An Overview of Recent Events for Renewable

Energy in Timor-Leste
By Scott Mackinnon
2,493 words
All prices in US$ unless stated

“Although we continue to see far more money invested in oil exploration than in the development of
alternative energies, the number of barrels found per million dollars spent is still declining. At some point,
perhaps soon, the financial returns to investment in low-carbon technologies will exceed those from drilling for
oil and gas. At that point, costs of new technologies are likely to sharply dip.”
- Chris Goodall, Ten Technologies to Fix Energy and Climate, p.8.

“Maybe ten years, twenty years from now we will have found technology that makes our energy cheap and
simple. Today all of these politically correct speeches about renewable energy but at my end of the world it’s
still far too expensive.”
- Dr Jose Ramos-Horta in a speech at Massachusetts Institute of Technology on 29/09/2009.

“Renewable Energy: moving to centre stage”i

There was once a Dili dance party where, for one awkward hour after the music began, nobody stood to
dance. Some sat drinking and talking while others sat passively, sneaking glances at possible partners
without making any moves. Finally, a couple walked out, began dancing, and others joined them within
seconds – sometimes meeting wordlessly from across the dance floor to affirm the looks each had
pretended not to notice before. Once one couple broke the ice, all others followed; yet all shied from
being the first to begin what they’d all come for.
It seems medium-to large-scale renewable energy (RE)ii action suffers from the same shyness of many
policymakers. Switching to RE may benefit governments, consumers, and a soon-to-be-massive set of
industries (not to mention our planet’s health); but the inertia of global fossil fuel dependence may keep
nervous governments from seriously asking RE companies if they want to dance.
As with many technologies still in development, the more we use RE, the better and more affordable it
becomes. Better practices meet fewer barriers once they find enough demand and funding: given
adequate materials supply, unit production and generation costs fall as demand grows, while both lead
to increased profitability and re-investment to improve the technology. For example, wind power
manufacturing and installation costed around $1,200/kW of generating capacity in 2008 and represented
42% of global RE investment; improved technologyiii and increased demand,iv among other factors such
as improved financing mechanisms, mean the cost will likely decrease to around $800/kW by 2013.v
Like that first brave couple on the dance floor, it requires leadership to begin the new era of energy.
Timor-Leste need not wait for slower, more oil power-dependent economies to embrace more
sustainable forms of energy, or to become more involved in the $2 bn/year (as of 2008) of assistance
given to support RE in less-developed countries.vi
In 2008, Timor-Leste took responsible and proactive RE action by commissioning a Portuguese-based
company, Martifer Renewables, to investigate Timor-Leste’s RE potential. Martifer completed an initial
report last year as a briefing for the final report, due in May 2010, which allowed the Government of
Timor-Leste (GoTL) to defend its energy policy against Opposition statements that it had “dismissed” RE
potential.vii There has been little further information from the GoTL other than spokesperson Agio
Perreira’s November 30 statementviii regarding Martifer’s report that, “Timor-Leste has great potential in
the areas of bio-energy (Water, Wind, Biomass, Geothermal, Photovoltaic, Biogas and Renewable
Fuel)ix,”, and even fewer comments from Martifer and its Australian support company, Wideform.x
Martifer makes no mention of Timor-Leste on its website, and an Australian Martifer spokesperson
confirmed that the company has not publicly released any information about the project.xi

