{"id":7054,"date":"2020-03-23T08:30:00","date_gmt":"2020-03-22T22:30:00","guid":{"rendered":"https:\/\/testblogs.griffith.edu.au\/asiainsights\/?p=7054"},"modified":"2023-03-10T10:50:36","modified_gmt":"2023-03-10T00:50:36","slug":"shifting-electricity-generation-from-non-renewable-to-renewable-sources-in-vanuatu","status":"publish","type":"post","link":"https:\/\/testblogs.griffith.edu.au\/asiainsights\/shifting-electricity-generation-from-non-renewable-to-renewable-sources-in-vanuatu\/","title":{"rendered":"Shifting electricity generation from non-renewable to renewable sources in Vanuatu"},"content":{"rendered":"\n<p class=\"wp-block-paragraph\">Vanuatu\u2019s <a href=\"https:\/\/www.nab.vu\/vanuatu-national-energy-road-map\">National Energy Road\nMap<\/a> (NERM) 2016-2030 lists targets and objectives that the Government,\nthrough the Department of Energy (DoE), considers essential for overall growth.\nThey include sustainable energy, and green growth. Both objectives allow\nincreased penetration of renewable energy sources into electricity generation\nwith a target for 2030 set at 100%. Current electricity generated from\nrenewable sources is approximately <a href=\"http:\/\/www.ura.gov.vu\/\">18.9%<\/a>. Therefore,\nreaching a goal of 100% by 2030 is highly unlikely. Major barriers include, but\nare not limited to: existing concession contracts between the Government and\nthe electricity service providers, financing, and a small customer base.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Vanuatu currently has <a href=\"http:\/\/www.ura.gov.vu\/index.php\/services\/relevant-legislation\/electricity-legislation\">concession\ncontracts<\/a> for the generation and distribution of electricity services set\nfor a fixed period of time, specifically with UNELCO for Port Vila, Malekula\nand Tanna capturing the southern part of Vanuatu and VUI <a href=\"https:\/\/doe.gov.vu\/index.php\/news-events\/news\/70-gov-t-signs-concession-agreement-with-vui\">concession\ndeed<\/a> for the north. Concession agreements when not properly designed carry\nsignificant risks if there are clashes with the regulator. For example, the Utilities\nRegulatory Authority (URA) is responsible for regulating utility services\nwithin Vanuatu under its Act of 2007 (as amended). However, the nature of the\ncontract with UNELCO means the regulator is obligated to allow provisions that\nmay or may not be in line with generally accepted regulatory practices\ntherefore limiting regulatory oversight. So, with limited regulatory assistance\nthere is likely to be little progress made with regards to incorporating\nrenewable energy sources into the generation of electricity or creating\nincentives to promote such exercises. There are efforts made by the Government\nin this area in the form of <a href=\"https:\/\/doe.gov.vu\/index.php\/projects-2\/item\/1-energy-efficiency\/1-grid-connected-solar-pv-systems-on-governmental-buildings-meteo-parliament\">Power\nPurchasing Agreements (PPA)<\/a> e.g. PPA for solar photo-voltaic systems. However,\nthis process is relatively slow because these are aid funded projects therefore\nlimited to when aid is available. A speedier transition to greater use of\nrenewable sources could be achieved by using <a href=\"http:\/\/www.ura.gov.vu\/attachments\/article\/67\/U-0002-14%20Feed%20In%20Tariffs%20Final%20Decision.pdf\">feed-in\ntariff systems<\/a> recommended by the URA that expand solar electricity\ngenerating to include electricity customers.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Financing renewable sources of\nelectricity generation can be costly, which can drive up electricity prices\nsignificantly if privately financed. This explains the significant portion of\ndonor funded renewable energy generating sources in Vanuatu such as the PPA previously\nmentioned worth approximately 500 million vatu (AU$6.8 million) which is grant\nfunded by the European Union. Therefore with solar currently accounting for\n4.5% of the 18.9%, it is clear that the NERM target of 100% renewable by 2030\nwould be near impossible, in the absence of other interventions. With respect\nto coconut oil used as a substitute for diesel in the generation of electricity\nwith lower capital costs, it is less efficient in generating electricity. It is\nalso uneconomical pricewise compared to diesel as determined by the <a href=\"http:\/\/www.ura.gov.vu\/index.php\/services\/regulated-services\/electricity-services\/affordability\">URA\nfinal electricity tariff determination of 2018<\/a>. <\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Finally, Vanuatu is\ngeographically disadvantaged with the spread of islands disproportionally\nspreading the electricity customer base where the majority reside in Port Vila\n(Efate) and Luganville (Santo). Therefore, the marginal cost of extending\naccess to outer islands is significant corresponding to smaller customer\ndensities over which to spread the incurred costs. Additionally, the two main\ncustomer bases are under two separate concession contracts. This lack of\ncustomer numbers, disincentivises feasible Government or concessionaire investments\nin renewable energy generating sources throughout Vanuatu if based on a least\ncost approach. <\/p>\n\n\n\n<p class=\"wp-block-paragraph\">In summary, a lack of regulatory oversight due to existing concession contracts does not allow for rapid inclusion of renewable electricity generating sources. This coupled with required high capital investments and low customer densities deviates from a sustainable energy future in Vanuatu and reaching the NERM target for 2030. Implications include slowed future economic growth due to inevitable price rises and affordability issues slowing electricity demand. Continued reliance on diesel generation maintains susceptibility to volatile fuel prices which cannot be mitigated by rapidly increasing the use of renewable energy sources.<\/p>\n\n\n\n<p class=\"author label wp-block-paragraph\">AUTHOR<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Edmond Tambisari <\/strong>is currently employed as the Senior economist at the Utilities Regulator in Vanuatu. A Master\u2019s Degree holder in Applied Econometrics from the University of Queensland with background experience in economics and financial analysis, as well as financial and compliance auditing.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Vanuatu\u2019s National Energy Road Map (NERM) 2016-2030 lists targets and objectives that the Government, through the Department of Energy (DoE), considers essential for overall growth. They include sustainable energy, and green growth. Both objectives allow increased penetration of renewable energy sources into electricity generation with a target for 2030 set at 100%. Current electricity generated [&hellip;]<\/p>\n","protected":false},"author":14,"featured_media":7055,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_lmt_disableupdate":"","_lmt_disable":"","_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_feature_clip_id":0,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_post_was_ever_published":false},"categories":[233,1755,1021,248,1055],"tags":[842,969,1050,1088,961],"class_list":["post-7054","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-feature-series","category-governance-democracy","category-pacific-outlook","category-png-and-the-pacific","category-economies-and-development","tag-climate-change","tag-pacific-islands","tag-pacific-outlook","tag-renewable-energy","tag-vanuatu"],"acf":[],"modified_by":"Kelsey 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