2015 PRE-BUDGET PROPOSITIONS

2015 PRE-BUDGET PROPOSITIONS

Featured, Other campaigns and activities No Comments

In line with article 13 of the Rio+20 Declaration and with other international commitments taken by the Government which stipulate that the effective participation of civil society in decision-making is a vital requirement for sustainable development, We, the civil society organisations and concerned citizens regrouped in the Coalition for People’s Cooperative Renewable Energy, namely the Centre for Alternative Research and Studies, the Small Planters Association, the General Workers Federation, the Federation of Civil Service and Other Unions, EcoSud, the Institute for Environmental & Legal Studies, the Rodrigues Government Employees Association, Rezistans ek Alternativ, as well as ecologists, engaged citizens & artists, are pleased to propose to the Government a complete, sustainable system for clean energy for the transition to sustainable forms of energy and the need to operationalise the broadening of the energy ownership base.

 

Our set of proposals:

  • Responds to the aspirations of the people
  • Significantly reduces Carbon Dioxide (CO2) emissions
  • Significantly improves health of the population by reducing Sulphur Dioxide (SO2) emissions
  • Initiates a Renewable Energy Boom in line with the “Deuxième Miracle Economique Mauricien” objective of the Government, by funding it through a necessary Tax on the profits of Coal Operators as per the “Polluter Pays” principle
  • Allows the People of Mauritius to participate in the ownership of power plants by increasing the number of operators, particularly small and medium, in the energy sector
  • Fosters regional cooperation, with natural gas coming from within the Indian Ocean Rim (Tanzania, Mozambique, Abu Dhabi)

Introduction

  1. Coal plants are not compatible with developing renewable energy, and will prove more costly for the country in the medium term. Instead of investing in coal, the country should capitalise on the current drop in oil prices to invest in a national energy programme combining natural gas and battery storage with massive deployment of renewable energy and energy efficiency, supported by adequate upgrading of the grid. The National Energy Commission (NEC) has assessed that over 2014-2025 investing in renewable energy and energy efficiency will cost the country 40% less as well as create more jobs than investing in coal. Coal is the past, not the future.
  1. Furthermore, and in total relevance with the Government’s aim of bringing about a “Deuxième Miracle Economique Mauricien”, the NEC has assessed that massive investment in renewable energy and energy efficiency will foster the emergence of a new economic pillar, e.g. the Green Economy. Installation and maintenance technicians would emerge all over the country and Mauritian companies would develop expertise that could be exported to the region.

 

  1. Deep methodological shortcomings were identified by the NEC in the CEB’s Integrated Electricity Plan 2013-2022 (IEP). The IEP should be updated, using a participatory process involving actively the private sector, academia and civil society. The energy future of Mauritius is to be worked out with precision, in line with a sustainable energy Policy and the Energy Pathway Two identified by the NEC, through appropriate modelling exercises and detailed feasibility studies.

 

  1. The recent drop in oil and coal prices, some USD 170 / t for high sulphur heavy fuel oil and USD 40/ t of coal are expected to generate savings of some Rs 1.8 billion for 2014 and 2015 as per computations of the KLR and as reported in the press. This provides considerable space for taking measures in favour of sustainable forms of energy and cleaner fossil fuels.

 

  1. With the deployment of solar and wind energy, there will be need for instant backup for when the sun or wind dips. Coal power plants however cannot deliver this critical function as they cannot start up in an instant. Natural gas plants, on the contrary, can. Plus, they are also much less polluting than coal plants.  Natural gas plants are therefore the logical partners for solar and wind plants.As modern diesel power plants offer the possibility of being converted into natural gas power plants, we should therefore invest in such plants with the conversion from diesel taking place as soon as the supply of natural gas is secured. Neighbouring countries such as Mozambique have vast reserves of natural gas which are about to enter commercial exploitation.

 

  1. It is unacceptable that the IPPs at present are not paying the MID levy on coal, which is being paid instead for them by the CEB, and therefore by the population. We understand that this is due to the Power Purchase Agreements (PPAs) the IPPs have signed with the State. However these PPAs are now coming up for renewal, and this gives the Government the perfect opportunity to set up a coal tax on the profits of the IPPs. Regarding the risk of the IPPs passing the tax on to the consumer, the State can easily prevent that through the price that will be offered to the IPPs in the new PPAs. Indeed the State now has the knowledge to assess exactly the real costs and profits of electricity generation from coal. It is a matter of giving the IPPs simply a fair price for all parties in the upcoming PPAs.

