1. SOLAR FARMS
integrated rural power plants
Food, income, water, energy, climate services
1.1 Outline project
To install 25 grid tied solar power plants of about 400kW each in 25 villages,
with a total of 10MW installed power in thin film solar panels,
with a potential to generate a total 20GWh/ year = $2.4mn/ y;
as well as to develop each year 500ha of marginal land into high value traditional food forest/ agroforestry/classA timber-/ rubber-/cacoa- / sugar palm/ bamboo /biomass plantation all in close cooperation with local farmers.
Local water and power supply (+wifi!) should form an integral part of the project in the form of a private/public cooperation.
To get solar PV arrays excepted in tropical Asia it is necessary to involve the population and offer enough employment and other services. Also we need to fight poverty and the heating climate in tandem (see Objectives 3.0)
This community based project promises to create high value rural income and to revitalize 25 villages. Besides we aim to maximize climate gains in the project areas and claim the Carbon Credits (CDM, VER) due.
The hardware and software to be developed for this innovative project could be exported the world over.
This pilot might be especially suitable for the dry zone of SriLanka.
Location should be chosen near a village, near a power line, with easy access to the planting area around.
To make a viable start we could seek $8mn in equity from investor offering a majority share in the overall $ 22mn solar farm project,
$8mn in local investment partly in shares for 50year land leases,
$5mn in soft loans.
2.0 The essence of the solar farm plan is to integrate land development in dry zone areas with the establishment of several of (small scale, <500KW) solar power plants with participation of the local communities. The shade and the security of the solar panels is used to start a tree nursery underneath.
Besides I could imagine the total plant on the roof of a vast rural factory/ school
2.1 Thin film panels are most suitable.
Thin film PV panels made from amorphous silicon are cheaper (<$1/W), more reliable (no internal connections) and perform better in hot climates than traditional solar cells; their big disadvantage is, that they take more space (50W/m2), thus are more costly to install and to maintain.
2.2 Use the shade of the panels
We are planning to turn this disadvantage into an advantage, by using the panels’ shade and allowing space in between, to develop the ground beneath. The whole fenced in area, about 4 times the total surface of the panels, will be developed into a tree nursery and vegetable garden and service roads in between the rows of panels, each 6 meters. All rain water falling on the panels will be collected and stored. If needed some power generated will be used to pump more water for the plantation and the village.
2.3 Land leased against shares
Another objective of the concept is reduce costs for land as well as security and maintenance by involving local village groups and institutions at various levels, invite those with roots in the district to invest and to give shares to land owners against lease of their under utilized lands.
2.4 Business case and exit strategy see 10 and 11.
Lord Nicholas Stern: The two defining challenges of our century are climate change and poverty. And if we fail on one, we will fail on the other. 2009
3.1 To stimulate the planting of trees and the use of solar power and to combine the two.
3.2 These projects should not be large scale commercial projects, but community based ones to give maximum benefit to the villagers.
3.3 The concept should be scaled up, to have a worldwide impact on global warming.
3.4 To further biodiversity by the planting of mixed species forests.
3.5 To learn from micro finance how to service the poor while making a profit and use women as agent of (climate) change.
3.6To use existing rural structures and organisations to avoid duplication and waste.
3.7 To generate rural job opportunities and income and to empower even the least affluent.
3.8 To improve local water and power supply.
3.9 To improve local environment through planting of trees, parks and building well shaded schools and temples.
3.10 To plant traditional ‘food forests’ and thus improve access to food, drinks, herbs, spices, medicine, fodder, biomass and construction materials.
3.11 To stimulate agroforestry, “Planting nitrogen-fixing leguminous tree species, like Faidherbia or Acacia albida, in maize fields has helped achieve up to four-fold yield increases in Malawi, Zambia, Tanzania, and Ethiopia.” Sugar palms can be tapped daily and are fire resistant.
3.12 To give people long term financial security by planting valuable timber crops.
3.13 To develop the dry zone of SriLanka, by starting in Hambantota and Moneragala, some of the poorest areas of the country.
3.14 To install 1GW power in community-based solar farms by 2025
3.15 To invest in biomass power generation.
4.1 SriToys, Background
The SriGroup of companies finds its origin in SriToys, a manufacturer and exporter of wooden toys founded in 1990 by Ferdinand Swart, a Dutch design engineer and environmental project initiator and PMJ Muhandiram, a Sri Lankan business man.
