Roadmap To Carbon Neutrality of The Maldives (2013)

2013
Roadmap to Carbon Neutrality

of the Maldives
On behalf of
Detlef Loy
Loy Energy Consulting
May 2013
Content
Acronyms and Abbreviations ..............................................................................................................3
1.
Preface ........................................................................................................................................4
2.
Introduction ................................................................................................................................5
3.
Public Electricity generation and supply.......................................................................................6

Electricity supply in the Great Male Region ..................................................................................6
STELCO ........................................................................................................................................6
Interconnection ...........................................................................................................................6
4.
Electricity supply on the Outer Islands .........................................................................................7
5.
Electricity tariffs and subsidies.....................................................................................................7
6.
Renewable Energy ..................................................................................................................... 10

PV in Male ................................................................................................................................. 10
PV on Outer Islands ................................................................................................................... 11
Hybrid wind/solar systems ........................................................................................................ 12
PV on new buildings .................................................................................................................. 13
Waste-to-Energy ....................................................................................................................... 13
7.
Transport .................................................................................................................................. 14
Air transport .............................................................................................................................. 14
Land transport ........................................................................................................................... 14
Taxation of vehicles ................................................................................................................... 16
Marine transport ....................................................................................................................... 16
Import of biofuels...................................................................................................................... 17
8.
Tourism and Resorts .................................................................................................................. 17

Energy consumption in the tourism sector ................................................................................ 18
Energy saving potential und use of RE ....................................................................................... 19
Leasing and operation of resorts islands .................................................................................... 19
Taxation in the tourism sector ................................................................................................... 20
Awarding Sustainable Tourism................................................................................................... 21
9.
Energy Efficiency in the residential, commercial and public sector ............................................. 22

Building Code ............................................................................................................................ 23
Example of Hulhumale............................................................................................................... 24
Standards and Labelling of electrical appliances ........................................................................ 25
GEF Project ................................................................................................................................ 26
Demand-side management activities ......................................................................................... 27
1
10. Targets for a low-carbon economy ............................................................................................ 28

11. Institutional strengthening ........................................................................................................ 28
Maldives Energy Authority (MEA) .............................................................................................. 29
Climate Change Advisory Council ............................................................................................... 30
References........................................................................................................................................ 31
Appendices
Cover photo: Photovoltaic system at the Soneva-Fushi Resort on the island Kunfunadhoo (BELECTRIC GmbH).
Acronyms and Abbreviations

BMU
Bundesministerium fr Umwelt, Naturschutz und Reaktorsicherheit (German

Federal Ministry for the Environment, Nature Conservation and Nuclear Safety)
CCAC
Climate Change Advisory Council
CCD
Climate Change Department (in the Ministry of Environment and Energy of the
Maldives)
EE
Energy Efficiency
FENAKA
FENAKA Corporation Limited
FIT
Feed-in Tariff
GDP
Gross Domestic Product
GEF
Global Environment Facility
GHG
Greenhouse Gas
GIZ
Deutsche Gesellschaft fr Internationale Zusammenarbeit
GoM
Government of Maldives
GWh
Gigawatt-hour
MEA
Maldives Energy Authority
MEE
Ministry of Environment and Energy of the Maldives
MGF
Maldives Green Fund
POISED
Preparing Outer Islands for Sustainable Energy Development
PPA
Power Purchase Agreement
PV
Photovoltaic
RE
Renewable Energy
SCNS
Support for the Climate Neutrality Strategy of the Maldives
SREP
Scaling up Renewable Energy Program in Low Income Countries
STELCO
State Electric Company Limited
toe
Tonne of oil equivalent
UNOPS
United Nations Office for Project Services
1.
Preface
The present report has been elaborated in the context of the project Support for the Climate
Neutrality Strategy of the Maldives (SCNS), executed between 2011 and 2014 by the Deutsche
Gesellschaft fr Internationale Zusammenarbeit GmbH (GIZ) with financial support of the German
Federal Ministry for the Environment, Nature Conservation and Nuclear Safety (BMU). Primary
objective of this project is to build up capacity and increase expertise of public institutions as well as
the private sector. In doing so, the GIZ project supports the Maldivian Government, the private
sector and local authorities in developing their own comprehensive strategies for minimizing
greenhouse gas emissions harmful to the climate.
One component of the SCNS project is the advisory service and support to the Ministry of
Environment and Energy (MEE) of the Maldives on the development and implementation of essential
elements for a coherent climate neutrality strategy. The main policy objective is to contribute to the
advancement of adequate framework conditions as well as administrative and decision making
structures on the national level.
The Government of the Maldives had announced in 2010 its ambition to become a carbon neutral
country, setting a signal for carbon intense countries to strengthen their efforts in lowering
greenhouse gas (GHG) emissions. The German government with its agency for international
cooperation GIZ supports this objective and agreed with the Climate Change Department (CCD) of
the MEE to formulate a Roadmap to reach Carbon Neutrality of the Maldives (see Terms of Reference
in Annex A). For this purpose the consultant and climate change expert Detlef Loy has been
contracted who went on a mission to the Maldives between April 6 and 18, 2013. During this mission,
discussions were held with a number of relevant stakeholders in Male and Hulhumale (see Annex D).
Preliminary findings and recommendations were presented during a stakeholder meeting on April 16,
2013 (see Annex E). Furthermore, the consultant attended a preparation workshop for a Global
Environment Facility (GEF) project on energy-efficient buildings and appliances1 and a national
investors conference in the frame of the Scaling-up Renewable Energy Program (SREP)2. Relevant
figures on which this report has been based on are compiled in Annex B.
The roadmap outlined in this report is primarily based on previous energy and climate change
reports and studies for the Maldives, on statistical, legal and economic publications, on results of
discussions with stakeholders from the public and private sector, on best practice cases in other
countries and on observations and conclusions of the consultant. The roadmap can be considered as
a follow-up or update to the energy policy strategies as outlined in the Strategic Action Plan 20092013 (GoM, 2009). It is obvious that not all aspects of a future roadmap for carbon neutrality could
be targeted in detail and with precision during the relatively short mission in the country. A number
of open questions remain and need to be further examined at a later stage. The present report is
therefore considered to initiate a dialogue within the Government and the civil society of Maldives
how the objective of carbon neutrality could be achieved, by proposing a number of steps and
initiatives that may not have been under consideration before.
The author would like to thank all those who contributed with their knowledge and ideas to this
report and spent time and efforts to provide valuable input. In particular, he is most grateful for the
assistance provided by the Climate Change Department of the MEE and the local team of the GIZ.
1
2
Stakeholder Validation Workshop on Strengthening Low-Carbon Energy Island Strategies on April 15, 2013
National Dialogue on Renewable Energy Investments on April 17, 2013
2.
Introduction
In March 2009, a first paper on carbon neutrality of the Maldives had been published by the British
author Chris Goodall. The then President of the Maldives took up this message and pledged that the
country would strive for carbon neutrality by 2020. This pledge was announced during the UN
General Assembly in 2009 and repeated at the Climate Conference in Copenhagen in the same year.
In 2010, a first energy policy strategy was elaborated by the Maldivian Government (Ministry of
Housing and Environment, 2010).
From the current point of knowledge, both the paper and the public announcement appear
somewhat overambitious and unrealistic. The trend for an ever-growing energy demand and
subsequent increased consumption of fossil fuels cannot immediately be revoked, as can fossil fuels
not be replaced from one day to the other by renewable energy sources. All this needs time, in
particular in a more than difficult environment like the Maldives with a dispersed geographical
landscape of about 300 inhabited and tourist islands, a growing economy and a particular strong
dependence on just one economic sector tourism- that by itself is one of the major energy
consumers.
Nevertheless, the original far-reaching objective has contributed to a number of activities and
initiatives in the past years which combined will all support to move forward on the road to carbon
neutrality. Certainly, this will be a longer way than expected and it will not be concluded by 2020, but
the initial steps have been taken and the willingness to proceed at all fronts is more than visible.
Still there are major obstacles on the road that need to be removed. Potentials for energy efficiency
have to be explored and tapped. Investments in solar electricity need to be made possible by
adequate framework conditions. Moreover, Government decisions need to be streamlined and
coherent in order to achieve the general goal. Interim or medium-term targets can help to evaluate
the success of any policy and should therefore be established to measure the results of the different
instruments and activities put in place. Taking the general public on board and motivating the private
business sector is essential for any climate change and energy policy. It is therefore necessary to
communicate constantly and on all levels about the national objective of striving towards carbon
neutrality and integrate all sectors of the civil society into the dialogue on how this goal can be best
achieved without distorting the economy or negatively affecting individual living conditions.
As has already been noted in (USAID, 2010), a precondition for designing a national action plan for
carbon neutrality is that the GoM undertakes a detailed forecast, analysis and planning of the
technical, economic, financial, and environmental implications for generation and transmission as
well as use and replacement of fossil fuels for the next 20 years. This would enable the government
to develop mechanisms and incentives for promoting elements of the plan, in particular regarding
the tapping of renewable energy sources and the implementation of energy efficiency activities.
This roadmap presents some elements that could be considered when paving the road to carbon
neutrality. First and above all, it would like to introduce a more realistic perspective in terms of the
distance from the starting point towards reaching the final goal. This may help to define future
priorities and concentrate on activities that are effective and relatively easy to implement, always
keeping in mind that the human, financial and institutional resources of the Maldives are limited.
3.
Public Electricity generation and supply
It is forecast that in the business-as-usual scenario the peak load for electricity demand in the public
supply sector (includes utilities, island council power supply and private supply on inhabited islands,
but excludes all tourist resorts) will increase from about 79 MW in 2010 to 146 MW in 2030 (USAID,
2010). This increase will primarily occur in the Greater Male region. Taking into account that all
currently existing genset units need to be replaced by 2030, this would mean the installation of 8-10
MW annually from now on.
Electricity supply in the Great Male Region

STELCO
The State Electric Company (STELCO) is currently 3 serving 27 islands around Male from an equal
number of power plants, serving about 43% of Maldives population (see Annex G). Each power
system is completely independent with its own power generation and distribution infrastructure. The
system in Male has an installed capacity of 61.4 MW and provides electricity to 33,430 mainly
domestic and commercial customers (August 2012). The installed capacity outside of Male totals 17.8
MW and serves 8,310 customers, mainly centered in Hulhumale. Due to the rapid development of
this island and the continued migration to the Greater Male Region, it can be expected that the
customer base outside of Male will grow significantly in the near future. Most systems, with the
exception of those on Male, Hulhumale and a few other islands are very small with capacities of not
more than 100 kW.
Due to non-operational turbines being in maintenance, Male has a dependable (available) generation
capacity of only about 52.2 MW4, while the peak load in 2012 has been in the range of 45 MW
(estimated). Power demand is increasing in Male at a rate of about 10% annually in the business-asusual scenario. Currently there is hardly any reserve capacity available in case of failure of the largest
genset so that the risk of blackouts is extremely high. According to STELCO, there is only space
available for another generator of 8 MW capacity. If demand further increases at past growth rates,
STELCO will very soon reach its technical and logistical limits. Demand would then increasingly have
to be covered by self-producers operating own individual diesel gensets for their power needs.
STELCOs generation performance is relatively good with efficiencies of about 38%, most probably
due to the young age of most gensets that in majority have been acquired in the last decade 5.
Interconnection
Most important and to be targeted with priority is the interconnection of islands in the region, in
particular between Male and Huhule (International Airport) and further onwards to Hulhumale. The
issue has been in discussion for some time (USAID, 2010). It would also provide additional chances
for feeding a higher share of RE capacity into the extended grid. In (USAID, 2010) it was estimated
that a connection with two 132 kV submarine and land cables between Male and Hulhumale would
cost about US$ 26.4m.
3
4
5
After reorganisation of the national electricity system in 2012.

