Project Management in Hybrid Solar Thermal Power Plant

Abstract

Culture drives the use of project management technology and has the ability to define desired service outcome for end users. Therefore blocking use of technology for organizational learning threatens the progress achieved by any development and jeopardizes the main objective of community development. Community members who are not acculturated to technology use must be provided with adequate training and encouraged to participate in development initiatives with the aim of increasing awareness. Community involvement in development initiatives should be incorporated right from the planning phase of development projects, to ensure that their positive impacts can be sustained in the long term. With this regard, Information Technology is merely a tool for communication that seeks to amplify the existing culture rather than transform it and the community, who are the end users beneficiaries and the government, should actively participate to foresee the project completion. This essay demonstrates project management to specific Information Technology sector, for this instance, Hybrid Solar Thermal Power Plant, a solar energy that is currently processed by World Bank in Bangladesh.

Data obtained for this analysis is culmination research efforts gathered between World Bank projects and extensive assessment performed by a group of industry practitioners in Bangladesh in pursue of project management and Information technology programs. Literature used in this essay is gathered from extensive research from various databases within the IT sector, specifically the Hybrid Solar Thermal Power Plant in Bangladesh, software/hardware solution as well as finance services.

Executive Summary

Research conducted in this study focused on prospects of Project Management implementation and best practices within solar energy sector processed by World Bank in a manner consistence with industry practices. The study also mentions problems inherent within the project application of solar photovoltaic (PV) in Bangladesh rural development, national subsidiaries and the government working to meet the basic energy needs. The analysis did however conclude that Project Management practices and methods indirectly increase the living standards and the livelihood of the rural poor. This therefore brings us to the conclusion that Project Management is indeed a practice that requires testing regimes to arrive at best practices and arriving at consistence Project Management is somehow a utopian concept. My team members therefore positioned that organizations help facilitate development of effective and efficient skills that allow formulation and execution of Project Management practices. Understanding both internal and external processes rather than relying on the prescribed best practices. My research team arrived at this conclusion by analyzing Bangladesh solar project whose practices revolved around principle of Project Management within the information technology industry.

Introduction

Project management is defined by Yongxoue and his colleagues (2003) as “asset of tools, processes and competencies utilized by people in order to enhance an organization’s services and practices” (p.1). And the Best Practices for this instance are defined by Murch (2001) as “activities, strategies or approaches that have been approved through research and evaluation to achieve effective practices in a given discipline, application or area of study” (p.12). The study will therefore identify current project management best practices as observed within Hybrid Solar Thermal Power Plant and record findings from each literature review along with necessary baseline to help us incorporate our findings into this final report. World Bank projects are aimed at mainstreaming sustainable development principles into development aspects. It also mobilized efforts of the community, the government and private-sectors to improve coordination among environmental institutions both internationally and locally. It increases the capacity of environmental and increases awareness of community on environmental issues and involves them in the active participation to monitor environmental quality. According to Yongxoue et al (2003), World Bank’s main objective is to “integrate the principles of sustainable development into country policies and programs and reverse the loss of environmental resources” (p.10).

Challenges to Integrate Climate Change Policy

Bangladesh management team lacked awareness in decision making level. The country had not prioritized solar development plan and poor coordination among line agencies at local levels to foresee the project completion were evident. There were so many undergoing projects, but locals lacked understanding of the project activities and how it would benefit them. Locals assumed that the project only targeted long term impacts which made them less motivated and more concerned about short term direct impacts. This brought us to the conclusion that complex issues in developing countries require more practical solutions to solve the problem in the community in a short-term basis. Even though, solar energy projects have been stated as one of the Bangladesh’s national development plan priority, in fact, it’s shocking to realize that the country has given the project less priority since its implementation (Yongxoue et al, 2003, p.3).

World Bank acted as an administrator for the Global Partnership on Output-Based Aid (GPOBA) with grants of a total of $8.3 million to sponsor part of the costs for installation of Solar Home Systems (SHS) and renewable energy mini-grids for poor households located in Bangladesh rural areas (p.2).

