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Seychelles (2012)

Source: REEEP Policy Database (contributed by SERN for REEEP)

This policy & regulatory overview is not updated anymore since 2015. We decided to keep it online due to high demand but would like to make you aware of the fact that it might be outdated.

Energy sources

Total installed electricity capacity (2008): 95 MW
Thermal: 100%

Total primary energy supply (2009): 240.5 ktoe
Oil and Oil Products: 100%

Electricity is produced at four diesel-fuel fuelled thermal power stations, servicing the islands of Mahe, Praslin and La Digue, as well as the inner islands, These stations generated a total of 275.7 GWh in 2009. Electricity use per capita in 2009 stood at 2,660 kWh.

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Reliance

Being more than one thousand kilometres from any neighbouring country, and deprived of any indigenous source of fossil fuel, the Seychelles depend heavily on the import of refined petroleum to satisfy national needs, as well as the demands for international marine and aviation bunkers. Oil imports in 2009 were estimated at 6,203 bbl/day. Fuel imports in 2009 amounted to US$205 million, or 25.4% of total imports.

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Extend network

In 2009, 96% of households had electricity. Transmission infrastructure is currently operating at 33 kV, with 11 kV distribution lines to the majority of inhabited islands. Roughly 243 km of medium-voltage above-ground network exists, with a further 126 km of underground distribution network.

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Capacity concerns

The Seychelles is almost 100% reliant on imported oil for energy needs, which is a significant economic and budgetary cost, and is the single largest contributor of greenhouse gases in the country (based on emissions during the shipping process, and in the burning of fuel to produce electricity). There is also an ongoing risk of trans-shipment accidents and spillage, a particularly significant threat for the remote UNESCO World Heritage Site of Aldabra, an atoll which is located close to a major petroleum shipping route through the Mozambique Channel. Any further reinforcement or extension of the national transmission and distribution network is also difficult, due to the topography of the islands, local environmental laws prohibiting development in certain protected areas, and the laborious and time-consuming process of importing the requisite equipment and parts.

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Renewable energy

Solar energy
Given that Seychelles is a tropical country receiving large amounts of sunshine, with an average 6.9 hours of sunshine per day, and an average irradiance of 5.8 kWh/m2/day, there is great potential to replace at least some of the current oil-generated (and polluting) electricity with solar energy systems. One opportunity with high economic, financial and environmental viability is the implementation of rooftop grid-connected PV systems. At present, the only active grid-connected PV system in the entire country is a 600- watt (4-panel) PV system installed by the Public Utilities Corporation (PUC). The PUC would like to expand its use of PV systems, but has not done so to date because of relatively low oil prices and a lack of investment capital. A few organisations and companies (Island Development Corporation, Seychelles Islands Foundation, etc.), which manage some of the smaller islands of the Seychelles archipelago, are investigating opportunities for alternatives to oil-generated electricity, in some cases including PV systems. The interest and experience of these other organisations represents an opportunity for partnerships in the demonstration of PV systems in the country. Solar thermal systems have also been proven viable in the country through pilot projects in the 1980s/90s, and there are currently five companies offering import and installation of solar thermal home systems in the country.

Wind energy
The potential for electricity generation from wind energy is present in the islands, with some sites having been identified as having average wind speeds of 6.9-7.5 m/s at 80m. MASDAR, an Abu-Dhabi based energy initiative, is currently further investigating the potential of Mahé island in particular, with a view to installing 18 MW of offshore wind power in the near future. MASDAR is currently overseeing the design, development and construction of 6 MW of this, in the form of 8 750 kW turbines on the uninhabited islands of Ile du Port and Ile Romainville. Estimates put annual production of the wind turbines in the region of 6-7 GWh. The US$28 million expected investment is to be provided entirely by MASDAR, with the PUC not having to contribute financially until the system transfers to their control after a contracted period.

Biomass energy
Few studies have been conducted into the potential for biomass in Seychelles, although preliminary trials were conducted through the Biomass Technology Group, with funding from the World Bank, for gasifiers in rural communities as a means of electrification, with promising results. As of 2011, the SEC has received five IPP proposals for waste-to-energy projects at the existing landfill sight in Mahe, including an incinerator, two biogas plants, a waste gasifier, and a landfill gas plant. So far, a decision has not been made as to which option is most suitable for the Seychelles. In addition, the Chinese Government, in partnership with the Ministry of Agriculture, is financing pilot biogas projects at four animal farms in the country.