85% of the installed capacity according to (ECFA, 2011)
Only five generation units on Male have been installed before 2002 (ECFA, 2011)
A feasibility study for interconnecting Male and Hulhumale should be started

as soon as possible. The interconnection should be complete by 2015 at the
latest to avoid shortages of supply on both islands and cope with the
increasing population in the new developments of Hulhumale.
III/2013 - 2015
It should also be examined if connecting Male with Villingili (estimated costs

US$ 16m) and Villingili with Thilafushi (US$ 10.9) at the same time could save
costs and avoid power shortages.
III-IV/2013
4.
Electricity supply on the Outer Islands
As outlined in (USAID, 2010), with demand not expected to grow significantly, the existing installed
capacity of diesel gensets is sufficient to cover the peak load on most of the Outer Islands over the
next 20 years, except in the Southern Province, where it needs an additional 1,000 kW to achieve a
satisfactory reserve margin. Some capacity shifting between islands may be needed as population
tend to settle more and more in regional centers, followed by an anticipated higher than average
electric load growth in those new urban developments6. It is also expected that replacement of some
gensets on the islands will be necessary due to reaching the end of their lifetime, while others will
need to be downsized because of a mismatch between generation capacity and average load.
The Outer Islands contribute only marginally to national CO2 emissions; therefore, any measures to
curb carbon emissions on those islands through replacing diesel fuel by renewable energy will only
have a minor effect on GHG reduction at country level. All activities in this direction should therefore
be seen primarily from a social, economic and security perspective as renewable energy may help to
prevent further increases of electricity generation costs or even lead to a downward trend of costs
compared to a system relying completely on fossil fuels. They may further assist in providing a more
reliable electricity supply with fewer outages, reduce the volume of fuel transports and improve local
environmental conditions by reducing noise and air pollution.
Electricity supply plans for the Outer Island with a 10-15 year forecast period
have to be set up based on future population development, expected capacity
needs, age of existing gensets and potential for RE electricity.
5.
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Electricity tariffs and subsidies
The current Maldives Electricity tariff rates have been approved by MEA in 2009 and were not
revised in the meantime. The tariff scheme shows a progressive increase with growing energy
consumption and is based on a fixed energy charge and an additional variable fuel surcharge. The
latter is related directly to fuel prices exceeding a margin of 8.0 (Greater Male Region) to 8.50 Rf (per
On most smaller islands the population has been declining between 2000 and 2006, probably due to decreasing job
opportunities in the fishery sector and only limited income generating alternatives.
Liter of diesel oil, depending on the region of electricity consumption, (Mercados, 2012))7. As can be
seen from Figure 1, the diesel price was constantly above 8.0 Rf/Litre since the last quarter of 2009,
with prices are currently in the range of Rf 15.5 per Litre (or about Rf 4.0 per produced kWh
electricity in the case of Male8). Accordingly the fuel surcharge increased from 0.08 Rf/kWh (US$-ct
0.5 per kWh) at the end of 2009 to 2.27 Rf/kWh (US$ 0.15 per kWh) in March 2013 (website of
STELCO, retrieved on April 23, 2013, see Figure 1). The fuel surcharge therefore became an important
cost item of the electricity bill. The energy charge varies significantly between the Greater Male
Region and the outer islands by partly more than 50%. Households in the Greater Male Region with a
consumption of 500 kWh/month had to pay about 4.9 Rf/kWh (US$ 0.33 per kWh) in March 2013.
This price was still well below the generation costs that are estimated at 5.25 Rf/kWh (US$ 0.35 per
kWh), not to forget distribution and metering costs that need to be added.
In 2010, a fuel surcharge subsidy was introduced, which became the most important part of overall
electricity subsidies due to increasing fuel prices and devaluation of the national currency. Subsidy on
fuel surchage now accounts for about Rf 35m (US$ 2.3m) per month. While in 2009 only several
hundred households benefitted from subsidies, there are now over 50,000 customers that have
appealed for being exempted from paying any fuel surcharge. In 2012, approximately 43,000 meters
received a fuel surcharge subsidy.
In addition to this, many low-income households have applied for support for the energy charge
under the Social Welfare program. Since the subsidy applies to all tariffs below the first 400 kWh
consumption per months, independent from the total amount of consumption, it benefits all
consumers, also those with sufficient financial resources. The so-called usage subsidy on the fixed
energy charge has remained relatively stable at Rf 10-15m per month.
All electricity subsidies increased between 2010 and 2012 from Rf 90m (US$ 6m, 0.33% of GDP) to
an estimated Rf 458m (US$ 30.5m, 1.44% of GDP). (Trimble, 2012). 29% of the subsidies has been
received by the most consuming quintile of households. In Male alone, the state financed about Rf
13.5m per month in 2011, most of this amount (Rf 10.9m) for subsidizing the fuel surcharge portion
of the domestic tariffs (Statistical Yearbook 2012).
7
8
Fuel surcharge subsidy is Rf 0.03 for each increase of Rf 0.1 per litre diesel above the threshold level of Rf 8-8.5.
STELCO has an efficiency of 3.85 kWh/litre). According to (Trimble, 2012), diesel represents around 70-80% of total
generations costs. Therefore, it will exceed Rf 6.0/kWh.
Figure 1: Diesel price for electricity generation
The cost of electricity generation in Male increased from about Rf 3.0 (US$ 0.20) at the beginning of
2010 to Rf 5.4 (US$ 0.36) per kWh at the end of 2011, while the tariffs remained stable within this
period (Trimble, 2012). When comparing with the current tariff level of about US$ 0.30/kWh on
average (USAID, 2010), it becomes obvious that the tariff rates are far from being cost covering, not
to speak of making any profit. Subsidies in real terms have about doubled between late 2009 and late
2011.
The average monthly electricity consumption per household in Male was just above 500 kWh in
2009, according to HIES estimates9. 68% of households accounted for 85% of electricity consumption
in 2009.
Keeping electricity prices artificially low across different consumption levels, gives the wrong signal
for a responsible electricity use and makes a number of energy efficiency measures non-economic.
If subsidies could be cut by half through abolishing the privileges for consumers with a high level of
electricity consumption would therefore release the amount of US$ 15m per year that could be
dedicated for energy efficiency measures instead.
It is therefore suggested that a national task force under the leadership of

MEA will be established to revise the existing tariff and subsidy scheme. The
tariffs should reflect the cost situation and subsidies only provided for those
in social need. Financial resources released by reducing the current level of
subsidies should be redirected into energy efficiency measures.
It has to be noted that some meters serve several households at a time.
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6.
Renewable Energy
The Maldives renewable energy sources are limited and consist mainly of solar energy that can be
tapped. Wind speeds are low and sites for larger wind turbines not easily available. Biomass residues
are scarce and consist mainly of organic material in domestic waste. Ocean thermal energy sources
and wave energy could be an option for the future, but technologies are still under development and
not yet commercially available. Also for solar energy use, the limited land area sets close boundaries.
With 1% of the total land area (300 km) covered with solar PV panels (mainly placed on rooftops),
about 720 GWh could be generated annually. This would be in the range of two thirds of the current
electricity consumption (including resorts).
The Maldives Energy Authority (MEA) has recently published a draft for a Standard Power Purchasing
Agreement (PPA) that forms the basis for contracts between Independent Power Producers using
renewable energy sources and the incumbent utilities (MEA, 2012).
This draft Standard PPA is in first place addressing operators of larger plants
that supply significant shares of the electricity demand on an island. It is not
appropriate for the supply of excess electricity from small-scale renewable
energy facilities. It is therefore recommended to design standard contracts
also for such systems, which generate only a few kilowatts.
III-IV/2013
The MEA has further published in February 2013 guidelines for the approval process of gridconnected PV applications and for the technical interconnection provisions of such systems (MEA,
2013b). The proposed administrative procedures can have a significant impact on the so-called soft
costs associated with the realization of PV installations and reduce the competitiveness of such
systems substantially.
For small-scale systems it is highly recommended that fast-track procedures
are put in place which are not creating additional administrative burdens and
are simple and cost-effective to enforce.
III-IV/2013
It is further recommended that MEA acts as a neutral body for solving

conflicts between utilities and independent RE operators and provides staff
for such task.
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PV in Male
The Scaling-up Renewable Energy Program (SREP) intents to install 11 MW of solar PV on the island
of Male (approx. 80,000 m) (MEE, 2012a). As there is hardly any open ground space available, most
of those installations need to be placed on the roofs of existing or newly constructed buildings. This
space is as well limited due to the type of roofs, their use for competing purposes, shading by
neighbouring buildings etc. However, even with 11 MW made available, they will contribute only a
fraction (less than 10%) to the current and expected electricity demand, unless extensive energy
efficiency and conservation measures are carried out.
10
Further investigation (mapping) will need to be done to assess the exact

amount and location of available rooftop space for PV installations in Male.
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Apart from this, the problem occurs that building owners may show no
interest in investing in and operating a PV system, in particular in residential
buildings with multiple apartment owners. That means that rooftops may not
be accessible for PV installations, although they would in theory be suitable
for carrying such systems. This natural building owner PV investor conflict
needs to be solved, otherwise it is most certain that the space for housing the
above mentioned size of solar panels will not be available.
I-II/2014
It is further proposed that a detailed mapping of all roofs suitable for PV

