ANTON DE KOM UNIVERSITY OF SURINAME

FACULTY OF TECHNOLOGY

RESEARCH REPORT

EVALUATION OF THE LEVELIZED COST OF ELECTRICITY IN THE

REGION OF BOVEN SURINAME

TAÍSA DE ALMEIDA FELIX

PARAMARIBO, SURINAME: JANUARY - 2018

Contents
1. Introduction ...................................................................................................................... 3
2. Electricity Sector in Suriname ........................................................................................... 4
2.1. Electricity Price .......................................................................................................... 5
2.2. Solar Energy Sector ................................................................................................... 5
2.2.1. The Electricity Act .................................................................................................. 6
2.3. Problem Description.................................................................................................. 6
2.3.1. Electricity Costs in the Hinterland ......................................................................... 8
2.4. Research Objectives and Scope................................................................................. 9
3. Methodology ................................................................................................................... 10
3.1. Net Present Value.................................................................................................... 11
3.2. Levelized Cost of Electricity ..................................................................................... 11
3.3. Structure of Cost ..................................................................................................... 12
3.3.1. Diesel power generation systems ....................................................................... 12
3.3.2. PV System ............................................................................................................ 12
3.4. Demand ................................................................................................................... 16
4. Findings and Results ........................................................................................................ 18
4.1. Tecnical Details ........................................................................................................ 18
4.2. Results – Levelized Cost of Electricity ..................................................................... 18
4.3. Economic analysis of the diesel power generation systems ................................... 19
4.4. Economic analysis of the Photovoltaic Systems...................................................... 19
4.5. Cost Comparison with Brazil ................................................................................... 20
5. Final Considerations ........................................................................................................ 22
6. References ....................................................................................................................... 24
1. Introduction
This project was developed between March, 8th and December, 31st, 2017 at the Anton
de Kom University of Suriname. The research was made in a multidisciplinary manner, involving
meetings with stakeholders of the electrical field, of the Government and also amongst
organizations interested on the improvement of community life in the Surinamese country side.

Of the companies and organizations that contributed to the development of this project
it is possible to mention the name of the Amazon Conservation Team (ACT), EBS, Guguplex,
Interamerican Development Bank (IDB), Interdata, Stichting Fonds Ontwikkeling Binnenland
(SFOB), SURMAC, as well as the United Nation Development Programme (UNDP).

Beyond the mentioned organizations, meetings with independent consultants,

engineers, researchers and teachers were held whose ideas and opinions in much contributed
for the further progress of this research.

During this period, it was also possible to participate in events, technical visits, lectures,
and conferences that enriched the experience and were fundamental to the development of
this research.

3
2. Electricity Sector in Suriname
Suriname’s electricity market is dominated by the state-owned. The policy and
supervision of energy in Suriname are done by the Ministerie van Natuurlijke Hulpbronnen
(Ministry of Natural Resources, MNH).

Under the supervision of the MNH there is the Energiebedrijven Suriname (EBS), a utility
that owns and operates all the country’s transmission, distribution and part of generation. EBS
owns thermal plants fueled with diesel and fuel-oil totaling 167MW, and also purchases
electricity from third parties, mainly from Afobaka 189MW hydro power plant and the state oil
company Staatsolie 96MW thermal power plant.

The power sector from Suriname consists of a few individual power systems, as can be
viewed in the Figure 1.

Figure 1 - The EPAR system (red circle) for Paramaribo and surroundings. The EPAR system has by far the
highest consumption of electric power in Suriname, serving over 133,000 customers in Paramaribo and
surrounding areas, with a peak demand of 207 MW in 2016; the ENIC system (purple circle) for New
Nickerie in West Suriname, and the surroundings of the district of Nickerie. It is the second largest power
system in Suriname. Electricity is generated at EBS Clara 20MW termal power plant. The District Power
Systems (black circles) each operating as an isolated power system with one or more Diesel Generator
Sets in a local power house; The Rosebel Gold Mines (green circle) where the Gold Mine operations of
IAMGOLD in the Brokopondo district are supplied with electric power coming from Afobaka Hydro power
Plant; The Brokopondo Distribution system (blue circle) feeding some villages in the Brokopondo district
from the 13.8/33 kV system at the Afobaka Hydro Power Plant [1] [2].

Regarding the rural electrification, EBS shares its responsibility with the Dienst
Electrificatie Voorziening (DEV), which is an agency part of MNH. About 130 villages have diesel
generators installed, serving an estimated population of 30,000 people. More than 100 of these
villages are provided with diesel fuel by DEV [3]. Rural households are not charged for the service
as all the costs are absorbed by the Government of Suriname [4].

4
 2.1. Electricity Price
The tariff of Electricity for consumers who are grid connected to EBS system is presented
at Table 1 and Table 2:
Table 1 – Residential electricity tariff of EBS for customers (Source: EBS – December/2017)

Monthly Consumption Tariff (US$/kWh)1

≤ 150kWh 0.036
151 – 300 kWh 0.04
301 – 450 kWh 0.044
451 – 600 kWh 0.067
601 – 800 kWh 0.099
> 800 kWh 0.175

Table 2 - Subscription rate based on the phase connection (Source: EBS – December/2017)

Phase Connection Fee (US$)

One-phase 1.45
Two-phase 2.2
Three-phase 2.43
When the cost per kWh of a PV system is the same or less than residential electricity
tariff, then the PV electricity is economically competitive for residential users. Assuming a 1-
phase connection with a consumption of 130kWh (what is suitable for a low-income family), the
cost of electricity bill would be: 130*0.036 + 1.45 = US$ 6.13, what is really cheap especially for
the evaluation of the feasibility of renewable projects in Suriname.