 

Proposals

  1. Implement the Report of the National Energy Commission as appropriately updated as well as reinstate the Commission urgently.

 

  1. Capitalise on the current drop in oil prices to invest in a national energy programme combining natural gas and battery storage with massive deployment of renewable energy and energy efficiency, supported by adequate upgrading of the grid.

 

a)      Introduction of a holistic and cleaner energy production setup based on:

i.      renewables, biomass, high biomass canes and more efficient use of bagasse, solar and wind energy;

ii.      Compressed Natural Gas(CNG), as according to reliable sources, Liquefied Natural Gas (LNG) has been found in a pre-feasibility study commissioned by the CEB to be costly,

iii.      the recourse to combined-cycle technology in power plants concerned so as to maximise yield as well as lower costs.

 

b)      The CEB has never undertaken any study on CNG, it is time to do so as a matter of urgency as natural gas emits the lowest C02/KWh compared to diesel and coal, has no sulphur compared to 0.4% in coal and 3.5% in high sulphur heavy fuel oil and has no ash left after combustion. See recommendation NEC 7 of the National Energy Commission.

 

c)       Take the opportunity of low oil prices to shift away from high sulphur heavy fuel oil to low sulphur heavy fuel oil until such time as CNG becomes available.

 

d)      Re-consider the 4×15 MW tender by CEB to allow for the possibility for the cluster to also operate in a combined-cycle mode.

 

e)      Launch public, open and transparent tenders for the procurement of new base load power plants using Natural Gas to replace existing old diesel plants.

 

  1. Set up a Coal Tax on the profits of the Independent Power Producers (IPPs) aimed at funding a renewable energy (RE) boom as well as phasing out coal.

 

  1. Set the rate of installation of solar panels at 30 MW per year for the next 5 years

 

  1. Set up a Small Planters and Citizens Cooperatives Renewable Energy Scheme, supported by the Coal Tax on the profits of the IPPs, as this will:

a)      Democratise the economy by enabling small planters and citizens to become electricity producers, notably through the setting up citizens’ energy cooperatives, supported by attractive subsidies paid from the Coal Tax; this will help break the current oligopolistic control of electricity production by the sugar conglomerates;

b)      Develop solar and wind plants, boost biomass production and curb coal in electricity production;

c)      Give a new economic future to the small planters of the country, so as to help them deal with the dramatic fall in sugar prices.

 

  1. Issue Government Green Energy Bonds, with the interests due to be funded by the Coal Tax on the profits of the IPPs, as this will:

a)      Fund a Renewable Energy boom

b)      Provide the public with a secure placement opportunity for their savings, with attractive annual interest repayments being paid from the Coal Tax

c)      Enable the CEB to obtain the funding to become a major operator of RE plants

d)      Support the Small Planters Electricity Solar Production Scheme, as the CEB can take a 25% share in the citizens’ solar cooperatives under the scheme instead of a 26% share in CT Power

e)      Foster strong mobilisation of the public for sustainable development, as ordinary citizens would have a direct financial stake in it

f)       Enable the democratisation of the economy and of electricity generation

 

  1. Cancel the CT Power project as it is an illegal contract, that will obstruct the country’s sustainable development

 

  1. Dissolve the CEB Investment Company Limited as it is contrary to good governance to have senior staff of the CEB sitting as Directors on a private company operating in the same field.

 

  1. Use the money that would have been wasted onCT Power (Rs 11 billion to build it and Rs 25 billion subsequently to operate it over 20 years) to make intermittent renewable energy become firm power through electricity storage projects :

a)      Set up utility-scale battery systems using reliable technologies such as those based on lithium-ion or vanadium;

b)      Set up pumped hydro storage systems in hilly areas of Mauritius using either river water, dams or sea water;

c)       Set up these projects in areas where small planters are abandoning their lands and where they could therefore set up solar farms to feed into these energy storage projects before onwards transmission to the grid;

d)      Have an in-depth Research and Development programme on energy storage be developed by the Ministry of Energy, the Mauritius Research Council and the University of Mauritius.

 

  1. Repeal the scandalous “Standby Generation Capacity Tax” on PV installations, which blocks the development of solar energy in Mauritius and puts our country on a truly backward path.