RE Rationale in Timor-Leste
The present GoTL has often acknowledged the benefits of RE and publicly stated intent to include it
within future energy infrastructure. The IV Constitutional Government Program (CGP) statesxii, “The
major power policy guidelines of this Government are mostly based in the search for renewable
alternative energies to assure the required power for domestic and industrial consumption,” to “reduce
the intensity of energy dependence”. While many sing RE’s praise for environmental friendliness, Timor-
Leste’s reliance on Indonesian state-owned Pertamina dieselxiii for most of its present electricity gives a
more pragmatic reason for the GoTL to investigate other energy options — particularly those that lie
within its national borders. A 2004 Power Sector Development Plan (PSDP)xiv prepared by the Asian
Development Bank (ADB) for the then-Ministry of Transport, Communications and Public Works stated
as much in warning, “Continued reliance on relatively high cost diesel generation could be a deterrent to
economic growth and competitiveness. A key issue for the Government therefore is the prospect for
developing alternative, cheaper sources of energy for power generation”.
The present GoTL’s promise to provide electricity to the nation as made in the CGP may have given GdTL
reason to proceed with its short-term heavy oil plans before the the issue arises in the 2012 election –
though what could this mean for Timor-Leste’s long-term energy sustainability and security?
The PSDP also outlined three medium-term goals for Timor-Leste’s electricity sector that still prevail:
identifying and developing indigenous energy resources to decrease dependence on foreign fuel;
fulfilling the present GoTL’s promise to provide electricity to all or most of the country; and developing a
legal and regulatory framework to encourage public and private investment in such projects.xv These
goals are essential and interlinked: the Hera and Betano heavy oil plants and associated electricity
network give quick-fix national electrification to accelerate rural development; however, their
implementation may distract from or delay long-term power policy guidelines, as per those in the CGP
mentioned above. A workable legal framework is essential to any energy system development, and thus
a basic law on renewable energy is one of 97 documents the Council of Ministers has stated it intends to
review by July 2010xvi — two months after Martifer’s reporting deadline to the GoTL.
Time is the main issue. If the GoTL intends to implement serious medium-to large-scale RE projects and if
Martifer intends to implement them correctly, they both need more time than the two years remaining
before the next national elections. It’s worth noting that the PSDP stated the GoTL in 2004 was aiming
for 80% national electricity supply by 2025 through ADB suggestions of hydroelectric plants, heavy oil-
fired diesel generators, wind farms, and onshore natural gas power plants. RE-only projects of an
equivalent scale—between the PSDP’s national demand forecast of 108.6 MW in 2025xvii and the revised
total heavy oil capacity of 250 MWxviii— require more time or political will to implement than non-RE
projects because:
1) RE projects generally require more fundraising before they begin because–despite very low
operation costs—they need more capital than non-RE projects and will likely need subsidising
through feed-in tariffs,xix for example, where governments give money to decrease the
initially high cost of some types of RE power generation so consumers pay the same as non-
RE;
2) Investors are more hesitant to support projects that use less well-established technology than
non-RE projectsxx;
 3) Lack of effective RE regulation in Timor-Leste, which the Council of Ministers has committed
to addressing before July, and general issues of doing business in Timor-Leste;xxi
4) Only some RE technology is currently more efficient than non-RE technologies: typical solar
PV panels provide 10–20% efficiency as opposed to 25% for the average internal combustion
engine, while wind turbines can give almost 60% efficiency – yet non-RE resources cost
money from fluctuating markets, compared with many RE resources with little or no cost.xxii
By current trends, in 2020 the generating cost of many RE technologies will decrease significantly: wind
(<4c/kWh), wave (4c/kWh), hydroelectric (4c/kWh), geothermal (4-7c/kWh), and solar (8-10c/kWh)
power will cost less to produce on average than the 12c/kWh that Dili consumers pay now.xxiii
The GoTL is probably aware that there is too little time before 2012 to fulfil its promise through a RE
network for all of Timor-Leste, but the danger may lie in thinking there is too much time thereafter to
use what seem like abundant non-RE resources. This may be a disincentive to develop RE for the future
and to instead settle into what the World Bank’s Strategic Climate Fundxxiv calls a “business as usual
approach” of using established unsustainable and—in the long term—unprofitable technologies. For
example, Opposition MP Jose Texeira admits this is a difficult process when he stated on 19 January 2010
that, “I agree that solar and other alternatives are the go. But there are not the very large ongoing
supply contracts worth billions over the next decade alone. Let's see who gets the contracts, but that is
where the bucks are. Big bucks. Why go alternative when big bucks are at stake, right?”xxv
While this may seem correct from a short-term financial perspective, the catch is that fossil fuels cannot
be used again: once they’re gone, they cannot be replenished within a practical time frame.