2.2. Solar Energy Sector

Even though Suriname has a history of projects with renewable energy microgrids that
hark back to the 1970’s2, solar and mini hydraulic plants still have a low market penetration in
the country. Apart from that, due to the addition in the last ten years of power generation via
thermal power plants the national energy source utilization has decreased considerably [5].

A solar radiation varying between 4.5 – 6 kWh/m2/day and a 5h of average solar peak
hours [6] puts Suriname to good perspectives in the future on the solar field.

Nowadays there are two large solar energy projects: a 5MW solar plant commissioned
in December 2014 that supplies the IAMGold Rosebel gold mine in Brokopondo district, and a
500kW photovoltaic (PV) plant in the city of Atjoni.

The Projected Solar projects by the electric utility are [7]:

- 2×1 MW Solar PV farm in Nickerie

- 1×300 kW solar PV farm in Coronie
- Roof-connected PV systems for pro-sumers
- Solar for Hinterland:
- Low population density areas: stand-alone PV systems

1
Assumption: US$ 1 = SRD 7,5
2
First renewable energy project with microgrids started in 1979 after a donation of a Cross flow turbine
by the Organization of American States (OAS), executed by the government and the Anton de Kom
University of Suriname [16]

5
 - High population density areas: diesel-PV hybrid systems

Until 2016 the lack of regulation was an obstacle for the development of large scale solar
projects. But in March 2016, the Government of Suriname enacted the Electricity Act, filling an
important gap in the electricity sector.

2.2.1. The Electricity Act

The Electricity Act has some important implications including the possibility to open the
country’s power sector to the private sector, the creation of the Energy Authority of Suriname
(EAS), and introducing Suriname’s first legislation in favor of renewables. The Electricity Act
provides guaranties for the energy produced from solar and wind plants, and is a great step
towards the incentive of renewable energy sources in Suriname [8].

Following the same guidelines of the Electricity Act, the Government of Suriname also
has acknowledged the need to strengthen the renewable energy sector with the National
Development Plan 2017-2022, where one of intended outcomes is the implementation of
programs for the reduction of CO2 emissions by the utilization of renewable sources for
electricity generation.

2.3. Problem Description

The population of Suriname is mostly concentrated on the coastal side. Less than 9% of
the population lives in Sipaliwini, a district in the interior that corresponds to 80% of the
country’s area (see Figure 2). These villages are generally far away from Paramaribo and are
situated in rural areas with little or no access to electricity.

Figure 2 - Sipaliwini

The isolation of the villages ate the possibilities at the electric sector. Some of these
areas are reachable by boat and some only by plane. It is a technical challenge to extend the
traditional electricity services at a reasonable cost.

The energy development in the interior of Suriname, especially in the villages far way of
the coastal area has been very limited and deals with many restrictions. Nowadays, diesel
generators are widely used by the inhabitants to generate electricity. The generators and the
fuel are provided by the government and can be used for 4-6 hours per day, usually between
19h and 23h.

The access to electricity affects considerably the life quality and the economic activities
of the region, even impacting the migration fluxes, given the fact that people tend to migrate in
search of better life conditions.

6
 Figure 3 - Relationship between energy demand and economic development. Suriname is indicated in red.
Source: World Bank.
For many decades there have been sporadic attempts of the Government of Suriname
and other non-governmental organizations to supply systems to produce electricity in these
remote areas. Several diesel generators have been installed and distribution systems created
but without long term perspective or feasibility. Many of the diesel units are either never used
or out of order, and the remaining operating units cope with logistical problems as high costs
for fuel, low frequency of supply from Paramaribo, and lack of maintenance [9].

Moreover, considering the fluctuation of diesel prices and an inflation rate of 98%3
between 2014 and 2016, the analysis of the price for alternative sources of energy is not only
welcome but also necessary.

The government is subsidizing 100% of the energy in the hinterland, and it is another
topic that should be reevaluated. First of all, the population in the hinterland doesn’t have a full
access to electricity. In this light, the present demand can be considered suppressed. There is
thus a certain potential of demand which, at this point, cannot be expressed by the village
populations [10].

Besides this, not everybody has access to the part time electricity: there are around
10,157 livings (about 7,6%) with no regular electricity service from the Electric Utility – EBS or
DEV [3].

Additionally, diesel generators regularly require maintenance. According to the

inhabitants, they also suffer from shortages of fuel, sometimes taking up to 5 months without
receiving the fuel that is supposed to be sent monthly.

It is important to highlight that not only the people from the interior is benefited by the
electricity subsides. Around 85% of Suriname’s half a million population is connected to the grid.
The average retail electricity is one of the lowest tariffs in Latin America and the Caribbean due
to government subsidies. As an example, in 2012 the power generation costs from EBS were
estimated at 0.20US$/kWh in 2012, while the average tariff that year was 0.07US$/kWh [22].

