This project component will address the weak enforcement of the rather limited policies and regulations to support enhanced application of cost-effective RE technologies for electricity generation in the off-grid areas in the country. The existing and proposed policies and plans will be reviewed in order to develop and support enhanced policies and regulations to boost RE-based electricity generation in the rural areas. National and local policies on renewable energy, energy efficiency and rural electrification within the context of an integrated energy policy and regulatory framework will be embodied in an enhanced national energy bill, that includes improvements in the integrated planning and implementation, institutional arrangements, financial and fiscal incentives and monitoring progress of the rural electricity generation and electrification program. This component will be on the development of and laying the groundwork for enforcement of the formal national master plan and local provincial rural electrification policies, plans and regulatory framework for the country.
Outcome 1: Enforcement of approved policies, and rules and regulations to support enhanced application of cost-effective RE technologies for electricity generation in the off-grid areas in Solomon Islands
The following are the expected Outputs that will be delivered to result to Outcome 1 and bring about the enforcement of approved policies and the requisite rules and regulations. The table below summarizes the Activities that will be carried out under Component 1 to produce the expected Outputs that will collectively bring about Outcome 1.
Table 1: Component 1 – Outcome, Outputs and Activities
| Output | Activities |
|---|---|
| 1.1: Completed review and enhancement of the draft national energy policy, including the proposed policies on renewable energy (RE Policy), energy efficiency (EE Policy) and rural electrification, associated investment plans, and the rural electrification program [N/A] | 1.1.1: Establishment of the Technical Working Group (TWG) and technical assistance in the review of the proposed national energy policy and related legislations, institutional and financial arrangements, capacity building, information and awareness programs, gender mainstreaming and other project outputs 1.1.2: Conduct of policy studies to guide the development of road map, planning model and implementation requirements for the national energy policy and related legislations 1.1.3: Revision of the draft national energy policy |
| 1.2: Formulated, approved and enforced policies, implementing rules and regulations (IRRs) on EE & RE technology applications for rural electrification [N/A] | 1.2.1: Formulation and adoption of the national energy policy and program based on integrated development planning and gender mainstreaming to be included in the updated national energy bill 1.2.2: Endorsement and finalization of the national energy bill for passage in the Parliament 1.2.3: Drafting and adoption of the implementing rules and regulations and the necessary monitoring and evaluation (M&E) system 1.2.4: Promotional campaign and lobbying by the MMERE, MECDM and stakeholders in the Parliament for inclusion of the national energy bill in the legislative agenda and seeking its approval |
| 1.3: Recommended, approved and enforced rural electricity regulatory framework [N/A] | 1.3.1: Review of policies, develop recommendations and facilitate approval for rural electricity generation regulatory framework and its necessary organizational structure and standards to implement the regulatory framework and policies on pricing, market development and other related areas 1.3.2: Development of implementation and enforcement guidelines for the RE-based rural electricity generation and EE technology application framework and assistance in the establishment of an energy regulatory commission 1.3.3: Design and implementation of agreed upon pilots to test the effectiveness of selected applicable policies and policy & regulatory framework for rural electrification that are novel in the Solomon Islands, but have been adopted and enforced elsewhere in the world, particularly in SIDS. 1.3.4: Implementation and monitoring of the energy regulations including financial and fiscal policies and regulations to support RE-based rural electricity generation and electrification. |
| 1.4: Formal rural electrification plans at the national and local levels [N/A] | 1.4.1: Determination and engagement of key actors in rural electrification planning to develop the rural electrification policies and plans at the national and local (provincial) levels 1.4.2: Development and adoption of rural electrification planning methodology and tools involving integrated planning approach, primary data gathering, demand modeling, energy efficiency and techno-economic optimization 1.4.3: Formulation and approval of national master plan and provincial level plans on RE-based rural electrification and EE technology application |
Output 1.1: Completed review and enhancement of the draft national energy policy, including the proposed policies on RE Policy, EE Policy, and rural electrification, associated investment plans, and the existing rural electrification program. [N/A]
Activity 1.1.1: Establishment of the Technical Working Group (TWG) and technical assistance in the review of the proposed national energy policy and related legislations, institutional and financial arrangements, capacity building, information and awareness programs, gender mainstreaming and other project outputs. This involves the creation of inter-ministerial and multi-stakeholder Technical Working Group (TWG) whose members represent the various key stakeholders/players in the area of energy, renewable energy (RE), energy efficiency (EE) and rural electrification that will coordinate and report on related policy issues concerning the residential, industry, financial and public sectors and gender mainstreaming activities. For this component, the TWG is tasked primarily with overseeing the review of existing RE and rural electrification practices in Solomon Islands and in similarly situated Pacific Island Countries (PICs), and the provision of data/information required on assessment of current situation and needs. After its creation, the TWG will be involved in overseeing and coordinating all the activities related to policies and regulations, technology program, capacity building and information towards their adoption and approval as covered under this and the other project components towards the smooth project implementation and realization of project goal. The TWG will back-stop the Project Board in terms of inputs and recommendations for the Board’s consideration through the coordination of the PMU.