installations in the Greater Male region takes place. Such mapping should
start with a visual analysis of air-borne or satellite pictures and include
building ownership and details on the roof structure wherever possible.
I-II/2014
Roofs on public, religious and official buildings should be offered to the

extent possible for PV installations financed and operated by the private
sector, under similar conditions that have been negotiated with the company
Renewable Energy Maldives (REM) and its German partner Wirsol. 10 Legal
arrangements for the leasing of such roofs to third parties need to be
designed.
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PV on Outer Islands
Also on Outer Islands, the space for PV installations is limited. Open space is restricted due to the
small size of the islands and rooftops may often be shaded by vegetation, essential for bringing down
indoor temperatures through avoiding direct exposure to sunlight. It has also been reported that
operators of public buildings (schools, health centers, police stations) are requesting a lease rate for
using the roofs for PV installations.
It would be helpful to map the potential roof spaces, in particular on public
buildings (schools, health centers, police stations etc.) of regional population
centers and of potential ground spaces on less populated islands.
I-II/2014
A general solution needs to be found how roofs on public buildings can be

made accessible for private investors, possibly through offering a
compensation in terms of reducing energy consumption of the buildings by
adequate investment measures.
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10
Relatively large roof spaces offer e.g. the Indira Gandhi Memorial Hospital (inaugurated in 1995) and the compound of
the Ministry of Defense and National Security in Male.
11
As part of the SREP investment plan and within its World Bank-led component ASPIRE (Accelerating
Sustainable Private Investments in Renewable Energy Programme), the GoM has called in early 2013
for a pre-qualification of interested parties to design, build, finance, own, operate and transfer gridtied solar PV systems for integration with diesel generators on 15 islands in the Upper North, North
and Upper South Region of the Maldives. The GoM has been seeking for investors to install PV
systems with a capacity of up to 30% of the peak load on each island, feeding solar electricity as
Independent Power Producer (IPP) into the existing grid under a Power Purchase Agreement with a
maximum Feed-in-Tariff of US$ 0.25/kWh. Although the specific islands in the three regions have not
yet been selected, it is already certain that none of the existing powerhouses has more than 1 MW
generating capacity. All of those islands are currently served by the recently formed utility FENAKA.
It is obvious that within such small operating environment the presence of two different generating
parties that are in need to closely interact with each other can create heavy turbulence and carries
along the potential for technical and commercial conflicts.
It is suggested that GoM (or in its place FENAKA) enters into agreement with III-IV/2013
private parties to take over the whole generation side of electricity supply
on the selected islands, i.e. including the existing diesel gensets. While in
this arrangement the operation of the electricity production would remain
in one hand, the grid operation and distribution of electricity to the final
customer could stay with FENAKA (see also the Mercados study of January
2013 on this subject, (AF-Mercados EMI, 2013a)).
Hybrid wind/solar systems

With regard to the intention of SREP to also target wind energy investments (10 islands are thought
to be fully supplied by a mix of wind and solar electricity with about 200 kW on each island and
battery support for storage),
. a critical technical assessment is required why all wind/solar systems that IV/2013
were installed in 2007 are currently out of operation (according to MEE).
Recommendations should be elaborated for the selection of adequate small
wind turbines and the provision of appropriate maintenance service.
The proposal to have FENAKA implement those systems should be

reconsidered at least for the pilot projects, as FENAKA currently has neither
the capacity nor the financial means to carry out such investment.
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It further needs to be assessed if such systems can be realized at generation III/2013

costs lower than about US$ 0.40/kWh or any current generation cost using
diesel fuel.11
11
Solar installations for full supply of electricity demand have recently been inaugurated on three islands of Tokelau in the
Pacific with a total population of 1,400 people and a combined land area of 10 km. The systems are backed up by
battery storage. Tokelau is therefore the first nation to become fully independent from fossil fuels.
12
PV on new buildings
So far, PV systems have mainly been installed on existing buildings, although the extensive
construction of new private and public buildings offers excellent opportunities for integrating PV
installations into the original architectural design. This will eliminate technical barriers for the
installation of such systems, reduce costs and increase the acceptance for PV systems among the
developers and investors.
Instant measures should be taken with regard to new building constructions III/2013
in the Greater Male region, in particular on the island Hulhumale, which can I/2014
be a showcase for low-carbon urban development (see also chapter 9.). The
state-owned Housing Development Corporation (HDC) is engaged in the
urban planning and sets specifications for constructions on plots sold to
private investors. Such specifications could also request to design rooftops in
such a manner that they can carry a maximum amount of solar PV
installations. In addition, the required minimum amount of solar electricity
share (compared to the expected consumption within the building) could be
defined.
Even more direct influence could HDC play out within their own social housing
projects, which are fully developed by HDC for later sale to individual
apartment owners. In this case, HDC could and should decide right from the
beginning on installing PV systems on all roofs of newly erected buildings. If
HDC is financially not capable of doing the investment, agreements could be
signed with external third parties to invest and operate the systems.
III/2013 -
For new high-rise buildings in the Greater Male region it is proposed that the III/2013 entity in charge of issuing the construction license (island council) requests
that suitable space is made available for the installation of PV systems. This
should be seen as a precautionary measure, as later modifications on the
building design will make solar electricity more expensive, even if the
installation of the solar systems will not be done at the initial stage.
Waste-to-Energy
Great expectations have been raised in past studies with regard to the controlled incineration of
domestic solid waste and the generation of electricity as a welcome by-product. To date, most of the
waste generated in the Greater Male region and on surrounding islands is dumped into the lagoon of
Thilafushi and partly incinerated at open air. Plans exist for constructing a larger incineration plant on
Thilafushi and some small units in regional centres of the Outer Islands. But so far, neither the
composition of the waste nor the implications in terms of technical solutions (in particular with
regard to limiting air pollution and finding adequate disposal sites for ashes and particles from
burners and filters) have been thoroughly investigated. A high organic share in the domestic waste
can significantly reduce the potential for generating excess electricity to be fed into the grid.
It needs investigation if the proposed utilization of waste-to-energy I-II/2014
13
technology on outer islands is feasible, taking into account the composition of

the waste, the available waste amounts, the specific costs of relatively small
incinerators, the filtration of the exhaust air and the disposal of the ashes.
7.
Transport
Transport is one of the most important energy-consuming sectors in the Maldives, mainly due to the
large extent of the country with a sizable number of dispersed small islands, local and tourism sea
travel, a large fishing fleet of rather small vessels and one of the largest seaplane fleets in the world.
Use of diesel fuel in the transport sector is mainly limited to sea travel, buses, pick-ups and other
larger transport vehicles for goods. Motorcycles and most passenger cars are using petrol (gasoline),
planes are operated by jet kerosene.
Energy consumption in the transport sector currently makes up about 50% of all energy use in the
Maldives. It is expected that the future overall quantity of energy for transport needs will increase
significantly under the business-as-usual scenario.
Air transport
There is currently a strong move towards expanding the network of domestic airports which would
make it attractive for local passengers to take a plane instead of the ferry and transport more goods
by air.
Sea-bound planes are almost exclusively used by foreign tourists. Maldivian Air Taxi has 20 seaplanes
and operates to 40 resort islands, while Trans Maldivian Airways has 25 planes and operates to 23
resorts islands (MOTAC, 2012a). It can be assumed that tourism-related air transport will further
increase due to the expected growth of tourist arrivals and the tendency for expanding tourism on
more remote islands
The effects of a growing domestic air transport on fuel use and
associated CO2 emissions need to be further assessed. Mechanisms need
to be established how those emissions can be offset (e.g. through
purchasing of CO2 emission certificates in the tourism sector).
I/2014 -
Land transport
Land transport is mainly concentrated on the islands of Male and Hulhumale, both with an area of
about 2 km. In particular in Male, transport is dominated by a high number of motorcycles (about
45,000 registered vehicles in 2010), while public transport has only been introduced recently and is
still scarce and not too comfortable. Even the relatively huge number of family cars with often
significant engine capacity is astonishing, as the longest distance to drive from one location to the
other is about 2-3 km with a total length of paved roads of about 60 km (Male) and there are no ways
to leave the islands by car.
14
From an external view, it is not easy to understand that transport is not primarily covered by an
efficient and extensive public bus service with an addition of regular or electric bicycles. Such system
would effectively avoid traffic congestions, lower urban pollution and noise, benefit pedestrians and
lead to a substantial decrease of petrol consumption. As distances are short, buses could operate as
hybrid diesel/electric vehicles.12 Sophisticated and easy to use bicycle lending systems could support
and stimulate switching from current motorcycle use to more environmental friendly transport
means.13 A model for a motor-free island is Villingili, where private ownership and use of
motorcycles or cars is not allowed.
Sophisticated rental system for bicycles in Mexico-City
It is suggested that the City Council of Male, the Ministry of Transport, the
entity in charge of public transport - Maldives Transport and Contracting
Company (MTCC) - and the MEE form a joint working group that looks into
options how individual traffic can be minimized or shifted to low- or nocarbon transport means and the public transport system can be further
improved.
12
13
III/2013 -
Hybrid diesel-electric buses are manufactured by a number of companies and operate worldwide in urban areas. The
transport company of the city of London has already 368 of such buses in its fleet.
See the excellent example from Mexico-City with a dense network of autonomous rental stations for bicycles in the city
center.
15
In particular, the island of Hulhumale could demonstrate that the use of

private motorcycles or cars is unnecessary under given conditions of very
limited range of transport. Roads could be clearly marked with separate
bicycle lanes and the use of public transport should be widely promoted
among the inhabitants. This has to be supported by an efficient and modern
bus service operating 24 hours and 7 days a week connecting major public
sites (harbor, commercial area, schools etc.) on different routes with the
residential sectors. For transporting larger or heavier goods, a pick-up
leasing or rental services could be established.
I/2014 -
Taxation of vehicles
Industrialized countries have experienced a strong correlation between operational costs for
transport and the use of individual transport means, i.e. whenever costs for vehicles taxes or fuels
have increased there is a tendency for purchasing more efficient, less fuel consuming cars and
avoiding car use by giving preference to other transport alternatives. Therefore, taxation of vehicles
as well as fuels can fulfill an important function in influencing the share of different transport modes
and reducing energy consumption and related GHG emissions without negatively affecting the
service for moving people and goods.
It should be analyzed if a (partial) change from taxing engine capacity to CO 2
emission (i.e. fuel consumption per mileage) could support a strategy of
reducing energy consumption in the transport sector.
I/2014 -
Differentiated sales taxes (GST) dependent on engine size or CO2 emission