Geothermal energy
No study has yet been conducted into the geothermal potential of the islands.

Hydropower
Seychelles does not have any installed hydropower capacity, nor does the potential exist for hydro-electric power generation, due to the erratic nature of the water resource.

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Energy efficiency

The usage of renewable energy is very marginal, and limited to pilot projects in solar PV and solar thermal. The per capita electricity consumption is presently 2,660 kWh/yr, and there are nearly 21,000 consumers, from which 19,000 are from the domestic/residential sector (85%), and 1,500 from the government (4%), and industry and commerce (11%). On the demand side, 216 million kWh were consumed in 2006, of which 36% was used by industrial / commercial customers, 32.7% by households, 19.3% by the government, 0.4% for street lighting, with the balance of 11.6% “export oriented”. The potential for energy efficiency in the industrial and commercial sectors is clear, with a large proportion of total consumption being attributed to a minority of customers from these sectors.

Per capita energy consumption stands at approximately 2.75 toe, considerably higher than the African average. This is primarily due to the dependence on petroleum products for the vast majority of energy needs, and indicates the possible need for demand-side management measures.

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Ownership

Electricity market
The Public Utilities Corporation (PUC, http://www.puc.sc/) is a government-owned corporate body responsible for providing the islands of Seychelles with electricity, water and sewerage services. The Corporation was formed on 1st January 1986, with the merger of the Seychelles Water Authority and the Seychelles Electricity Corporation Ltd, and was set up under the Public Utilities Corporation Act 1985. The PUC generates approximately 95% of the country’s electricity, with the remaining 5% being self-generators for own use. Currently, the PUC Act does not allow for IPPs to supply electricity to the grid, as there is no mention of the possibility of selling electricity to the PUC.

Liquid fuels market
The parastatal body, Seychelles Petroleum Company Ltd. (SEPEC) has sole responsibility for the importation, distribution and storage of petroleum products.

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Competition

Both the PUC and SEPEC are state-owned, vertically integrated authorities, with the monopoly of their respective sectors. Competition in the provision of electricity or petroleum services is currently non-existent. Some companies, such as Solar Energy Seychelles, are offering consumer-scale renewable energy systems, but as yet no alternative generator of any comparable scale to the PUC is operating in the country.

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Energy framework

The Seychelles commissioned a new energy policy in 2009 and the UNDP is supporting a team of experts, including a renewable energy specialist, to develop a 2nd National Energy Policy during the period 2009-2010. The new energy policy is supposed to improve on the previous energy policy of 1999, especially in terms of a more in-depth analysis of the energy potential of the country. So far, a first draft has been produced. Common themes for the two policies are likely to be improving the security of energy supply, the availability of modern energy services to the population, and the further implementation of energy conservation projects. As of August 2011, many of the recommendations made for the 2010-2011 period in the draft of the Second National Energy Policy remained unfulfilled, including the drafting of energy strategies and scenarios, as well as re-assessing the institutional role of the Ministry responsible for Energy, and the reform of the PUC Act to create a modern, comprehensive Electricity Act. In addition, the Government has set out targets for RE deployment in the country, of 15% of the energy mix from RES by 2020, rising to 30% by 2030. However, the Seychelles does not currently have any form of legal or financial framework in place for renewable energy.

In 2011, the SEC invited submissions from international consultants for the drafting of a new Energy Bill, the scope of which is to address many of the pertinent issues surrounding current energy legislation in the country. The Bill is set to include legal recognition and a definition of activities for IPPs, formats for power purchase agreements, third-party grid connection and electricity sales, reformation of regulatory functions in the energy sector, and provisions for financial incentives for sustainable energy uptake, including tax exemptions for equipment and feed-in tariffs.

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Energy debates

Since the dramatic oil price increase of July 2008, the government has begun to seriously address the issue of alternative energy technologies as part of the national plan. In his State of the Nation address in February 2008, President James Michel stated: “The issue of energy is one that is critical for us, and for our future. The amount of petroleum products our country is consuming now is not sustainable in the long term. The government is presently drafting an energy policy that will look at radical solutions that we will have to adopt. The government will remove all taxes, including GST [Goods and Services Tax], on certain solar energy products.”