The projects benefited more than 14,000 households and over 5000 small to medium enterprises. Some of the projects included irrigation pumps, poultry farms and as well as timber mills in the rural areas. The ongoing project is expected to enable majority of poor rural population and dispersed areas have access to affordable energy through the SHS and mini-grid projects. Zafrul Islam as quoted in Sibanda and Mahbub (2003) states that the GPOBA projects will support the Government of Bangladesh’s goal to ensure that the entire country has access to electricity by 2021. 80% of Bangladesh’s population live in rural areas and are also the group most affected by a lack of sufficient electricity generation. These projects will help 140,000 more households gain access to affordable electricity (p.1).

Sibanda and Mahbub (2003) continue that the proposed SHS project will reduce SHS installation costs benefiting off-grid areas. Mr. Islam Sharrif as quoted in Sibanda and Mahbub (2003) adds that our mission at IDCOL is to encourage private sector investment in energy and infrastructure projects,” said Mr. Islam Sharif, CEO of IDCOL. The output-based aid approach has an impressive track record to date because it helps low income households gain access to electricity and makes it attractive for the private sector to offer services to the poor (p.2).

In his statement Mr. Islam Sharrif concluded that the amount paid by GPOBA was seen as an incentive for business in the country to offer services to the poor people and the World Bank out-put based approach will ensure that payments made go directly to the qualifying household access to SHS installation (Sibanda and Mahbub, 2003, p.2). Since its establishment in 2003, GPOBA has sponsored various projects including education, infrastructure and health designed to create incentives for efficiency and long-term development projects.

Developing countries have over the years been striving to provide energy solutions to the poor marginalized areas. Despite many projects that have been implemented for years, more than 1.5 billion people in developing countries mostly in the Su- Saharan African region and South Asia remain without access to electricity services today. In this regard, World Bank continue to implement projects to meet Bangladesh lightening and other basic energy needs since majority of the households in the rural areas depend on expensive fuel based energy power such as kerosene, which are indeed inefficient and polluting. World Bank’s project uses renewable energy-based technologies ranging from solar photovoltaic (PV) systems to micro hydropower to off-grid areas as alternative to power solutions in remote and dispersed communities. This projected has also been accelerated due to the recent increment of fuel prices. Among the financiers, World Bank is the leading sponsor of the off-grid electrification benefiting more than 1 million households including both small and medium size enterprises. After extensive research, my team members argued that long-term sustainability of the project will depend on many factors either than just technology. First of all, Bangladesh will require effective prioritization and adequate planning to ensure implementation of technological solutions, infrastructure and financial are provided for long-term purposes. Drawing on World Bank’s experience in design and implementing off-grid electrification projects, rural electrification solar projects guidance and insights into fundamental design principles for sustainability and sound practices for effective decision-making in Bangladesh will an effective solution (Cabraal et al, 2008).

Context and Background

It’s quite clear that access to energy solutions would incredibly improve Bangladesh’s welfare. According to Cabraal et al (2008) research, there are about 260 million rural household without access to electricity. It is evidenced that majority of these households reside in either dispersed or small villages far form the city centers. World Bank is therefore trying to bridge this gap by implementing projects that provide electricity to such neglected areas using technology options approaches such as solar PV that have attained commercial maturity over the past 15-20 years. Based on practical knowledge gathered from various literatures and international experience accumulated through the past and on going World Bank operations, data obtained here will provide useful guidelines for designing sustainable off-grip projects. Given the unique features of the World Bank projects, the essay seeks to offer basic design principles of project management and sound practices for effective decision making not prescribe solutions for success. This essay is categorized in three sectors mentioned as: a context and background section 2) Discussion of critical factors in Project Management and; 3) Guidelines for Off-grid Project Designs (Cabraal et al, 2008).

To ensure the likelihood of sustainability of the projects, Cabraal and his colleagues (2008) argue that Bangladesh government should play a role of off-grid options by simplifying regulations, appointing competent and dedicated project management staff to foresee the completion of the project. Since the project is technology driven, the project should include cost effective analysis to determine the least-cost solutions and our technology choice will be based practical considerations. Deliverance mechanisms and consumer service for off-grid projects specifically rely on private sector participation in line with local realities which enable access to quality and affordable products and services in the long-term. The projects are also aimed at improving lives and livelihood opportunities to help those who cannot afford personal house connections. From the perspective of data gathered from various literatures, such technological applications increase the economic attractiveness of the community.