Recent Events
Martifer’s representative to Timor-Leste is based in Lisbon and Sydney, and is on leave until March. An
Australian Martifer spokesperson confirmed that the company could not discuss the matter until this
time.
Yet signs of RE progress in Timor-Leste abound. The Director General of the Secretariat of State for
Energy Policy (SSEP), Marcus dos Santos, is listed as one of 10 countries’ representativesxxvi in the
Program for Scaling-Up Renewable Energy in Low Income Countries (abbreviated to SREP), one of three
climate change-specific World Bank programs within its Strategic Climate Fund. The SREP working
group’s Preliminary Design Document states, “The transformative goal of the SREP might be to shift low
income pilot countries to a different model of energy use by providing an incentive to ‘leapfrog’ to the
use of renewable technologies. By changing the technological path in countries that do not yet have
significant greenhouse gas emissions, the program could make an important development and climate
impact.” The document also diplomatically states that SREP needs to find “the appropriate balance”
between RE-focused climate change mitigation and not hindering low income countries’ access to
energy, but its emphasis on raising a minimum $250 million for pilot programs supplying up to 10 MW of
energy per facility in countries that may include Timor-Leste may give hope to a country that will soon
import “essentially the cheapest, dirtiest fuel on the market for generating electricity”.xxvii
Although 10 MW per facility is far less than the two Hera and Betano power plants will produce, it may
be important to supplying stable and secure electricity to Timor-Leste through decentralising and
localising its power plants. The Rural Energy Policy in Timor-Leste report from July 2008xxviii states
“electricity supply by a central or local grid *may be+ economically unattractive” in up to 90,000
households by 2020 due to their low demand for power, and emphasised decentralising rural
electrification through projects such as methane gas seeps at Alimbata. That Timor-Leste lacks electricity
grid infrastructure may seem a disadvantage in providing electricity to rural areas; yet it is also an
opportunity to ensure Timor-Leste’s districts receive more dependable electricity that is generated from
and better-suited to their own land, and to ensure that the nation doesn’t need to spend its time on the
same electricity challenges that other countries have gone through since the Industrial Revolution.
Moreover, many developing countries are realising how much more effective RE can be for rural
development than non-RE. An August 2009 UNDP report titled Energy in National Decentralisation
Policies xxix states nine of 50 less-developed countries (LDCs) specifically mention RE in their
decentralisation policies, while only two countries mentioned fossil fuels. The report also mentions that
poor rural resources and capacities hinder decentralised rural electricity management, and that national-
local government cooperation produces better results for rural energy planning and implementation.
The Director General of the Secretariat of State for Energy Policy has not yet responded to this author’s
request to discuss these matters. The author will continue to monitor these and related activities.