In August 2011, two 8 MW generator sets, provided to the country by the Abu Dhabi Water and Electricity Authority (ADWEA) were commissioned, increasing the capacity of the Roche Caiman power station by 35%, and providing electricity to meet the country’s rising demand. Close Energy debates
 

Energy studies

Seychelles is member of the Common Market of East and Southern Africa (COMESA). This effective integration has translated into the formulation of several regional projects, among them the Comesa Model Energy Policy Framework, which aims to provide an outline of contents expected in National Energy Policy, which countries can then adopt and/or customise, therefore, harmonising policies in the spirit of regional integration.
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Role of government

The Ministry of Environment, Natural Resources and Transport (MENRT) took responsibility for the Public Utilities Corporation in 2009 after the dissolution of the Ministry of National Development (MND). Prior to its dissolution, the MND established an Energy Security Steering Committee in 2008, with the aim of studying how the country can move away from its dependence on imported oil to satisfy its energy needs. In addition, the recently established Seychelles Energy Commission also strongly supports the idea of implementing more renewable energy systems in the Seychelles. The Department of Energy and Transport (DET_ initially existed under the MND, and was recreated in 2011 to develop, implement, monitor and evaluate energy policy, as well as promote sustainable technologies and renewable energy development. Presently, due to the recent creation of the Department, there is no separation between the DET and the SEC.

The MENRT also implements energy conservation projects. In the past, an Energy Affairs Bureau (EAB) implemented a small stand-alone PV project on one of the smaller islands.

The Ministry of Finance (MF, http://www.finance.gov.sc/) plays a major role in running the PUC, as the Ministry is responsible for setting the Corporation’s annual budget, and has the power to lend public money to the PUC. The PUC Act also stipulates that the Corporation cannot enter into any contracts worth more than SCR 500,000 without the Ministry’s permission. Finally, the Ministry is responsible for approving the oil prices and electricity tariffs set by the SEPEC and the PUC respectively. Close Role of government
 

Government agencies

The Seychelles Energy Commission
The Seychelles Energy Commission (SEC) was established in July 2009 as part of MENRT; part of its role is to promote the use of more sustainable and viable alternative technologies, especially RETs. The Commission has numerous responsibilities under its establishing Act, including advising the MENRT on national policy objectives for energy supply, co-ordinating the development and implementation of a national energy strategy and plan, and advising the Ministry on renewable energy and energy efficiency, to encourage the use of renewable energies in the country.

Private Sector Involvement
MASDAR, a Dubai-based company promoting carbon neutral initiatives, is active in renewable energy development in the Seychelles. Currently it is focused on wind power development. In-depth studies on the potential of wind will begin in 2010, and various test sites are being investigated, including the proposed 6 MW Ile du Port and Ile Romainville installations. Close Government agencies
 

Energy procedure

Grid-Connected Rooftop Photovoltaic Systems (2010-2014)
Approved in June 2010, this UNDP-GEF project, co-financed by the UNDP, the Government, and private sector and international donors, aims to increase the use of PV systems as a sustainable means of generating electricity, thereby significantly reducing reliance on fossil fuels, through pilot projects for rooftop PV systems, on all of the main and selected smaller islands of the Seychelles. The identified barriers to the deployment, diffusion and transfer of solar PV systems will be addressed through the following project components:
a) establishing a strategic policy and legal framework,
b) strengthening technology support and delivery systems, and
c) creating pilot PV projects.

In October 2009, The Abu Dhabi's-based energy company MASDAR and the Seychelles government announced they will be carrying out a wind resource assessment study for the proposed wind power project on the island of Mahé.  The study comes as part of a collaborative agreement signed by the two parties in January 2009 to develop renewable energy in the Seychelles. After a promising initial assessment, four wind measurement masts were installed as part of a wind resource assessment study to measure, amongst other things, wind speed and direction. The masts will be in operation for a minimum of one year.

The next phase of the project, which will be an investigation into the environmental, technical and commercial feasibility of installing wind energy generators on Mahé, will be launched upon completion of the wind resource assessment, should the study determine wind conditions on the island to be suitable for the generation of electricity.

A site selection process identified Inner Harbour (Parcel H8331), La Misere (Parcel B1721) Tea Factory (Parcel B2509) and Four Seasons (Parcel T289) as locations for the masts. The selection process balanced environmental concerns against technical aspects such as electrical grid access and wind potential.