4.2 SriToys manufactures wooden and cotton toys for export for schools, mailorder and retail makets world wide. STI is the world leader in jigsawed and hand decorated, solid wood figurines, animals and puzzles. We can produce over 3000 different products, all of own designs.
4.3 We have been represented at the foremost Toy Fairs worldwide for the last 20 years, with a major stall at Nurnberg Toy Fair. Each year we present a new collection. We employ 260 full time at 3 locations, including wood treatment plant.
4.4 PMJM have excellent relations with all banks and with the government at the highest level.
FS has a background in community development, self help housing, small enterprise consultancy, micro finance and starting export ventures; now promoting the replanting of rainforest and through our NGO (see tree-credits.org) planting food forest and agroforestry in India.
4.5 Since 2005 we explore the possibilities to start assembling solar panels, for local solar plants and for export.
The SriGroup offers a base with enough experience, infrastructure, relations and connections to get such a complex project implemented.
5.0 Solar PV power
5.1 Sri Lanka is situated just north of the equator with a top level irradiance of 2300 kWh/ m2. Solar PV panel prices are rapidly reaching net-parity here. In fact for industrial use (electricity for industries is higher than for small households) it is already viable if the right feed-in tariff and import concessions are granted. A typical installation can be paid for within 5-6 years if interest payments are excluded. And expectations are that electricity prices and feed-in will rise in dollar terms.
5.2 PV systems for homes are still out of reach for most due to high retail prices for the panels, high interest rates and the need for batteries to be able to have even a light at night. Still it is attractive to own your own power supply and it increases you property value
5.3 Large solar plants (the first one in Hambantota to open soon) have the advantage of economy of scale and direct income from feeding the grid; and from professional operation and maintenance. But investments and overheads are high and internal losses of power increase with size, so that bigger is not always better. Also they take space and will replace local activities or wild life reservations.
5.4 Solar farm
That why we are working on a hybrid form, combining the advantages of both sides and on top of that facilitates the development of marginal lands into mixed production forest.
To enable grid tie up, the availability of power lines in the vicinity is essential;
to locate the solar plant one or two acres of marginalized, sloping, south facing lands is needed. Try to build around existing trees and to follow contour lines to retain the water.
And more than 25 acres of barren land should be available around the village to be developed.
Further the need for improved water and power supply and the availability of a strong civil society in the village calling for improvements is an important qualification.
6.0 Whether to combine solar power and trees
Both trees and solar panels are “machines” to capture and transform solar energy with a similar efficiency and they compete for space. Investment per acre for PV panels is at least 200 times higher than for trees. Solar panels start to produce power and income from day one, trees have to grow and only by year 5 they might produce an income, but the credits for the carbon stored in wood reach parity by year 10 with the panels per acre. And after 30 years the panels have to retire while the trees are at its prime and represent a great value.
6.2 Advantages combining solar – trees
both solar plants as well as trees are long term investment of which the management can be shared
together they are an ideal long term investment
to use the shade of (and the fencing for) the panels for starting a tree nursery
to use the run off water of the panels to water the saplings.
solar generate a regular income of which a small part can be used to plant trees
with solar power, water can be pumped to be used to grow (tree) crops
land to grow trees can be leased against shares in the solar enterprise
solar is popular and attract capital, trees are much cheaper but are hard to finance
carbon credits of both solar and trees can be bundled
labour, mainly maintenance and guard duties can be shared
initially solar income can pay for tree planting labour
trees improve working conditions and local environment around the solar plant
trees have many more advantages on its own.
6.3 Water and more
Most power generated will be sold to the grid, but at times that the tariffs are low, power can be used to pump water; this is vital in these semi-arid locations for agriculture and to provide the nearby village with piped water.
Power and water supply are tasks of the government. Local public/private cooperation should be considered within a full package to provide all eminities within the 25 year duration of the solar project, containing: local power and water supply, a tank and water tower, food and firewood, employment and income, 20 acres of food forest, some housing, if not a school, at least a good playground, if not a place of worship, at least a beautiful park.
7 Community involvement
We envision community participation will take place at various levels:
Location. Besides basics like availability of power lines and suitable lands, the locations will be chosen on invitation of village groups in the target area.