World Bank investment projects have over the years made impressive gains in improving electricity access specifically in developing countries. It’s estimated that majority of Bangladesh population both in rural and marginalized areas have no access to electricity. Poor household here are defined as people living in off-grid areas with low-income levels. Government programs in Bangladesh should in this case prioritize allocation of scarce resources. This is because unprivileged populations are found to be concentrated in the rural communities. However, the costs required to electrify this places vary significantly. Marginal areas have been without electricity for sometime since private organizations are unwilling to connect customers because if the inherent high costs installation and with lower tariffs. In reality, private sectors prefer to concentrate on grid intensification due to lower cost per connection and easier to implement. Government projects are rarely off-grid decisions and its time they supported energy initiatives that would stimulate the growth of micro-enterprises that would benefit the economy. For these reasons, some off-grid projects have been neglected hence the need for World Bank sponsorship. The spatial-analysis of power line being plotted in Bangladesh is one of such example (Cabraal et al, 2008, p.4)

Critical Factors in Project Management

Project managers of off-grid electrification in Bangladesh are responsible for major critical decisions that affect sustainability of the solar project. Cabraal and his colleagues (2008) states their decisions to include “technology choice, ensuring affordability, social safeguards and environmental considerations, as well as taking advantage of opportunities to initiate and enhance productive activities and institutional applications” (p.12). It also argued that the project management should include regulatory actions and appropriate business models.

Comparing technology options

Once the deserved unprivileged community is located, the next step would require determination of suitable technology for grid extension. Overall process of collection of baseline data on energy consumption is collected in terms of income and information on solar energy resources. World Bank also prioritized the use of solar battery charging station (SBCS) that can charge several batteries simultaneously with the use of solar energy. It’s evidenced that a station with 2kw capacity charged battery can serve up to 50 households. The only disadvantage is that the solar powered batteries can only serve people living near the station since the battery must be transported to and from the charging station once a week. This idea basically allows poor households to charge their batteries when they can afford. SHSs solar project is a predominant technology that consists of a 10-100 Wp solar PV panel that attracts solar radiations through the daylight and stores the energy in the automobile battery which is then transmitted through cabling and low-wattage Dc lamps. Overall, World Bank projects in the rural Bangladesh total to 1.3 SHSs for homes and community centers with 60MW totaling to about $ 680 million in investment costs (Energy and Mining Sector Board, 2007).

Although SHSs initiatives have been the most prioritized project in Bangladesh, the white Light Emitting Diode (LED) technology have also enabled easy access to LED productions. SHSs are currently the only off-grid electrifications that can function virtually anywhere despite the geographical variations like lack of sunshine or solar radiation intensity. But in this case, Bangladesh has been experiencing solar resources throughout the year to enable PV to function efficiently. Normally conducting a solar radiation measurement program is not necessary during the pre-investment phase since the systems are modular and rugged and the best thing is that they require little maintenance mostly periodic cleaning of the glass panel and few repairs here and there. Adequate attention is also required to ensuring that the products are reliable and deliver promised service levels. World Bank involvement has ensured increased quality and customer satisfaction and reduced reputable risks discredited with technologies and projects. In our perception, World Bank should ensure that consumers have convenient access to spare parts and maintenance services otherwise the project would be pointless. Barkat (2003) argues that “in some projects, quality systems were installed without providing for longer-term maintenance, which harmed the reputation of the project and technology” (p.6). It has been long argued that when private sectors are offered off-grid contracts, the desired service outcomes are defined at the completion of the project. Cabraal et al (2008, p.15) add that when it comes to technology neutrality, the service provider must be left to make the ultimate choice and appropriate subsidiaries must be provided to level the playing field.

