CONSULTANCY SERVICES FOR ENERGY RATIONALIZATION AND DEMAND RESPONSE

Country:

Tanzania

City/Locality:

Dar es Salaam

Notice/Contract Number:

PA/001/08/HQ/C/137

Publication Date:

Aug 7, 2008

Deadline:

Sept 19, 2008

Funding Agency:

Songo Songo Gas Development Project

Buyer:

Songo Songo Gas Dev and Power Gen Project/TANESCO Component
TANESCO

Original Language:

English

Address:

Mr. N.O. Suke
Secretary, TANESCO Tender Board
TANESCO
TANESCO Head Office
Umeme Park Building, Ubungo-Morongoro Road, Ground Floor, Room G.15, P.O. Box 9024
Dar es Salaam
Tanzania

Telephone:

(225 22 2451145/2452172

Fax:

(255) 22 2451145/2452172

Email:

Click here

THE UNITED REPUBLIC OF TANZANIA

TANZANIA ELECTRIC SUPPLY COMPANY LIMITED

EXPRESSION OF INTEREST FOR PROVISION OF CONSULTANCY SERVICES
FOR ENERGY RATIONALIZATION AND DEMAND RESPONSE (DR) IN TANZANIA

(IDA Credit 3569 - TA)

Bid No. PA/001/08/HQ/C/137

Introduction

This request for expressions of interest (EOI) follows the restructuring of the Songo Songo Gas Development and Power Generation Project Credit No. 3569-TA to obtain consultancy services inter-alia on Energy Rationalization and Demand Response (DR) in Tanzania.

The Government of the United Republic of Tanzania has received financing from the International Development Association (IDA) towards the cost of Songo Songo Gas Development and Power Generation Project. The Government intends to apply a portion of the fund savings from the above project to the eligible payments for Energy Rationalization and Demand Response (DR) in Tanzania for which this Expression of Interest (EoI) is advertised.

The Tanzania Electric Supply Company Limited (TANESCO) is a utility company owned by the Government of Tanzania its core business activities being generating, transmitting, distributing and selling electricity. TANESCO now invites eligible qualified consultants to express their interest in participating and submitting the Expression of Interest (EoI) to provide the following consulting services: Energy Rationalization and Demand Response (DR) in Tanzania

Eligible Interested Consultants must provide information indicating that they are qualified to participate in providing the services (brochures, description of similar assignments, description of experience in similar conditions, availability of appropriate skills amongst staff and any other relevant information). Consultants may associate to enhance their qualifications.

Objectives

Due to frequent droughts in the catchments of the hydropower generating dams, there is need to consider demand side management (DSM) intervention measures that can reduce in the short to long term load shedding problem and if possible moderate demand and hence investment needs to service demand. Therefore the main objective of the Energy Rationalization and Demand Response (DR) consultancy is to propose demand side management actions that could be implemented immediately to help address future demand growth and supply shortfall situations taking into account the planned near-term system generation increases lined up for implementation and demands for lower tariffs in the short to medium terms.

Tanzania Electric Supply Company Limited (TANESCO) wishes to engage a consultant to advice on possible options, strategies and actions that consumers and the utility would adopt to increase the optimal and efficient use of electric energy thus achieving savings from the reduced utilization of more expensive energy generating or purchasing options, and meeting the Government’s obligations to low income consumers.

Scope of the Services
To achieve the above objectives the successful consultant will perform the following consultancy services:
-Study the power sector in Tanzania, including the long term Power System Master Plan, results of previous demand-side management actions, the new Electricity Act, the Power Sector Reform Strategy and other sector reforms and assess the customer base, tariff (structure and rates), load profile on an hourly basis by tariff categories and identify the sectors contributing to the load shape. Based on TANESCO’s tariff classification, assess the current tariff recovery rate from the different sectors, and the current subsidy offered to different sectors. Evaluate likely response to price signals (price elasticity). Estimate willingness to pay among customer groups, particularly among poorest customers and recommend incentive pricing schemes that can be offered by TANESCO to promote DSM.

-Identify and define the load shape objectives that will be considered during this study. Possible load shape objectives include peak clipping, valley filling, load shifting, strategic conservation etc. and also identify the end-use applications that can be targeted to reduce peak demand. Estimate the potential electricity savings (both total demand and peak load) from the range of identified applications and demand side options (e.g.load control, energy efficiency). Carry out a detailed cost/benefit analysis of these applications for the end-users and TANESCO, including analysis on societal and environmental benefits (including reduction of greenhouse gas emissions), and highlighting key risks and implementation issues. Study the major electricity consuming sectors in the country and identify end-uses offering the greatest DSM potential. List all available options that can replace existing consumption conditions in order to achieve the DSM objectives. This should include replacing existing end-use technologies with alternative efficient technologies. The consultant will be required to prepare screening criteria for comparing the alternative technologies and estimating their DSM potentials.

-Prepare a DSM Program Plan including determination of DSM technologies, determination of the targeted market sector or segment (consumer groups), identification of barriers to DSM and possible solutions including incentives, estimation of the market potential of the recommended DSM options, an implementation and marketing plan, and procedures for monitoring and evaluating the DSM Programme etc. and also the consultant shall prepare a likely range of supply curves (over the next 2 - 3 years), taking into account different hydrological scenarios, more or less reliance on hydro (depletion of reservoirs), short and long run marginal cost of thermal generation, reserves, and new proposed capacity expansions and DSM interventions.

