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ISSUE 11

April 2013

Pacific Energiser E CO N O M I C D E V E LO PM E N T D I V I S I O N

SPC shares energy resource mapping experience at the Pacific Energy Summit Petroleum developments in the Pacific – update

NEWSLETTER


Pacific Energiser E CO N O M I C D E V E LO PM E N T D I V I S I O N

APRIL 2013 ISSUE

11

NEWSLETTER

In this issue: Leadership, governance, coordination and partnership SPC shares energy resource mapping experience at the Pacific Energy Summit..........................................................................4

Capacity development, planning, policy and regulatory frameworks

4

North-REP launches awareness materials on Earth Day 2013 ...........5 Kiribati community-based workshop on gender, climate change and energy...................................................................6 Supporting renewable energy targets through policies, legislation, and fiscal incentives and initiatives ...................................8 Federated States of Micronesia starts comprehensive scope for coconut sector ......................................................................................11

Energy production and supply (petroleum) First quarter 2013 oil market report (January–March 2013)...........................................................................12 Petroleum retail prices in Pacific Island countries and territories in the first quarter of 2013...................................................14

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Petroleum developments in the Pacific – update..................................18

Energy production and supply (Renewable energy) Lighting up the rural communities of Marshall Islands with solar power............................................................................................19 Providing affordable electric lighting in the Federated States of Micronesia – the North-REP approach.................................................21

End-use energy consumption IIEC implements energy efficiency projects in Cook Islands................23

Other news International Renewable Energy Agency (IRENA) in the Pacific region.................................................................24

Pacific energy events calendar (May–December 2013).....................................................................27

Cover photo supplied by Frank Vukikomoala, SPC. Disclaimer: All care and diligence has been used in extracting, analysing and compiling this publication, however, SPC gives no warranty that the information provided is without error.

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Message from Deputy Director (Energy), Economic Development Division, SPC Solomone Fifita

Bula everyone The first quarter of 2013 can be regarded as historical in the regional energy landscape of Pacific Island countries and territories (PICTs).

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irst was the inaugural Pacific Leaders Energy Summit (PLES) in Tonga on 21 and 22 March. This was a joint initiative by the Tongan government and development partners that allowed Tonga to share its model known as the Tonga Energy Road Map 2010–2020 (TERM) from the perspective of the government, as well as from the perspective of the development partners working on it. The PLES emphasised how crucial it is to get political commitment and leadership and to put in place effective coordination mechanisms that are essential for the transformation of the energy sector. Second was the Pacific Energy Summit in Auckland, cohosted by New Zealand and the European Union, on 24–26 March. Aimed at a quantum leap forward for the use of clean, affordable and efficient energy in the Pacific and a corresponding reduction in the region’s persisting fossil fuel dependence, the Summit co-hosts announced that a funding envelope of NZD 635 million was secured, which included commitments of NZD 255 million in grant funding and NZD 380 million in concessional loans sufficient to support over 40 projects throughout the region. Associated with the leadership shown at the two summits, was the launch of the International Renewable Energy Agency (IRENA) Global Renewable Energy Islands Initiative (GREIN) interest clusters on roadmaps and power grids. Established at the Third Assembly of IRENA, the inaugural meeting elected by acclamation Andrew Daka, Executive Director of the Pacific Power Association, as leader of the interest cluster on power grid integration and Solomone Fifita, Deputy Director (Energy) at the Secretariat of the Pacific Community (SPC), as roadmaps interest cluster leader. It is pleasing to note the number of current national and regional activities that are taking place which show that Pacific leaders are, in fact, leading the transformation of the region’s energy sector. The Fiji government is currently reviewing its 2006 National Energy Policy in line with its energy sector goal ‘To facilitate the development of a resource-efficient, cost effective and environmentally

sustainable energy sector.’ Similarly, the 2007 National Energy Policy of Solomon Islands is currently being reviewed by SPC. Leadership in the energy sector must be matched with partnerships. It is encouraging, therefore, to note that the Pacific Power Association, SPC and the Sustainable Energy Industry Association of the Pacific Islands will be supporting the IRENA workshop series that will be held in Palau in April. The workshops will be on efficient renewable energy integration in the Pacific Islands region, and they will look at introducing four technology guidelines for solar photovoltaic systems (off-grid design, off-grid installation, grid connected design, grid connected installation) in the Pacific region. In the calendar for the next quarter also was the Pacific’s small island developing states (SIDS) DOCK meeting (6–9 May). SIDS DOCK is an institutional mechanism established to facilitate the development of a sustainable energy economy within the small island developing states. The ultimate goals of SIDS DOCK are to increase energy efficiency by 25% (2005 baseline), to generate a minimum of 50% of electric power from renewable sources and achieve a 20–30% decrease in conventional transportation fuel use by 2033. The meeting for the Pacific will build on the momentum of the PLES and the NZ Energy Summit and will attempt, among other things, to create practical partnerships between SIDS DOCK and the various bilateral, regional and multilateral initiatives that are taking place in the energy sector of PICTs. All of these summits and partnerships are taking place during a period when petroleum products prices in Singapore are continuing to fall. While this may be a short term relief to some, let us not forget that the prices are still above USD 100 per barrel. The transformation of PICTs’ energy sectors must, therefore, be seen as a no-regret and a no-return pathway. ‘Ofa atu Solomone Fifita


leadership, governance, coordination and partnerships

SPC shares energy resource mapping experience at the Pacific Energy Summit A full understanding of the energy sector based on a comprehensive analysis of the energy supply and demand dynamics is crucial for increasing investments in clean, affordable and reliable energy services in the Pacific Island countries and territories (PICTs). This was one of the key messages delivered by the DirectorGeneral of SPC, Dr Jimmie Rodgers, in his dual role as a moderator and a panellist in the recently concluded Pacific Energy Summit in Auckland, New Zealand.

‘T

he population of PICTs is expected to double in the next 20 years. Governments’ revenue from fisheries will be influenced by the observed changes in tuna migration due to climate change. Climate variability will impact on the renewable energy resources potentials – the sunshine hours for solar energy, the wind speed for wind power and the rainfall that provides for hydropower will all be affected. Similarly risks and disasters will continue to impact infrastructure developments in PICTs. On top of these, transportation costs will always be high given the distances and small volumes. All of these key areas of SPC’s responsibilities will impact on the PICTs’ renewable energy investment plans,’ Dr Rodgers explained. Dr Rodgers highlighted to the meeting some of the facts SPC had derived from the analysis of the various sectors it is working on. On the region’s population, the five Melanesian countries of Fiji, New Caledonia, PNG, Solomon Islands and Vanuatu account for more than 80% of the region’s population and about 98% of the region’s land area. While efforts to promote renewable energy began some 30 years ago, it is the Melanesian countries (Fiji, New Caledonia, PNG and Vanuatu) and Samoa that have shown recognizable increases in the share of renewable energy in their energy mix. Despite this increase in the share of renewable energy, access to electricity in PNG, Solomon Islands and Vanuatu is among the lowest in the region. SPC’s analysis of the energy sector of PICTs has also shown that most of the fossil fuel imports to the region are used in transportation indicating that efforts to reduce fossil fuel reliance in PICTs must also deal with the transportation sector. For instance in Fiji, a national biofuel standard has been adopted and their fourth coconut bio-fuel plant was commissioned at Gau in the Lomaiviti Groups last month and five more mills will soon be commissioned in Moala, Matuku, Rabi, Vanuabalavu and Lakeba. The key challenge to a comprehensive analysis of the energy sector of PICTs is the sharing of data, the meeting was told. While the commercial sensitivity of some data are understandable and should be respected, it would help everyone if data are readily available from a central location. Renewable energy resources data are available from multiple resource mapping sources such as the International Renewable Energy Agency, the World Bank, the Secretariat

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of the Pacific Regional Environment Programme and SPC. Mac Leauanae of Macal Consulting Ltd and David P Grinlinton of the University of Auckland appreciating the energy sector analysis reports at SPC’s booth at the Pacific Energy Summit showcase. (photo courtesy: SPC)

Feasibility studies are all over the place and energy supply and consumption data are held by many partners. Petroleum and power utility information and statistics are stored in various locations. It is for this reason that Forum Leaders have tasked SPC with the responsibility of reviewing and strengthening national capacity in energy data and information gathering and collation, management, dissemination and, analysis of economics, social and environment to better inform national and regional energy planning and policy choices. Work at SPC is well underway to establish a Pacific Regional Energy Repository, building on existing SPC web portals such as PRISM, GeoNetwork, and the Pacific Hydrological Cycle Observing System, and linking to other sites where Pacific energy data and information are stored. The summit was a joint initiative by the New Zealand Government and the European Union designed to enable PICTs to work with development partners to take a substantive step towards their goals of implementing energy efficiency and renewable energy initiatives, with a special focus on generation and distribution of electricity. All in all, the gender event at COP 18 provided insights and changed the mindset of people to be more positive and focused on viewing women as agents of change in addressing climate change issues; gender should be a crosscutting issue in climate negotiations, policy making, and implementation; women should be empowered at a local level; and they should receive capacity building assistance so they can become active drivers for true progress. These strategies are important to achieve our common goal – gender equality and a sustainable future for all.

