Handover Summary

Energy Assessment - Timor-Leste

December 2017

Team leader: Nicolas MakramGroup Leader: Alex Piatek

Trekkers:

Henry Andresen - Bachelor of Engineering (Environmental)Mason Bierlein - Bachelor of Law / Bachelor of Economics (Advanced)Thomas de Heus - Bachelor of Engineering (Mechanical and Sustainable Energy)Ben Disher - Bachelor of Engineering (Civil and Environmental) / Bachelor of FinancePatrick Edwards - Bachelor of Engineering (Mechanical) / Bachelor of FinanceDavid Gailey - Bachelor of Engineering (Mechatronics) / Bachelor of CommerceJunwei Huang - Bachelor of Engineering (Mechanical)Alexander Teicher - Bachelor of Engineering (Mechanical and Aerospace)Isaac Walton - Bachelor of Engineering (Mechanical)

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Table of Contents

Abstract: 3Introduction: 4The Problem: 5The Solution: 6Alternative Solutions 10Future Actions: 11Appendix: 12Referencing: 12

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Abstract:

The December Energy Assessment team was faced with the challenging task of providing

the people of Timor-Leste with a cost-effective, reliable and sustainable power supply. The

July team found that solar power was the best approach, thus it was decided to pursue this

further. Additional empathising led to several very interested clients, proving solar power

had potential in Dili. Contact was made with Hugh Collett from IMEX Tropical, who had

identical goals but was already over six months ahead of the project in terms of

groundwork. He had a supplier and installer organised and had already spoken to many

businesses around Dili. As Collett supported the idea, after a group discussion it was

decided a partnership with him was the most effective way to progress the project.

The partnership involves working alongside Collett to link up the supplier, Sundaya, with

local businesses in Timor-Leste. Collett operates on commission from Sundaya, so Project

Everest would initially receive a percentage of this commission. Sundaya is a social

enterprise producing solar panels in Indonesia, and Collett has been operating as the sole

distributor of their small scale solar products in Timor-Leste. However Sundaya also has

the capabilities to expand into the large scale solar market as well, so Collett, with the help

of Project Everest, is facilitating this expansion. It is hoped this venture will allow the energy

project itself to expand further, facilitating more innovative ideas that utilise the knowledge

and revenue gained through the partnership. The aim is to then branch into other areas that

are identified by future teams as opportunities for Project Everest to pursue.

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Introduction:

The task for the Timor Energy Assessment team in December was to continue the work

conducted by the July team in addressing the unreliability of electricity in Timor-Leste.

Specifically, the team confirmed July’s findings that solar power was the most practical

business venture. Research led the project to a partnership with Hugh Collett, the local

agent for Sundaya solar products.

With regards to the design thinking process, the team spent some time empathising to

reaffirm the July team’s conclusion, and from there moved on to the define stage. In this,

the issues with Timor-Leste’s energy supply were outlined. The team then began ideating

our solution based off ideas raised by the July team as well as own research. It was

concluded that the best solution was to install solar systems for medium-large business,

thus allowing them to reduce electricity costs and avoid blackouts and voltage fluctuations.

This market also has the capital to invest in solar systems large enough to provide Project

Everest with enough profit to continue the energy project sustainably. These funds will then

be used to pursue other markets such as rural areas that may not be as profitable initially

without significant capital backing.

For future teams, several challenges are anticipated. Firstly, the government of Timor-Leste

may not support or may even work against the project. It has been noted in several

previous cases, the government has either refused to support aid projects or through

corruption, money for projects has disappeared. Secondly, undertaking a partnership with

Hugh Collett poses a risk as a large amount of trust is being placed in him. This has been

mitigated through the signing of a Memorandum of Understanding between Project Everest

and IMEX Tropical.

The Problem:

Timor-Leste has multiple issues when it comes to its energy supply. Current electrical © XYZ For Good Pty Ltd T/A Project Everest 2017 4

transmission lines and infrastructure exist, but are unreliable and of poor quality, which

leads to regular surges and power outages in many areas around the country. This

infrastructure is also very limited in certain areas, leaving rural areas without power or with

very limited power. Much of this issue comes from Timor-Leste’s violent history, specifically

Indonesia’s Scorched Earth Operation post independence referendum in 1999. Much of

Timor-Leste’s vital infrastructure was destroyed, forcing the country to rebuild rapidly and

leaving the energy infrastructure devastated.

