Vanuatu: Tourism and Renewables Market Assessment Consultant

Contract

Project

Vanuatu: Tourism and Renewables Market Assessment and Business Model Development Consultant

Expertise

Category

Advisory Support: Level G

Location

Duty Station

Port Vila, Vanuatu and outer islands

Contract Length

Start Date

1 October 2016

End Date

15 December 2016

Part-time/Full-time

Full time

Contract Value

Daily Rate

N/A

Days Estimated

32 days

Total Fees

Up to $24,000 USD

Specifics of Recruitment

Introduction:

Based in Seoul, the Global Green Growth Institute (GGGI) is an intergovernmental organization founded to support and promote a model of economic growth known as "green growth", which targets key aspects of economic performance such a poverty reduction, job creation, social inclusion, and environmental sustainability. GGGI works with countries around the world, building their capacity and working collaboratively on green growth policies that can impact the lives of millions. The organization partners with countries, multilateral institutions, government bodies, and private sector to help build economies that grow strongly and are more efficient and sustainable in the use of natural resources, less carbon intensive, and more resilient to climate change.

GGGI supports stakeholders through complementary and integrated workstreams – Green Growth Planning & Implementation and Knowledge Solutions – that deliver comprehensive products designed to assist in developing, financing, and mainstreaming green growth in national economic development plans.

GGGI work in Vanuatu

The revised Vanuatu National Energy Roadmap 2016-2030 (NERM) to provide 100% access to sustainable and reliable electricity in off-grid areas by 2030. One of the green growth policy objectives under the updated NERM is to promote the use of renewable energy in Vanuatu’s main economic sectors, including agriculture, fisheries and tourism. The NERM sets a target of 25% of rural tourism bungalows[1] to be using renewable forms of electricity by 2020 and 65% by 2030.

The National Sustainable Development Plan (NSDP) (currently being finalized) sets out the Government’s objectives for social, environmental, and economic development which include objectives related to sustainable infrastructure (including access to reliable and affordable energy that increasingly comes from renewable sources), environmentally-responsible economic growth, and sustainable natural resource management. Given the current dependency on petroleum based energy supplies any migration to renewable energy production will have a positive impact on reducing Co2 emissions and improve the carbon footprint of the Islands.

The Vanuatu Strategic Tourism Action Plan 2014-2018 emphasizes that electricity continues to be a major cost for operators, especially accommodation providers. One of the key strategies under the plan is to support Green Tourism initiatives and promote rural electrification, renewable energy and telecommunications to support tourism investment.

In line with the above Government objectives and priorities, the Department of Energy (DoE) in collaboration with the Department of Tourism (DoT) through technical assistance from the Global Green Growth Institute proposes to hire a consultant to carry out market research and analysis and develop business models for increasing access to renewable energy and energy efficiency for small-scale[2] tourism bungalow operators in Vanuatu. The study will build on the results from a DoE and DoT pilot project (funded by GIZ) which provided plug & play solar photovoltaic (PV) systems to approximately 30 bungalows in Efate[3]. The results of this study are expected to feed into the design of a future national implementation project for green energy in the tourism sector.

Background

Vanuatu’s formal economy is dominated by the tourism industry. The total contribution of travel and tourism to Vanuatu’s GDP was estimated to be 48% in 2014 and this is expected to increase to 52% of GDP in 2025[4].

Vanuatu’s energy supply is heavily reliant on petroleum products, with 71% of grid-connected electricity generated by imported fossil fuels and many off-grid communities relying on small diesel gensets for a few hours of electricity per day. The transport sector is entirely dependent on petroleum products. With its population distributed over 65 islands, distribution of energy supplies is both logistically challenging and costly. The result is that energy (and electricity) services at the moment are available only to a small share of the population, and at high prices.

While being a key economic driver for the country, the tourism industry is highly dependent on a reliable energy supply and improving affordability and access to energy, including for small rural tourism businesses, is a government priority. At the same time, in order to preserve the natural environment upon which the tourism industry relies and align to government objectives on green energy development, the DoT is pursuing an eco-tourism approach and is working with its partners to promote sustainable, environmentally friendly tourism development, especially in rural areas.

