Procurement Notices

Reference No.

PN/FJI/084/22

Consultancy Title

Consultancy for the Development of National Rural Mini- Grid Tariff Structure and Guideline (FREF)

Location

Hybrid Approach – In country and Remote Work

Application deadline

5 August 2022

Type of Contract         

Individual Contract

Post Level

Local/International Consultant

Languages required:

English

Duration of Initial Contract:

16 Weeks (4 Months)

1. Background and Introduction:

The Fijian Government established FREF in 2017 to provide affordable, reliable, and renewable electricity for rural Fijians and to fulfill the commitments made in the 5- Year and 20- Year National Development Plan. FREF is registered as a charitable trust under Fiji’s Charitable Trusts Act 1945, designed to be a ‘special purpose vehicle’ that complements the Fijian Government’s rural electrification initiative.

Approximately 96% of Fiji’s population have access to electricity but the remaining 4% are either too far away from the nearest electricity grid or located on the maritime islands that are not serviced by the national electricity provider. As such, FREF’s core objective is to electrify the last segment of Fijians and improve the electricity quality of existing rural communities.

FREF is envisaged to electrify approximately 300 rural communities over the next 10 years using innovative renewable energy solutions with a strong focus on Mini-Grids. A Mini-Grid is an off-grid electricity distribution network involving small-scale electricity generation. To achieve its mandate, FREF uses a revolving fund structure under which affordable monthly tariff payments from rural communities are placed into a trust fund and used to electrify additional rural communities throughout Fiji.

FREF is working with Private Financing Advisory Network (PFAN) to develop a strategic plan to guide its electrification works. This also entails developing detailed financial and economic models that will help FREF better expand its customer base with more cost-effective renewable energy solutions and efficiently manage its asset portfolio.

Concurrently, Fiji’s retail electricity tariffs are regulated by the Fijian Competition & Consumer Commission (FCCC) pursuant to section 39 of the FCCC Act 2010 and the Fijian Competition and Consumer Commission (Control of Prices for Retail Supply of Electricity and Ancillary Services) Order 2022, which expires on 25 May 2025. FCCC is the Independent Regulator for the electricity sector and plays a vital role in designing and enforcing electricity tariff methodology under section 5 (1) and 6 of the Electricity Act 2017, outlining the structures, regulations and tariff determination guidelines. This will be critical in effective management of FREFs operations.

Adhering to FCCC licensing procedures and compliance requirements will be vital for any private operators and/or Distributed Energy Services Companies (DESCOs) involved with FREF. To operate a generation plant and supply or sale of electricity to off-grid customers, the generator owners will need to obtain an Electrical License for Installation and Generation and seek exemption for sale or supply to off-grid consumers from FCCC. FCCC will support FREF in the management of tariff and technical regulations.

FCCC oversees regulating existing electricity operators such as Energy Fiji Limited as well as newer entrants into the sector under a net metering system. Currently, there are no specific regulations for Mini Grids, in addition cost reflective tariff structures for Mini Grids are still to be developed. Supporting FCCC in the development of these will be a vital part of the proposed technical assistance (TA). The outputs of this work will also act to inform and complement PFANs work in developing sound financial models but also provide overall guidance to operationalization of Phase 3 of FREF.

The request for technical support from United Nations Development Programme (UNDP) is aimed to recruit a technical consultant who will support FCCC in developing following:

1. Develop Regulatory Framework for different technologies (this will be public information),
2. Develop working tariff models for different technologies (solar, hydro, wind and its hybrid model with diesel generation) under building block methodology,
3. Prepare Grid codes / technical requirements for off-grid sites in compliance with Electricity Act 2017 and Electricity Regulations 2019,
4. Prepare Inspection forms and Guidelines for off-grid sites (in compliance with Electricity Act 2017 and Electricity Regulations 2019), and
5. Develop in- house capacity for FCCC to be able to carry out similar tasks/ activities in future and provide capacity building training for FCCC staffs on above deliverables.

Key Facts:

FREF has successfully utilized funds from the Leonardo DiCaprio Foundation to electrify 47 households on Vio Island off the coast of Lautoka using a solar mini- grid system in December 2018.

Prior to FREFs electrification works, Vio Island had no access to electricity and relied entirely on harmful diesel gensets that not only were loud and created harmful fumes but was also expensive to fuel up and maintain.

