29th November 2016 This financial year has been a purposeful portfolio for Tonga Power. The result are due to a strong and incremental earning improvement through our shared capabilities, harnessed through valued collaboration with the Board of Directors, the shareholding Minister, Government and the ongoing support of development partners.
In 2015/2016 TPL recorded a Net Profit of more than $5.4 million as at June 30th 2016. The Board declared a dividend of $3 million pa’anga for the Group to the shareholder, the Ministry of Public Enterprises.
In October 2015, TPL announced the reduction in its connection and disconnection fees from $30 to $20 pa’anga and had continued to reshape the Company to improve efficiencies and reduce costs through an organizational restructure early this year.
In December 2015, the Ha’apai Cyclone Ian Reconstruction Project was completed as scheduled. The Ha’apai network has been 100% completed which included the HV network upgrade from 6.6KV to 11KV. The project was jointly funded by MFAT and the Asian Development Bank.
In March 2016, the $2 M 11 kV switchboard was installed successfully over a period of 2 weeks. All generation and network feeders and interconnectors were relocated to the new switchboard at the power station located at Popua.
Towards the end of March, we began the implementation of the Enterprise Resource Planning Project (ERP). The ERP system integrates and automates internal and external information across all the business units and functions. The system will provide TPL with improved governance, the ability to cope with growth and diversification and facilitate cost reductions of TPL’s services.
In April 2016, a team of 6 Line Mechanics from TPL were engaged on a monthly rotation as part of the assistance to Fiji in restoring the power supply following Tropical Cyclone Winston. The Electricity Network Recovery Project for Fiji was funded by the Asian Development Bank. The assistance was successfully completed and the team was highly commended on the efforts undertaken.
In May 2016, TPL implemented an electrical safety awareness campaign with the aim to raise public awareness of the hazards associated with electricity. This includes educational programmes in primary schools, on TV, Radio and community consultations.
A major accomplishment included the installation of over 1,500 new Light Emitting Diode (LED) street lights throughout the four main islands of Tongatapu, Vava’u, ‘Eua and Ha’apai.
The commencement of the Outer Island Renewable Project (OIREP) network rebuild in ‘Eua began with the procurement of cable and hardware. The project is scheduled to be completed by 2017 and will continue towards Vava’u.
The Tonga Village Network Upgrade Project completed stages 1 and 2 and is now continuing to stage 3 of the project. Line losses for the completed villages has dropped from 18% down to 12%. Over 20 villages out of the 33 villages (>60%) have been completed to date and the team are currently at work in Vaini.
The installation of 500 smart meters including communication devices were successfully installed and achieved over 99% pass rate under operation. The project will continue until all electricity consumers residing in Tongatapu receives a smart meter. The project cost for phase 1 is about $3 million. The total cost when fully completed across Tongatapu is in the order of $4.1 million.
These portfolio includes major investments to strengthen our infrastructure which substantially contributes to the reduction of electricity tariff and contributes towards the Government’s 50% renewable energy target by 2020.
A 25 year Power Purchase Agreement was signed between Tonga Power Ltd and Zhuhai Singyes Green Technology Co. Ltd, an Independent Power Producer from China to construct a 2MW solar facility in Tongatapu. The project is funded entirely by Zhuhai Singyes at a cost of more than $10 M pa’anga.
Since July 2015, the electricity tariff for all of Tonga decreased by 13.12 seniti from 83.11 per kWh to 69.99 seniti per kWh as of June 2016. This is a 15% decrease on the back of decreasing diesel costs with savings from our solar plants and wind generation.
In September 2015, TPL established a working committee to organize the Pacific Power Association Conference. The conference was one of the major achievement of Tonga Power Ltd during the year as it recorded the highest number of participants in the 25 years of hosting this event. Over 250 delegates attended the conference from power utilities across the Pacific including private businesses and donor partners.
Looking ahead, there remains a number of key challengers for Tonga Power. Energy Storage is one of TPL’s critical requirement prior to the expansion of Renewable Energy Generation to TPL’s electricity network. An energy storage road map has been compiled over the past months. TPL plans to introduce bulk energy storage as an enabler that will optimize and translate the investment in renewable energy generating plant to greater electricity tariff reductions.
TPL continues to work very closely with the Electricity Commission in ensuring compliance with the requirements of the Electricity Contract, which became effective in September 2015 and 100% conform to reporting obligations set forth in the Concession Contract.
TPL in conjunction with MEIDECC are preparing a USD $70 million energy submission to the Green Climate Fund (GCF) Board with assistance from ADB, which includes activities such as the outer islands mini-grid investments across the Ha’apai Group, battery storage in ‘Eua and Vava’u, mini grids in both of the Niuas lead by MEIDECC, 3 new on-grid solar farms in Tongatapu with a total capacity of 6.4 Megawatt and associated battery storage.
TPL continues to work closely with MEIDECC to complete preparatory works and will be responsible for the bulk of the project implementation activities. We would like to acknowledge the Chairman of the Board, Carl Sanft and the Board of Directors for your trust in the ability of the management team and your continued support throughout the year.
This is an exciting time for Tonga Power and we look forward to achieving our goals through the implementation of more projects in the future.
ENDS
Issued by the: Tonga Power Ltd