As of 2017, 17% of residents are not connected to the grid, with the majority located in rural

areas (EDTL, 2017). Furthermore, of connected users a large portion do not pay for their

electricity. This makes a solution to Timor-Leste’s energy dilemma complex, as those who

do not pay are unlikely to invest money into solar in the first place, and those in rural

communities are unlikely to have the capital to be able to pay.

Post-independence the government constructed a large diesel power plant at Hera to

power the country. This plant is operating at around 40% capacity on average (EDTL,

2017), leading to thinking within the government that solar is not needed when there is

excess energy not yet being produced at the plant. Furthermore, the diesel supply to the

plant is controlled by the nephew of Xanana Gusmão, a national hero and the first

president of Timor-Leste. Corruption and nepotism makes the Timorese government

difficult to work with, with the potential of them even hindering the progress of the project.

The fact that diesel is used to generate electricity makes the cost in Timor rather high

compared to other commodities, at USD$0.24/kWh for large businesses. This leads to a

monthly cost of around $5000-$10000 per month on electricity for large businesses or

hotels. In addition to this, the diesel generators are currently run at a cost of USD$105

million per year, yet only make USD$28 million per year from electricity bills being paid

(Collett, 2017). These are substantial amounts of money and present an opportunity for

solar to be attractive to these businesses.

The Solution:

The most viable solution is to implement large scale solar systems into local medium-large

businesses throughout Timor-Leste, and in the future to rural communities. Through

researching and empathising the team came to the conclusion that these types of larger, © XYZ For Good Pty Ltd T/A Project Everest 2017 5

more established businesses were the most likely to adopt renewable energy due to their

large budget and desire to save money. Some of the large companies contacted were

interested solely to cut costs whereas others were more passionate about the environment

and reducing their carbon footprint. Others had crucial equipment which relied on the grid

for a continual power supply (which it could not reliably provide) and hence were in need of

a more stable power source.

The team has forged a partnership with Hugh Collett, a New Zealand former teacher who

has been living in Dili for the past two years, and Indonesia before that. In the last 7 months

Collett has arrived at similar conclusions as to the direction and logistics needed to sell

solar panels and related products to the people of Timor-Leste. He is working as an agent

selling for Sundaya, a large Indonesian based social enterprise (essentially the same as

our original proposed business model). Sundaya’s product brochure is available in the

appendix. Based on a lengthy two-way discussion, the conclusion drawn was that Energy

Timor-Leste, as well as future teams, would act as salespeople alongside Collett and

Sundaya. Project Everest will receive a 5% commission (one third of IMEX Tropical LDA’s

commission from Sundaya) where Project Everest was involved in facilitating a sale and

then use that to invest in other ventures. Whilst working with Collett, students can gain

business experience, potentially acting as preliminary assessors for Sundaya with the hope

that the work sparks further ideas. Using revenue from sales, regional communities within

Timor-Leste can be helped far sooner than initially expected. Further research into

Sundaya as a company has revealed that it boasts partnerships with numerous other

organisations around the world, meaning other Energy Assessment teams from Project

Everest may also be able to partner with Sundaya internationally, ideally making 15%

commission. Once a solid foundation is established and trust is built within the local

community, further projects seen as too far out of reach before, could now become more

achievable. For further information on this partnership, refer to the Hugh Collett meetings

file in the appendix.

Through the partnership with Hugh Collett, the team plans to assess and seek out clients

and relay their usage information to Sundaya. Sundaya will supply the panels and

installation and Project Everest, through Collett, will take a 5% commission of the sale. This

option was chosen after meeting with Collett and discovering that not only did his intentions

align perfectly with the Project Everest’s, he was already much further advanced than the © XYZ For Good Pty Ltd T/A Project Everest 2017 6

Team and was in a position to begin installation in early 2018. In the small market that is

Dili, and the fact that the project was still a substantial amount of time from first installation,

it was decided as a team to pursue a partnership with Collett. He has been inspired by the

Trekkers’ enthusiasm and was more than happy to work together, especially considering

that he is just one person and the Team increases his reach considerably. As this was a

defining step for the project, the following SWOT analysis and BMC were carried out:

Table 1 - SWOT Analysis

Strengths Weaknesses

● Supplier, installer, maintenance

already established

● Access to knowledge/skills in

business

● Minimal startup costs for us

● Potentially decreased profits

● Putting trust into Collett

● Effectively become salesman

○ Loss of satisfaction

● Unknown timeframe

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● Get paid quickly

● No liability on us

● Access to contacts

● PE gains presence in Timor-Leste

● Minimal bureaucratic paperwork to

deal with

● Minimal control

Opportunities Threats

● Expand into PE established

countries

● Monopolise the market

● Immediate capital to invest into new

ventures

● Succession plan

● Can jump onto new ideas from

Collett

● Future collaboration with Sundaya

○ Industry experience

● What do we offer? (expendable)

● Trusting Collett

● Do Sundaya want us?