Following the electrification of Vio Island under the FREF, Vio Island has become the first ever Fijian community to have access to clean, renewable, and affordable energy from a centralized micro-grid solar system. The village now has access to 24 hours of clean electricity, children can study under electric light as opposed to dull kerosene lamps and candles, the community can now have access to broadcast media, internet services are now readily accessed, and mobile phones can be charged effortlessly. This undoubtably has significantly empowered the community to be more productive and catalyzed an improvement in standard of living across generations.

The figure below illustrates FREF targeted communities.

Figure 1: Targeted communities for FREF

Phase 2 of FREF aims to electrify 5 communities which would benefit 200 households, part of which will be funded by the Government of the United Kingdom.

FREF is guided by its own Constitution which stipulates that the business, affairs, and strategic decisions for the wellbeing of FREF will be the responsibility of its Board of Trustees (BOT). The BOT is chaired by the Permanent Secretary responsible for Infrastructure and consists of the Permanent Secretary responsible for Finance and the Solicitor General. The BOT has complete mandate under the FREF Constitution to conduct affairs of the fund and effectuate the purpose set forth for FREF.

An Advisory Committee (AC) is also part of the FREF governance structure and is tasked to provide technical guidance and recommendations to the BOT for informed decision making. The AC is made up of senior representatives from the Ministry of Economy, Department of Energy, and the Fiji Locally Managed Marine Area Network with observers from various partners that include the Private Financing Advisory Network (PFAN) and the Global Green Growth Institute (GGGI). GGGI has been instrumental in supporting FREF to develop a Monitoring and Evaluation Framework for Rural Electrification Projects in Fiji. This includes pre- and post-implementation survey design, survey guidelines, training guidelines and support to analyze the results from the surveys conducted and development of recommendations.

These two tired governance arrangements are provided with secretariat support by the Climate Change and International Cooperation Division (CCICD) of the Ministry of Economy. Figure 2 illustrates FREF’s governance structure[1]:

Figure 2: FREF Governance Structure

1. Objective:

FREF, through the United Nations Development Programme (UNDP) is a technical consultancy to support FCCC in developing a National Rural Mini-Grid Tariff Structure and Guideline. The outputs of this technical support will inform and govern FREFs implementation work as well as develop in- house capacity for FCCC to be able to carry out similar tasks/ activities in future.

The Consultant will determine the number, effort and the nature of experts required to achieve the objectives of this TOR, in accordance with their proposed approach and methodology. The consultant will include in their technical proposal, work plan and financial proposal all other supporting staff necessary to achieve the objectives of the TOR in accordance with the Consultants’ proposed approach and methodology. Final scope of work will be agreed in collaboration with FCCC during the inception phase.

Task 1: Cost of Service Analysis for Rural Off- Grid & Mini- Grid Systems

The Consultant will need to undertake the following specific sub-activities under this activity noting that final deliverables will be guided by and agreed with FCCC and FREF:

• Develop electricity demand and supply forecasts for the FREF identified sites, based on reasonable assumptions about demand growth, improvement in service (increased hours of supply) and reduction in losses and other important assumptions. The forecast is to be provided under 3 scenarios: base, low and high case with basis of forecasts clearly documented.
• Provide estimated investments and future capacity needs across generation, transmission, and distribution to be able to meet projected demand and supply based on the learnings, FREF’s existing sites, other available information, and justified assumptions.
• Conduct a cost- of- service survey for FREF identified sites to establish costing and revenue stream information for various categories of consumers, including any additional required investments.
• Develop Regulatory Framework for different technologies (this will be public information),
• Develop working tariff models for different technologies (solar, hydro, wind and its hybrid model with diesel generation) and hand over final tariff models to FCCC,
• Prepare Grid codes / technical requirements for off-grid sites in compliance with Electricity Act 2017 and Electricity Regulations 2019,
• Prepare Inspection forms and Guidelines for off-grid sites (in compliance with Electricity Act 2017 and Electricity Regulations 2019),
• Develop a 5-year succession plan for resource/regulatory capacity to support FCCC and FREF on off-grid mini-grid electrification.