3
Centrale Bank van Suriname

7
 This low electricity price is a major barrier to renewable energy development in the
country. The Electricity Act starts addressing this issue by stating that subsidies must be reduced
in order to improve energy efficiency [8].

In summary, the government is spending a lot of money4 to provide a poor service to

the population in the interior and some of it to subsidize electric energy to the families and
companies that in many cases are perfectly well fit to afford the non-subsidized price of
electricity. This analysis is particularly important to be discussed especially considering the
economic crisis that the country is facing (in 2016, GDP shrank more than 10%, according to the
International Monetary Fund - IMF5).

Furthermore, nowadays there is an economical pressure by international organizations

on the government to increase even more the price of the fuel. According to the IMF, decisions
to freeze fuel prices and partially reverse the increase in electricity prices, despite rising energy
costs, have significantly reduced available government resources.
2.3.1. Electricity Costs in the Hinterland
Analyzing the total cost of the subsidies on electricity prices for Suriname is far from an
easy task because vital information such as details about power plants installed in the interior
are just not public/available. Another important issue that has a great impact on the total cost
of electricity - the manpower that is necessary to distribute the fuel and lubricants and to
maintain the diesel generators - is not even taking into account on these calculations.

Using available data about installed capacity and expenditures on fuels and lubricants in
the years 2014 and 2016 it was possible to make some analysis on how government spending
has evolved in relation with the installed power in the communities in Sipaliwini.
Table 3 - Government expenditures per kW6

Year Installed Capacity (kW) Cost SRD/kW Cost US$/kW

2014 4,370 2.19 0.65
2016 4,852 2.06 0.33

From Table 3 it is possible to make some relevant observations. The installed capacity
increased more than 10% between 2014 and 2016, while the cost per SRD was reduced. If the
analysis is made in cost per US dollars, the reduction in 2016 was over 50% compared to 2014.

4
According to the Finance Minister of Finance Gillmore Hoefdraad, at the first semester of 2017 the
Surinamese government spent almost US$ 18 million dollars to subside the electricity supply.
5
In 2016 the International Monetary Fund (IMF) approved a Stand-By Arrangement for Suriname, to
support the government's economic reform program. In 2017, after disagrements between the
Government of Suriname and IMF regarding the total cut of governamental subsides for electricity prices,
taxation of fuel and the elevation of interest rates caused the suspention of the program.
6
Exchange rate changed used for the calculations:
2014: US$ 1 = SRD 3.35
2016: US$ 1 = SRD 6.29
Source: Centrale Bank van Suriname

8
 The most plausible explanation7 for this decrease in the cost per kW was the difference
in the exchange rate between SRD and dollar at the period. In 2014, US$ 1 corresponded to SRD
3.35 and after a large devaluation, in 2016 US$ 1 became worth SRD 6.29.

As a result, there was great economic pressure for rising fuel prices (the domestic price
was below the international market price), and although the price of the liter of diesel increased
by about 40% in the local currency, this increase did not cover the depreciation of the SRD
against the dollar in the same period.

Thus, in the period analyzed (between 2014 and 2016) the local price of diesel in US
dollars decreased by about 50%8, and therefore, the value of the cost in US$/kW decreased in
the same proportion.

It's worth pointing out that the cost of diesel generation of electricity cannot be
estimated based on the expenditures in fuel and lubricants. There are several other parameters
that should be considered, like labor costs, transportation costs and maintenance costs. The
analysis in US$/kW installed is just a different way to evaluate the government expenditures
over time.

2.4. Research Objectives and Scope

The main purpose of this project was to evaluate the feasibility of photovoltaic systems
to provide electricity access to the region of Boven Suriname. It was made comparing the
levelized costs of the electricity (LCOE) in the hinterland considering two energy sources: diesel
fuel and solar energy considering a 24/7 supply of electricity, what is in accordance with the
National Development Plan 2017-20229. The lifespan of the projects evaluated at this report is
20 years.

In the interior, the economic activities are based on agricultural, fishing, mining and
tourism. With a full access of electricity, these activities may have the possibility to grow and
improve the incomes of the population who lives in these areas. As an example, the
Interamerican Development Bank (IDB) estimates that for East Para, the supply of 24h electricity
service in the region will boost demographic and economic development with 40% in the first
years [11].

But more than an economic analysis, in our modern society the full access to electricity
cannot be treated as a luxury. The full access to this facility have significant impacts in variables
like education of the youth, health services and empowerment of rural communities, and can
be of significant impact on the Human Development Index of Suriname.

In this scenario, the evaluation of feasibility of Photovoltaic Energy is expected to be a

good way to save money, whereas this technology, in despite of high installation costs, requires
little maintenance and doesn’t have transportation costs for the fuel.

7
Other factors such as the gain in scale due to the increase in installed capacity and the increase in
efficiency due to the installation of new generators may have contributed to the cost reduction in
US$/kW, but these factors, isolated, do not have the capacity to reduce that much the cost per installed
kW.
8
The diesel price in the year of 2017 in Suriname varied between 0.7 and 0.8 US dollars per liter. However,
estimates show that the diesel price without subsidies would be around 1.41 US dollars per liter [7].
9
The accessibility to energy for everyone who lives in the Republic of Suriname and stimulating the use
of renewable energy sources as part of an optimal energy mix are addressed in the document.