could as well push the market into offering vehicles that are more efficient
and provide a signal of awareness for the purchasing customer.
I/2014 -
Higher taxes on private motor vehicles or on petrol may also reduce the use
of such transport means, as there is a strong correlation between transport
costs and annual mileage.
I/2014 -
Marine transport
The volume of fish catch has considerably decreased over recent years. This will certainly also affect
diesel consumption of fishing vessels, although at a lower rate. Based on (BeCitizen, 2010), diesel
consumption for fishery has been in the range of 308.000 tons in 2009, higher than the consumption
for electricity generation.
Further investigation will be needed to assess options for reducing fuel consumption in the fishery
industry.
16
Near distance ferry transport has the potential for being partly supported by solar energy. In
addition, more efficient ship designs (in particular catamarans) offer opportunities for lowering
energy consumption per travelled distance.
Alternative marine transport modes, as well as options to reduce energy
consumption in the existing fleet of fishing vessels and ferries should be
assessed.
III/2014
Import of biofuels
Fossil based diesel fuel can be completely substituted by biodiesel derived from various organic
sources, such as palm trees, coconuts, jatropha, rapeseed etc. As such sources are scarce in the
Maldives, biodiesel would need to be fully imported.
In addition, bioethanol can partly replace gasoline, up to about 10% blend without modification of
vehicle engines. Larger shares with up to 100% bioethanol use are possible, but need adapted
engines.
For all biofuels, sustainability criteria in terms of ecological, social, agricultural and other aspects
need to be closely observed and constantly controlled. With regard to GHG mitigation it needs to
ascertain that overall emissions are really reduced compared to fossil fuels and the release is not
simply shifted from the Maldives to the place of fuel origin.
The feasibility and implications of importing biofuels (biodiesel and
bioethanol) preferably from nearby countries for blending with fossilbased fuels should be assessed. As there are only storage facilities in the
Maldives for diesel and gasoline and no refinery exists, the fuels would
probably have to be imported in blended form.
8.
I/2014 -
Tourism and Resorts
Tourism has become the most important industry sector of the Maldives, with bringing in more than
30% of GDP (Rf 6.1m out of 20m in 201114). Revenues from the tourism sector were more than US$
2b in 2012 (US$ 1,868m in 2011). The tourism industry is almost exclusively limited to 105 resort
islands (one resort one island policy), which operate their own individual energy supply systems,
and more recently - to safari boat cruise shipping. Total bed capacity of the resorts numbered
about 22,800 as of September 2012 (MOTAC, 2012b).15 In addition, the 19 hotels of the country had
a combined bed capacity of 1,600 and 67 guesthouses offered almost 1,000 beds in September 2012.
The resorts are predominantly concentrated in the administrative divisions of the atolls Kaafu and
Alifu (North and South). Taking tourists from the international airport in Male to their destinations
and back is also an important part of the transport sector.
14
15
At constant prices of 2003.

Due to closure of some resorts the operation bed capacity was lower at 21,130 in September 2012.
17
The number of tourist arrivals reached 931,000 in 2011 and 958,000 in 2012. Tourist bednights were
6.53m in 2011 and 6.45m in 2012 (resorts and hotels) with an occupancy rate of about 76% in the
resorts segment.
It is planned to develop a further 50 resort islands with about 7,700 beds in the upcoming years.
Leasing of those islands has already taken place and the resorts are at different stages of completion.
The bed capacity of existing resorts may also further increase, as the allowed build-up area has
recently been increased from 20 to 30% of the available land space on each island.16
According to projections, tourist arrivals are expected to reach 1.24 million by 2015 (MOTAC, 2012b),
while tourist bednights would increase to 7.7 million, i.e. about 60% more than in 2012. For 2021, it
is even forecast that tourist arrivals could increase to 2.5 million. For the period of the current
Tourism Master Plan 2013-2017 it is envisaged that the bed capacity (resorts and hotels) will increase
from 25,000 beds to 35,500 beds and bednights would grow from 6.5 million to 12 million (MOTAC,
2012a).
Energy consumption in the tourism sector

Tourist resorts are a major consumption sector for energy, in particular diesel and LPG. According to
the Energy Balance of 2009 (BeCitizen, 2010), electricity production and use is larger in all resort
islands combined than in Male. It is therefore extremely important to take the tourist industry on
board in any low-carbon strategy. Estimates calculate that per bed about 4.5 tons of diesel for
electricity generation are being consumed each year (BeCitizen, 2010).17 This leads to a total
consumption of about 99.000 tons of diesel in 2012 18, responsible for the release of 280,000 tons of
CO2. With an assumed electrical efficiency of 28% (BeCitizen, 2010), this will result in an electricity
generation of about 327 GWh or an average of 340 kWh per tourist (about 50 kWh per overnight
stay). According to (BeCitizen, 2010) and based on surveys, most of this consumption is used for air
conditioning (around 40%), while refrigeration, desalination and lighting account for about 10% each.
Air conditioning is certainly an important consumption factor as temperatures rarely drop below 25
C at night and most accommodations are directly exposed to sunlight during the day.
In a business-as-usual scenario, electricity consumption would increase by 2017 to about 600 GWh
with CO2 emissions growing accordingly, although it can be assumed that new resorts will be
somewhat more energy-efficient than the existing ones.
If only the GHG emissions from use of electricity would be offset by purchasing emission certificates
on the international market, it would cost the tourism industry about US$ 1.4m annually at current
prices19 and consumption levels. Per tourist visit the extra costs would be in the range of less than
US$ 1.50.
We propose to come to voluntary agreements with resort licensees and/or
resort operators in order to achieve improved energy performance and
increase the share of RE in existing resorts, in particular through use of solar
energy for water heating (at least for central laundry and kitchen services) and
16
17
18
19
III/2013
I/2014
But it has also been reported that already in the past some resorts exceeded the allowed maximum of 20% built area.
See also consumption figure in (Ministry of Housing, Transport and Environment, 2010)
BeCitizen, page 58: Energy needs from resorts equaled 96,241 toe in 2009 (transport excluded). See also page 63,
where 94,175 toe of diesel are mentioned (difference would then need to be LPG).
Prices for Certified Emission Reductions (CER) and EU Emission Allowances are currently in the range of US$ 5 per tonne
CO2.
18
for electricity generation.
GoM should consider purchasing CO2 emission certificates on the international

market from tourism tax revenues to offset energy-related GHG emissions in
this sector.
I/2014
Energy saving potential und use of RE

Without knowing the existing situation in detail, it can be assumed - based on experiences from
other tourist accommodations in tropical countries - that the energy saving potential is significant.20
Appropriate building designs, proper insulation and shading and increased awareness among guests
and staff could reduce the amount of air-conditioning needed. Low-flow water taps can reduce cold
and hot water use with subsequent positive consequences on energy consumption. Guestroom
management systems and energy-efficient refrigeration systems for accommodations and central
food storage can lower electricity needs substantially, even in 5-star hotels and resorts21. In
particular, natural ventilation and fans can assist in reducing electricity demand for air-conditioning.
Modern LED lights in combination with control sensors may reduce electricity needs for lighting and
can be directly fed from solar battery systems. Waste heat from diesel gensets can accommodate hot
water demand, in particular for central services, such as laundries, but also be used for cooling and
desalination purposes.
Some resorts in the Maldives already use RE at a minor scale, mainly in the form of solar collectors
for heating fresh water, while the integration of solar electricity systems is still rare.22
Leasing and operation of resorts islands

Resort islands are leased by the Government to either local or foreign entities or joint venture
companies23. The resort operator can be the same entity or a different company and requires a
license that will be renewed every five years. About half of the bed capacity is currently under
control of local operators. The Tourism Act states that all resorts and hotels will be leased for 25
year. If the initial investments exceeds US$ 10, then the lease period can be extended for up to 35
years. New regulations since 2010 allow resorts to lease for up to 50 years against the payment of
fees.
Environmental issues in the tourism sector are being covered in the Regulation on the Protection
and Conservation of Environment in the Tourism Industry24 that came into force in July 2006,
pursuant to the Maldives Tourism Act of 1999. This regulation requests that an Environmental Impact
Assessment is carried out and submitted to the Ministry of Tourism prior to any construction project,
20
21
22
23
24
See e.g. here: http://www.caribbeanhotelandtourism.com/CASTchenact.php

See the example of Hilton Egypt at www.seda-eg.com/sites/default/files/
sustainbility_hilton_egypt_jan_2013.pdf, where audits in 18 hotels have shown savings with an average payback period
of 2.8 years.
One of the few larger-scale PV installations in the tourism sector if not the only one of its type in the Maldives can
be found at the Soneva-Fushi Resort on the island Kunfunadhoo. It has a capacity of 70 kW p, serves the spa area and
was realized in 2009 by the German company Belectric.
Leasing and taxation issues are regulated in the Maldives Tourism Act of 1999 and its amendments.
To be downloaded from the website of Environmental Protection Agency epa.gov.mv
19
in accordance with the Protection and Conservation of Environment Act of 1999. The regulation
targets the areas of waste and sewage treatment and sets requirements for desalination of water on
each resort island, restricting the use of groundwater and setting standards for non-obstructing the
shoreline, among others, but is not specifically mentioning any energy-related subjects.
MOTAC could also consider including energy-related requirements in the
licensing contracts similar to those requested for waste disposal and
environmental protection. But, as most licensing agreements for future
development have already been signed, this proposal may not achieve
adequate results.
IV/2013
Construction permits should include the obligation for installing solar thermal
systems in new resort and hotel developments, as is now the case in Egypt. 25
I-II/2014
It should be considered if energy-related aspects could be made subject of a

future amendment of the environment protection regulation. A legal
framework could be established by extending the requirements for passing the
Environmental Impact Assessment procedure26 with standards on energy
efficiency, maximum consumption per overnight stay and minimum shares of
RE contributions.
III-IV/2013
Taxation in the tourism sector