Task 2: Tariff Design (and model) for Rural Off- Grid & Mini- Grid Systems

The Consultant will need to undertake the following specific sub-activities under this activity noting that final deliverables will be guided by and agreed with FCCC and FREF:

• Based on the findings of Task 1, assess the FREF identified sites electrification costings (generation and power purchase costs, transmission costs, operating and maintenance expenses, non- operating revenue expenses, interest costs, cost if debt, etc.) with defined parameters/ classifications to estimate revenue requirements.
• Present how the effective costings will be used for tariff structure design, cost- recovery tariff determination and include an option of simulate alternative tariff structures.
• Develop modeling tool(s) that can be used by FREF and other stakeholders to:
  •  Determine effective/ efficient costings for different FREF identified sites.
  • Include the possibility to parameterize revised tariff periods and the implementation of tariff changes over a specific period.
  • Include options and allow projections for demand forecast, fuel prices, transmission & distribution losses, supply projections (generation capacity and output), operating & maintenance expenditure, capital expenditure, revenues, debts, etc.).
• Develop optimal tariff structures by consumer category, considering economic efficiency, financial viability, geographic location, and social objectives. Tariff structures may include (i) cost- reflective tariff for each consumer category, and (ii) socially sensitive tariff that includes cross- subsidy towards vulnerable consumer categories with proposed criteria.
• Draft a tariff cost recovery criterion envisaging gradual and systematic tariff adjustments toward full cost. This task would be based on the findings of the abovementioned tasks regarding the sector revenue shortfall due to tariff below cost and will recommend a set of measures to bridge this gap over the medium timeframe. The duration of the transition period to cost recovery level will be determined considering political and social acceptability.
• Recommendations to improve the existing tariff methodology / setting and revenue distribution mechanism.
• Suggest alternate tariff rationalization pathways, while examining the transition revenue gap (subsidy requirement) at each step of the pathway over the assignment time horizon. The tariff rationalization pathways should be developed in close consultation with the Regulator and sector companies, communication consultants who can provide insights into consumer and stakeholder behavior.

Task 3: National Rural Off- Grid & Mini- Grid Guideline

The Consultant will need to undertake at least the following specific sub-activities under this activity noting that final deliverables will be guided by and agreed with FCCC and FREF:

• Develop a Guideline for rural electrification which will complement Fiji’s Electricity Act 2017. This also entails creation of electrical standards for installation, generation, transmission, distribution and retail of electricity to end consumers for off-grid consumers.
•  The Guideline will outline procedures and compliance requirements for any private sector entity or Distributed Energy Services Companies (DESCOs) that intend to operate off-grid electricity distribution networks involving small-scale electricity generation under FREF
• The guidance will include, but not be limited to stipulations of service level agreement between private sector operator and/or Distributed Energy Services Companies (DESCOs) and FCCC. Management of the agreements will be supported by FREF and potentially UNDP.
• It will also include monitoring and operational requirements and compliance of operators under FREF.
• The output of these guidelines is intended to feed into legally binding Mini Grid policy and regulations which will involve Department of Energy (DoE) and other stakeholders.
• Specific requirements for guidelines to effectively operate and manage FREF will be agreed with the consultant in collaboration with FCCC and FREF at the start of this assignment.

Task 4: Capacity Enhancement

The Consultant will need to undertake the following specific sub-activities under this Activity:

• Conduct a workshop to present the findings of the cost of service, tariff models, tariff design and FREF Guideline. Incorporate the observations during the workshop in the final report.
• Training: Closely engage with FREF and FCCC officials throughout the course of the consultancy and provide guidance to FCCC for future tariff calculation exercises. The training would also include sessions on tariff determination principles, tools, and guideline processes in other countries which could be replicated in Fiji.

Time Frame: 16 Weeks with the following deliverables.

The consulting services will be implemented over a four-month (16 weeks) period from the commencement date.

The following reports, in the English language, will be submitted in the format and with copies as stipulated in the contract. Expected timelines for deliverables are from the issuance of Notice to Proceed. A detailed outline for each deliverable will be agreed in the contract based on FREF and FCCC’s approach and methodology. Tentative milestone payment percentages are subject to verification at contract negotiations. All components of each item must be completed to qualify for a milestone payment.

Each deliverable will be reviewed by FREF and FCCC technical assistance team who will be required to provide comments within 10 working days after the submission of each deliverable. If no comments are received within maximum of 10 working days, the deliverable will be considered agreed. Upon acceptance as determined by FREF and FCCC, the progress payments will be made according to the payment schedule specified in the contract. Deliverables will be provided as soft copies in MS Office (Word, Excel, Powerpoint) and PDF formats, and hard copies will be provided to FREF and FCCC as agreed in the contract.