9
3. Methodology
Thirty-three villages from Boven Suriname region were studied considering the full
supply of energy with both technologies: PV System and diesel generator. Some of the villages
in this region weren’t analyzed because it wasn’t possible to obtain information about the
number of inhabitants or because they couldn’t be located on the map.

Figure 4 – Boven Suriname Region. Source: www.maps.maphill.com

The main obstacles to analyze the LCOE of the PV system and diesel generators in the
interior were: the low and dispersed electricity consumption, isolation of rural populations, and
the lack of data about theses villages.

The project included data gathering and data analysis based in the Ministry of Natural
Resources data. From the analyzed data, it was noticed that the power installed in each village
has a little or no proportion to the size of the village population. An example of this is a city of
Botopasi, which with 563 inhabitants has a diesel generator of 60kW while the inhabitants of
Nw. Aurora, which has almost twice as many inhabitants (1051), is served by a 45kW generator.
Therefore, make an analysis of the cost of electricity also needed to resize the generators.

It is difficult to compare PV and diesel-powered system technologies fairly, since their

cost structures are entirely different. A diesel system has a low initial cost, while a PV system is
significantly more expensive for the same energy demand. However, the PV system uses no fuel
and has very low maintenance costs, while the diesel generator requires constant purchase of
fuel and maintenance on a regular basis [12].

Based in orientations from best practices for renewable energy projects10, the
calculations were made using the Net Present Value (NPV).

10
USAID/Office of Energy, Environment and Technology: Best Practices Guide: Economic and Financial
Evaluation of Renewable Energy Projects (2010).

10
 3.1. Net Present Value
Net Present Value (NPV) is the difference between the present value of cash flows from
an investment and the amount invested. NPV is frequently used to analyze the profitability of a
project.

The NPV is simply the present value of all future cash flows, discounted back to the
present time at the appropriate discount rate, less the cost to acquire those cash flows. A zero
net present value means the project repays original investment plus the required rate of return.

The formula for calculating NPV is the summation of cash flows for each period,
discounted at the required rate of return:

=
1+

Where:

Cn: Cash flows for each period n

N: Total number of periods

r: discount rate

Conditioning the NPV to a value greater or equal to zero, there is a guarantee that the
electric utility will not be adversely affected by the electricity tariff.

3.2. Levelized Cost of Electricity

The Levelized Cost of Electricity (LCOE) is the estimation of the price per unit energy
generated. The method considers the lifetime generated energy and costs, and is made to
remove biases between different technologies11 [13].

The levelized cost of electricity is given by:

#$
∑ ∑(
) %&' $
LCOE = ∑ = *$
!" ! ∑(
) %&' $

Where:

Cn: Cash flows for each period n

En: Electrical Energy generated for each period n

N: Total number of periods

r: discount rate

11
There are other ways to compare different technologies. The Levelized Avoided Cost of Electricity
(LACE) is one of them.

11
 3.3. Structure of Cost
One of the motivations for the development of this research was the lack of reliable data
on the real cost of electricity in Suriname. Accordingly, to determine the LCOE it is indispensable
to gather data related to projects costs in the country.

Even for a technology widely diffused in the interior of the country, such as diesel
generators, the available data are not clear enough to estimate the cost of producing electricity.
Estimations show that 65% of the supply costs are related to fuel costs, 29% transportation costs
and 6% operations and maintenance costs [2]. These costs are borne by the State (through DEV)
and do not include the capital costs of the diesel generators.

This determination of the cost structure12. was only possible thanks to the help of the
stakeholders of the electric sector, who provided data about projects recently executed in
Suriname and evaluated qualitatively and quantitatively the estimations of this research.

It is worth to point out that no costs related to reinforcement and/or maintenance of

the grid were considered 13.

3.3.1. Diesel power generation systems

To determine structure of costs for diesel generator’s LCOE, the price of Cartepillar©
generators (able to operate 24h) were used. The prices were obtained in the Surinamese market
in 2017 and the sizes ranged from 12kW to 240kW. The chosen generator for each community
depended only on the estimated energy demand.

The maintenance cost obtained based on the experience of EBS were

Table 4 - Maintenance cost for diesel generators. Source: EBS

Regular Service (per year) – US$/kW 12.20

Major Overhaul (per year) – US$/kW 50.81

It is observed that when it comes to the cost of diesel generation of electricity in isolated
communities a prime factor is the cost of transporting the fuel from the capital to the interior.
In Suriname, it can reach US$ 10,000 for air transportation14 of 6 barrels [14].

The data related to transportation of the fuel were based on MNR expenditures to
monthly deliver the fuel to the communities

As the project lifespan is 20 years, to analyze the LCOE, there is a forecast of the
replacement of the generator after 10 years of use.

3.3.2. PV System
The PV systems market in Suriname is underdeveloped, so installation prices per kW are
considerably higher than those in locations with this technology well-developed.

12
The cost of an electricity-generating system includes all costs over its lifetime: initial investment,
operations and maintenance, cost of fuel and cost of capital.
13
These costs should not be overlooked, as some electrical installations are precarious and need repair.
Moreover, many of these houses in the interior even have a switch to turn off the lights.
14
In the region of Boven Suriname, which was the focus of this research, the fuel is sent by land to Atjoni
and from there it goes by boat to the final destination.