Tourism is being addressed by various taxes and is one of the main income sectors for the
Government Revenue (total Rf 8,323m in 2011):
25
26
27
28
A tourism-General Sales Tax (T-GST)27 with currently 8%, generating Rf 665m in 2011 and Rf
1,579m in 2012; this tax will increase to 15% from June 2013 on and should then generate an
extra US$ 133m per year (Rf 2,847m expected for 2013).
A bed tax (also referred to as tourism tax) of US$ 8 per accommodation bed and night that
generated Rf 751m in 2011 (16% of total tax revenue) and Rf 813m in 2012.
A land lease tax28 that is charging US$ 8 per m of land accumulated to Rf 1,603m in 2011.
The airport service charge generated about Rf 329m in 2011.
A bill to increase airport departure tax, which is currently US$ 18 and usually charged with
the air ticket, failed to pass in parliament in 2009. An airport development tax of US$ 25 has
been proposed, but is still not in place.
See http://solarthermalworld.org/content/egypt-starts-green-tourism-initiative-hotel-solar-obligation.
The Environmental Impact Assessment Regulation of 2012 is currently only available in Dhivehi language. The EIA
enforcement for any activity that may have an impact on the environment began with the Environmental Protection
and Conservation Act of 1993. First regulations governing the administration of the EIA process were published in 2007
by the Ministry of Environment.
The GST is practically a Value Added Tax and was initially introduced on tourism in 2011, but was applied to all sectors
of the economy since October 2011. In compensation, most import duty has been eliminated from December 2011 on,
except for a few items. These include goods that would deteriorate the environment.
Introduced in 2011 (Tourism Act, 2010). Initially it used to be a tax based on the number of tourist beds.
20
All taxes together have earned the GoM some Rf 1.6b (more than US$ 100m) in 2011 , out of a total
government revenue from the tourism sector in the order of Rf 3.3b (40% of the total government
budget), and an estimated Rf 4.3b (US$ 290m) in 2012. Over 90% of the total government tax
revenue is from tourism, import duties and transportation related taxes.
Besides those taxes, it is proposed that the majority of revenues for the future Green Fund that
would finance renewable energy and energy efficiency projects among others will also be earned
from the tourism sector, i.e. through resorts, dive schools, reef fishing and safari boats contributions
(MEE, 2012b). In comparison to the tax revenues from the tourism industry mentioned above, the
proposed budget for the Green Fund of US$ 1.6m is negligible.
Reflecting the importance of the tourism sector for the energy (fossil fuel) IV/2013
consumption of the Maldives, it should be considered spending larger
amounts of revenues earned from this sector for incentives that promote
RE and EE measures or introducing partial tax waives for the application of
such measures.
Awarding Sustainable Tourism

GoM has since 1997 awarded some resorts for their strategies of complying with sustainable tourism
requirements (President of Maldives Green Resort Award). Some tour operators also honor certain
resorts in a similar manner, thus responding to higher awareness among their tourist clients and
using such awards as marketing tools. It is recommended that the criteria for such awards give more
attention to energy aspects than they have done in the past.29 A Green Star (Eco-Label) has recently
One of the prominent awards for Sustainable Tourism is the international Green Globe Award
(www.greenglobe.com). It has established a number of standards and indicators as criteria in the fields of
Sustainable Management, Social and Economic aspects, Cultural Heritage and Environment.
As for energy, the following criteria have been set up:
Energy consumption should be measured, sources indicated, and measures to decrease overall consumption
should be adopted, while encouraging the use of renewable energy.
Energy use is one of the most damaging activities on the planet with adverse impacts degrading air, water, soil
quality, human and ecological health. Energy efficiency through sustainable technology and effective waste
management is a key strategy to reduce the negative impact. The greatest environmental and financial
benefits related to business operations are achieved by frequently monitoring utility bills, effectively training
and providing incentives for staff to implement energy efficiency programs, and routine preventive
maintenance of mechanical equipment. By applying energy efficient practices to the operations and investing
in renewable energy technologies (e.g., solar, wind, micro-hydro, and bio-mass), the Business can help conserve
natural resources, promote energy independence, and reduce greenhouse gas emissions.
It is noticeable that the criteria are formulated in a rather vague manner without really setting indicators that
would need to be fulfilled.
29
An example for mainly ignoring the important energy issue is demonstrated by the awards provided by the
international organization Travelife that is dedicated to honor Sustainability in Tourism (www.travelife.org). One of the
recipient of the Travelife Gold Award is the Chaaya Reef resort on the island Ellaidhoo. The resort states as its
environment policy that energy efficiency measures would be taken and that it is seeking for renewable energy sources,
but does not specify, which measures have already been implemented.
21
been introduced in the Egyptian hotel industry with support by GIZ. 30
GoM should start an initiative for awarding specifically resorts and hotels that
comply with minimum energy efficiency standards and use renewable energy
sources.
I/2014 -
Tour operators should be made aware of the concerns associated with energy
supply on resorts islands and should from their side urge resort operators
and/or leasing companies to fulfill certain requirements in terms of EE and
use of RE. Such requirements should include minimum shares of RE supply,
installation of an adequate energy management system to avoid excessive
diesel fuel consumption during low load periods, the obligation to use only
solar collectors or waste heat from the gensets for hot water production, the
proper insulation of buildings if air-conditioners are used and the purchase of
appliances with the highest energy efficiency standard available on the
market.
I/2014
It is further recommended that MOTAC in alliance with other relevant

ministries forms a Green Unit to plan and monitor all activities for the
sustainable transformation of the tourism industry.
I/2014 -
A further operational unit should be established in collaboration with the

tourism association to ensure proper implementation of the different
measures and sharing of experiences between the stakeholders.
II/2014 -
9.
Energy Efficiency in the residential, commercial and public sector
Electricity consumption in the residential and commercial sector absorbs a high share of total energy
consumption in the Maldives. In the domestic sector, the most important areas are refrigeration of
food, air-conditioning and lighting. In the commercial and public sector it is mainly air-conditioning
and lighting.
30
See www.greenstarhotel.net
22
Due to low levels of climate-adapted

construction, high outdoor temperatures and
increasing demand for comfort, air-conditioning
is becoming more and more popular, despite
relatively high electricity rates. The penetration
of refrigerators and freezers (or their
combinations) in private households is high.
With regard to lighting, the use of energyefficient light bulbs (CFLs) or fluorescent tubes is
already widespread and has practically replaced
inefficient incandescent light bulbs in recent
years. But still there is significant potential for
reducing lighting energy by using more daylight
without allowing direct solar radiation to enter
the building.
Most existing buildings have no wall or roof
insulation against transfer of heat from the
outside to the indoor environment. New roof
constructions are sometimes insulated, but
there are no specific legal or technical
requirements to do so.
(Picture: Office Building with individual room air conditioners in Male)
Building Code
The Ministry of Housing has started some time ago with drafting a Building Act and a Building Code
(Ministry of Housing, Transport and Environment, 2010). While the first is mainly regulating the
construction permission and execution process and the licensing of building practitioners, the second
is thought to prescribe functional requirements for buildings and the performance criteria with which
buildings have to comply in their intended use. So far, the draft of the building code is mainly looking
at structural, functional (e.g. sanitary) and safety issues, but has not incorporated any specific
energy-related requirements.
From our point of view, a building code can be beneficial on the background of a well functioning and
sufficiently equipped public administration that is capable of supervising the construction process
and can enforce sanctions in case of non-compliance. Such administrative structures can certainly be
established in the Greater Male region (using the existing island councils or the Housing
Development Corporation, see below), but it is doubtful that such control can effectively be set up on
the smaller Outer Islands.
It is therefore proposed that other instruments will be developed for making
constructions on the smaller islands become more energy-efficient, in
particular for such houses that are being constructed informally by the
owners themselves. This could be done by providing adequate information
about building designs, construction material etc. and making such material
(e.g. for insulation of roofs and walls) available on the local market.
23
III/2014
For all local public or Government buildings, the Ministry of Housing should
establish guidelines for minimum energy performance standards and the
purchasing of energy-efficient appliances and devices (in particular for airconditioning and lighting).
II/2014
Example of Hulhumale
The most extensive development in building construction is currently taking place on the island of
Hulhumale. It is planned that housing is provided for up to 60,000 residents by 2020 on this
reclaimed land area. All of the residential and commercial buildings have been erected in the past
nine years (since 2004), either by private investors or state-owned institutions. The government
owned Housing Development Corporation (HDC)31 has taken over the central role for overseeing the
urban planning and developing own projects.
In the case of the development of Hulhumale, HDC occupies three different roles: acting as master
developer, engaging as builder of infrastructure and social housing projects and serving as regulator
with oversight of planning, architectural guidelines and building regulations. In this regard, HDC plays
a central role in determining criteria for constructions of the private sector as well as for own
developments, in particular in the social housing sector for low-income families.
So far, energy efficiency and use of renewable energy has not been a focal issue that HDC has dealt
with. Despite of the enormous construction volume, none of the already existing buildings carries
solar installations or has been specifically designed to cope with tropical climate conditions in an
energy-efficient way. In particular, the practice of window shading and wall insulation is not very
common.
Social housing development on Hulhumale with financial

assistance of China
Private housing investment on Hulhumale
Hulhumale could serve as a showcase model for energy-efficient building

construction and a low-carbon urban development for the whole country
and beyond. Since HDC can directly guide the process of architectural
designs and use of energy-efficiency and renewable energy technologies, it
31
IV/2013 - ..
Formerly Hulhumale Development Corporation. The name was changed in 2009 with the extended mandate to develop
government housing projects not only in Hulhumale but also elsewhere in the Maldives.
24
should take over a leading role in this regard. Properties should be sold
with the obligation to reduce the need for air-conditioning to the lowest
level possible through passive measures, such as insulation of the building
envelope and use of natural ventilation, and construct roofs in such a
manner that sufficient space for solar panels is made available. Social
housing projects32 should be designed in a climate-friendly and adapted
way and carry PV installations that are either operated and maintained by
HDC or an external third party selected out of a bidding process. Most
probably, HDC will initially need to be assisted in drafting regulations and
specifications dealing with energy-related aspects, including legal and
contractual issues. Furthermore, architects have to be made aware of
options for climate-adapted designs and building-integrated use of solar
energy.
Standards and Labelling of electrical appliances