For more information: Solomone Fifita Deputy Director (Energy) Energy Programme, EDD, SPC (SolomoneF@spc.int)

Pac i f i c energ is e r 


capacity development, planning, policy and regulatory frameworks

North-REP launches awareness materials on Earth Day 2013 The North Pacific ACP Renewable Energy and Energy Efficiency project (North-REP) launched its educational awareness campaign on Earth Day, 22 April 2013, at the Pohnpei Cinemas in front of hundreds of elementary school children. The event was organised by the Joint Risk Management Network, of which SPC is a member.

Invited guests and students at the opening ceremony of the Earth Day 2013, FSM (photo courtesy: SPC)

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his year’s theme for Earth Day is The Face of Climate Change. The North-REP tent presented the new awareness materials for the first of three topics on renewable energy and energy efficiency, Save energy – good practices, with flyers for children on how to save energy in their homes and in their daily activities. These materials will be disseminated through the public school system to children across the Federated States of Micronesia (FSM), along with a game that teaches energy saving tips. The educational materials will be displayed in English and in local languages in most hardware stores, supermarkets, utility lobbies and airports in all four FSM states. An information desk will be placed at each location and brochures, flyers, and posters will be on display from mid-May to November to help educate the people on saving energy, on the benefits of using energy efficient appliances and on producing their own energy. Along with the educational materials, a website (http://www. spc.int/northrep/) and a Facebook page (www.facebook. com/northrep) have been created to showcase the events surrounding the implementation of the various renewable energy projects that are managed by North-REP in the four FSM states and across Micronesia. So far, the page has seen 1,137 weekly visitors and hosts an energy game that can be played to test your energy knowledge. Please visit these pages for more information on North-REP and its activities.

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Students at the North-REP tent – explanation on how an inverter works, FSM (photo courtesy: SPC)

FUNDED BY THE EUROPEAN UNION

NORTHREP

North Pacific ACP Renewable Energy and Energy Efficiency Project

For more information: Patrick Blank North-REP Communications Specialist Energy Programme, EDD, SPC (Palikirconsultants@gmail.com)

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capacity development, planning, policy and regulatory frameworks

Kiribati community-based workshop on gender, climate change and energy Gender mainstreaming is: ‘the process of assessing the implications for women and men of any planned action, including legislation, policies or programmes, in all areas and at all levels. It is a strategy for making women’s as well as men’s concerns and experiences an integral dimension of the design, implementation, monitoring and evaluation of policies and programmes in all political, economic and societal spheres so that women and men benefit equally and inequality is not perpetuated’ (UN ECOSOC, 1997).

Participants during the gender mainstreaming workshop in Kiribati (photo courtesy: SPC)

S

PC’s Energy Programme, under the Gender in Adaptation and Low Carbon Development in Pacific Small Island States project, coordinated a two-day gender mainstreaming workshop in Kiribati for community-based organisations, community leaders, women’s networks and youth groups. This purpose of this capacity building workshop was to pretest the gender training toolkit for community-based organisations.1 The workshop sessions aimed to gauge the participants’ understanding of gender and trained them in ways to incorporate gender into their climate change and energy projects or activities. The workshop provided a platform for participants from different communities to understand and come up with a definition of gender in their own language and cultural context and then to see how it connected to climate change and energy. The activities centred on: ■ understanding the gender concept, using their own local

context and language;

■ gender and energy; and ■ gender and climate change adaptation. 1

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Training toolkit on gender sensitive approaches for community-based organisations and community leaders to integrate gender sensitive issues in energy and climate change projects/policies in a participatory manner.

There were 18 participants representing community-based focal groups, and we were thrilled to also have representatives from the Kiribati Association of Persons with Disabilities to be part of our workshop. In order to help achieve our objectives, the training was held in i-Kiribati. On the first day, the participants were encouraged to share their traditional knowledge and use their own language and culture to define the concept of gender. After some discussion, they came up with a local definition – te oin tabe – and participants understood that it evolves and changes over time. The gender and energy session was a new topic for the participants. They lacked an understanding of the importance of gender roles in the use of energy sources. In filling in these gaps and to enhance the participants’ knowledge, we held group interactive sessions. The participants were divided into their own focal gender groups (special needs, church groups, women’s groups, youths) and were asked to brainstorm and identify the different energy sources in their household and community, list the uses of the energy sources and who uses them (identify gender roles and gender needs in relation to the energy sources) and note any challenges encountered in

Pac i f i c energ is e r 


capacity development, planning, policy and regulatory frameworks

accessing these energy sources. The second activity focused more on participants brainstorming how these challenges are addressed and how this has assisted them in addressing the following gender goals: ■ practical needs (things they do to make

their lives easier, more free time to do other activities);

■ productive

needs (economic activity to generate income); and

■ strategic needs (part of decision making).

It was interesting to note how the participants used their culture to understand the link between gender and energy. A representative from the youth group discussed the use of an energy source, firewood from the pandanus tree, to preserve their dancing skirts for a cultural performance: ‘With limited firewood on Tarawa, the traditional knowledge on the preservation of dancing costumes will also be dying out.’ Energy has an important role to play in the preservation of culture, in income generating activities and in our daily livelihoods. At the end of this session the participants were able to understand and appreciate the different energy needs of youth, people with special needs, women and men. The participants also reported the increasing cost of electricity over the years. The second day of the workshop focused on gender and climate change. Climate change is an issue that is discussed in our government and communities, so the participants had a fair understanding of what it is and were able to relate their experiences of the effects of climate change on their own community. However there was a lack understanding of the gender roles and how these are affected by climate change. For example, sea water intrusion was recorded as an issue and household chores have to be done with limited rain water, but there has been no specific mention of how the limited water affects the gender roles: women’s roles in cleaning, washing and cooking and men’s roles in looking for clean water and collecting rain water.

Using biomass to do cooking, Kiribati (photo courtesy: SPC)

The participants worked with their own focal group members and did a gender vulnerability mapping exercise. Participants were able to identify the problems encountered for each role they play in trying to adapt to climate change, and to find solutions to these problems, focusing on their gender roles. The gender vulnerability mapping allows participants to identify who are most vulnerable to climate change and they were able to acknowledge the fact that different people (men, women, people with disabilities, children and youths) have different needs. To sum up, the workshop was a capacity building programme for these community focal groups; it enhanced their knowledge and skills and they will now be able to mainstream gender into their climate change and energy projects/ activities. It was also a learning experience for the facilitators (personnel from SPC’s Energy Programme and Foundation of the Peoples of the South Pacific – Kiribati) in terms of how culture, traditional knowledge, experience and resources can be used to communicate the importance of mainstreaming gender into climate change and energy projects/activities. We take this opportunity to acknowledge our development partner and the donor, the German Federal Ministry of Environment, Nature Conservation and Nuclear Safety (BMU). We also wish to express our gratitude to the Foundation of the Peoples of the South Pacific – Kiribati for assisting SPC’s Energy Programme to organise this workshop.