In terms of grid development, the transmission and distribution network in South Mahe has been undergoing maintenance and extension since 2007. This includes significant upgrades to the transmission network between the Roche Caiman power station and Anse Boileau, via East Coast, as well as the extension of the existing 33 kV network from Dugand to Port Launay via Port Glaud. Further benefits include the potential to extend the 11 kV network from the recently-commissioned substations of Takamaka, Baie Lazare, and Anse La Mouche to areas where development is underway, particularly in the tourism sector, to cope with rising demand.

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Energy regulator

The Public Utilities Corporation (PUC), which was formed on 1st January 1986, also has the responsibility for regulating the electricity sector. The SEC Act 2009 also gives the Seychelles Energy Commission responsibility for regulation of the energy sector, as well as the promotion of fair and efficient market conduct in the energy sector.
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Degree of independence

The PUC is a parastatal (government-owned corporate) body responsible for providing the islands of Seychelles with electricity, water and sewerage services. The annual budget of the PUC is set by the Ministry of Finance. The SEC Act established the SEC as an independent body within the MENRT, but the Commission still relies on the Government for funding. Administration for the SEC is conducted by a board of five to seven members, appointed by the President.

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Regulatory framework

The Public Utilities Corporation (PUC) was established under the Public Utilities Corporation Act 1985. The Act stipulates that PUC not only provide, but also ensure, continued supply of electricity, potable water and sewerage services to the population of Seychelles.

As yet, there is no dedicated regulatory framework for sustainable energy in the country.

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Regulatory roles

Responsibilities of the Public Utilities Corporation (PUC) to the energy sector include:

  • Providing an efficient, safe and reliable supply of electricity and water, and to treat and dispose of wastewater, paying due regard to the environment and consumers' interests;
  • Continually keeping up with advancements in technology so as to improve services;
  • Promoting an environmental consciousness and a deeper sense of responsibility amongst employees as service-personnel.
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Energy regulation role

The Ministry for Energy, Natural Resources and Transport, through the Seychelles Energy Commission, is responsible for the formulation of regulations pertinent to the electricity sector, as well as all facets of energy management in the company. Tariff-setting for electricity is performed by the PUC, with approval necessary from the Ministry of Finance. The MF is also responsible for approving oil prices set by the SEPEC.

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Regulatory barriers

Efforts to promote and adopt renewable energy technologies in the country, including PV systems, wind, biomass and biomass gasification projects, have had limited success. In some cases, the proposed technology was not technologically feasible in the context of a Small Island Developing State.  Efforts have also failed because of legal, regulatory, and policy constraints that have restrained the adoption of RETs.

There is no administrative mechanism in place that allows for alternative producers of RETs to access and feed into the public electricity grid, nor is there a feed-in tariff system. Previous experience with solar water heating technology shows that without incentives, the uptake of alternative systems by commercial and private sectors is limited. The establishment of an independent energy regulator, and a legal framework for sustainable energy, would overcome a number of barriers to renewable energy uptake.

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References

International Renewable Energy Agency. Renewable Energy Country Profile: Seychelles. Available at: http://www.irena.org/REmaps/countryprofiles/africa/Seychelles.pdf [Accessed 20th September 2013]

Indexmundi. Seychelles Oil - Imports. Available at: http://www.indexmundi.com/seychelles/oil_imports.html [Accessed 20th September 2013]

ESI Africa. Seychelles Country Profile. Available at: http://www.esi-africa.com/node/8801 [Accessed 20th September 2013]

Charles, B. Identifying and Managing system weaknesses and challenges for a successful Renewable Energy Technologies’ deployment in Small Island Developing States. September 2011. Available at: http://lup.lub.lu.se/luur/download?func=downloadFile&recordOId=2173165&fileOId=2173166 [Accessed 20th September 2013]

Khaleej Times. ADWEA commissions 16MW power plant in Seychelles. 21 June 2011. Available at: http://www.khaleejtimes.com/displayarticle.asp?xfile=data/theuae/2011/June/theuae_June598.xml&section=theuae&col= [Accessed 20th September 2013]

Solar Energy Seychelles. http://www.solarenergy.sc/ [Accessed 20th September 2013]

Seychelles Energy Commission. Expression of Interest: Drafting of an Energy Bill. 2011. Available at: www.egov.sc/documents/Advert%20for%20the%20Drafting%20of%20Energy%20Bill.pdf [Accessed 20th September 2013] Close References