Activity 1.1.2: Conduct of policy studies to guide the development of a road map, planning model and implementation requirements for the national energy policy and related legislations. This entails the conduct of studies that are focused on RE-based rural electrification, energy efficiency measures, and integrated energy planning and investment guidelines. These studies will consider the unique constraints to the provision of electricity services in rural areas, given their geographical features, and the small scale of government systems and markets of the country. This activity will involve the provision of technical assistance in the review of, and formulation of relevant recommendations to the proposed Energy Bill. Consultations will be carried out with different stakeholders particularly the private sector and the participation of women to capture their respective true sentiments about what major concerns to facilitate RE/EE development must be addressed by the bill including the impacts of the relevant electricity generation and regulation and its implementing rules and regulations. Other potential programs and incentives particularly to include income generating activities and their proposed implementing rules and regulations to accelerate the growth of the RE/EE applications in the rural areas shall also be developed with thorough consultations with stakeholders and recommendations made through the TWG in support of attracting investments in rural electrification projects.
Activity 1.1.3: Revision of the draft national energy policy. This involves the updating and enhancing of the existing draft national energy policy to come up with the revised draft for endorsement to MMERE and to other appropriate government authorities prior to submission to the Parliament. The updating will be based on the results of the policy studies and the recommendations in enhancing the proposed energy policy developed through stakeholder consultations and expert technical assistance that will highlight income generating and investment opportunities in rural electrification projects. This activity will also ensure that in the review and finalization processes of the National Energy Bill (inclusive of the National Energy Policy, RE Policy, EE Policy and rural electrification associated investments) that these are gender-inclusive and outcomes are gender-responsive.
GEF support is required for the incremental technical assistance in the review, consultation meetings and policy studies and revision of the draft national energy policy focusing on RE-based rural electrification.
Output 1.2: Formulated, approved and enforced policies, implementing rules and regulations (IRRs) on RE and EE technology applications for rural electrification [N/A]
Activity 1.2.1: Formulation and adoption of the national energy policy and program based on integrated development planning and gender mainstreaming to be included in the updated national energy bill. This involves the drafting of the necessary national energy policy, legal and regulatory framework and realistic targets for RE and EE and the related legislations into the proposed Bill. The proposed draft will be based on the recommendations of the policy studies and the agreed road map, making sure that the formulated policies are in accordance with the country’s goals in the utilization of indigenous resources in various RE forms, electricity generation regulations, demand management and energy conservation, RE-based rural electrification and income generating activities due to enhanced energy access. Discussions with, and guidance by, the TWG will be carried out until the draft is adopted and endorsed to MMERE for its appropriate action[1].
Activity 1.2.2: Endorsement and finalization of the national energy bill for passage in the Parliament. This involves the coordination of the revision and improvement of policies by the TWG, with the PMU as the Secretariat, until these are finalized This activity will facilitate the processes of approval and enforcement of the National Energy Bill (inclusive of National Energy Policy, RE Policy, EE Policy and rural electrification associated investments) are gender-inclusive and outcomes are gender-responsive.
Activity 1.2.3: Drafting and adoption of the implementing rules and regulations and the necessary monitoring and evaluation (M&E) system. This involves the formulation of the implementing rules and regulations (IRRs) for the approved policies. The drafting of the IRRs, while the policies, regulatory frameworks and bill are being evolved and reviewed in parallel, will help clarify the intentions of the Bill[2]. While the Bill is being finalized, the TWG shall regularly update the IRR to incorporate possible changes in the contents of the Bill for eventual endorsement and adoption by the Parliament and the pertinent authorities. This activity also includes the development of the system for the monitoring and evaluation of the impacts of the enforcement of policy, pricing and regulatory measures that are recommended and implemented to promote the use of RE/EE technologies and their applications, including gender-responsive IRRs and standard operating procedures (SOPs) at the national and local level.
Activity 1.2.4: Promotional campaign and lobbying by the MMERE, MECDM and stakeholders in the Parliament for inclusion of the national energy bill in the legislative agenda. This involves the MMERE and the stakeholders carrying out the necessary lobbying for the prioritization of the draft Energy Bill for consideration of the Parliament. Meetings with the TWG shall be regularly done to keep track of developments. This activity involves the promotion of the draft IRR including the modalities on how its various provisions ought to be implemented until the Bill is approved and prepared for implementation and institutionalized for enforcement.
GEF support is required for the incremental financial support and technical assistance in the formulation, adoption, finalization, endorsement, lobbying and preparation for implementation and enforcement of the energy legislations and IRR.