For more information: Kuini Rabo Energy Programme Assistant Energy Programme, EDD, SPC (KuiniR@spc.int) Participants working in groups during gender mainstreaming workshop, Kiribati (photo courtesy: SPC)

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capacity development, planning policy and regulatory frameworks

Supporting renewable energy targets through policies, legislation, and fiscal incentives and initiatives

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his article illustrates how policies, legislation and fiscal incentives can facilitate the development of renewable energy sources for the 14 Forum Island countries (FICs1). It gives the current status of the electricity generated from renewable energy sources (RES-E), specific renewable energy targets on electricity production, existing renewable energy support policies, and fiscal incentives. The article also highlights two initiatives that the Secretariat of the Pacific

Community (SPC), in collaboration with the International Renewable Energy Agency (IRENA), is currently implementing to support and facilitate increasing use of renewable energy sources. According to the 2009 SPC energy indicators database, Papua New Guinea, Fiji and Samoa contributed the most to the electricity generated from renewable energy (see Figure 1).

Figure 1: Clean electricity contribution for 14 Forum Island countries2 70%

65.8% 61.0%

60%

50%

40%

35.9%

30%

20% 13.8% 10%

0%

0.3% Cook Islands

Fiji

0.3%

0.7%

0.3%

FSM

Kiribati

Nauru

1.8% Niue

0.3% Palau

Hydro power is recorded as the dominant renewable energy source for electricity generation in these three countries, and they are continuing their efforts to expand the use of hydro power. The commissioning of the Fiji Electricity Authority 40 megawatts hydro power plant, the Nadarivatu hydroelectric scheme, in September 2012 shows Fiji’s commitment to the increasing use of hydro potential. In the last three years, the Fiji government has provided annual budget allocations and fiscal incentive for increasing use of renewable energy sources. In February 2012, the Reserve Bank of Fiji made regulations requiring commercial banks to hold 2% of their deposits and similar liabilities in loans to the renewable energy sector. In the same year, the Fiji government introduced tax incentives for renewable energy projects and power cogeneration as well as for biofuel production. Fiji is the only Melanesian country that has been granted an extension to its renewable energy loan project, initiated through the Sustainable Energy 1

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0.2% PNG

RMI

Samoa

0.6%

0.3%

Solomon Islands

Tonga

1.6% Tuvalu

Vanuatu

Financing Programme (SEFP), a World Bank programme. Through SEFP, the Fiji Development Bank provided financial support to the installation of a 122 kW solar PV farm at Port Denarau Marina in February 2013. Most countries have established their official renewable energy targets, which can be seen in their respective national energy policies, national development strategies, and energy sector plans and roadmaps. Renewable energy targets reflect an understanding of the future role that different sources of renewable energy generation will play alongside efficiency and conventional generation; and therefore targets need to be based on a country’s available resources and capacities. In addition to renewable energy targets, renewable energy support policies for encouraging private investors and independent power producers are required if countries are to meet their targets. The list of these renewable energy targets, policies and fiscal incentives is presented in table 1.

The Forum Island countries are Cook Islands, Federated State of Micronesia, Fiji, Nauru, Niue, Palau, Papua New Guinea, Republic of Marshall Islands, Kiribati, Samoa, Solomon Islands, Tonga, Tuvalu and Vanuatu. These data are currently being updated to reflect 2011 data.

Pac i f i c energ is e r 


capacity development, planning, policy and regulatory frameworks

Table 1: Existing renewable energy (RE) targets, policies and fiscal incentives for 14 FICs

Forum Island countries

RE targets

RE policies

RE fiscal incentives

Cook Islands

50% electricity generation through RE by 2015 and 100% by 2020

Net metering policy exists, access to grid limited to 2 kW, no feed in tariff

No duty tax exemption, donor funded projects are exempt

Fiji

90% electricity through renewable energy sources by 2015 (FEA target)

Power purchase agreement (PPA) but no independent regulator

Duty tax exemption allowed on renewable energy machinery and equipment imported for government and private companies. 95% of cost for pico hydro is funded by government for rural communities, 5% funded by communities, reduced duty tax on diesel used for biofuel blending

Federated States of Micronesia

30% renewable energy in primary energy supply by 2020

Electricity Act amended in 2012 for RE uses, net metering policy and electricity regulator

Exemption on duty tax on governments’ projects while private companies pay 25%

Kiribati

Electricity from renewable energy to reduce fuel imports by 20% by 2025.

No policy

Exemption on duty tax on governments’ projects while private companies pay 10%

Nauru

50% renewable energy in primary energy supply in 2015

No policy

Exemption on duty tax on governments’ projects

Niue

20% renewable energy and alternative energy in electricity supply by 2013

No policy

Exemption on duty tax on governments’ projects

Palau

20% renewable energy in electricity supply by 2020

Net metering act exists, no feed in tariffs or power purchase agreements

No duty tax exemption, donor funded projects are exempt

Papua New Guinea

No RE target but electrification access target of 27% total households by 2015

PPA exists – electricity regulator the Independent Consumer & Competition Commission (ICCC)

No duty tax exemption, donor funded projects are exempt

Republic of Marshall Islands

20% renewable energy in primary energy supply by 2020

No policy

Duty tax exemption on RE products import

Samoa

Increase the contribution to total country energy consumption by 10% by 2016

Power purchase agreements with IPPs

No duty tax exemption, donor funded projects are exempt

Increase the supply of renewable energy for energy services by 20163

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Electricity regulator established under the Office of the Electricity Regulator

Overall sector goal: to reduce the growth rate in the volume of imported fossil fuels by 10% by 2016

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capacity development, planning policy and regulatory frameworks

Solomon Islands

50% renewable energy by 2020 (proposed in the current review of the energy policy)

Private users licensed to install RE (mainly solar PV) for use during power outages

No duty tax exemption, donor funded projects are exempt

Tonga

50% renewable energy in electricity supply by 2020

No policy but service agreement exists for integration of solar energy production from Popua Solar farm to the grid Electricity regulator exists Electricity commission exists

No duty tax exemption, donor funded projects are exempt

Tuvalu

100% renewable energy in electricity supply by 2020

Licenses allow private users to generate own power No regulator

No duty tax exemption, donor funded projects are exempt

Vanuatu

65% renewable energy in electricity supply by 2020

Independent power producers allowed to generate electricity outside UNELCO4 existing grid networks

No duty tax exemptions but donor funded projects need to seek approval from cabinet

To increase the use of renewable energy sources, IRENA, in partnership with SPC and the German Agency for International Cooperation CCCPIR (Coping with Climate Change in the Pacific Region Programme), initiated the process of developing renewable readiness assessments (RRAs) in two countries – Kiribati and Nauru. An RRA is designed to define a detailed list of criteria considered necessary for the ongoing operation of existing renewable energy facilities and for further renewable energy development. The objective is to facilitate a coordinated approach and the setting of priorities that can facilitate discussions with bilateral and multilateral cooperation agencies, financial institutions and the private sector regarding the implementation of actions and initiatives emerging out of the RRA. An RRA comprises a process and methodology that includes completing a set of templates and a final report. The methodology covers all forms of energy services (transport, heat, electricity and motive power), and all renewable energy sources, with each country selecting those of particular relevance. The RRA initiative is to be replicated for other interested countries. The Solomon Islands National Energy Policy is currently under review and a national energy forum is to be convened in Solomon Islands from 19 to 20 June 2013, where the draft reports of the revised energy policy and the two energy subsectors, energy efficiency and petroleum, are to be

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presented and discussed with a wider audience. The forum is to be used for developing the renewable energy components of the two subsectors, petroleum and alternative liquid fuels and energy efficient appliance and technologies that will contribute to the overall Solomon Islands RRA. In its effort to strengthen the enabling environment for renewable energy deployment in the 14 FICs, SPC, in collaboration with IRENA is currently embarking on a marketing and capacity building assessment initiative. The assessment is being carried out through administered questionnaires and face-to-face interviews. The aim of the survey is to determine potential markets and capacity needs in relation to deployment of renewable energy. The target audiences are governments, the private sector, and finance and power utilities.