 

  1. Set up a Sustainable Biomass Development Programme (SBDP), with a fair price to small planters, so as to phase out coal, roll back the abandonment of sugar lands, preserve the green cover of Mauritius and give a new economic opportunity to small planters:

a)      Identify those plants that are suitable for Mauritius in terms of high calorific value but also no environmental impact (prevent the proliferation of invasive species such as the Arundo Donax that will kill our fragile ecosystems). This needs to be done through a proper scientific, transparent and multistakeholder national study, involving civil society. High-fibre fuel canes should be the focus of this effort as the country has solid expertise in cultivating sugar cane, the plant is not invasive in Mauritius and high-fibre canes have an exceptional calorific value, higher than other biomass plants such as Arundo Donax.

b)      Establish a fair pricing system to encourage small planters to produce biomass and IPPs to burn it rather than coal, so that the proportion of biomass is increased and that of coal is reduced.

c)       Review the pricing for bagasse so that maximum bagasse is used at the optimal efficiency and bagasse displaces coal as far as possible.

d)      Increase the bagasse transfer price so that planters by securing additional revenue are able to remain in production and continue supplying canes , essential component in a biomass based strategy, and refrain from abandoning land, a loss of biomass as well as an environment hazard.

e)      High biomass canes have been successfully developed and used in Reunion, create the enabling environment for the introduction and rapid propagation. These canes can be harvested all year round via staggered calendar of cultivation. High biomass cane is preferable to Arundo Donax, which is an invasive plant, and thus an environmental hazard, and whose chlorine content may damage boilers.

f)       Set the price of biomass energy at par with the cost of low sulphur heavy fuel oil as biomass emits no additional C02, no sulphur oxides and ash is a valuable fertiliser.

 

  1. With the vision of having a Central Sustainable Electricity Board (CsEB), initiate a 3-year programme to transform the CEB into a sustainable energy operator and re-establish a strong public service.

 

  1. Remove VAT on all renewable energy equipment and parts as well as apply a zero-rated VAT regime to operators of such plants.

 

  1. Introduce financial and fiscal incentives to facilitate the recourse to battery storage for energy produced from solar panels in particular.

 

  1. Amend legislation to remove all barriers for small to medium scale operators to enter the renewable energy sector, especially solar.

 

  1. Establish mandatory targets for demand reduction from industrial, commercial and Government users starting with 10 MW in 2015 increasing to 40 MW in 2018.

 

  1. Set up a bonus/malus system in respect of industrial users whereby on the one hand, they are afforded incentives for demand reduction and higher self-sufficiency in electricity from renewable forms of energy and on the other hand, gradually phase out the subsidy on industrial tariffs.

 

  1. Introduce the mandatory blending of ethanol E10 with mogas so as to displace a fossil fuel and avoid the emission of additional CO2.

 

  1. Implement the urgent recommendations from the Report of the National Energy Commission (NEC) as listed in Annex 1.

 

Considering that the NEC has assessed that over 2014-2025 investing in renewable energy and energy efficiency will cost the country 40% less than investing in coal, as well as create more jobs ; considering that the privatisation of electricity production in Mauritius has further exacerbated our dependency on fossil fuel imports, especially coal, as well as has created an unacceptable monopolisation of power production through giant coal-based Independent Power Producers (IPPs); the energy sector in Mauritius needs to become truly sustainable and people-controlled; in other words, a real Power Shift in the country.

Yours sincerely

 

For the Coalition for People’s Cooperative Renewable Energy

 

 

Copy to:

  • The Honourable Ivan L. Collendavelloo, Vice-Prime Minister, Minister of Energy and Public Utilities
  • The Honourable Seetanah Lutchmeenaraidoo, Minister of Finance and Economic Development
  • The Honourable Pravind Kumar Jugnauth, Minister of Technology, Communication and Innovation
  • The Honourable Mahen Kumar Seeruttun , Minister of Agro-Industry and Food Security
  • The Honourable Sudarshan Badhain, Minister of Financial Services, Good Governance and Institutional Reforms
  • The Honourable J. Raj Dayal, CSK, PDSM, QPM, Minister of Environment, Sustainable Development and Disaster and Beach Management
  • The Media

Annex 1 – Urgent recommendations from the Report of the National Energy Commission (NEC)

 