Output 1.3: Recommended, approved and enforced rural electricity regulatory framework [N/A]
Activity 1.3.1: Review of policies, develop recommendations and facilitate approval for rural electricity generation regulatory framework and its necessary organizational structure and standards to implement the regulatory framework and policies on pricing, market development and other related areas. Following the overall national energy policy development into a proposed national energy bill and its components, a rural electricity regulatory framework shall be initiated focusing on RE-based electricity generation. This activity includes the following:
- Identification of critical issues for successful realization of rural electricity regulatory framework from previous, relevant studies including institutional, legal, financial and technical standards aspects
- Analysis of the best international and regional practices in terms of necessary elements of a formal framework to promote and realize REs
- Review of the existing regulations/policies governing grid and off-grid electricity and RE technology applications in the country including any subsidies applicable to it.
- Development of a set of criteria to be used for comparing RE-based power with grid electricity or petroleum-based generation in the country including cost, technical capacity and sustainability (environmental, social and economic).
- Formulation of practical recommendations on regulations, which should be recommended to the SIG to regulate the implementation of RE technologies with appropriate standards as well as put REs on a level playing field with grid electricity.
Activity 1.3.2: Development of implementation and enforcement guidelines for the RE-based rural electricity generation and EE technology application framework and assistance in the establishment of an energy regulatory commission. This activity involves the development of viable and effective ways to enforce the adopted regulations through an implementation plan and organizational structure with the assistance of the PMU and hired consultants. The TWG will be responsible for this. As the National Energy Bill is being deliberated on which includes already the proposed regulatory frameworks and establishment of the mandate for an energy regulatory commission, parallel preparatory work in terms of implementation plans and enforcement guidelines for the RE based rural electricity generation framework will be carried out. The developed guidelines will also include the designation and activation of the Gender Focal Point (GFP) to enforce IRRs to: (a) ensure gender promotion and application of EE; (b) promote role of gender in rural electrification; and, (c) ensure gender responsive national energy planning and energy integrated development planning. This activity involves the conduct of a series of formal and informal meetings with relevant ministries, through the TWG, on the promotion of the formulated policies to familiarize them with the aim of removing financial and non-financial barriers to the widespread application of RE-based electricity generation of Solomon Islands.
Activity 1.3.3: Design and implementation of agreed upon pilots to test the effectiveness of selected applicable policies and policy and regulatory framework for rural electrification that are novel in the Solomon Islands, and but have been adopted and enforced elsewhere in the world, particularly in SIDS.
- Activity 1.3.3.1: Solicitation and evaluation of ideas for novel rural electrification policies – This involves the review and discussion of rural electrification policies, including those of provision of incentives, applied elsewhere in the world, but not yet in Solomon Islands (and in PICs/SIDS) by experts and local policy makers. Among the ideas include allowing private sector entities or communities to venture into rural electrification projects in off-grid areas, particularly RE-based power generation and distribution. Ideas will be discussed with local governments particularly in areas where identified/confirmed demos will be implemented.
- Activity 1.3.3.2: Design of policy pilots – The vetted ideas in Activity 1.3.3.1 will be used in this activity. The design will involve liaison with local government and reaching of consensus on location(s) for policy pilots and on the purpose and specifications of such piloting activity. The detailed design of policy pilots (at least 2) will then be carried out, including the pertinent system for monitoring, annual documentation, and dissemination of results. These pilots will involve the implementation of specific innovative policies that will promote rural electrification in off-grid areas in the country. For example, private-owned and operated RE-based power generation and distribution systems. The design and agreement on novel policies will extend the scope of policies in the country for RE-based power generation.
- Activity 1.3.3.3: Implementation of agreed upon local-level policy pilots – This includes preparation and approval of required government notices or other documentation, that will facilitate the implementation of the planned policy pilots. This includes outreach to potential entities that will benefit and will be positively affected by the piloted policies such as the private sector and community entities. Note that the implementation of policy pilots will provide proof of concept and lessons learned so that these novel policies can be replicated in other locations in the country.
- Activity 1.3.3.4: Design and implementation of plan to monitor results of the local-level policy pilots – This includes documentation and dissemination of the results of the pilots. The monitoring plan will assess the effectiveness of outreach to potential investors and seek to understand how influential the piloted policies were in regards their interest in participating in the rural electrification program of the country.
Activity 1.3.4: Implementation and monitoring of the energy regulations including financial and fiscal policies and regulations to support RE-based rural electricity generation, EE technology application and electrification. This activity involves the support actions to facilitate the passage of the energy bill within the SPIRES timeframe in order to optimize the impact of the entry of more RE-based rural electrification projects. As a follow-through of Activity 1.2.4, this activity will provide further support to MMERE and the government as a whole in laying the ground work for the introduction, launching and implementation of the energy bill as it becomes a law as well as the necessary guidance on the documentation and endorsement of the draft IRR produced in Activity 1.2.3 containing the proposed energy regulations including policies, plans and RE/EE standards to guide their implementation and enforcement. This will be augmented by the capacity building, information and awareness activities in Component 4 of the key stakeholders.