MEA has started to work on the introduction of Standards and Labels for electrical appliances.
Examples from other countries have demonstrated that the introduction of Minimum Energy
Performance Standards (MEPS, i.e. setting upper limits for the specific energy consumption of a
certain appliance) and the use of labels which indicate energy consumption or cost saving in
comparison with other similar types of equipment on the market, can have a considerable impact on
saving energy, in particular with regard to larger domestic appliances, such as refrigerators, freezers,
TV sets, air-conditioners etc.
MEPS prevent that less energy-efficient appliances will enter the market, while labels can be an
additional purchasing criteria by selecting a more energy-efficient appliance out of the range of
products which are available on the market. Both MEPS and labels refer to testing procedures which
are still not globally harmonized. Therefore, indications for a certain energy consumption might
differ, even for the same product, as the criteria for executing consumption measurements can differ
from country to country.
The Maldives have a rather limited purchasing capacity and are getting products from different
countries of origin. Often those products will carry with them a label for a certain country of
destination. As those labels are different from country to country in style, information and the way
data have been retrieved, they are hardly comparable and of very limited value for uninformed
consumers.
Therefore, the idea was born to introduce an own Standards and Labelling scheme for the Maldives.
As this approach is in principle right and understandable, it bears a number of problems and
challenges. The market size of the Maldives is rather small; therefore, the amount of pressure that
Maldives can use in the direction of manufacturers is limited. Even if there is a legal requirement for
attaching labels on certain products, the correctness of such labels needs to be verified from time to
time. This requires the existence of certified laboratories, which can execute the test routines
32
A social housing program is currently under implementation with financial assistance from China. Between 2012 and
2014, 3,000 housing units will be built, including row houses, semi-detached houses and multi-story flats (the latter for
5,000 residents have already been completed on Hulhumale). Following will be another 4,000 housing units, this time
with assistance from China and India (GEF, 2011).
25
established by the country rules or within internationally accepted testing standards. It is evident
that the Maldives do not have the capacity to do such testing for the moment. Even it tests are done
on a random basis (as by far not all products on the domestic appliances market can be covered),
they still need sufficiently equipped laboratories and trained personnel to conduct such tests. Critical
is also the control of imports, in particular if MEPS should prohibit the sale of less efficient products.
Therefore, other solutions need to be found that look more into a regional approach, e.g. in
cooperation with the much larger markets of India33 or Sri Lanka34. While India has a relatively
advanced mechanism for standards and labels in place, Sri Lanka has so far only established a
labelling scheme for Compact Fluorescent Light bulbs, while the ruling for refrigerators and freezers
is still in discussion. But even in India, labels are to date only mandatory for frost-free refrigerators,
tubular fluorescent lamps, room air conditioners and distribution transformers, while they are
voluntary for appliances such as TV sets, washing machines, ceiling fans, among others. Voluntary
arrangements are often ignored by manufacturers, as more energy-efficient appliances are often
regarded as luxury items.
Even below requirements for standards and labels, the GoM could arrange
with retailers to purchase more energy efficient appliances on the
wholesale market and provide adequate information on energy
consumption of appliances in their outlets. It is therefore recommendable
to investigate the origin of major appliances on the Maldivian market and
collect information on the energy consumption of appliances within
different product categories. Wherever products are being imported with
labels, those labels should be displayed in the stores, unless their message
is completely dysfunctional for the consumer (e.g. labels written in
Chinese). Such requirement could e.g. be incorporated in consumer
protection acts.
I-II/2014
As the awareness for energy-efficient products is relatively low among the

general public, information campaigns with support of the electric utilities
should be arranged, e.g. within a regular annual energy week, by providing
information with or on electricity bills or by setting up showrooms for
demonstrating the difference of energy consumption of common domestic
appliances on a permanent basis.
IV/2013 -
GEF Project
Under the project title Strengthening Low-Carbon Energy Island Strategies a funding proposal for
the Global Environment Facility (GEF) that is thought to run from 2013 until 2018 is currently in
preparation with support from the UN Office for Project Services (UNOPS) (GEF, 2011). The proposal
is specifically addressing energy efficiency in the building and appliance sector. It is targeted at all
types of new and existing buildings and wants to promote the replacement of inefficient appliances
and the market introduction of energy-efficient products through setting of standards and use of
labels as well as awareness rising among retailers, customers and users.
33
34
See Bureau of Energy Efficiency, www.beeindia.in

See www.gic.gov.lk/gic/index.php?option=com_info&id=1700&task=info&lang=en, and the homepage of the Sri Lanka
Standards Institution: www.slsi.lk
26
The project consists basically of six components, combining technical assistance and investment
measures:
1. Establish an assessment and monitoring system for the Energy Efficiency Road Maps for the
building sector (focused on small island tropical environment)
2. Selection and recommendation of new design parameters for EE & LCE buildings
3. Developing local technical expertise
4. Technology transfer and commercial-scale demonstration of EE & LCE technologies
5. Policy for Transformation of Markets for EE & LCE technologies
6. Financing for EE and LCE Building Technologies.
Investment activities are primarily focused on the social housing sector, targeting the soft loans
provided by China and India for such new constructions (see above) as the major source of cofinancing. It is therefore essential that agreements are established with the donor countries on how
energy-efficiency and RE aspects can be incorporated in the future housing projects. Furthermore,
the project wants to address the subject of EE standards and labelling for diverse electrical
appliances (see previous chapter).
Below the level of introducing officially voluntary or mandatory labels, HDC
could provide advice for new apartment owners on the purchasing of
energy-efficient equipment (air conditioners, fans, washing machines,
refrigerator/freezers, lighting etc.) or equip social housing projects with
adequate appliances.
I/2014 -
As the GEF project will not start before 2014, it should be considered if the
GIZ project could lay the foundation, on which the GEF project could further
proceed in the future. Assistance could be provided e.g. in setting guidelines
for the use of energy-efficiency technologies and designs in the (social and
private) housing sector.
III-IV/2013
Demand-side management activities

With support of the GoM, several energy audits in public buildings have been executed in the past in
order to identify energy saving potentials. The private sector has also mandated energy audits, in
particular within the hotel sector. Experiences from other countries show that energy audits are
better accepted if their execution is financially supported by the Government and technical
guidelines determine the performance of the audit.
Continuous awareness raising on energy saving issues among the general public is essential for the
success of any energy policy. One way of spreading the message is by sending out specific
information, e.g. on purchase and use of energy-efficient equipment, with or on the consumer bills.
Energy audits will be financially supported by the GoM for all major energy
consumers and guidelines for the performance of such audits will be
established.
27
I/2014 -
STELCO and FENAKA (as well as other utilities) with support of the MEE and I/2014 MEA will inform their customers about energy-efficiency related issues, e.g. in
combination with sending out consumer bills.
10. Targets for a low-carbon economy

Setting long-term goals and objectives is fundamental for any political process. Government
decisions should be instrumental in achieving those objectives through various measures. In order to
judge if the correct road is taken or political decisions need to be adjusted, a constant monitoring
and evaluation process is necessary, preferably measuring the impact of the decisions in comparison
with intermediate and short-term targets.
In 2009, former President Nasheed announced the objective for Maldives to become carbon neutral
by 2020. This was mainly a political move giving the world a signal that the Maldives would take
climate change as a serious threat for its own survival and would react consequently, although its
contribution to climate change is minimal.
The third National Environment Action Plan of 2009 established a number of goals and specific
targets, among those the target to submit a bill to Parliament by 2010 on reaching carbon neutrality
until 2020 and the target to cover 50% of the electricity supply from renewable energy sources by
2015. Neither has such a bill been submitted to Parliament nor is it realistic that the RE goal will be
achieved in the remaining time span.
In order not to loose credibility among the international community it is recommended to set new
and most likely achievable targets for the next 10 to 15 years. As it is unlikely that carbon neutrality
can be achieved by indigenous renewable energy sources covering all energy demands, such targets
will also have to consider offsetting part of the GHG emissions (e.g. in the tourism sector) through
the purchase of carbon emission certificates on the international market.
The GoM will define new short and medium targets for achieving carbon
neutrality or for the Maldives to become a low-carbon economy.
III-IV/2013
The GoM will further set up a monitoring and evaluation system for
measuring the progress in achieving the targets and proposing political
corrections where necessary.
I/2014 -
11. Institutional strengthening

It is the general observation of the consultant that coordination of political activities between the
Ministries as well as between the ministerial level and state-dependent entities needs to be
improved. Clear guidance on political intentions and a defined sharing of responsibilities within the
Government seems to be lacking to a certain extent. It was not possible to analyze the competence
and strength of each institution visited during the mission. We will therefore concentrate on the
28
important Maldives Energy Authority (as the regulating entity) and the role of the Climate Change
Advisory Council in the following.
Maldives Energy Authority (MEA)

The MEA was established in April 2006 following the abolishment of the former Maldives Electricity
Bureau. The MEA is an independent regulatory body affiliated to the Ministry of Environment and
Energy and operates under the guidance of a governing board. Its mandate is determined by a
presidential decree and includes the following subjects:
1. Providing advice to relevant government organizations regarding energy, and assisting in
decision-making in this sector.
2. Setting the standards and operating the regulations for the administration and monitoring of
this sector according to government policy on energy.
3. Developing the regulatory code and standards on the production and use of energy in the
Maldivian context, and developing and administering the regulations for the provision of
energy in the Maldives.
4. Setting the standards for the sources of energy that are imported into or sold in the
Maldives.
5. Issuing permits to parties that wish to provide electricity services, setting up the system of
fees for the services provided by such parties, issuing permits to parties that wish to produce
electricity for their own use, and monitoring such parties to ensure adherence to relevant
regulations.
6. Issuing permits to electric technicians and setting the standards for consultants.
7. Investigating issues between parties arising from non-compliance to the terms of
agreements between providers and users of electricity.
8. Monitoring the statistics on the production and usage of energy in the Maldives, ascertaining
the energy requirements of the nation, and gathering data, researching and disseminating
information on this issue.
The MEA is in charge of regulating the utility sector as well as the non-utility sector (e.g. operators of
gensets on the resorts islands or electricity generation by island councils).
The MEA has recently received technical assistance from the World Bank and ADB for the
formulation of electricity sector regulations ( (AF-Mercados EMI, 2012). In December 2012, drafts
were published for public comment on Metering Scheme, on a Service Provider Code, on Installation
Standards and on Licensing of Electrical Engineers.
Furthermore, in February 2013 the MEA published a technical guideline for the grid-connection of PV
systems and a manual for application of PV grid-connections (MEA, 2013a) (MEA, 2013b).
In its duty to oversee the annual statistics related to energy production, distribution and use, in May
2013 the MEA has sought consultancy support for the collection of energy-related data.
In addition, the MEA has published a draft Power Purchase Agreement for contractual arrangements
between renewable energy developers as supplier of electricity on one hand and the state owned
utilities STELCO and FENAKA as purchasers of such electricity on the other hand (MEA, 2012).
The MEA has also started activities on Standards and Labelling of electrical appliances (see chapter
9.). A revision of the current tariff structure is still up for decision. Rules for feed-in tariffs and net29
metering schemes have been elaborated with support of consultants (AF-Mercados EMI, 2013b)
under an ADB support project (ADB, 2011), but need to be further elaborated and put in place (see
Annex C for comments on the proposal for feed-in tariffs).
In comparison with the huge number of tasks, the MEA is significantly understaffed. The MEA
occupies a variety of functions, which in other jurisdictions are shared between statistical offices,
electrical inspectorates and bureaus of standards.
Unless the MEA receives further financing, it is therefore recommended that
it concentrates its efforts on essential issues that cannot be handled by other
entities. In this context, the MEA should refrain from intervening in technical
issues that can be solved independently by other parties, such as the approval
of the interconnection of PV systems (MEA, 2013b), which is primarily an
issue between the PV plant operator and the grid operator (other than
expressing the permit for electricity generation which should remain with
MEA).
III/2013
As already mentioned in the chapter on Standards and Labelling, the

introduction of own labels is not recommended for the Maldives and the
verification of standards based on international testing practice needs
laboratory equipment which is currently out of reach for the country.
Statistical issues should be left as far as possible in the hands of the