For more information: Koin Etuati Energy Policy Officer Energy Programme, EDD, SPC (KoinE@spc.int)

Union Electrique du Vanuatu (Limited) is a private utility company, which, through concession agreements, produces and distributes electricity in assigned concession areas.

Pac i f i c energ is e r 


capacity development, planning, policy and regulatory frameworks

Federated States of Micronesia starts comprehensive scope for coconut sector The regional Framework for Action on Energy Security in the Pacific (FAESP) emphasises the importance of Pacific Island countries developing their energy sector planning, policy and regulatory frameworks. The existence of relevant and up-to-date energy policies, accompanied by strategies and road maps for their implementation and a supporting regulatory framework, is vital to progress towards a well-coordinated, effective and secure energy sector.

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broad range of over 70 people from government, private sector, traditional leadership and civil society gathered on 23 February in Kolonia, Pohnpei to set forth on a strategic plan of action to rehabilitate the coconut sector in the Federation. The Coconut Sector Strategy Design Team workshop was organised by FSM Department of Resources and Development (R&D), with support from FSM Coconut Development Authority (CDA), FSM Office of Environment and Emergency Management (OEEM), the Secretariat of the Pacific Community (SPC) and FSM PetroCorp, now known as Vital. During the workshop, state and municipal representatives from Kosrae, Yap, Chuuk and Pohnpei were introduced to the internationally proven Focused Results Delivery (FRD) process for sector strategy design. The FRD process has been customised by R&D and Vital to address the unique requirements of the multicultural and multi-government context within the FSM. A strategy for the coconut sector is a means for the national and state governments to achieve meaningful outcomes under both the National Energy and Agriculture Policies already in place in the FSM. The Strategic Plan of Action to be developed over the next 150–180 days will be market-led, private sector-driven and government supported. Energy and agriculture, along with tourism and fisheries, are the identified long-term linchpins of FSM economy. These four sectors are also expected to develop coherent strategies for development and domestic growth beyond 2023, a prerogative of the Mori Administration. In early May, FSM will be hosting its 1st National Investment Symposium around the four linchpin sectors of the economy. A draft strategy should be in place that maps the value chain, identifies opportunities to create, retain and distribute

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value across the sector, and will offer focused investment opportunities for development partners. At the one-day workshop, presentations were delivered by R&D Deputy Secretary Alissa Takesy, CDA GM Namio Nanpei, OEEM Director Andrew Yatilman, Vital CEO Jared Morris and Vital CFO Mathias Lawrence. In his presentation, Morris linked the broader long-term concerns of Vital to the concerns of people and their families. He noted that in the long view, Vital would diversify to meet the direction of the National Energy Policy. Ultimately, he said, the nation simply cannot afford to continue spending over USD 50 million annually for fossil fuel, and that it was ‘time to stop planning our actions and start actioning our plans.’ Takesy, Nanpei and Yatilman expounded variously on the critical need for a multi-stakeholder process, the essentiality of public policy support and that there must be private sector – business and civil society – involvement in order to achieve and maintain social and economic sustainability over time. One of the primary outcomes of the workshop was the designation of a Core Strategy Team. The Core Strategy Team will be visiting each of the states over the next several months to undertake consultations with community groups, traditional leaders, the private sector, NGOs, farmers associations and governments to gain the necessary input and support toward the ultimate aims of increased productivity and contribution to jobs, business growth and alternative livelihoods throughout FSM.

For more information: Olivier Wortel Communication Officer Vital-FSM PetroCorp, Pohnpei (Olivier.Wortel@fsmpc.com)

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energy production and supply | p e t r o l e u m

First quarter 2013 oil market report (January–March 2013) The price of Asia Pacific Benchmark Dated Brent crude fluctuated in rose and fell in the first quarter of 2013. The price was highest in February, when the monthly average was USD 116.323/bbl. The average for the quarter was USD 112.569/bbl, an increase of 2.02% over the fourth quarter of 2012, when the average price for the quarter was USD 110.34/bbl.

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he price of Asia Pacific benchmark dated Brent crude oil fluctuated in the first quarter 2013. During this quarter, February had the highest dated Brent crude price which stood at a monthly average of USD 116.323/bbl. In comparison with last quarter, average dated Brent crude price in the first quarter 2013 increased by 2.02% from USD 110.34/bbl to USD 112.569/bbl. January started with low petroleum product prices, but they increased at a dramatically faster pace than expected in

February, then started to decrease from mid-February and continued on a downward trend towards the end of March. Dated Brent price in the first quarter of 2013 fluctuated between USD 106/bbl and USD 118/bbl. The highest Platts published price of USD 118.86/bbl for this quarter was on 14 February. Prices plummeted from mid-February and continued to collapse throughout March the lowest published prices of USD 106.03/bbl for dated Brent crude was published on 22 March, 2013.

Mean of Platts Singapore petroleum product prices from March 2012–March 2013 145

135

USD/Barrel

125

115

105

95

85

10 12 14 16 18 20 22 24 26 Mar Mar Apr Apr May May May Jun Jun

Mogas 92

Jet/Kerosene

28 Jul

30 32 34 36 38 40 42 44 46 48 50 52 2 4 6 8 10 12 Jul Aug Aug Sep Sep Oct Oct Nov Nov Nov Dec Dec Jan Jan Feb Feb Mar Mar

Gasoil 50ppm

At the beginning of January 2013, prices for gasoline, gasoil and Jet/kerosene showed weakness compared to the previous month of December 2012. Much of the decrease in prices was a result of low demand from Indonesia and additional supply to the market from China and India. Major maintenance work at many of the nation’s refineries limited their capacity and was responsible for the sudden increase in prices at the end of January and early February. Other factors behind this surge

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Gasoil 500ppm

Gasoil 2500ppm

Gasoil

Dated Brent

in prices included strong fundamentals in Europe, tightly supplied Mediterranean markets and a healthy demand from Africa and the Middle East. Cold weather demand in Japan, along with additional buying from Hong Kong and China, helped increase jet and kerosene prices in January. For the same period in January, gasoil prices increased on the back of firm demand from Europe as a result of prolonged cold

Pac i f i c energ is e r 


energy production and supply | p e t r o l e u m

Daily Mean of Platts Singapore (January–March 2013) 150

140

130

120

USD/Barrel

weather, as well as limited the supply due to hefty refinery maintenance in Singapore. Increased demand for heavy sulphur gasoil usage by the utilities and transport sectors in Pakistan, Jordan and some African countries provided support for the gasoil market.

110

100

Much of February’s gasoline 90 price increase from early February to mid-February 80 was attributed to the brief shutdown at Pertamina’s Balongan refinery and outage Mogas 92 (Unleaded Petrol) at other regional refineries, causing a reduction in production capacity and a shortage of gasoline in the market. Kerosene prices ascended as well, due to high kerosene demand in North Asia and limited supply in the Asia region. Gasoil prices were further supported by increased demand from the Middle East and Africa. Petroleum prices, however, started to go downhill after mid-February as a result of muted regional demand for gasoline and a decrease in demand for kerosene used as heating fuel due to the winter season in north Asia drawing to a close. A weak European market, along with surplus supply, put downward pressure on gasoil prices. Prices continued to plunge in March, mainly influenced by an overall weak demand and surplus supply in the market. Gasoline prices dropped due to sluggish Indonesian demand and weak European benchmark. In addition to this, gasoline prices continued to be pressured, as a surplus supply of Indian

Jet /Kerosene

Gasoil 50ppm

Gasoil 500ppm

Gasoil 2500ppm

Gasoil

Dated Brent

barrels continued to move into Asia, in the process flooding the already stagnant market. Jet/kerosene prices remained quiet as demand for heating kerosene faded away in the North Asia due to surplus supply in Singapore and a weak global demand from the aviation sector. Furthermore, gasoil prices fell in March as a result of poor regional demand and concerns over increased gasoil exports from China and India leading to surplus barrels in the market.