12
 The values for maintenance are also considerably high, as companies find it difficult to
find skilled labor to perform this type of work. In addition, the few companies in the field of solar
energy in the country still have little experience especially dealing with medium or large PV
systems.

All materials required for installation (panels, inverters and batteries) are imported.
Therefore, the companies responsible for the installation of photovoltaic systems generally pay
high freight rates.

These parameters make the price of the installation, and as a consequence, the LCOE
higher than those practiced in more mature markets15 in the solar energy area.

The assumption made for the PV system calculations was that the village should be 100%
supplied by solar energy. In these cases, the LCOE is naturally less competitive if compared with
a hybrid system diesel generator/sola, as is the case of the 500kW installation in Atjoni. The
project in Atjoni has a LCOE estimated at 0.43 US$/kWh [7].

Another particularity that impacts a lot at the LCOE value in these villages is the Cloud
Coverage. In Paramaribo, the weather is mostly cloudy between 47% and 74% of the time
depending on the time of year. It is noteworthy that rainforest regions, including the
communities of Boven Suriname, this percentage tends to be higher than in the city.

A high cloud coverage implies a greater need for batteries for the PV system. Therefore,
in order for a community's electricity supply to be 100% through photovoltaic panels, a greater
investment in the size of the battery bank16 is required for the storage, especially for the cloudy
days.

However, when deciding to invest in a solar-based system for a small community, one
of the first evaluations that should be done is about the type of installation that will be used:
stand-alone home system or stand-alone microgrid. This choice is essential for the evaluation of
the LCOE, since from it is possible to evaluate the cost of the project.

3.3.2.1. Photovoltaic Stand-Alone Home System

Systems of the stand-alone home system type is the most widespread in Suriname as it
is simpler to design and faster to install. It fits well when it comes to the isolated home project,
but may not be the most appropriate when it comes to a public policy of rural communities.

Because it is a closed module to be purchased and installed separately in each house,

there is little flexibility in case of a future increase of installed power.

15
Generally, these markets are the parameter used for comparison in feasibility projects. This type of
comparison should be done with caution since it does not take into account the particularities especially
when it comes to places where the solar energy market is still underdeveloped.
16
For the type of PV project proposed in this research, it is necessary to design a bank of batteries that
lasts up to 4 days. Batteries increase the cost of the PV system, but much less than grid connection in
remote areas. They are needed not only for remote residential and commercial applications, but also for
off-grid repeater stations for mobile phones, radio beacons, etc [22]

13
 3.3.2.1.1. The case of Kwamalasamutu
In 1994/95, 14017 Solar PV systems were installed in Kwamalasamutu18. Of these, 112
Solar PV systems were systems that supply two households, while 28 houses have an individual
Solar Homer PV system. About twelve years late, in 2006, of the 140 solar Home PV systems only
about 15-20 (with 2 or single connected houses) home systems were still in operation [9].

Figure 5 - PV arrays installed in Kwamalasamutu. Source: Kevin de Cuba (2006)

The Solar Home PV system had the main purpose of lighting to supply some lamps
and/or connected appliances for 3 hours a day distributed over two houses18.
The main reason for this small durability of the stand-alone system in Kwamalasamutu
was the way the inhabitants dealt with electricity and the lack of maintenance.

With the start the power supply, people began to increase the amount of electrical
equipment in their homes. Thus, many times the battery bank was not able to supply electricity
for the period originally planned.

Then, eventually occurred some situations, as for example when a house ran out of
electricity while the neighbor still had electricity, the residents themselves improvised an
electrical connection to the neighbor's house. Because of this, in a chain reaction, the
installations were rapidly deteriorated.

Moreover, since an average battery lasted for 4-5 years, they should be replaced, and it
is after this period the remaining batteries started to fail.

3.3.2.2. Photovoltaic Microgrid Stand Alone

Considering the flexibility of the system in the case of future increases in demand and
also aiming at a better control of the maintenance of the systems, it was decided to evaluate
the LCOE of a stand-alone microgrid system.

17
The large amount of stand-alone systems installed is also a limiting factor when considering the
installation of an entire community because it raises maintenance costs.
18
See report: Van Kampen, M.A. and dos Ramos, O.A., “Zonne-energie Kwamalasamutu, verslag van
uitvoering”, October 1994.

14
 Figure 6 - Microgrid Stand Alone System (Source:www.invictoenergies.com)

The biggest drawbacks to installing stand-alone power grid systems are the lack of
expertise of local companies (most of them only work with stand-alone home PV system) and
the fact that foreign being hired to do this type of installation are often not used to the
conditions that are found in the interior of Suriname19.

With the recent projects in Atjoni and IMGOLD, the expertise of companies in the field
of solar energy is increasing. Thus, it is expected that the price of installation and maintenance
of solar photovoltaic systems in Suriname will decrease in the coming years.

Another factor that makes the Surinamese case different from international
benchmarking is the use of land for the installation of panels and batteries. Densely populated
places may encounter problems because they do not have enough area for installation. In the
interior of Suriname, a region with a low-density rate, the problem of use of land is different.

There is not a land scarcity area for panel installation. However, in these villages, there
is no official landowner. It belongs to the community, so there is a prior need to negotiate with
local leaders before the installation of the PV system.