Shared ownership, savings by the locals, investment by those with roots in the region, 50year lease of land
MFIs, woman saving and loan groups, farmers cooperatives, rotary clubs, individuals will do the day to day management of the solar farm together with the technicians.
monthly renumeration: looking after 100 solar panels 600rs ( power income 5kW = 1000kWh/month = 9000rs), max. 500 panels/ family; looking after 100 young trees up to year 4: 300rs each month, max. 1000 trees. Also for trees planted on land leased by SF also outside the solar plant reservations. Some of these income will pay for water and power bills.
Income generation: besides renumerations for investors and for care takers the project will generate food, fodder, medicine, fuel and other product of the growing food forest or agro forest. Both concepts are native to SriLanka.
Trees, timber, biodiversity, no mono cultures, mixed orchard, mixed plantation
Since this combining of community participation and investing with solar power plant with agroforestry is such a novel enterprise that many new operational manual have to be developed. It is logical that this should result in to start of a consultancy and software development unit to specialize in novel approaches and solutions for global warming and poverty reduction combined with alternative energy, agroforestry and microfinance.
9 Budget Solar Farms
Research, development, marketing, legal, management $1.5mn
Import 10MW thin film solar panels (for 25 units of 400kW) $10mn
Inverters, cables + others elect. eq. in container (25x $60k) $1.5mn
Structure, 2.5m high, 4m x 500m rows, terrassed, with roads $2mn
Property development and water supply $1mn
Other; training, housing, infrastructure, software, hardware, etc.$2mn
Land on lease hold, value $2mn
To develop the 2500 ha of food forest $2mn
We propose a Holding Company owning 65% of Solar Farms, including all land leased for 33y and its produce. The HC could be owned 90% by VC, 10% by STI.
Venture Capital 8mn
SriToys, FS, project proposal, management 1mn
Development Bank soft loan 5mn
Local investors, land lessees, local management 8mn
10 Business Case, potential sources of revenue:
sales of electricity to the grid, upto $2.4mn/year, for about 25 years
local power and water supply (public / private)
agro business on 5000 ha plantation, will be planted in a 10 year program, return for tree crops like coconut, rubber and mango are upto $10K /ha/ year
property development on 500 acres, incl. housing, schools, parks.
software development, management services and consultancy to implement solar farms worldwide (this might be the main revenue stream in the long run)
sales, import + export of solar PV equipment,
carbon credits (CDM), potential $0.2-0.3mn/year, are generated by solar panels
carbon credits (CDM) for trees potential $0.4mn/year by year 12, $1.4by year 17 and growing very quickly, if planting continues.
timber sales of 200K trees per year from year 12
11 Exit strategy
It is the intention of the principles list the company on the Colombo stock exchange within 4 years.
The solar farms part the investments are as follows:
$1.5mn for R&D and marketing, should result in a strong consultancy firm in solar farms and the combination with (mixed) plantations, property development, community participation and micro finance.
$ 10mn to import 10MW thin sheet panels; because of the scale we can work far below the market value (now $4/W), so it will always be possible to make a profit on these.
$ 1mn, same goes for the inverters and the other electrical equipment
$ 1mn for water and site development, $ 2mn for housing, infrastructure and overheads, $ 1mn for land and $ 1mn for further local input are planned to be financed locally and will return to the local investors in case of default.
Besides arranging the financing (VC + bankloan) the preparations of the project involve a lot of permits and clearings of the following departments:
planning and rural develop dept.
electricity and alternative energy dept.
water and environmental dept.
However endorsement at the highest political level (President) and passing an act in parliament are crucial for the success of the scheme, as is support at district level. With such powerful patronage of the scheme all necessary permits will materialize.
Since we plan for 25 unique projects in 25 unique locations only general guidelines can be approved by the central government, most of the permits have to be arranged at district and provincial level.
The government is also needed to grant wavers of import duty and allow favourable feed-in tariffs.
The roadmap is as follows:
install test array of 100 panels (5KW) on STI HQ roof
get political backing
advertise the concept locally
get bank approval
get investors approval
find location for pilot project
write guidelines for pilot project
get all permits and concessions for pilot
implement pilot project
get act in parliament passed
advertise to find 24 locations and groups
evaluate pilot and update guidelines
finalize budget and finances
get all permits needed from central government
write tenders for subcontractors
help getting permits at local level
import 10MW solar panels (120 container loads)