In Vanuatu, small tourism operators located off-grid (i.e. all islands except the concession areas which partially cover the four main islands of Efate, Santo, Tanna and Malekula) either have no access to electricity or only intermittent access with which to supply services for their clients such as lighting, cooling (fans, very limited air-conditioning), communication (mobile phone, rarely internet) and refrigeration. This off-grid electricity is primarily produced by diesel generators. Cooking is usually carried out using LPG or biomass fuel. 

The retail price for diesel (and LPG) in Vanuatu is among the highest in the region (and even more expensive in the outer islands due to transportation costs) resulting in very high electricity generation costs for rural tourism operators[5]. The tourist operators often face difficulties and lose out on customers, either because inability to offer services or because of uncompetitive prices compared with those facilities connected to the grid which can provide better and more reliable services at lower cost. Further, limited access to electricity also limits the ability of these remote tourist operators to access their client base and booking agents, sometimes resulting in operators losing out on bookings and therefore on potential income. There is also anecdotal evidence that renewable energy electricity supply can increase resilience to natural disasters such as tropical cyclones and earthquakes because the electricity supply is not dependent on shipping of diesel to islands and therefore can be available after a disaster event if shipping has been disrupted or diesel gensets damaged.

This study aims to investigate the demand for renewable energy (RE) and energy efficiency (EE) products by the rural tourism industry and what services RE and EE equipment could assist in supplying at a competitive cost. The study will also look at how that demand can be met, i.e. how RE and EE use can be increased to improve electricity access, reliably and affordability to rural tourism operators in a way that is sustainable in the long-term. The business models developed will show how RE and EE technologies can be affordable and sustainable in the long-term for provision of services such as lighting, cooling, communication, refrigeration, water heating[6] focusing on provision of solar PV and solar water heating in off-grid tourist bungalows and lodges but also considering biogas and/or improved cookstoves and LED lights as appropriate.

When compared to volatile petroleum fuel based electricity prices, RE & EE systems can provide stable operating costs to assist off-grid rural tourism operators with long-term business planning. The green technologies also contribute to improving the state of the environment and support efforts to position islands as sustainable tourism destinations.

Objectives/Purpose of the Assignment:

The objective of this assignment is to carry out market research and analysis and develop business models for increasing access to renewable energy and energy efficiency technologies/products for small-scale tourism operators in Vanuatu.

Scope of Work:

The Consultant shall:

• Research, collect, review and assess appropriate and relevant data, documentation and information on rural energy and tourism sectors in Vanuatu through the DoE, the DoT, Tourism Associations and other sources and stakeholders.  In particular, the Consultant shall review and utilise information from the 2012 BizClim Study[7].
• Review the experience (including conducting a site visit) from the DoE/DoT pilot solar PV project funded by GIZ[8] in July 2016 which provided systems to approximately 30 small bungalow operators on Nguna, Pele and Emae Islands and in North Efate.
• Carry out an evaluation of the GIZ pilot project, including how well systems are performing, whether end-user expectations have been met, impacts on different beneficiary groups (bungalow owners, hosting villages, youth, women, etc.), economic, social or environmental impacts which can be identified (if any) and use any lessons learnt and cost information to inform the analysis of the present study.
• Identify stakeholders, visit and carry out interviews in-person with small-scale tourism operators on Efate and two (2) other islands with above average tourism activity (the islands should be confirmed in consultation with DoE and DoT) to inform and obtain feedback on the scope and objective of the initiative, to assess energy needs and expectations of energy services, ability and willingness to pay from the rural tourism operators. In addition, interview by phone between 25 and 50 bungalow operators on at least five (5) other remote islands (additional to the islands visited). All interviews should be conducted using a standard questionnaire developed by the consultant.
• In consultation with suppliers/vendors and using commercial available and proven technologies in Vanuatu, where after sales services will be available if needed, recommend appropriate standard RE & EE system packages (e.g. small, medium and large system package and packages for electricity or cooking/heating) for rural tourism operators based on their energy needs and demand assessment including expectations on energy services and willingness and ability to pay.
• In consultation with suppliers/vendors, develop preliminary technical design and costing including components and accessories for the identified RE & EE system packages.
• Estimate the final cost to operators to implement RE and EE (LCOE) and benefits for given standard cases (small, medium and large system package, electricity / cooking / heating packages corresponding to typical bungalow operator’s size and energy needs)
• In consultation with DoE (including VREP team), DoT, Provincial Tourism Centres, GGGI, GIZ, Australia and New Zealand (and other development partners if appropriate) and private RE & EE vendors, develop and recommend appropriate bankable, sustainable and replicable business and institutional models for off-grid small-scale RE and EE technology/products supply, operation and maintenance for tourism operators and bungalows. This would include but not be limited to investigating:
  • Improving the supply chain: Investigate options, including using the existing VREP model for subsidised equipment costs and expanding the range of certified products and suppliers where needed (e.g. solar water heating, larger PV systems)
  • Improving availability of finance: Investigate subsidy, credit and leasing options, including using the exiting VREP model but designing new financing models, i.e. less reliance on grants and more reliance on low-interest loans (which could be financed through the new National Green Energy Fund which is to be set up in future), innovative financing/payment models (e.g. payment through mobile phone)
  • Possibility of using intermediary agents for hire/lease or solar equipment (such as booking agencies who already take a cut from rural bungalows when making bookings), local cooperatives or others who would be willing to act as a central agency for bungalows who are already clients or other such modalities involving pre-existing commercial relationships
  • Integrating/linking the business model with the minimum standards and Eco-Tourism ratings that the Department of Tourism is currently working on
• Design and build-into the business/institutional model post-installation service support (maintenance, spare parts, etc.) and specify how the rural tourism operators will get long-term service support
• In consultation with DoE and the DoT, develop appropriate criteria and identify potential pilot rural off-grid tourism sites (bungalows/lodges) for a proposed future project to trial the proposed business model(s)
• In consultation with selected rural tourism operators, conduct a business revenue and value for money assessment for deployment of RE & EE systems
• Investigate cost of loans and potential access to financing for RE and EE for tourism operators
• Conduct a preliminary assessment of training needs of the rural tourism operators with regard to renewable energy and the proposed business models and include recommendations on training actions needed (e.g. guidelines on renewables and energy efficiency), groups which should be targeted and how training could best be delivered.
• Include a system for monitoring and evaluation of the installations so that data and information can be fed back to the DoE and the DoT for at least a 5 year period.

The consultant shall closely coordinate the implementation of the assignment with the DoE, the DoT and the Global Green Growth Institute (GGGI) and shall report to GGGI.

Output/Reporting Requirements/Deliverables:

1. Inception Report detailing methodology and approach to accomplish the outputs and including list of stakeholders to be consulted and travel plan
2. Draft Report on evaluation of the GIZ solar energy for tourism pilot project
3. Draft report covering all aspects of the scope of work, including at least two proposed sustainable business models
4. Final report responding to all comments received

All reports must be in English, in accordance with GGGI’s formatting requirements, and submitted in hard copy and digital formats along with complete sets of raw data, research materials, and interview notes.

Deliverable Schedule:

*weeks from contract signing

The consultants shall liaise and report on an ongoing basis to the Vanuatu Country Representative and shall copy all communications and deliverables to Antony Garae, Director of the DoE.

Qualifications/Experience/Expertise

• Minimum qualification of a Master’s degree in Science, Engineering, Economics, Finance or Business Administration
• At least 15 years of relevant experience in technical or advisory services or business experience on development projects or renewable energy/climate change mitigation projects for private sector, governments and institutional clients
• Excellent command of oral and written English
• Spoken Bislama needed for the interviews with rural tourism operators (the services of a translator may be used to carry out the interviews if needed)
• Experience undertaking similar work in Vanuatu for renewable energy development, project design, economic and financial analysis and project management.
• Experience in looking at energy needs for the tourism sector in Vanuatu would be an advantage
• Excellent analytical skills in technical project implementation
• Strong networking relationships with key national stakeholders
• Experience of participatory approaches and consultations
• Displays cultural, gender, religion, race, nationality, age sensitivity and adaptability