Installation cost used, including labor, was US$ 4000/kW. This cost was divided into 50%
battery, 25% panels and 25% inverters.

Considering a lifespan of 20 years, to calculate the LCOE there were predicted two
battery replacements (every 7 years), and one inverter replacement (after 10 years of usage)

The transportation cost of materials, in the case of a solar system, impacts mostly in the
price of installation.

For the maintenance cost, in addition to the planned replacements of batteries and
inverters, the main component is labor20. As Boven Suriname area can be accessed by boat, the
cost of maintenance is basically the cost of a sporadic visit of a technician. This cost is much

19
Batteries that are not suitable for the tropical and humid weather and the use of batteries that needs
regular maintenance (water replacement) are some of the problems already found on PV systems
installed in the hinterland.
20
Remote monitoring of the system is provided in these types of installation. Therefore, in addition to the
scheduled visits, if there is a problem in the PV system the company responsible will automatically
triggered to perform the repair.

15
lower if compared to other technologies of electricity generation. For the calculations of LCOE
the cost of US$ 500.0021 per year per village was used.

Another cost that can be considered is the security against theft of the panels. It is
possible to put some security system in the place, but the best way to ensure system operation
is to engagement of the community in the project. These costs weren't considered in the
calculations of the LCOE at this research project.

3.3.2.2.1. The case of Palumeu

Another example of an unsuccessful PV project held in the hinterland of Suriname took
place at Palumeu, a village approximately 350 km from Paramaribo.

In this case, several Small Home PV-Systems (SHS) totalling 40kW were put into service
in 1994. Lack in experience within the community in operating and maintaining the SHS-systems
resulted in batteries failing after just one year of operation. [15]

3.3.2.3. Other cases

For several years in the interior of Suriname the hotels are successfully using PV systems.
The telecommunication utility sector also relies on PV systems to keep solar-powered telecom
towers in isolated areas in the middle of the Surinamese tropical rainforest.

3.4. Demand
The demand of a village plays a central role in determining the size of the diesel
generators and/or the PV system and is important for both electricity providers and
government institutions.
Without an accurate picture of the present and resulting forecasts for future, wrong
planning may occur resulting in either energy shortages or too high costs [10].
Table 5 Average consumption per year [10]

Average Consumption per Household

(Kwh/Year)
Vilage in the interior 1,699
Suriname 3,700

The demand presented in Table 5 is less than the true existing demand because of the
suppressed demand due to the limited access to electricity.

When a community starts to have a full access to electricity there is a considerable

change of habits of the population. A simple example is hunting and fishing, which have to be a
daily activity if there is no possibility of cooling. After 24-hour access to electricity, people will
not have to hunt/fish every day, and there will be plenty of time to devote to other activities
that probably will also demand electricity consumption.

21
This data was based on other maintenance contracts for solar systems in the interior, where
maintenance is usually made once a year and takes only a few hours of labor. Most of these systems are
installed in hotels and are a good parameter for our analysis because in some cases the size of the load is
similar to a small village. In addition, if we consider all the villages evaluated (33), the annual expenditure
with maintenance with Boven Suriname region would be 16,500 US dollars.

16
 In this regard, the power consumption tends to increase greatly if compared to the
current 4-6h scenario of access to electricity. In these cases, the expected demand for the full
availability of electricity supply is sometimes multiplied by three [10].

Based on the consumption of a small house, with some facilities like TV, radio, fridge,
four lamps and power connection, the monthly consumption estimated for the calculations was
150kWh/per house, each one with 4.2 inhabitants [3].

Another factor to be considered in the demand analysis is migration. Many of the

inhabitants from these communities migrate to the capital Paramaribo for several reasons: lack
of employment, poor utility (electricity/water) and better life in city or education of their
children are some of them [10]. Once the electricity is supplied 24 hours a day there is a
considerable return of the migrants to the city of origin [16].

Analysis of EBS data shows that the level of consumption for commercials fluctuates
between 34% and 37% of that of households. This is quite a stable pattern and hence provides
a good basis for estimations [10]. For the calculations at this project a 35% for the public facilities
and commercial consumption has been adopted.

17
4. Findings and Results
4.1. Tecnical Details
The Project lifespan considered is 20 years. For the calculations of both energy sources,
it was used an interest rate of 8% based on a study conducted to calculate the LCOE of 27kW PV
System from Staatisolie located in Suriname [15].

Many of the analyzed communities have oversized or undersized generators that it

should be. Both cases can result in a waste of money due to loss of efficiency, overheating,
diminution of the lifespan of the generator, etc. Therefore, and because it is difficult to know
the real physical condition the generators of all the villages evaluated, it was decided to consider
the calculation of the purchase of new equipment in all the cases.

Data about fuel and lubricant consumption of the generators were based on guidelines,
for each generator, from their operation and maintenance manual. The diesel price used in
calculations was 0.75 US dollars per liter, which is an average value considering the fluctuations
of the price in 2017.

For the PV, the high Cloud Coverage makes the system rely more on batteries, turning
the total cost of the project more expensive. Because of this, it's necessary to guarantee the
batteries supply for 3 or 4 days, according to the experience of local companies.