i
This is the title of a 2006 Merrill-Lynch Oil and Gas Industry report, available at www.sefi.unep.org/index.php?id=58.
ii
RE in this article refers to electricity-generating practices fuelled by non-finite resources (ie., those which can be replenished in a realistic
timeframe for human consumption), such as wind, solar, and hydroelectric energy.
iii
Current individual wind turbine maximum generating capacities are around 3 MW, and average individual generating capacities will approach 5
st
MW by 2030; see Renewables Global Status Report 2009, by the Renewable Energy Policy Network for the 21 Century (REN), p.16, available at
www.ren21.net/pdf/RE_GSR_2009_Update.pdf, and “A Plan for a Sustainable Future”, Scientific American, Nov 2009, p.41.
iv
Installed world wind capacity doubled from 32 GW to 62 GW between 2002 and 2006, and again to 120GW in two years until 2008; see
Renewables Global Status Report 2009, by the REN, p.11, available at www.ren21.net/pdf/RE_GSR_2009_Update.pdf.
v
See Chris Goodall, Ten Technologies to Fix Energy and Climate, p.22.
vi
This figure has quadrupled from $500 m since 2004; see Renewables Global Status Report 2009, by the REN, p.14 available at
www.ren21.net/pdf/RE_GSR_2009_Update.pdf.
vii
18/12/2009 GoTL post on Timor-Leste e-mail list compiled by Mike Dooley (mmdooley@bigpond.net.au).
viii
GoTL post on Timor-Leste e-mail list compiled by Mike Dooley (mmdooley@bigpond.net.au).
ix
Hydro, wind, geothermal and PV solar electricity generating methods are not classified as “bio-energy”, and are typically referred to as
renewable or alternative energies.
x
Wideform is an Australian-based construction company established in 1974 by Portuguese Australian, Fernando “Fred” Ferreira, who provided
financial support for international action towards Timor-Leste’s independence during the 1990s (source: 27/10/2009 press release from Timor-
Leste President’s office). It ranked as one of Australia’s 300 top-performing companies before entering into voluntary administration on
30/11/2009.
xi
While its statements aren’t fully substantiated and its contributors have not responded to this author’s inquiries, it’s worth noting that a
xi
TimorLorosaeNacao blog post on February 4, 2010 implies that Martifer’s final study may be dismissed regardless of its findings. An unofficial
translation of TLN’s post quotes Portuguese news agency, Lusa, in stating, “It appears that the potential in Timor-Leste for alternative energy is
huge, but collides with the unwillingness of Government officials who are lobbying to resolve the immediate electricity supply problem. ... Many
voters could vote in opposition because it *GoTL+ did not fulfil the promise of bringing electricity to the entire country.”
xii
Democratic Republic of East-Timor [sic] Presidency of the Ministers’ Office, IV Constitutional Government Program, chapter 1, part 5, p.22,
available at www.laohamutuk.org/misc/AMPGovt/GovtProgramEng.pdf.
xiii
Energy Services Delivery Project Information Document, World Bank, p.2, available at www-
wds.worldbank.org/servlet/WDSContentServer/WDSP/IB/2006/01/12/000104615_20060112165107/Rendered/INDEX/Project0Inform10Concep
t0Stage0Final.txt.
xiv
Power Sector Development Plan for Timor-Leste, ADB (Pacific Department), September 2004, available at
www.adb.org/Documents/Studies/Timor-Power-Sector-Dev/default.asp.
xv
Power Sector Development Plan for Timor-Leste, ADB (Pacific Department), September 2004, p.26.
xvi
GoTL media release from 11/02/2010, received via Timor-Leste e-mail list compiled by Mike Dooley (mmdooley@bigpond.net.au).
xvii
Power Sector Development Plan for Timor-Leste, ADB (Pacific Department), September 2004, p.11.
xviii
Speech by Minister of Infrastructure Pedro Lay, as published in “Cornerstone Laying for Hera Power Plant”, 22/01/2010, available at
www.laohamutuk.org/Oil/Power/cornerstone/10PowerHeraCornerstone.htm.
xix
A growing number of countries are adopting this approach, including Nigeria, The Philippines, and Kenya – see, Renewables Global Status
Report 2009, by the REN, p.18 available at www.ren21.net/pdf/RE_GSR_2009_Update.pdf.
xx
Financing Renewable Energy: Instruments, Strategies, Practice Approaches discussion paper, KfW Bankengruppe (Group Communications),
October 2005, pp. 25-26.
xxi
See Doing Business 2010: Timor-Leste, World Bank / International Finance Corporation, available at www.doingbusiness.org/downloads.
xxii
Chris Goodall, Ten Technologies to Fix Energy and Climate, p. 23 and 277; and “Solar Power”, National Geographic, Sept 2009, p.39.
xxiii
“A Plan for a Sustainable Future”, Scientific American, Nov 2009, p.44, and EDTL electricity credit receipts from April 2009 until present.
xxiv
Preliminary Design Document, SREP, 12/03/2009, p.6, available at www.climateinvestmentfunds.org/cif/keydocuments/SUREP.
xxv
Received on 19/01/2010 via Timor-Leste e-mail list compiled by Mike Dooley (mmdooley@bigpond.net.au).
xxvi
Other countries involved in SREP are Germany, Japan, The Netherlands, Norway, Rwanda, Switzerland, Tanzania, The UK, and The USA.
xxvii
“The Heavy Oil Power Deal: A Dark Cloud over East Timor’s Bright Future”, report by National Toxics Network (Inc), March 2009, p.6,
http://ntn.org.au/ntndocs/heavy_oil_power_report09.pdf.
xxviii
This report was compiled in cooperation with the SSEP and is available at
www.scribd.com/document_downloads/17291145?secret_password=&extension=pdf.
xxix
Energy in National Decentralization Policies, UNDP, August 2009, p.15, www.undp.org/energy/docs/Energy_Decentralization_r8.pdf.