middle power Peak power PV Short-term fluctuations: medium Time Frequency Frequency management value Long-term fluctuations: medium Short-term fluctuation Long-term fluctuation Cannot be adjusted Control output for peak & middle capacity Need countermeasures for short-term fluctuation 4. Smart Integration of RE with DEG - Medium Penetration of PV into DEG supply -

17. 16 Base power 0:0012:0024:0018:006:00 Power demand Generator minimum output Middle power Peak power PV Short-term fluctuations: large Time Frequency Frequency management value Long-term fluctuations: large Short-term fluctuation Long-term fluctuation Cannot be adjusted Need countermeasures for both short & long-term fluctuation Cannot be adjusted 4. Smart Integration of RE with DEG - Large Penetration of PV into DEG supply -

18. 17 Hydro Power Generation ● Dispatch plans by operators ● Economic Dispatch Control (EDC) ● Fast response by GF operation ● Output fluctuation control (ΔP), or frequency fluctuation control (ΔF) △ DEG backup operation (during emergency) △ Voltage/reactive power control (during voltage fluctuation) ● MPPT control △ Unit nos. control / variable speed control (smoothing control) □ Output restriction control (pitch control, unit nos. control) Existing Grid Dedicated evacuation feeder ● Frequency regulation to be monitored ● MPPT control □ Output restriction control (fixed settings) ● MPPT control □ Output restriction control (unit nos. control, fixed settings) Mega Solar (to be dispatched by utility) Wind Turbines (to be dispatched by utility) ● MPPT control △ Wind farm control (smoothing control) □ Output restriction control (unit nos. control, fixed settings) (Legend) ● : Normal operation conditions △: Normal / emergency operation conditions □ : Autonomous distributed operation conditions General concept of Autonomous Distributed Control System 4. Smart Integration of RE with DEG

19. 5. Sample Case study in the island of Ebeye in the Republic of Marshall Islands 1.Current situation of power supply Peak demand: 2,200 kW Minimum demand during daytime: 1,600 kW 3 DEGs (1,200kW x 3, 1800rpm) 2.Maximum allowable PV capacity without storage Short-term output fluctuation: 155kW Long-term output fluctuation: 2,000kW 3.The optimum level of PV penetration was investigated where the minimum LCOE (Levelized Cost of Electricity) can be achieved.

20. 5. Sample Case study in the island of Ebeye in the Republic of Marshall Islands LCOE turns upwards due to the capital cost of long-term energy storage when the penetration goes beyond 2000kW.

21. 5. Sample Case study in the island of Ebeye in the Republic of Marshall Islands excluding the PV system Capital cost of long-term energy storage is the major increasing factor of LCOE beyond 2000kW PV penetration.

22. 21 For example, if PV output is restricted to 50% throughout the year, annual power generation would be reduced by approximately 9.1%. Since the incidence of high output is low, the impact on annual power generation is limited. Solar radiation and cumulative frequency in Okinawa 5. Sample Case study in the island of Ebeye in the Republic of Marshall Islands

23. 22 PCS PV array (1000kWp) 500kW PV array PCS ② Multiple PCS control Nos. of small capacity PCSs (10 ～ 50kW) are controlled in accordance with PV power output. ① Reduced PCS capacity The designed capacity of PCS is smaller than PV array capacity. 5. Sample Case study in the island of Ebeye in the Republic of Marshall Islands

24. 23 (source: study result by JICA) Output restriction of RE can be the cost-effective solution compared with long-term storage, since the restricted energy and its benefit is much smaller than necessary capital of storage system. 5. Sample Case study in the island of Ebeye in the Republic of Marshall Islands

25. Issues to be Focused 24 1.Analyzing optimum penetration of RE is Important first step for the optimal development of RE in Pacific Island Countries, in consideration of the LCOE with storage system. 2.Cost-benefit analysis to compare introduction of long-term storage and output restriction of RE should be conducted, since the restricted energy could be much smaller than necessary capital of storage system. 3.JICA’s Hybrid Islands Program will propose best solutions on these issues for Pacific Island Countries, fully utilizing Japanese resources, such as Okinawa’s knowledge and experience for small grid operation.

26. THANK YOU VERY MUCH FOR YOUR ATTENTION.