Productive and Institutional Application

Many rural communities in Bangladesh require energy solutions to sustain their economic activities. Many of their projects are usually constrained by lack of modern supply of energy and jeopardized their ability to live above poverty levels. Economic activities related to water pumping, small cottage industry, poultry rearing, fish farming among others are very important in sustaining community development. Many of these projects require small amount of power as low as 100w to 3kW, which could be provided by SHS. In this case, the government should initiate and enhance productive activities for long-term project sustainability. This brought us to the conclusion that the major ingredients to providing off-grid require technical assistance and adequate financing from the government, private subsidiaries and international donors. Therefore the costs of SHS built to serve the off-grid community need to be justified in its productive loads especially in daytime when the sunshine is out enough to supply nighttime household loads, otherwise the wall project would not be cost effective (Cabraal et al, 2008, p.15).

The main objective is to ensure that potential productive applications are likely to be fruitful once the SHS is built. For effective implementation, early identification of local participant for the SHS project, assisting individuals in developing business plan and identifying financial modalities. Sometimes over optimisms evaluation of potential productive application may be impractical to implement since they do not indicate significant potential for utilization. Institutional and community application are also important to ensuring off-grid electrification come to its full potential. For example, community centers around at the projects area such as hospitals and schools can voluntary give assistance by financing the projects. In a business model perspective, World Bank or donor-funded institutions that have offered critical mass of assistance for PV market packages are offered bidding where the highest bidder is given the right to sell the SHS to local households at subsidized rates and even a contract to install the PV systems to selected institutions. An important feature of this model is that the project enables long term maintenance and services that meet specific service standards (Cabraal et al, 2008, p.16).

The critical mass packages greatly increases the package attractiveness to private sectors and creates an infrastructure to support retail sales in the area. Studies conducted by Gouvello (2008) clearly categories this type of business model as systematic and pragmatic approaches. Systematic approach is defined by Gouvello (2008) as one that analyzes the technologies used in a specific rural area. It identifies the bottlenecks [determines] whether the use of electricity can contribute to diminishing or removing the limiting factors, evaluates the costs and gains, and provides guidelines to induce the proposed change in the process (p.15).

On the other hand, Gouvello (2008) defines pragmatic approach as an approach that “follows an optimistic tactic, taking advantage of pre-existing opportunities resulting from the ongoing or planned implementation of another project or program” (p.15). In simple terms, a successful project would require implementation of a quick-win project that would quickly provide revenue-enhancing gains, facilitated by access to electricity. Here, the study argues that success of rural electrification projects should aim at generating new revenues and improve the livelihood of the locals.

Enhancing affordability

In order to increase affordability, off-grid electrification project in the rural Bangladesh must include subsidiaries, low-cost energy options like SHs for this instance, consumer financing and finally polices and business practice. Role of subsidiaries in this case would be to foresee the completion of grid-based rural electrification to off-grid areas that have poor and dispersed population. It has also been argued that technologies for decentralized service have the ability to configure individual units that have higher investment costs to low fuel and operating costs compared to fuel-based supply systems. In some cases, the resulting energy costs may be higher that what a potential customer is willing to pay and subsidiaries in this case help off-grid consumers afford the upfront costs of access (Sibanda and Mahbub, 2003, p.17).

Subsidiaries for off-grid populations are often justified on social equity grounds, that is what Barnes and Halpern (2000) defines as their ability to help rural dwellers to attain a level of parity by extending infrastructure costs and lifelines tariffs. In market imperfection aspect, Barnes and Halpern (2000) states that “lack of adequate information regarding specific opportunities, true cost of service and unavailable long-term financing often slow down the already economic off-grid projects or those that are close to completion” (p.5). Therefore appropriate designed subsidiaries for off-grid electrification enables the completion of physical interventions to occur by providing the otherwise uninterested investors with financial incentives and support. Barnes and Halpern (2000) add that project management mechanisms that mostly target the economic projects of the needy societies are usually effective if they incorporate implementation program that work. For example, it’s considered more effective to subsidize the upfront costs to consumers or business costs in dispersed areas than operating costs (Cabraal et al, 2008, p.18).