4.2. Results – Levelized Cost of Electricity

The results found for both technologies: PV System and diesel generators are
summarized in Table 6.
Table 6 – LCOE for diesel generation System and PV System

Village Number of Diesel Generators PV System

Inhabitants LCOE (US$/kWh) LCOE (US$/kWh)
1 Abenaston 468 0.76 0.59
2 Adawai 47 1.63 0.68
3 Amakkakondre 79 1.34 0.64
4 Asidinhopo 231 0.91 0.61
5 Bendiwatra 69 1.27 0.71
6 Bendekondre 368 0.99 0.60
7 Bendekwai 164 0.88 0.61
8 Botopasi 563 0.91 0.59
9 Dan 423 0.85 0.59
10 Dangogo 245 0.85 0.61
11 Dawme 240 0.87 0.61
12 Futunakaba 123 0.87 0.63
13 Gengeston 314 0.84 0.59
14 Godo 581 0.89 0.59
15 Granslee 349 0.77 0.60
16 Grantatai 216 0.95 0.60
17 Gujaba 2196 0.77 0.58
18 Gunzi 100 1.07 0.62
19 Hekoenoe 385 0.94 0.60
20 Jaw Jaw 385 0.93 0.59

18
 21 Kajana 348 0.79 0.60
22 Kajapatie / Kajaa 827 0.62 0.59
23 Kambaloea 737 0.70 0.59
24 ligorio / Golio 146 1.05 0.64
25 Malobi 577 0.89 0.59
26 Massiakreek 428 0.85 0.59
27 Lespansi (1 and 2) 153 0.94 0.61
28 Nw. Aurora 1051 0.74 0.58
29 Pamboko 233 0.87 0.60
30 Pikinslee 1609 1.05 0.58
31 Semoisi 683 0.76 0.59
32 Stonhoekoe 282 0.86 0.61
33 Toemaipa 313 0.86 0.60

4.3. Economic analysis of the diesel power generation systems

The variation of LCOE for diesel power generation systems relies on two main
parameters: the distance from the community to the city of Atjoni (which is the last city
reachable by car) and the number of inhabitants, since the larger diesel generators are generally
more efficient in terms liter per kWh generated.

According to the values presented in Table 6 it can be verified that the cost of a possible
generation of electricity 24h using diesel generators would be very high, varying between 0.62
and 1.63 US $ / kWh in the region of Boven Suriname.

With the calculation redone to estimate the LCOE for an unsubsidized diesel22, the
results are even worst. As an example, for Abenaston, one of the cities with the lowest LCOE,
the cost of electricity would grow from 0.76 to 1.37 US dollars per kWh.

Based on this analysis that considers the price without subsidies of diesel, it is interesting
to note that the actual expenditure of the government for the supply of electricity in the interior
is much higher than that spent on generators, maintenance, fuels, and lubricants. This is because
the government incurs in two overlapped costs: the electricity subsidy and also the diesel
subsidy, making the impact on government accounts even greater.

4.4. Economic analysis of the Photovoltaic Systems

As can be viewed in Table 6, the LCOE for PV systems are lower and have more uniform
distribution than diesel generation of electricity. The minimum and maximum LCOE values were
respectively 0.58 and 0.71 US dollars per kWh.

The more uniform distribution, occurs because the cost of transporting the materials
has less impact than in the case of diesel generation, which requires frequent delivery of fuel.
Another factor is that for PV systems under the same conditions the cost per kW installed does
not change that much especially in projects between 10-100kW.

Comparing the values of the LCOE it turns out that the solar technology for the 24-hour
supply of electricity in the interior already quite competitive. In figure 5 there is the comparison

22
Estimations show that the diesel price without subsidies would be around 1.41 US dollars per
liter [7].
19
of LCOE for some of the cities showed in Table 6. For small and distant cities such as Bendiwatra,
the estimated LCOE is 1.27US$/kWh for diesel generator system, almost twice more expensive
than the 0.71 US$/kWh estimated for solar generation.

Figure 7 – Comparison of the LCOE for diesel generation system and PV system

4.5. Cost Comparison with Brazil

The states in the north of Brazil, Guyana, Suriname and French Guyana shares lots of
similarities regarding the low populational density, socio-economic history and the weather (see
Figure 8).

Figure 8 - Guyana, Suriname, French Guyana and the state of Amapá. Source: Rudy Van Els

Besides of the social, economic and geographic similarities they also share the same
pattern of isolated electric networks (see Figure 9) and generation based on diesel generators
for the cities in the interior.

20
 Figure 9 Isolated Networks in the Guyana, Suriname and French Guyana Source: IDB

Regarding the similarities between Suriname and the north of Brazil, in small villages in
the Brazilian Amazon region, as well as in Suriname Amazon region, electricity is only available
through diesel generator systems for a few hours per day. These systems also rely on subsidies,
even though in Brazil the electricity is not free to these consumers.

Because of these similarities, a comparison between the Levelized Costs of Electricity in

Brazil and Suriname for PV Systems is interesting.

A study conducted in 2012 [17] analyzed the level cost of a small isolated community in
the interior of Brazil. As a parameter of Surinamese comparison, data from LCOE from Gunzi
were used, since the estimated demand is similar to the studied case in Brazil.
Table 7 – Comparison of the LCOE in Brazil and Suriname

Photovoltaic Systems - LCOE (US$/kW)

Brazil 0.43
Suriname 0.62

From Table 7, it can be seen that the LCOE evaluated in Brazil is approximately 30%
cheaper than the Surinamese case. It is noteworthy that the study of the Brazilian case
considered a generic village, so that the value of LCOE may be slightly higher depending of this.