Freight rates Freight rates for this quarter stood at 192.600 WS points, a decrease of close to 6.18% compared to the previous quarter. Freight rates fell in January and February but rose in March. March had the highest freight rate for the quarter – 208.075 WS.

Monthly average 30kt clean tanker Singapore – Australia rates 250

Worldscale rates

200

150

100

50

0 Mar-12

ISSU E 11 | A PR IL 2 0 1 3 

Apr-12

May-12

Jun-12

Jul-12

Aug-12

Sep-12

Oct-12

Nov-12

Dec-12

Jan-13

Feb-13

Mar-13

13


energy production and supply | p e t r o l e u m

Exchange rates The major currencies showed a slight appreciation against the US dollar; otherwise they all remained stable with very little fluctuation.

1-Jan 3-Jan 5-Jan 7-Jan 9-Jan 11-Jan 13-Jan 15-Jan 17-Jan 19-Jan 21-Jan 23-Jan 25-Jan 27-Jan 29-Jan 31-Jan 2-Feb 4-Feb 6-Feb 8-Feb 10-Feb 12-Feb 14-Feb 16-Feb 18-Feb 20-Feb 22-Feb 24-Feb 26-Feb 28-Feb 2-Mar 4-Mar 6-Mar 8-Mar 10-Mar 12-Mar 14-Mar 16-Mar 18-Mar 20-Mar 22-Mar 24-Mar 26-Mar 28-Mar 30-Mar

Pacific currencies against USD

Pacific currencies against US dollar 1.15 1.10 1.05 1.00 0.95 0.90 0.85 0.80 0.75 0.70 0.65 0.60 0.55 0.50 0.45 0.40 0.35 0.30 0.25 0.20 0.15 0.10 0.05 0.00

Australian

Fijian Dollar

New Zealand

Tongan Pa'anga

Samoan Tala

Solomon SBD

PGK

Source: www.oanda.com

For more information:

Pritanshu Singh | Assistant Petroluem Officer | Energy Programme, EDD, SPC | (PritanshuS@spc.int)

Petroleum retail prices in Pacific Island countries and territories in the first quarter of 2013 In the long term, the greatest single factor influencing petroleum prices is the cost of crude oil. In the short term, however, marketplace forces of supply, demand and competition can have a significant effect on the price of petroleum. Similarly, when the price of Dated Brent crude oil increases, petroleum product prices increase as well; resulting in more money being spent on importing these products into Pacific Island countries and territories (PICTs). In the first quarter of 2013, Singapore FOB (free on board) petroleum product prices for gasoline (unleaded petrol), gasoil (diesel) and jet/kerosene were higher than in the previous quarter. This was because the Dated Brent crude oil price in first quarter of 2013 (USD 112.569/bbl.) was higher than in the previous quarter (USD 110.34/bbl.) This put up the prices of all the petroleum products, with gasoil prices being the highest, followed by jet/kerosene prices and finally by gasoline prices. Three other factors influenced the petroleum product prices in the first quarter. 1.

14

Gasoline prices increased as a result of limited supply in the midst of firm demand. A shutdown at Malaysia’s 170,000 barrel/day Melaka II refinery caused gasoline production to decrease and hence demand for gasoline was met by hefty imports. The further increase in gasoline prices was due to strong market demand in

Europe and Africa. 2.

Refinery problems at BP’s Carson refinery, Chevron’s El Segundo refinery and Tesoro’s Wilmington refinery in the US west coast led to a reduction of jet fuel supplies in the market and this helped improve the premiums for jet fuel in the region. The increase in the demand for kerosene in Japan and Hong Kong during the cold snap in early 2013 also assisted in raising the price of jet/kerosene.

3.

Longer than expected cold weather in Europe led to a rise of strong spot demand for gasoil, which is used for heating. Additional demand from East Africa and the Middle East helped reduce surplus gasoil in the market and in turn caused the market to become tight and gasoil prices to increase.

Pac i f i c energ is e r 


energy production and supply | p e t r o l e u m

Crude oil prices are important in determining petroleum product prices because crude oil is the primary raw material used to produce gasoline, diesel and jet/kerosene. The price of crude oil may account for over half the price of a litre of

gasoline, diesel and jet/kerosene. Hence the increase in dated Brent crude oil price in the first quarter might cause an increase in the pump prices of petroleum products in PICTs.

Graph 1: Retail process in PICTs for first quarter 2013

2.5

2

USD/Litre

1.5

$1.64 $1.55 $1.51

$1.64 $1.55 $1.51

1

0.5

0

USD/l - ULP

USD/l - Diesel

USD/l - Jet/Kero

ULP Ave.

Diesel Ave.

Jet/Kero Ave.

pump prices. Tuvalu, Cook Islands and French Polynesia also had high retail prices when compared with average retail prices for gasoline, diesel and jet/kerosene. As a result of the different quality of fuel being imported by PICTs; graphs 2–4 are used to make good comparisons of retail prices.

In the first quarter of 2013, pump prices in most PICTs were lower than the average retail prices. PICTs with low prices included American Samoa, Fiji, Kiribati, Republic of Marshall Islands, Solomon Islands and Tonga. Of these, American Samoa had the lowest retail prices. Niue had the highest

Graph 2: Average retail gasoline prices in PICTs

$2.50

$2.00

$2.27 $2.01

$1.99 $1.99

$1.91

$1.80 $1.81

$1.80

$1.63

USD/Litre

$1.50

$1.65 $1.48

$1.43

$1.50 $1.26

$0.99

$1.00 $0.79

$0.50

$0.00

USD/l - Retail ULP Prices

ISSU E 11 | A PR IL 2 0 1 3 

USD/l - MOPS (92 RON)

USD/l - MOPS (95 RON )

ULP Ave.

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energy production and supply | p e t r o l e u m

Average gasoline retail prices in PICTs were compared with the mean of Platts Singapore (MOPS) prices for 92 and 95 RON (research octane number) gasoline for the first quarter of 2013. MOPS prices for 92 and 95 RON gasoline are used as a baseline for price comparison because these are the two common grades of gasoline used in the 14 PICTs. All PICTs except American Samoa had higher retail prices than the MOPS prices for 92 RON and 95 RON. 95 RON gasoline is generally more expensive than 92 RON and this could be one of the reasons for four of the fourteen PICTs (Cook Islands, French Polynesia, New Caledonia and Niue) that use 95 RON gasoline having high gasoline retail prices. While gasoline retail prices remained relatively stable from

January to March 2013 for most PICTs, some showed interesting trends. For example, gasoline prices in Papua New Guinea, Tonga and Samoa followed a similar trend with a continuous increase in prices from January to March. Retail prices in New Caledonia and French Polynesia behaved similarly, with a steady increase from January to February but prices plunged in March. Retail prices in Nauru, however, decreased in February and increased in March. Gasoline prices from New Zealand and Jamaica were compared with retail prices in PICTs. Prices in Jamaica were considerably lower than in most PICTs, while gasoline prices in New Zealand were almost the same as in Nauru and New Caledonia but lower than in Tuvalu, Samoa, Cook Islands and French Polynesia.

Graph 3: Average retail diesel prices in PICTs

$2.50

$2.29 $2.02

$2.00

$1.84 $1.84

$1.45

USD/Litre

$1.50

$1.00

$1.82

$1.72

$1.68 $1.54

$1.54 $1.39

$1.30

$1.30

$1.27 $0.95

$0.82

$0.50

$0.00

USD/l - Retail diesel prices

USD/I - MOPS (Diesel 10ppm)

During the first quarter of 2013, American Samoa had the lowest diesel retail prices. MOPS prices for 10 ppm and 500 ppm for the first quarter of 2013 were used as a baseline for price comparison as these are the two common diesel qualities used in the 14 PICTs. Niue had the highest retail price for diesel, followed by Cook Islands, French Polynesia and Tuvalu. Tonga and Tuvalu both import 5000 ppm diesel and the retail prices of diesel in these two countries is higher than some countries that import 10 ppm and 500 ppm diesel. Tuvalu in particular has high retail prices compared to PICTs that import 10 ppm diesel, such as American Samoa, Cook Islands, French Polynesia and New Caledonia, as well as to other PICTs that import 500 ppm diesel, such as Fiji, Nauru

16

USD/I - MOPS (Diesel 500ppm)

Diesel Ave.

and Papua New Guinea. The trend in diesel retail prices was relatively stable for most PICTs. However, prices in Samoa increased sharply in March, while in New Caledonia and French Polynesia pump prices behaved in a similar way as gasoline prices; prices were stable from January to February and decreased in March. In Nauru, diesel prices at pump increased in February and fell in March. Both Papua New Guinea and Tonga showed a steady increase in diesel retail prices from January to March. Comparing retail prices of diesel in PICTs with those in New Zealand and Jamaica, prices in all PICTs except American Samoa were higher.