• Duty station: Hybrid Approach – In country and Remote Work. Ideally based in-country, but a local staff model working in conjunction with an international expert consultant may be considered.

• Excellent project management to ensure high-quality and timely execution of deliverables.
• Excellent relationship management skills.
• Sensitive to country and organizational culture of clients.

Experience and qualifications:

• Minimum Bachelor's degrees in Electrical Engineering or equivalent in a related field.
• At least 10 years of experience in power systems tariff analysis and guideline development. Ideally the consultant should have experience working in Fiji in the energy sector.
• Has designed and implemented energy projects that were sustainable from a commercial and social point of view.
• Experienced in developing tariff structures and guidelines for energy projects for consideration by investors.
• Understands financial and technical details of managing on-grid and off-grid energy facilities.
• Has access to network of experts in Fiji, regionally, and/or globally in energy sector.

Language requirement:

Proficiency in English (written and spoken) required.

Price Proposal and Schedule of Payments

Consultant must send a financial proposal based on Lump Sum Amount. The total amount quoted shall be all-inclusive and include all costs components required to perform the deliverables identified in the TOR, including professional fee, travel costs, living allowance (if any work is to be done outside the IC´s duty station) and any other applicable cost to be incurred by the IC in completing the assignment. The contract price will fixed output-based price regardless of extension of the herein specified duration.

Tentative milestone payment percentages are subject to verification at contract negotiations. All components of each item must be completed and presented to the FREF Advisory Committee and FCCC to qualify for a milestone payment. Payments will be done upon completion of the deliverables/outputs and as per below percentages:

Evaluation Method and Criteria

Individual consultants will be evaluated based on the following methodology Cumulative analysis

The award of the contract shall be made to the individual consultant whose offer has been evaluated and determined as a) responsive/compliant/acceptable; and b) having received the highest score out of set of weighted technical criteria (70%) and financial criteria (30%). Financial score shall be computed as a ratio of the proposal being evaluated and the lowest priced proposal received by UNDP for the assignment.

Technical Criteria for Evaluation (Maximum 70 points)

• Criteria 1: Minimum Bachelor's degrees in Electrical Engineering or equivalent in a related field – Max 15 points
• Criteria 2: At least 10 years of experience in power systems tariff analysis and guideline development. Ideally the consultant should have experience working in Fiji in the energy sector – Max 15 points
• Criteria 3: Previous experience of designing and implementing energy projects that were sustainable from a commercial and social point of view – Max 10 Points
• Criteria 4: Working experience in developing tariff structures and guidelines for energy projects for consideration by investors – Max 10 points
• Criteria 5: An understanding of financial and technical details of managing on-grid and off-grid energy facilities – Max 10 points
• Criteria 6: Has access to network of experts in Fiji, regionally, and/or globally in energy sector – Max 10 points

Only candidates obtaining a minimum of 49 points (70% of the total technical points) would be considered for the Financial Evaluation.

Documentation required

Interested individual consultants must submit the following documents/information to demonstrate their qualifications. Please group them into one (1) single PDF document as the application only allows to upload maximum one document:

• Letter of Confirmation of Interest and Availability using the template provided in Annex II.
• Personal CV, indicating all past experience from similar projects, as well as the contact details (email and telephone number) of the Candidate and at least three (3) professional references.
• Technical proposal, including a) a brief description of why the individual considers him/herself as the most suitable for the assignment;
• Financial proposal, as per template provided in Annex II. Note: National consultants must quote prices in United States Dollars (USD).

Note: Successful individual will be required to provide proof of medical insurance coverage before commencement of contract for the duration of the assignment.

Incomplete and joint proposals may not be considered. Consultant with whom there is further interest will be contacted. The successful consultant shall opt to sign an Individual Contract or a Reimbursable Loan Agreement (RLA) through its company/employer with UNDP.

Annexes

Annex I - Individual IC General Terms and Conditions

Annex II – Offeror’s Letter to UNDP Confirming Interest and Availability for the Individual IC, including Financial Proposal Template

For any clarification regarding this assignment please write to Mr. Dale Kacivi – procurement.fj@undp.org  or dale.kacivi@undp.org 

All applications must be clearly marked with the title of consultancy and submitted by 5:00pm, 5th August 2022 (Fiji Time) online via UN Jobs website https://jobs.undp.org/ or etenderbox.pacific@undp.org