Department of National Planning, which is publishing the annual statistical
yearbook.
Climate Change Advisory Council

In April 2009, a Climate Change Advisory Council CCAC) has been installed as expert group that was
thought to spearhead the governments efforts to mitigate and adapt to the effects of climate
change. The council was presided by the Vice President and reported directly to the Presidents
office. It consisted of representatives from ministries as well as a number of experts from various
professional areas. It was also supported by a group of international climate change and energy
experts.
The council has failed to meet in the recent past, although there is an urgent need to integrate
external knowledge into the decision making of GoM.
It is therefore recommended that the CCAC will be reactivated. The
government side should primarily be represented by technical staff, while an
effective Secretariat should be established and convene for regular meetings.
An adequate budget should be allocated to allow for financing of
contributions which support the work of the CCAC.
30
III/2013 -
References
ADB. (December 2011). Republic of the Maldives: Capacity Development of the Maldives Energy
Authority.
AF-Mercados EMI. (June 2012). Developing a Regulatory Framework for the Maldives Energy Sector.
AF-Mercados EMI. (January 2013a). Solar PV Integration in Maldives - Phase I Report.
AF-Mercados EMI. (March 2013b). Financial Incentives to Renewable Energy in Maldives, Draft
Report.
BeCitizen. (November 2010). The Maldives' 2009 Carbon Audit.
ECFA. (March 2011). Engineering and Consulting Firms Association Japan / Tokyo Electric Power
Company (TEPCO). The Study on Upgrading the Male' Distribution System in the Republic of
Maldives.
GEF. (2011). Project Identification Form: Strengthening Low-Carbon Energy Island Strategies.
GoM. (November 2009). The Government of Maldives, Stategic Action Plan 2009-2013.
MEA. (2012). Maldives Energy Authority, Standard Power Purchase Agreement, Draft.
MEA. (February 2013a). Maldives Energy Authority, Guideline on Technical Requirements for
Photovoltaic Grid-connection.
MEA. (February 2013b). Maldives Energy Authority, Manual for Photovoltaic Grid-connection
Application.
MEE. (2012a). Ministry of Environment and Energy, Maldives SREP Investment Plan 2013-2017.
MEE. (December 2012b). Ministry of Environment and Energy, Establishment of the Maldives Green
Fund, First Annual Operation Plan and Budget, Draft Version 2.
Mercados. (2012). Capacity Development of the Maldives Energy Authority.
Ministry of Housing and Environment. (2010). Maldives National Energy Policy and Strategy.
Ministry of Housing, Transport and Environment. (2010). Maldives National Building Act - Second
Draft.
Ministry of Housing, Transport and Environment. (2010). National Assessment Report 2010.
MOTAC. (2012a). Ministry of Tourism, Arts and Culture, Fourth Tourism Master Plan 2013-2017.
MOTAC. (2012b). Ministry of Tourism, Arts and Culture, Tourism Yearbook 2012.
PWC. (January 2011). PriceWaterhouse Coopers, Framework for Energy Investments in the Maldives.
Tourism Act. (2010). Law 20/2010, Second Amendment to the Maldives Tourism Act.
Trimble, C. (2012). An Analysis of the distribution and fiscal burden of electricity subsidies in the
Maldives. World Bank.
USAID. (April 2010). Maldives Submarine Cable Interconnection, Pre-Feasibility Study.
31
Annex A:
Terms of Reference
of consultancy service
Annex B:
Relevant Figures
1)
GHG emissions
Total GHG emissions in 2009: 1.3m tons of CO2eq, of this
Power generation: 43%
Transport sector: 30%
(Comment: The import of 281.000 toe of diesel will lead to 784,000 tons of CO2).
Energy consumption accounts for GHG emissions of about 1.0m tons of CO2eq.
GHG emission per capita: about 4.2 tons CO2eq.
Emission per US$ 1000 of GDP: 0.93 tons CO2eq.
Annual increase of GHG emissions: 10-15%.
Tourism directly accounts for 36% of GHG emissions (of this resorts 23%).
Fishing (1,216 vessels) directly account for 11% of GHG emissions (using 36,681 tons of diesel in
2009) According to National Assessment Report 2010, industrial fishery used 6m liters of
diesel.
Outer Islands account for 6% of GHG emissions.
Domestic sea transport accounts for 21% of GHG emissions.
2)
Fossil fuel imports

2009: US$ 193.3m (about 14% of GDP)
2010: US$ 245.0m (about 17% of GDP)
2011: US$ 340.2m (about 26% of GDP)
2012: US$ 474.6m (about 35% of GDP)
According to Maldives Customs Service:

Import of all petroleum products in 2011: US$ 366.4m, of those petrol US$ 33.4, diesel US$
289.3 and aviation gas US$ 25.2
Import of all petroleum products in 2012: US$ 488.3, of those petrol US$ 39.0, diesel US$
330.7 and aviation gas US$ 99.4
In 2009, 281,000 toe of diesel for US$ 153.2m were imported35.

SREP: In 2011, US$ 261m (=20% of GDP) were spent for importing 316,000 toe of diesel.
35
1 ton diesel = 1.01 toe, 1 toe = 11.63 MWh
SREP: About 81% of fuel imports is diesel (DL: would have been 321,000 toe in 2011). 44% of it is
used for electricity generation.
Total imports (c.i.f.) were US$ 1,465 in 2011.
3)
Primary energy consumption

Total primary energy consumption in 2009 was 340,000 toe.
SREP: TPE was 224,000 toe in 2002 and 396,000 toe in 2011.
4)
Electricity generation
122,000 toe of diesel (1,419 GWh) were used for (public) electricity generation.
Total installed capacity:
Types
Inhabited islands
Tourism Resorts (estimated)
Industrial Islands
Total
Installed capacity (MW)

120
105
20
245
According to (MEE, 2012a), there are no data about the installed capacity on resorts islands.
Therefore, it was simply assumed that the installed capacity would be 1 MW per resort.
Installed capacity in Male is 48 MW (MEE, 2012a).
Fuel efficiency varies from 0.68 litres/kWh to 0.26 litres/kWh.
Subsidy in the electricity sector: about US$ 25m in 2011 (MEE, 2012a).
(MEE, 2012a): FENAKA operates electricity generation and distribution on 115 of 194 inhabited
islands, STELCO operates electricity systems on 10 islands (DL: according to STELCO website now
27 islands), island councils provide electricity on 63 islands and 6 islands have a private
electricity supplier.
(Ministry of Housing, Transport and Environment, 2010): MWSC produces more than 500 m of
desalinated water und used 2,126 tons of diesel in 2004.
National Electricity generation (Energy Balance 2009, own calculation):
STELCO, Greater Male region

STELCO, Outer Islands
Regional utilities, island
councils, private operators on
Outer Islands
Industry, commerce, MWSC
Cold stores and canning
industry
Resorts
Total
5)
Electricity production
Toe
MWh
19,530
227,000
1,019
11,850
33,563
390,000
Diesel input
Toe
51,269
2,979
115,220
Efficiency
%
38.1
34.2
29.1
1,453
1,745
16,900
20,300
3853
6,233
37.8
28.0
25,543
82,853
297,000
963,050
91,226
270,780
28.0
30.6
Electricity consumption
National public electricity consumption (excluding resorts and self-generation) in 2011 was 428
GWh. (MEE, 2012a): 225 GWh is consumed in Greater Male region (excluding Hulhule the
airport island), 217 GWh is being consumed in Male.
Electricity consumption in Male in 2011: 212 GWh according to Statistical Yearbook 2012 (217
GWh according to (MEE, 2012a)). 49% of this is used in the residential sector (104 GWh), 37% in
the commercial sector, 13% in Government buildings and 2% in schools and public places.
Electricity consumption on the outer islands varies from 8,000 MWh/a to less than 95 MWh/a
per island.
6)
Resorts
Number of tourist resort islands: 104 (October 2012), 6 of those closed for renovation or other
reasons.
About 50 more resorts could be developed with a planned capacity of 7,700 beds.
About 22,800 beds in resorts.
Average diesel use for electricity generation per bed: 3,807 liters (Source: MHTE, Dept. of
Climate Change and Energy, National Assessment Report 2010) would mean about 84m liters
in 2012, from which about 235 GWh could have been produced.
Electricity in resorts (source: Energy Balance 2009): Average use of diesel for electricity
production estimated at 4.59 toe/bed, resulting in 91,226 toe diesel in 2009. Average conversion
efficiency for electricity generation is assumed to be 28%.
7)
General data
a) Population:
Total registered population, not including expatriates: 351,000 as of July 2012 (Statistical
Yearbook 2012).
Greater Male region: 63,00036, not including expatriates (Statistical Yearbook 2012).
Annual population growth rate: 1.69% (MEE, 2012a)
Number of inhabited islands: 190 (was 194 in 2006).
Only 4 islands besides Male have a population > 5,000.
One quarter of the islands has a population < 500.
On average 6.2 persons per household.
Average household income: Rf 28,909 in Male and Rf 11,200 on other islands (2010).
Forecast (Dept. of National Planning): 2020 370,000; 2030 414,000 (not counting immigrant
workers and their families).
b)
GDP in 2012:
Rf 34,148m (US$ 2,214m, estimated, at current market prices).