Pac i f i c energ is e r 


energy production and supply | p e t r o l e u m

Graph 4: Average retail jet/kerosene prices in PICTs

$2.50

$2.34 $2.04

$2.00

$1.88 $1.65

USD/Litre

$1.50

$1.36

$1.31

$1.33

$1.24 $1.05

$1.00 $0.76 $0.50

$0.00

AmSam

French Polynesia

Fiji

Kiribati

USD/l - Retail Jet/Kero prices

Some PICTs, such as Cook Islands and Nauru, do not regulate kerosene prices so the number of PICTs used for jet/kerosene price comparison is less. In the first quarter of 2013, Niue had the highest retail price of jet/kerosene, and Samoa, Solomon Islands and Tuvalu also had higher than average prices. In comparison to MOPS prices for jet/kerosene, prices in all PICTs except American Samoa were higher. Generally, jet/kerosene prices for most PICTs slightly increased from January to March, except in French Polynesia, where retail prices for jet/kerosene gradually decreased. Price adjustment in most PICTs is done on a monthly basis except in Fiji, which carries out price adjustment on a quarterly basis. Kiribati in particular had low pump

ISSU E 11 | A PR IL 2 0 1 3 

Niue

PNG

Samoa

USD/l - MOPS (Jet/Kero)

solomon Islands

Tonga

Tuvalu

Jet/Kero Ave.

prices, primarily because it has undergone no price change from 2009 due to an internal government decision, despite fluctuation in MOPS prices. Cook Islands have also made no price adjustment since October 2012. Note: ‘all graphs were produced using exchange rates from www.oanda.com’.

For more information: Pritanshu Singh Assistant Petroluem Officer Energy Programme, EDD, SPC (PritanshuS@spc.int)

17


energy production and supply | p e t r o l e u m

Petroleum developments in the Pacific – update Samoa shifts to lower sulphur diesel fuel In response to Platts lowering the sulphur specification from 5000 ppm (parts per million) to 500 ppm on 2 January 2013, the Government of Samoa stated in a press release that it has approved the same changes in diesel specification, effective from the first delivery of low sulphur diesel to Samoa in mid-January. Samoa’s shift to low sulphur diesel came as a result of increasing environmental problems of high sulphur diesel fuel and changes in the petroleum supply chain, brought about by the changing fuel trend in the Pacific, where some Pacific Island countries and territories (PICTs) such as Fiji, Papua New Guinea and Marshall Islands, are moving to low sulphur diesel fuel. As a result of growing demand for low sulphur diesel globally and in the Pacific, Singapore refineries of diesel

Papua New Guinea liquefied natural gas project On 30 January 2013, the Government of Papua New Guinea revived the National Petroleum Company of PNG (a governmentowned body) to look after the nation’s interests in the ExxonMobil-led PNG Liquefied Natural Gas Project and other future gas projects. The Papua New Guinea liquefied natural gas project will realise the potential of three large gas discoveries in the southern and western highlands of Papua New Guinea. The integrated project includes gas production, processing and liquefaction facilities, as well as offshore and onshore pipelines. The project will have a lifespan of about 30 years (until 2043) and is estimated to produce nine trillion cubic feet of gas.

have increased the availability of lower sulphur diesel, typically by reducing the supply of high sulphur diesel when upgrading their refinery units. This can serve as an indication that, in years to come, the availability of high sulphur diesel will become limited and those who continue to use it will end up paying more for a lower quality fuel. It is crucial that Pacific Islanders realise that the more sustainable option exists, namely, that of buying 500 ppm sulphur diesel, which is ten times cleaner and costs only a little more than 5000 ppm diesel. The move by Samoa to shift to lower sulphur diesel can surely serve as an encouragement to other PICTs that continue to use high sulphur diesel fuel. Tonga is reported to have accepted the switch to 500 ppm and a formal announcement is to be made soon.

Introduction of a green tax in Fiji In an effort to reduce carbon dioxide emissions, the Government of Fiji in its 2013 budget imposed an additional two cents added to to the cost of every litre of diesel and petrol imported into Fiji as part of the carbon or green tax. This became effective on 1 January 2013. This move is to encourage the use of renewable sources of energy and reduce Fiji’s dependence on fossil fuels. The two cents per litre fiscal duty is enforced only on unleaded petrol and diesel, while kerosene, white benzene and pre-mix are exempted. Moreover, the carbon tax is applicable only to fuel used by motor vehicles and not by buses, the fishing industry and inter-islands vessels.

For more information: Pritanshu Singh Assistant Petroluem Officer Energy Programme, EDD, SPC (PritanshuS@spc.int)

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Pac i f i c energ is e r 


energy production and supply | r e n e w a b l e e n e r g y

Delivery of solar home systems component (batteries) to the rural communities of RMI under SPC North-REP (photo courtesy: SPC)

Lighting up the rural communities of Marshall Islands with solar power From mid December 2012 to February 2013, technicians were kept busy installing solar home systems in the outer island communities of the Marshall Islands. The EU-funded, SPC-implemented North-REP (North Pacific ACP Renewable Energy and Energy Efficiency Project) worked closely with the Ministry of Resources and Development and its installation contractor, Marshalls Energy Company (MEC), to install 496 solar home systems. Funded by the Global Environment Facility, the ADMIRE (Action for the Development of Marshall Islands Renewable Energies) project partnered with North-REP to cover the cost of transportation to the outer island communities.

M

EC organised its technicians into two teams. Using the installation guidelines/manuals and experience from the North-REP training in September 2012, the teams managed to install 161 solar home systems (SHS) on Maloelap Atoll, 87 on Ailuk Atoll, 164 on Namu Atoll, 51 on Lae Atoll and 23 on Lib Atoll – these are now fully operational. Other installations were done on nearby islands of Majuro Atoll and were used for training and public awareness purposes. The comprehensive consultations held during the household survey and the end-user training using the manuals in local languages were helpful in preparing the households. This contributed to the ease of installation.

ISSU E 11 | A PR IL 2 0 1 3 

Initial reactions Mayor Rufina Jack of Ailuk Atoll and Councilman Mark Stege of Maloelap Atoll expressed their appreciation to the government, the European Union, SPC and all the stakeholders that made it possible to light up their communities’ houses. Their people were happy to have lighting to undertake incomegenerating activities and children are now able to study and do their homework in the evening. The systems also provide energy services for radio, charging cell phones and other small electrical appliances. Ailuk Atoll Senator Maynard Alfred and Mayor Rufina Jack recently visited the Ministry of Resources and Development to extend an invitation to government, SPC

19


energy production and supply | r e n e w a b l e e n e r g y

and MEC to attend the commissioning of the installed solar home systems, which has been scheduled for April. North-REP and MEC will be visiting all the installed sites in April to check on the installations so as to ensure that the installation was conducted following the guidelines and checklist. Mapping of each house with details such as the owner(s), house photographs, positioning coordinates and system information is currently being pursued. With the data initially collected from the survey, and using one of the islands as an example, North-REP engaged a Geographic Information System consultant to provide training to MEC. The mapping of all five atolls will be completed by June 2013. In parallel, North-REP, with the Ministry of Resources and Development and MEC, has scheduled the installation of another 500 solar home systems on six atolls that have paid MEC their installation fee of USD 100 per household; this installation fee is kept in a dedicated account that will be used for the operation, maintenance and replacement of system components in the coming years. North-REP is also working closely with Environmental Protection Agency and Office of Environmental Planning & Policy & Climate Change in the development of a battery collection and a recycling and replacement programme; it has started collecting used batteries from the outer island communities and storing them in Majuro.