GEF support is required for the incremental financial support and technical assistance in the formulation, adoption, finalization, endorsement, and preparation for implementation and enforcement of the energy rural electricity regulatory framework and initial organizational structure.
Output 1.4: Formal rural electrification plans at the national and local levels [N/A]
Activity 1.4.1: Determination and engagement of key actors in rural electrification to develop the RE-based rural electrification and EE technology application policies and plans at the national and local (provincial) levels. This activity involves the formulation of the formal rural electrification plans, inclusive of rural energy development investment schemes; follow-up for enhancement of rural energy and EE technology application policies, regulations and plans; and consistent commitments by SIG, private sector, donor agencies and local communities, with the assistance of the TWG and support teams at the provincial level to formulate the rural electrification plans and associated investment plans that are also gender-inclusive and outcomes that are gender-responsive.
Activity 1.4.2: Development and adoption of rural electrification planning methodology and tools involving integrated planning approach, primary data gathering, demand modeling, energy efficiency and techno-economic optimization. This activity involves the carrying out the processes underlying electrification planning by first determining the range of possible approaches vis-à-vis what are existing planning methodologies and the required different levels of data inputs for each province. Depending on data availability and methodological differences applicable to a province, the type and amount of primary data to be collected in preparation of electrification planning exercise will be determined according to the situation and needs of each of the provinces. To achieve this, electrification planning will be based on the collection and geographical referencing of data in all the following areas: (i) Existing and planned electricity grid structures, (ii) Location and size of population centers, (iii) Infrastructure in the fields of health, education and economic institutions (e.g. markets, banks, microfinance institutions) and (iv) Assessment of renewable energy potentials. This activity will also involve modeling electricity demand based on the type and quality of available and additionally gathered primary data in line with the two basic approaches existing for demand modeling: Top-down (using econometric methods) or bottom-up (using extensive data for mapping education, health and economic services to model demand). The activity will result to the proposed RE-based rural electrification plans including EE technology application for each province.
Activity 1.4.3: Formulation and approval of national master plan and provincial level plans on RE-based rural electrification including EE technology application. This activity involves the assessment of electrification solutions (network expansion, mini-grid, stand-alone system, etc.) and the optimization of the corresponding installation setups in accordance with the agreed criteria as defined previously in Activity 1.4.2. Based on the PPG exercise, particularly in the selection process for demonstration sites, the locations vary in many respects; therefore, the planning process will have to incorporate additional considerations, e.g. regarding land-use management, availability of financing, social institutions, economic and social impact accounting of energy access and other considerations. Some of the main factors to be considered include geographic parameters such as the availability of energy resources, distance to grid and between localities, or the dispersal of housing in a specific area, topologic expediency and the prevalence of natural constraints (forests, protected areas, etc.). After the assessment of the electricity access solutions is done and the most appropriate approach is selected, the formulation and adoption of the formal rural electrification plans including EE technology application at the national and provincial levels will be carried out. The TWG will be involved in the review and endorsement of the recommended RE-based rural electrification approach and plan for each of the provinces that will be consolidated in a national RE-based rural electrification master plan. Based on the review, the MMERE will decide on the plan of action on the recommendations and formally approve the rural electrification plans in accordance with the set policies and approval guidelines regarding the matter which will be the main output of the activity to be disseminated in Component 4.
GEF support is required for the incremental financial support and technical assistance in the formulation, adoption, finalization, endorsement, and preparation for implementation and enforcement of the national master plan and provincial plan on RE-based electrifications.
[1] This form of regulatory reform will create commercial incentives for private and public sector power utilities to provide power in rural areas, both through extension of electricity networks, RE-based decentralized power provision and overall comprehensive energy regulatory framework that will pave the way for more investments in rural electrification. The overall regulatory reform will also address problems experienced in existing RE installations regarding the development of standards, acquisition, installation, operation and maintenance of RE-based decentralized systems. The regulatory reform shall focus on the following developmental issues: renewable energy, off-grid energization and electrification, energy efficiency, technical standards, access to clean development mechanisms (CDM) funding and reduction of first costs. The updated national energy bill will therefore focus on three components: renewable energy, off-grid energization and electrification of rural areas and energy efficiency and conservation and their regulatory frameworks.
[2] The TWG and the stakeholders can understand the Energy Bill provisions, and once enacted into law, can be effectively implemented. It will also facilitate communication and ownership with the stakeholders particularly the Parliament. The IRR shall include the regulatory framework and the M&E system to ensure that the intentions of the energy law are properly taken into full consideration.