● Lock-in contract?

Figure 1 - Business Model Canvas

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Alternative Solutions

At this point, several alternative avenues and future ventures have been explored. One is small scale solar options for farmers, such as water pumps and drying rooms. Jan Kaliski, Collett’s friend, has built a prototype of a drying room that could be constructed in a cost-effective way if done resourcefully. This product allows farmers to dry their crop in a few days rather than a few weeks, increasing the percentage of crop not spoiling. Furthermore, drying retains the nutrients and allows for easier transport and longevity of crop. Kaliski’s dryer only required a heater and small fan to operate, opening the potential for a solar powered device that is cost-effective and easy to use. There are also other options for small scale solar powered agricultural processes that would improve farmer well-being, such as corn husking and peanut grinding. However, this avenue needs to be explored further using the Agriculture Assessment findings to determine whether it is viable as a business venture.

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Future Actions:

Positive sales relationships must be maintained with all clients, especially in regards to the project transition periods. Client locations, summaries and progress are provided in the drive (see appendix) accompanied with a customer progression spreadsheet to ensure the new team can operate as efficiently and seamlessly as possible at the start of project. It is suggested that all incoming Trekkers refer to this spreadsheet to touch base and build relationships as soon as possible with serious clients. An unofficial handover document will be included, explaining the immediate actions to be carried out. There will also be one or more associated December Trekkers for each significant stakeholder. It is encouraged to contact them for any details concerning those contacts specifically.

The future of this project relies on Project Everest and Collett/Sundaya maintaining a positive relationship. The idea of this partnership is to gain skills and knowledge that will allow Project Everest to engage new markets with innovative products. Thus, future actions should consist of maintaining the business of linking Sundaya with clients alongside Hugh and simultaneously using the experience and revenue gained to explore new business ventures that may enable the energy assessment project to progress further. There must be a research and development aspect of the project that considers the possibilities of expanding into rural areas and/or small scale solutions. This will involve continuing to gain partnerships with NGO’s, potentially assisting with funding, education, and locating rural residents off the grid.This partnership enables the project to take a more innovative direction due to the revenue to be gained from sales and experience from being involved in the solar market.

As Sundaya already has global partnerships, there is the potential for expanding a Project

Everest and Sundaya partnership to other countries. As the team is currently working

through Collett, this is a long term goal, but certainly one with high potential. A global

partnership would be incredibly beneficial for Project Everest to set up a long term solution to

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the UN development goal 7 to “Ensure access to affordable, reliable, sustainable and

modern energy for all.” (Progress towards the Sustainable Development Goals, 2017)

Referencing:

1. Energy Team and Guterres, V. (2017) Meeting at EDTL.

2. Energy Team and Collett, H (2017) Multiple conversations about the future of energy

in Timor Leste.

Appendix:In order of mention in document:

Hugh Meeting summaries: https://drive.google.com/open?

id=11InX0zO59XN2ufSFyqTO1EK64Ilip7tv © XYZ For Good Pty Ltd T/A Project Everest 2017 11

Memorandum of Understanding with Hugh: https://docs.google.com/a/projecteverest.ventures/document/d/1127t8fWBhWsPFCRtc4DnyLghBQ22UXiG9PSHGlmGvR4/edit?usp=sharing

Sundaya brochure and info: https://drive.google.com/open?id=0B2mfZD1h744NSHNTSHZzcmE2aTNfZ0tpcUZsa2dURnZyWUM4

Meeting summaries: https://drive.google.com/open?id=1ZQXaZlluHdk8LTfPXFPlh-cTI_gP47RU

Map of clients around Dili: https://drive.google.com/open?id=1ZZQMu_DvcjYHjy8lwo-X9LQrpWimXyHB

Client summaries:https://docs.google.com/a/projecteverest.ventures/document/d/1ZUiDaBmrp9Upe8gOusDOXYoOX1sXbRk7BHbarSj0h94/edit?usp=sharing

Customer progress sheet:

https://docs.google.com/a/projecteverest.ventures/spreadsheets/d/

1HRZ6DSHjk6ELAXCsHyz59dxFFC_KT78sHo8GQA2DEF8/edit?usp=sharing 

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