NEC 1          URGENT ACTION: Accelerate the following immediate supply options

1.4   Commission medium-speed diesel engines (2×15 MW in 2015 and 2×15 MW in 2016), that will use low-sulphur HFO and can later be used with natural gas or biodiesel,to prevent all risks of load shedding, reinforce RE backups and to be viewed as anticipated investment to cater for future semi-peak/peak demand

NEC 11        Set up an Office of Sustainable Energy Development (OFSED), with members drawn from all key stakeholders, including civil society to, inter alia:

a)      Advise in the formulation of policy and strategies to achieve sustainability in the energy sector in line with  the MIDPolicy;

b)      Promote the effective implementation of the renewable energy programmes;

c)       Ensure that the interests of consumers, public health, the environment and future generations are safeguarded in the field of energy; and

d)      Assess and advise on the sustainability of project proposals in the energy sector.

NEC 14     Develop a Renewable Energy Master Plan for the Republic of Mauritius and initiate the large-scale grid integration of variable RE through the following:

a)      Define a methodology for the management of large scale grid integration of variable RE, with focus on Smart Grid deployment.

b)      Define the precise capacity credit to be assigned to variable RE.

c)      Based on international best practices, use the existing hydropower, medium-speed diesel engines and gas turbines as backup capacity for variable RE, and give variable RE plants first priority in generation scheduling and dispatching under normal power system operating conditions.

NEC 15   As part of the RE Master Plan, implement large-scale electricity storage for variable RE to become firm power.

NEC 17  Enable CEB to build and operate RE plants, so as not to limit RE projects only to private promoters, and define a target share for CEB in MID’s objective of 35% of electricity generated from RE.

 

NEC 19  Review the price of bagasse for small and medium planters so that it encourages bagasse production, through consultations between the concerned parties.

 

NEC 20  Devise a price mechanism for bio-energy (biogas, biomass, biodiesel) that will encourage the development of bio-energy.

 

NEC 21  The IEP [CEB’s Integrated Electricity Plan 2013-2022]needs to be updated by early 2014 to implement Pathway 2[NEC’s recommended energy strategy for 2014-2015], in line with all the above, in an inclusive, participatory manner, and by using planning tools and methods that align energy planning with sustainable development.

 

 

Annex 2 – Overall context for the transition towards a sustainable energy future

Achieving a sustainable energy future is an absolute imperative for any country. But for a Small Island Developing State (SIDS) such as Mauritius, this imperative is acute. The latest figures from Statistics Mauritius (Environment and Energy & Water Statistics 2013), released in June and July 2014, state that Mauritius is highly dependent on imports of fossil fuels, with the bill increasing exponentially each year. We import about 85% of our energy needs and in 2013 this cost the country nearly Rs 35 billion. Ten years before, in 2003, the bill was Rs 6.9 billion. The cost to the country has been multiplied by 5. In other words, the cost has increased by 400%… But in terms of the actual concrete quantities of fossil fuels imports consumed, the increase over the past decade has been only 38%!! Overall net consumption of fossil fuels imports has barely risen from 927.2 thousand tons of oil equivalent (ktoe) to 1,281.6 ktoe. Energy imports back in 2003 represented 10.6% of the overall imports bill for Mauritius. In 2013, it has doubled to 21.1%. An increasing part of our GDP is being eaten up by fossil fuel imports.

In contrast, intermittent renewable energy (RE) technologies such as solar photovoltaic technology (PV) has seen over the past three years tremendous progress both in terms of performance and cost reduction. The price of PV has tumbled by 70% between 2009 and 2012 in Europe, according to the United Nations’ International Renewable Energy Agency (IRENA).This cost decrease trend has to a large extent reached Mauritius.

Furthermore, with the dramatic fall in sugar prices, the country over the past decade has witnessed a massive abandonment of sugar lands. The latest 2013 Digest of Agricultural Statistics indicate that 16,000 hectares of sugar fields have been lost between 2004 and 2013. This poses an acute social and environmental problem:

  • Social: small planters are quitting their lands as they cannot earn a decent living from sugar
  • Environmental: Mauritius is losing its green cover and concrete (commercial malls, IRS, RES) is eating up whole swathes of agricultural land and countryside.

8,000 hectares from the total of 16,000 abandoned land should be site aside for the sustainable, environmentally-compliant productionof biomass. The other 8,000 hectares remaining should be utilized to increase local food production, through sustainable modes of production.

Related Articles

Leave a comment

Back to Top