Subsidiaries provided by SHS in World Bank projects in Bangladesh reflects wide variations of systems costs, government attitudes towards subsidiary support and willingness to pay levels. For example, the SHS subsidiary projects known as the RERED include PV system size of 20-70 WP with approximately 12 % cost in subsidiary range. Subsidiary financing can be gained from micro-financial institutions, banks and leasing companies. Such arrangements can increase affordability by spreading first costs over several years. Therefore strong partnership between microfinance institutions and energy companies would facilitate fast off-grid lending programs (Cabraal et al, 2008, p.19).

Role of Technology

SHS technical option is to enhance affordability and provide smaller, lower-power solar systems that offer lower quantity of service without compromising quality (Cabraal et al, 1996). For example, a solar panel costing $ 50 to $75 would provide 3-4hours of lighting on a daily basis. Also, the SHS costing $ 600 can operate up to 3-4 hours of lighting and radio daily. LED technology advances are also cost efficient and can also be adopted into the most marginalized and retail infrastructure. Overall, adequate attention to SHS products and services are needed lead to reduced costs and replacements less expensive (Cabraal et al, 2008, p.19).

Role of Policies and Business Practices

It has often been argued that reduced capital costs subsequently improve affordability of capital-intensive off-grid technologies. Some countries oppose the off-grid technologies, encouraging further consumption of high fuel. The implementation of solar PV have simplified energy solutions and enabled Bangladesh to build long-term relationship with its donors and subsidiaries hence reducing the share of costs attributed to management and overhead costs (Cabraal et al, 2008, p.20).

Business models for off-grid Services

World Bank support for off-grid electrification projects was principally aimed at improving access to energy systems for the less privileged people living in the rural and dispersed communities that are unlikely to be reached by grid electrification. Combination of its goals along with country’s objectives of including other subsidiary players either than the government in mobilizing additional human effort, and financial resources would see the implementation of off-grid electrification to serve the poor communities. Off-grid projects are unlikely to attract private investors in the isolated areas. A prevalent business model in this case would require mobilizing the community to take full responsibility of the project operation, provide maintenance and management services. In this case, community based model requires substantial technical assistance in design and feasibility studies, social organization and extensive training as the Bangladesh case demonstrates (Cabraal et al, 2008, p.20).

The Bangladesh government should also play a role by funding and inviting proposals from private sectors, rural energy fund and support such investments on qualifying bidders. In either case, the governments sound practice to subsidize a portion of the capital costs while the community and private sectors balances the investment costs and full cost of the operation and maintenance. The third approach calls for active participation of government-contracted projects or public utilities operating in marginalized areas. Here, the government takes full charge by regulating tariffs which is an equivalent to the lifeline tariff of rural grid customers. In other words, utility operator is provided a subsidy from a public source as part of capital operations and maintenance costs. This model is also evident in the Philippines where the government funds its micro-operation projects. For Bangladesh case, World Bank project centered on off-grid SHS has enabled rural electrification. Such business model for commercial PV dissemination is classified by Cabraal et al (2008) as 1) a dealer where projects are given to open markets and; 2) fee for services. In the dealer model, a consumer is made to purchase products or services either with cash or by financing. Here, a consumer takes full responsibility for all operations and replacements costs. With regard to World Bank projects, the dealer aspect often incorporates micro-finance assistance, which deals with the initial high upfront costs (Cabraal et al, 2008, p.20).

The fee for service aspect on the other hand gives the company which retains the full ownership of the equipment full responsibility of maintaining and providing replacement parts over the lifetime of the service contract. An example of a service fee model can be seen in the Renewable Energy for Rural Markets Projects (PERMER) initiated in Argentina in 1999. Although a country can choose from a wide range of off-grid technologies, so far PV is considered suitable technological choice because of its cost effective aspects. However, requisite framework and procedures for dispersed population should be added to the ongoing system (Cabraal et al, 2008, p.23).

Regulating off-grid services

Bangladesh government should regulate donor funding initiatives by ensuring off-grid customers do not pay excess tariffs, or suffer from poor quality services provided by the service-provision mechanism. It should also ensure that regulatory requirements designed for off-grid markets are appropriate, devise reporting and service quality standards in rural areas and set lower costs that can be redistributed over an extended period (Reiche et al, 2006). For SHS service for instance, Reiche et al (2006) argues that the only regulatory body that would foresee the completion of the project would be the government that provides subsidies for system purchase and installation. Reiche and his colleagues (2006) add that

regulatory actions involve accreditation of participating companies, settings and enforcing standards (preferably adopting internationally accepted standards), verification of installation, and random monitoring of system performance-actions that World Bank-supported projects usually require of counterpart government agencies (p.7).