21
5. Final Considerations
Results obtained were encouraging, since the LCOE using diesel generators was, mostly,
much higher than the LCOE for PV System. The solar sector in Suriname has great prospects,
especially after the Electricity Act.

Following there is an evaluation of the impacts of a possible replacement of diesel

generators by solar systems in the hinterland.

Social Impacts:

 The full access to electricity is a way to reduce the social and regional inequalities by the
possibility of economic development of the villages.
 Some of the reasons that many of the inhabitants of these communities migrate to the
capital Paramaribo such as the lack of employment, education of the children and better
access to health, can be mitigated by the full access to electricity.
 Full access to electricity might lead to reduction of corruption, as politicians will not be
able to use liters of diesel as an exchange for political support.

Environmental Impacts:

 The considerably reduction of carbon footprint of Suriname. The substitution of diesel

generators by PV systems at the communities evaluated at this research would avoid
the carbon emissions in approximately 3 tons/year23.
 Decrease of river pollution. With more than 150,000 liters of diesel being send every
month to the villages, the fuel spilling due to the precariousness of transportation have
to be considered.
 Batteries: need to seek disposal solutions with the contracted company. Even if
discarding only happens 10-15 years after the installation, it is prudent to discuss and
agree to these terms before signing a contract.
 One of the possible reverse aspects of the energy-development conflict relationship is
to maintain an environmental sustainability [17]. This is an important variable to be
considered to maintain an economic sustainable development of these villages.

The environmental impact is a particularly important variable of analysis, because

Suriname is one of the greenest countries in the world when it comes to the proportional size
of the original forest in the territory.

Lessons Learned from similar rural electrification projects

 It’s necessary to consider the increase of demand.

 The most successful projects were: monitored over several years and received more
than one provision of funds, implemented by multidisciplinary research teams, and
executed as local development projects considering technological socioeconomic and
cultural aspects [16].
 The participation of the Electric Utility Companies is helpful because of the technical
knowledge to support these initiatives, but they do not have the capillarity to manage
small disperse mini grids in the interior [16].

23
Based on the current supply of 4h of electricity per day.

22
Further Considerations:

 There is a need for lots of dialogue with the communities before rural electrification a
project. They cannot have very high expectations, thinking that they have the right to
have free electricity, but they also shouldn't have too low expectations thinking and
being against the project. The issue of low expectation should be discussed principally
with villages that have already had some project related to electric power, which did not
work as planned.
 A possible withdrawal of subsidies should be carefully evaluated since these are low-
income communities, which often survive from hunting and fishing and don't even have
access to cash. Moreover, today these communities don’t have any electricity meter
installed.
 To develop renewable market in Suriname it is imperative to make the Energy Authority
of Suriname (EAS) an independent regulatory authority.

Suggestions of future evaluations of LCOE in the hinterland:

 Calculating LCOE of hybrid systems in the region taking into account the generators
already installed in the villages.
 Some of the villages are close to each other and they can be connected in just one power
system.
 Consider the possibility of utilizing biodiesel: palm oil, babaçu, andiroba, buriti are some
of the cases that were studied at the Brazilian amazon forest, and some of them are
suitable for the interior of Suriname.

23
6. References

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Electric Power System of Suriname," CARILEC Engineering Conference Copyright, 2010.

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[3] Algemeen Bureau voor de Statistiek, "2012 Census Results – “Bijlagen Huishoudens,
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[4] Inter American Development Bank, "Support to improve sustainability of the electricity
service - Economic Analysis Annex Component II - Sustainable Rural Electrification and
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[5] N. R. Nannan, D. Lachman, H. Bhagwandin and C. Sirianni, "Framework for the Production
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Anton de Kom University of Suriname, Faculty of Technology, Paramaribo, Suriname, 2013.

[7] J. Aseja, "Solar Contribution to NV EBS Power Expansion Projects," in CARILEC - Renewable
Energy Conference, Paramaribo, Suriname, 2017.

[8] Bloomberg New Energy Finance, "Climatescope 2017 - The Clean Energy Country
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[9] K. d. Cuba, "Towards Sustainable Energy production and use in the lands inhabited by the
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[11] R. Rijs, "Sustainable rural electrification and institutional strengthening Socio-

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[12] M. Kolhe, S. Kolhe and J. Joshi, "Economic viability of stand-alone solar photovoltaic system
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[13] K. Branker, M. J. M. Pathak and J. M. Pearce, "A review of solar photovoltaic levelized cost
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[14] A. Aboikoni, "Combination conventional & renewable energy for rural electrification -
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[15] A. Raghoebarsing and A. Kalpoe, "Performance and Economic Analysis of a 27kW grid-
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[16] R. v. Els, "The challenge of attending remote communities in the region with renewable
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[19] 3 July 2017. [Online]. Available: https://www.cbvs.sr.

[20] Government of the Republic of Suriname, "Policy Development Plan 2017 - 2021, Part 1 -
Development priorities of Suriname," 2017.

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[22] R. Jharap, "Rapid Assessment and Gap Analysis Energy Sector Suriname," 2014.

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