Installation of a solar home system in a rural community in Marshall Islands under SPC North-REP (photo courtesy: SPC)

All in all, lighting up the outer island communities of the Marshall Islands has been a long and a laborious journey, but the good news is that things have progressed and been made possible with the government’s support and advice through the Ministry of Resources and Development and other local key stakeholders, the European Union, partnerships with ADMIRE and SPC’s commitment – all of which ensure the successful implementation of North-REP in the Marshall Islands.

FUNDED BY THE EUROPEAN UNION

NORTHREP

North Pacific ACP Renewable Energy and Energy Efficiency Project

For more information: Senator Maynard Alfred and Mayor Rufina Jack visiting the Secretary of Resources & Development of RMI to extend an invitation to the commissioning of the solar home systems installed in Ailuk Atoll (photo courtesy: SPC)

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Peter Anjain North-REP Energy Officer (RMI) Energy Programme, EDD, SPC (PeterA@spc.int)

Pac i f i c energ is e r 


energy production and supply | r e n e w a b l e e n e r g y

Providing affordable electric lighting in the Federated States of Micronesia – the North-REP approach In the first quarter of 2013 North-REP received 18 containers of solar equipment for electrification of rural areas of Chuuk and Yap States: solar panels, batteries, charge controllers, inverters... and rechargeable lanterns.

T

here is a lot of talk in the renewable energy sector about solar lanterns. The concept is generally to have rechargeable lanterns, each one powered by its own small solar panel. This is not the case under North-REP in the Federated States of Micronesia (FSM). In the State of Chuuk, the lanterns arrived without panels. Was this a mistake? How will they be charged? Can they still be considered ‘solar’ lanterns? A solar lantern is simply a lantern that can be recharged using solar power. To be more specific, using a solar PV panel. To be able to recharge your lantern, you need three components inside a lantern: one light emitting device, one battery and one charge controller. The latter is the electronic device that allows the lantern to be charged using a solar PV panel without any additional accessories. Voltage and current output of a solar panel depend fundamentally on solar radiation, and on the technical characteristics of the panel. Charging the battery can be optimised using a charge controller, and good quality solar lanterns have one inside. This allows for charging the lanterns with virtually any source of DC power, provided it can supply the right voltage and current. Would these lanterns, without one dedicated solar panel each, still qualify as ‘solar’ lanterns? We believe so, as long as they are charged using solar power. So, why did we order these lanterns without their own panels? From a technical perspective, the main issue with lanterns having their own panel is that they depend on how much sunlight reaches the panel. On a very cloudy day, you might not be able to fully charge your light and have as many hours of light as you need, although the lantern could provide that if fully charged. Similarly, they are sensitive to where the panel is located. Is it in full sun, with no shade? Is it facing in the right direction, at the right tilt angle? If not, the output of the panel is decreased, and you might not have the necessary number of hours of light, even when you have a perfectly sunny day. Our approach is to have these lanterns recharged using the large solar PV system located at the school. The system is dedicated to powering the school, so we simply increased the number of panels to cater for the extra load from the recharging of lanterns. These panels, unlike the small ones typically used in solar lanterns, are high quality, large-scale production panels. Translated into numbers, one 200 W panel, costing about USD 200, can charge 20 lanterns a day.

ISSU E 11 | A PR IL 2 0 1 3 

Lantern charging station designed for North-REP in Chuuk, FSM (photo courtesy: Sunlabob)

Assuming this panel will last 20 years (experience shows it will most likely last longer), the cost of the panel is USD 10/ year. Or USD 0.5/year/lantern. This is the same as saying that to recover the cost of the panel, you have to charge USD 0.01/week/lantern. Including lantern replacement cost based on two years’ lifetime, the salary for the technician and administrative costs, one recharge will cost around USD 0.13. One charge provides six hours at full brightness (100 lumen), or up to 30 hours at minimum brightness (20 lumen). Lantern replacement after two years is a very conservative estimate, as the manufacturer’s warranty will cover the first two years, and the estimated lifetime is up to five years. This should address any concerns about affordability. What about reliability? What happens on a cloudy day? The lanterns will be charged during school hours, using directly the output from the solar panels. But what if this output is not enough? In this case, the school has a large

21


energy production and supply | r e n e w a b l e e n e r g y

battery bank, which can provide power to the lanterns on those rare occasions when the output from the panels is not sufficient. To give a rough figure, using only 10% of the energy stored in the battery bank, you could recharge 1,000 lanterns. Given this set up, lanterns will always be fully charged before the sun sets, providing light for 5–50 hours on one charge (depending on the brightness selected). Additionally, we purchased impact-proof and weather sealed lanterns, to make sure they can withstand the salty environment and some accidental drops. This should help in giving them at least two or three years The lanterns can be used to recharge mobile phones. Chuuk lagoon islands have no access to of life. The components should last up to electricity but extensive access to mobile phone network. (photo courtesy: Greenlight Planet Inc.) five years, but it is important – especially for setting the tariff – to be conservative fits-all’ approach has a proven track record of failed projects. with lifetime at the beginning, and reduce the tariff later if Socio-economic factors must be the starting point to identify longer lifetime is indeed achieved. appropriate technologies, and this is the approach taken by North-REP in FSM. This should address the reliability concerns. What about the non-technical reasons behind this choice?

First and foremost – sustainability. Who will take care of repairing and replacing the lanterns once they fail? If you distribute lanterns with their own panels to each household, tracking, monitoring, repairing and replacing them becomes complicated. Not impossible, but complicated. What becomes even more complicated is to collect fees. Fee collection is paramount for sustainability, as it is the necessary condition for whoever will manage the project to be able to have enough cash to buy spare parts, pay a technician to make repairs, and replace them at the end of their lifetime. It is much simpler to give the lanterns to the technician at the school for having them recharged. This will enable the technician to check their condition and perform repairs, and collect fees in exchange for the recharge service. Is this a model for other islands in FSM and in the Pacific? Possibly. The main argument is that technical solutions have to be tailored to the context where they are applied. Deploying renewable energy technologies with a ‘one-size-

FUNDED BY THE EUROPEAN UNION

NORTHREP

North Pacific ACP Renewable Energy and Energy Efficiency Project

For more information: Emanuele Taibi North-REP Energy Specialist (FSM) Energy Programme, EDD, SPC (EmanueleT@spc.int)

Different uses for lanterns: desk lamp for studying, social light, cooking light. (photo courtesy: Greenlight Planet Inc.)

22

Pac i f i c energ is e r 


end-use energy consumption

LED lighting at the airport car park in Rarotonga, Cook Islands (photo courtesy: IIEC)

IIEC implements energy efficiency projects in Cook Islands The International Institute for Energy Conservation (IIEC) will be implementing three energy efficiency projects in Cook Islands under the Promoting Energy Efficiency in the Pacific: Phase 2 (PEEP2) funded by the Asian Development Bank (ADB). The IIEC is the PEEP2 Technical Assistance Consultant and is tasked with improving efficiency in the use of electrical power for consumers in Cook Islands, Papua New Guinea, Samoa, Tonga and Vanuatu – through demand-side energy efficiency improvements in the residential, commercial and government sectors of each country.

T

wo energy efficiency projects comprise of the supply and installation of solar light-emitting diodes (LED) lighting for the international airport car park and in the Punanga Nui Market in Rarotonga, Cook Islands. The third project comprises of a fridge/freezer replacement program (FFRP) at national level, with the objective of replacing old inefficient fridge/freezers with high efficient fridge/freezers. Under the FFRP, retailers will offer an attractive rebate at the moment of purchase (NZD 200–500) depending on fridge/freezer volume. The retailer will then be reimbursed for the rebates on a monthly basis. IIEC estimates that the airport car park project will provide cost savings of USD 4,900/year and CO2 savings of 6.7 tons of CO2/year. The Punanga Nui Market project will provide

ISSU E 11 | A PR IL 2 0 1 3 

identical savings. For the FFRP, IIEC estimates average cost savings of USD 188/year/consumer. Assuming the replacement of 300 inefficient fridge/freezers, the FFRP would provide approximately 83,280 kWh/year in electricity savings and a CO2 abatement of 66.4 tons of CO2/year. In addition, the FFRP will enable considerable cost savings to householders resulting in higher disposal income.