Guidelines for Off-Grid Project Management

In order to maximize the chances of sustaining operation of the off-grid solar project over the long term, important project management principles as illustrated below must be implemented.

Solar Home System for Bangladesh

Main points gathered from this analysis concluded that;

• the conception and implementation of the SHs project must always be consistence with the overall rural lighting plan for Bangladesh. In this regard, the project should steer clear of ad-hoc factors that may kill the come to completion
• Project management should be driven by technological design; In this regard, cost-benefit analysis should be conducted to identify alternative technologies that are least-cost solution. Here, choice of technologies must be tested for practical considerations like availability of adequate resources, ease of operations and maintenance and access to spare parts. Also, data should be collected across various sectors that would be willing to use the services which would be factored into technology selection process. In SHS for example, the World Bank would require collected data of energy consumption and income levels’ and choice on appropriate technologies should be left to the service provider, who has investment parameters to consider.
• in early in the assessment phase, the government should pay high priority to raising community awareness, involve and support donor initiatives to foresee the project success. Here promotion programs and community meeting are required.
• Mobilization of both government and sponsoring agencies is required since off-grid electrification is difficult to implement. Persistence and efforts from the government in support of World Bank projects are very important in ensuring completion of the projects.
• Government commitment to revive subsidiary slack when external financing ends to ensure the completion of the project is also required.
• Competence of local Project Management Unit (PMU) is important to the project success. In this regard, an external donor should obtain implementing agency commitment for appointment of competent staff that would devote their time to the project.
• Off-grid projects that rely on private sector participation should employ simplest delivery mechanisms or business models that commensurate with local realities. Here, the project management should seek the assistance of service providers, assess risks involved, provide technical assistance and provide technical assistance where appropriate.

The World Bank has initiated projects that would ensure off-grid systems products are disposed off safely or even recycled. National recycling programs must be made and education arrangements to ensure safe disposal of hazardous waste.

References

Barkat, A. (2003). Rural Electrification and Poverty Reduction: Case of Bangladesh. Paper presented at Sustainable Rural Electrification in Developing Countries: Is It Possible?, International conference of NRECA International, 6, 1-3

Barnes, D. F., and Halpern, J. (2000).Subsidies and Sustainable Rural Energy Services: Can We Create Incentives Without Distorting Markets? Washington, DC: World Bank

Cabraal, A., Cosgrove, M., & Schaeffer, L. (1996). Best Practices for Photovoltaic Household Electrification Programs. Asia Technical Department Series, 324, 1

Cabraal, A., Terrado, E.,& Mukherjee, I. (2008). Designing Sustainable Off-Grid Rural Electrification Projects: Principles and Practice. The Energy and Mining Sector Board, 2, 1-34

Energy and Mining Sector Board. Catalyzing Private Investment for a Low Carbon Economy: WorldBank Group Progress on Renewable Energy and Energy Efficiency in Fiscal 2007. Washington, DC: World Bank.

Gouvello, C. (2008). Maximizing the Productive Uses of Electricity to Increase the Impact of Rural Electrification Programs. ESMAP Formal Report No.332/08. Washington, DC: World Bank.

Murch, R. (2001). Project Management – Best Practices for IT Professionals. New Jersey: Prentice-Hall Inc.

Reiche, K., Tenenbaum, B., & Torres, C. (2006). Electrification and Regulation: Principles and a Model Law. Energy and Mining Sector Board DiscussionPaper No. 18. Washington, DC: World Bank.

Sibanda, J., & Mahbub, M. (2003). World Bank-administered GPOBA and IDCOL help low-income households in Bangladesh access electricity. News Release, 10, 1-2

Yongxue, C., Sunny, G., Giannelia, M., Hughes, A., Johnson, A., & Khoo, T. (2003). Identifying Best Practices in Information Technology Project Management. Organizational Development, 30, 1-22.