Rf 21,160m (US$ 1.653, estimated, at constant 2003 prices).
Per capita: US$ 5,273 (at current market prices, based on a total population of 420,000,
including expatriates).
By sector: Tourism 28%, Construction and Manufacturing 14%, Electricity and Water 3%,
Transport & Communication 19%, Fisheries and Agriculture 3%, Other Services % (source
Maldives Monetary Authority 2013).
36
This figure is far lower than noted in most recent publications, but does not include foreign migrant workers and
nationals who live in Male, but are still registered on their native islands.
Annex C:
Comments on draft report
Financial Incentives to Renewable Energy in Maldives
Some comments on the draft report
FINANCIAL INCENTIVES TO RENEWABLE ENERGY IN MALDIVES

(March 2013)
Detlef Loy, GIZ consultant

(dloy@freenet.de)
Off-grid systems
How are off-grid systems defined? Apparently islands with an installed capacity of up to 500 kW are
regarded as off-grid or as noted on page 54: roughly 50% of the installed capacity is not grid
connected? Or is everything off-grid that is not served by either STELCO or FENAKA?
What would be the effect of FITs for such systems on the national budget? Why should such systems
be paid a FIT based on generated electricity (possibly used in an inefficient way) instead of paying a
one-time investment subsidy?
FITs would be paid for all sizes up to 500 kW?
Isolated/scattered consumers that are not even connected to any small island network, could
relatively easily manipulate the amount of self-generated and consumed RE electricity and charge for
this amount.
Another question is, if there is really potential for off-grid systems that are purchased and operated
by individual owners (with presumably low income levels on remote islands).
Net-Metering
It is not further outlined how the net-metering will be applied for systems up to 50 kW (this will
certainly affect the majority of all PV installations). Will banking of surplus sales be possible beyond
year end? Or will a positive balance on side of the generator be reimbursed and if yes, at what
conditions?
The study states that this methodology might require some additional support for the deployment of
these small installations, though actual tariffs, i.e. without subsidies would enable these facilities to
compete with retail tariffs (page 44). This would mean that self-consumption will also receive some
reimbursement that will balance the existing subsidy for conventional electricity (on page 55 it says
that the net-metering regime would be a 1:1 pricing mechanism).
For large facilities, the study notes on page 44 that they may install RE facilities for their own supply
with considerable amount of energy surplus which may be sold to the grid.. These facilities may be
handled with an alternative approach between traditional FIT and net metering. It is not clear how
this approach would manifest in practice.
Furthermore it is not clear if small systems (<50 kW) necessarily will have to be building integrated or
household facilities (as mentioned on page 55).
Tendering
Why is tendering proposed in parallel to FIT for system above 50 kW? And there seems to be a
contradiction with regard to the timing of tenders: on page 47 the report notes that the Consultant
recommendation would be to use tenders at least in the initial stages, while on page 49 it says: it
seems to be faster and simpler to kick-off the market based on a traditional FIT approach. However,
once the market is moving and certain target is achieved, tenders may be an interesting alternative to
fine-tune the level of tariff for future developments, and reduce costs accordingly.
The question remains if there is any potential for large-scale projects that could be tendered
(Maldives presents a very particular power sector dominated by small systems which barely allows
large-scale facilities, page 54) and if the current administration (MEA and utilities) is really capable
of designing tenders and evaluating and contracting bids.
Calculation of initial FIT
It is not quite clear, how the FIT levels have been calculated, in particular those for PV systems with
storage. What is the cost basis for storage systems?
The author of the report proposes a unified tariff scheme despite possible cost differences
depending on the location. What is the cost differential for systems installed in Mal and those on
remote islands?
1,600 kWh/kWp energy yield appears high and should be carefully examined. Total PV system costs
of between 2,510 and 2,800 US$/kW might not be realistic in an underdeveloped market (page 60).
BoS costs will certainly be far higher than in developed environments with high installation rates.
Furthermore, administration costs have not been sufficiently taken into account. They can be
substantial and prohibitive, in particular as the permission procedure for grid-connection of RE
systems is relatively complex (see MEA guideline of February 2013).
Are the avoided costs of conventional generation under efficient operation conditions (page 55) for
the calculation of off-grid tariffs really reflected by taking the lowest unit generation cost as
benchmark? Current generation costs vary between 280 US$/MWh and about 680 US$/MWh (see
page 65).
Investment subsidies
It does not become clear, why investment subsidies have been ruled out completely (page 48). We
agree that output based approaches support the efficient performance of RE facilities, but this will
also be the case if capital costs would be lowered through grants or low-interest loans.
Share of extra costs among consumers
The report states that if electricity tariffs are not enough to cover RE generation costs, the extra
costs should be distributed among all consumers regardless whether they are connected to the grid
where the RE energy is being injected. This statement focusses on RE generation costs without
considering that in particular in small supply systems and without major involvement of storage
systems a sufficient back-up system has to be maintained. Those costs have to be taken into
consideration as well as they are directly related to the nature of intermittent RE sources. Otherwise
the incumbent utility will be increasingly burdened with high capital costs for spinning reserves and
back-up that cannot be recovered through actual electricity tariffs.
Bilateral contracts with consumers
The reports mentions the option that all installations with a capacity higher than 500 kW shall market
the electricity output through bilateral contracts directly with consumers (or with the corresponding
Distribution Utility). The first will require the permission for wheeling of electricity between
generator and the contracted consumer. And it will require the consumer to sign an additional
contract with the DU for the supply of reserve capacity.
Others
The FIT rate will either have to be numerated in foreign currency (US$) or if expressed in local
currency, the rates have to be regularly adjusted by the relatively high inflation rate.
Annex D:
List of stakeholder meetings during consultancy mission
Meetings held between April 8 and 17 in Male and Hulhumale:
Housing Development
Corporation (HDC)
Ministry of Environment and
Energy
Climate Change Department of
MEE
Maldives Energy Authority
(MEA)
Energy Department of MEE
Housing Department of the
Ministry of Housing and
Infrastructure
Consonant Solutions
Transport Authority
STELCO
FENAKA
Male Water and Sewerage
Company (MWSC)
Ministry of Economic
Development (MED)
Ministry of Tourism, Arts and
Culture (MOTAC)
Mr. Suhail Ahmed, Managing Director;

Mr. Mohamed Shahid, Dep. Managing Director
Dr. Mariyam Shakeela, Minister
Mr. Ali Shareef, Ass. Director;
Mr. Zammath Khaled (Environment Analyst);
Mr. Ahmed Saleem, Permanent Secretary
Mr. Ajwad Mustafah, Deputy Director
Mr. Ahmed Ali, Head of Energy Dept., Ass. Director
MEA
Ms. Fatimah Shaufa, Ass. Architect
Mr. Mohamed Rasheed, Consultant

Mr. Abdul Nasir Mohamed, Dep. Director General;
Mr. Abdul Rasheed Nafiz, Chairman
Mr. Ahmed Iqbal, Senior Engineer;
Mr. Azzam Ibrahim, Senior Engineer;
Mr. Abdul Malik Thoufeeg, Engineer,
Mr. Ahmed Saif, Engineer
Mr. Moosa Ibrahim, Ass. Managing Director
and colleagues
Mr. Ahmed Mujthaba, Operations Manager;
Mr. Mohamed Ali, Engineer Projects
Ms. Saeeda Umar, Coordinator
Ms. Aishath Ali, Director General;
Mr. Farooq Mohamed Hassan, Consultant/Project
Manager for Tourism Adaptation Project;
Mr. Moosa Zameer Hassan, Dep. Director General
Annex E:
Presentation of preliminary findings and recommendations in
Stakeholder meeting, April 16, 2013
Annex F:
Attendance list in stakeholder meeting, April 16, 2013
Annex G:
Power Generation System of STELCO
Island
Male
Villingili
Hulhumal
Thilafushi
Kaashidhoo
K. Gaafaru
K. Thulusdhoo
K. Himmafushi
K. Gulhifalhu
Gulhi
Maafushi
Guraidhoo
AA. Ukulhas
AA. Bodhufulhadhoo
Mathiveri
AA. Feridhoo
AA. Maalhos
AA. Himandhoo
ADH. Omadhoo
ADH. Kuburudhoo
ADH. Dhigarah
ADH. Dhidhdhoo
ADH. Fenfushi
V. Fulidhoo
V. Thinadhoo
V. Keyodhoo
V. Rankeedhoo
Installed Capacity (kW)

61,420
2,800
4,000
1,660
610
390
940
1,020
163
360
1,660
618
380
320
390
224
160
428
370
170
202
107
375
260
170
217
94
Source: STELCO website, retrieved on May 3, 2013
Peak Load (kW)

40,000
1,470
2,410
580
220
105
280
320
32
110
520
235
110
67
102
61
53
85
84
40
65
17
80
56
32
66
24

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2013

Roadmap to Carbon Neutrality

Roadmap to Carbon Neutrality

Public Electricity generation and supply.......................................................................................6

Electricity supply on the Outer Islands .........................................................................................7

Electricity tariffs and subsidies.....................................................................................................7

Renewable Energy ..................................................................................................................... 10

Tourism and Resorts .................................................................................................................. 17

Energy Efficiency in the residential, commercial and public sector ............................................. 22

Roadmap to Carbon Neutrality

10. Targets for a low-carbon economy ............................................................................................ 28

Roadmap to Carbon Neutrality

Acronyms and Abbreviations

Bundesministerium fr Umwelt, Naturschutz und Reaktorsicherheit (German

Climate Change Advisory Council

FENAKA Corporation Limited

Gross Domestic Product

Global Environment Facility

Deutsche Gesellschaft fr Internationale Zusammenarbeit

Maldives Energy Authority

Ministry of Environment and Energy of the Maldives

Maldives Green Fund

Preparing Outer Islands for Sustainable Energy Development

Power Purchase Agreement

Support for the Climate Neutrality Strategy of the Maldives

Scaling up Renewable Energy Program in Low Income Countries

State Electric Company Limited

Tonne of oil equivalent

United Nations Office for Project Services

Roadmap to Carbon Neutrality

Roadmap to Carbon Neutrality

Roadmap to Carbon Neutrality

Public Electricity generation and supply

Electricity supply in the Great Male Region

After reorganisation of the national electricity system in 2012.

Roadmap to Carbon Neutrality

A feasibility study for interconnecting Male and Hulhumale should be started

It should also be examined if connecting Male with Villingili (estimated costs

Electricity supply on the Outer Islands

Electricity tariffs and subsidies

Roadmap to Carbon Neutrality

Roadmap to Carbon Neutrality

Figure 1: Diesel price for electricity generation

It is therefore suggested that a national task force under the leadership of

It has to be noted that some meters serve several households at a time.

Roadmap to Carbon Neutrality

It is further recommended that MEA acts as a neutral body for solving

Roadmap to Carbon Neutrality

Further investigation (mapping) will need to be done to assess the exact

It is further proposed that a detailed mapping of all roofs suitable for PV

Roofs on public, religious and official buildings should be offered to the

A general solution needs to be found how roofs on public buildings can be

Roadmap to Carbon Neutrality

Hybrid wind/solar systems

The proposal to have FENAKA implement those systems should be

It further needs to be assessed if such systems can be realized at generation III/2013

Roadmap to Carbon Neutrality

Roadmap to Carbon Neutrality

technology on outer islands is feasible, taking into account the composition of

Roadmap to Carbon Neutrality

Sophisticated rental system for bicycles in Mexico-City

Roadmap to Carbon Neutrality

In particular, the island of Hulhumale could demonstrate that the use of