-Analyze the nature and load profile of the grid system including major distribution feeders in a selected few cities. Identify cost-effective demand management opportunities that can be implemented so as to reduce electricity consumption generally and in particular during peak periods, droughts, emergencies, etc. Demand responses could include: energy efficiency, fuel substitution, cogeneration, distributed generation, improvement of electric grid reliability and availability, load management, manage electricity bills etc. An assessment of a selected few large consumers with potential contribution to demand responses should be undertaken in the study.

-Propose an energy rationalization and demand response scheme. Compare costs of the proposed Demand Response (DR) plan with rolling black outs or with the real cost of fuel to fully meet demand needs at current consumption levels. Based on experience in other countries, highlight likely key factors and pre-requisites for such plan (energy rationalization and demand response scheme) to be successful, for example support from key government authorities, government willingness to give an honest perception of the crisis, high level committee to carry on the process, etc.

-Evaluate financial conditions of TANESCO under different proposals, pre and post implementation of the proposed demand response plan, taking into account reductions of sales and payment of fixed costs. Evaluate risks for each one of the business segments of the industry. Propose schemes that do not affect the recovery of fixed costs by TANESCO. Evaluate impact on management and propose adjustments for uncontrollable factors, beyond management control. Evaluate TANESCO capability to absorb, as much as possible, the cost of imported power from IPPs and proposed leased plants to be commissioned in the short to medium terms. The analysis should include cases with and without demand response measures. Evaluate impact on tariffs if additional fuel expenses were to be covered by the power sector customers. Based on experience in other countries, evaluate likely impact on perception of potential investors if a DR scheme is implemented – compare to the hypothesis of blackouts or long-lasting cross-subsidies on fuel. That should include investigation of whether there is room to lower tariffs in the short to medium terms.

Advise and design programs to: (i) reduce ongoing power costs to electricity consumers (industry, commercial and residential) through energy conservation and efficiency measures, (ii) educate the consumers and the public in general on the current and future impacts of electricity pricing and usage, (iii) facilitate the uptake by electricity consumers of immediate and longer term measures to conserve energy, and (iv) facilitate measures for more efficient use of electrical appliances. Carry out a cost/benefit analysis which should include the avoided supply cost for TANESCO vis-à-vis the total DSM Programme cost and benefits to all participants including reduced electricity bills or incentives to end-users. Further identify barriers blocking investments in energy efficiency and demand side management interventions in Tanzania. Suggest mitigating measures that would promote and encourage such investments

-Develop a detailed design of the proposed energy rationalization and demand response scheme, after discussions with government authorities, TANESCO and the World Bank. The plan should include a proposal to inform and educate electricity consumers on demand management measures. Evaluate total expected savings based on cost benefit analysis under different supply and demand scenarios. Details such as initial grandfathering of energy entitlements, exemptions, penalties and bonuses, and protection to the poor should be presented. New processes at the utility to deal with power rationalization efforts should be identified. A detailed implementation plan should be prepared and finally identify possible support to be provided by consultants as the process is designed and implemented. That should include capacity building within TANESCO for future management of DSM and DR Programme to be proposed, including ways to operationalise DSM and DR Programme and monitor its implementation

Selection

A successful consultant will be selected in accordance with the Guidelines Selection and Employment of Consultants by World Bank Borrowers dated May 2004 and revised on October 1, 2006.

Eligible Interested Consultants may obtain further information at the address below from 09.00 – 12.30 hours and 14.00 – 16.30 hours local time (Monday to Friday) exclusive of public holidays:

Secretary Tender Board, TANESCO Head Office-Umeme Park Building, Ubungo-Morogoro Road, Third Floor, Room No. 305A, P.O. Box 9024, Dar Es Salaam, Tanzania. Tel: 255 (22) 2451145/2452172; Fax: 255 (22) 2451145/2452172; Attn: Mr N.O. Suke.

Expression of interest (One (1) Original and Five (5) copies) with the accompanying materials should be submitted to the address below before or at 14.30 hours local time on 19th September 2008.

Secretary, TANESCO Tender Board, TANESCO Head Office-Umeme Park Building,
Ubungo-Morogoro Road, Ground Floor, Room G.15, P.O. Box 9024, Dar Es Salaam, Tanzania. Tel: 255 (22) 2451145/2452172; Fax: 255 (22) 2452172/2451145.

No proposals are required to be submitted at this stage. On the basis of obtained information from eligible interested consultants, TANESCO will prepare a shortlist of Consultants who will be invited through a Letter of Invitation including detailed Terms of Reference (TOR) to submit Request for Proposals (RFP).

Place, Date and Time of Opening

The Documents for Expression of Interest submitted to the above address shall be opened publicly in TANESCO Twiga Board Room immediately after 14.30 hours local time on 19th September 2008.

Late submission of the documents, portion of documents, electronic documents, documents not received, documents not opened at the opening ceremony shall not be accepted for evaluation irrespective of the circumstances.

SECRETARY
TANESCO TENDER BOARD

CONSULTANCY SERVICES FOR ENERGY RATIONALIZATION AND DEMAND RESPONSE

Request For Expressions of Interest

General Information

Contact Information

Assignments

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