For more information: David Morgado Environment and Energy Specialist IIEC, Thailand (dmorgado@iiec.org)

23


other news

International Renewable Energy Agency (IRENA) in the Pacific region Launch of the IRENA islands network At the margin of the Pacific Energy Summit in Auckland on 24 March 2013, the IRENA Global Renewable Energy Islands Network, known as GREIN, was launched. It is aimed at bringing IRENA members together to share knowledge and experience on a number of activities organised around eight clusters. This initiative was established at IRENA’s Third Assembly in Abu Dhabi in January 2013. The launch in Auckland of two of the most popular clusters, the technology roadmap cluster and the power grid integration cluster, was timely because the Pacific Energy Summit brought together players in the energy sector from all corners of the industry. The IRENA Director-General, Mr Adnan Amin, in his opening remarks, emphasised the benefits and opportunities of renewable energy to countries in terms of replacing fossil fuels, and creating new employment and a cleaner future.

Participants during the launch of the IRENA islands network in Auckland, New Zealand on 24 March 2013. (photo courtesy: IRENA)

The full membership of the cluster was unable to attend the launch due to visa problems but the following members attended: Cyprus, Jamaica, Nauru, New Zealand, Niue, Palau, Solomon Islands and Tonga. Observer organisations also attended the launch, some of which

24

were: Pacific Power Association, Secretariat of the Pacific Community, European Investment Bank, New Zealand Wind Association, New Zealand Agency for International Development, Pacific Region Infrastructure Facility, Asian

Pac i f i c energ is e r 


other news

Development Bank, World Bank, and Secretariat of the Pacific Regional Environment Programme. Private sector representatives included: German Agency for International Development, Electric, NEXT, and Younicos.

The technology roadmap for islands cluster IRENA’s work on technology roadmaps focuses on a mix of technologies that might be developed in a cost-effective way over time to generate electricity, heat and cooling building and transport fuels. IRENA has allocated resources for developing three roadmaps by the end of June 2014. from 8–12 April in the Republic of Palau. The workshop The criteria for each roadmap were Participants from the Efficient Renewable Energy Integration Workshop, Palau. discussed and a general consensus was (photo courtesy: IRENA) reached that criteria could include IRENA membership; commitment at the political level, including making available financial was conducted by IRENA in collaboration with the Pacific and human resources for development of the roadmap; and Power Association (PPA), the Sustainable Energy Industry significant potential for renewable energy application to Association of the Pacific Island, the Palau Public Utilities generate electricity. Mr Solomone Fifita, Director of SPC’s Corporation and the Secretariat of the Pacific Community Energy Programme, was elected cluster leader and the (North-REP). members agreed that his role would include developing the roadmap cluster activities. The workshop aimed at providing policy makers and utilities with practical knowledge and hands-on experience in:

The power grid integration on islands cluster

The IRENA work on grid integration looks at models that enable better understanding of grid instability when higher shares of renewable energy are introduced into the grid. The IRENA work on power grid integration started with the selection of the PowerFactory software to assist with the analysis of case studies. The first study for the Pacific was done for Palau and two additional studies will follow. Mr Andrew Daka, Director of PPA was elected leader of the cluster. IRENA’s commitment to grid assessment is timely and responds to the growing share of renewables in electricity grids across the Pacific region. The GREIN platform is expected to play a key role in IRENA’s engagement with Pacific countries, and members of the network are encouraged to share knowledge, expertise and resources in the quest for a sustainable renewable energy economy and future.

Palau workshop on efficient renewable energy integration A week-long technical workshop on efficient renewable energy integration in the Pacific islands region was convened

ISSU E 11 | A PR IL 2 0 1 3 

(i)

technical guidelines for solar photovoltaic (PV) installation;

(ii)

assessment of grid stability using a modelling tool for higher shares of renewable energy integration into island grids.

About 40 participants from utilities and government agencies in the northern Pacific (i.e. Marshall Islands and Federated States of Micronesia and Palau) attended. The first half of the workshop focused on technical guidelines for installing PV systems in the Pacific region. This included off-grid design, off-grid installation, grid connected design and grid connected installation based on the international standards. It was stressed that the endorsement of such guidelines in each island country or territory is critical for the sustainable implementation of PV systems in the region. The second half of the workshop delivered the assessment of grid stability to raise confidence in planning high shares of renewable energy integration into island grids. A preliminary result of IRENA’s pilot study in Palau in collaboration with PPA was presented, and hands-on training using the software modelling tool was provided so that participants could better understand ways to assess the levels of renewable energy

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other news

integration into island grids without affecting the energy quality. The participants generally agreed on the IRENA approach and methodology of the grid assessment but also highlighted the need for technical support in data collection and the use of the software itself. There was high expectation from the participants that IRENA will continue to support the Pacific region with technical training in these fields to develop capacity and build confidence in making the transition to renewable based islands. The next step will involve selecting two additional case

studies for the grid assessment project later in the year. The selection will be done in collaboration with PPA and the grid integration cluster of the GREIN platform. By the end of 2013, a methodology is expected to be developed. IRENA expects to continue its collaborative effort with regional players to ensure that energy security in the Pacific is strengthened through collaborative efforts.

For more information: about IRENA can be found on https://www.irena.org or you may contact Ms 'Apisake Soakai at (ASoakai@irena.org) regarding activities in the Pacific region

Efficient Renewable Energy Integration Workshop participants, Palau. (photo courtesy: IRENA)

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Pac i f i c energ is e r 


Pacific energy events calender (May–December 2013) Date

Event

Venue

Responsible agencies

Officer responsible

6–9 May

SIDS DOCK Pacific Regional Meeting

Nadi, Fiji

SIDS Dock

Al Binger (abinger@sidsdock.org)

7 May

Pacific Energy Oversight Group Meeting

Nadi, Fiji

SPC

Solomone Fifita (SolomoneF@spc.int)

6–9 May

Joint Meeting of South Asia, South East Asia and the Pacific Islands Networks of ODS officers

Gold Coast, Australia

UNEP

Artie Dubrie (dubrie@un.org)

14–18 May

IRENA Capacity Building Project – consultation with key stakeholders in the energy/renewable energy sector in Samoa

Apia, Samoa

IRENA/SPC

Kavita Rai (KRai@irena.org) Kuini Rabo (KuiniR@spc.int)

22 May

National workshop on development of legislations for appliance labelling and standards

Tarawa, Kiribati

SPC

Makereta Sauturaga (MakeretaS@spc.int)

23 May

2nd National Consultation Workshop on the review of Fiji National Energy Policy

Suva, Fiji

GIZ/SPC

Katerina Syngellakis (Katerina.syngellakis@giz.de)

23–24 May

4th Meeting of the North-REP Project Steering Committte

Pohnpei, FSM

SPC

Rupeni Mario (RupeniM@spc.int)

27–30 May

ESCAP Asian and Pacific Energy Forum (APEF 2013)

Vladivostok (Russian Federation)

ESCAP

Shaswat Sapkota (sapkotas@un.org)

28–30 May

Vienna Energy Forum

Vienna, Austria

UNIDO

M.DRAECK@unido.org

June (tbc)

Completion of installation of Phase 1–500 solar home systems

RMI

SPC

Arieta Gonelevu (ArietaG@spc.int)

6–7 June

Chuuk State Energy Summit

Weno, Chuuk, FSM

CPUC

mwaite_cpuc@mail.fm

10–14 June (tbc)

International Climate Initiative Project meeting during the Subsidiary Body session in Bonn

Bonn, Germany

SPC

Kuini Rabo (KuiniR@spc.int)

17 June

Train the trainers workshop on grid connected solar PV systems and energy efficiency building construction and retrofitting

Palau Community College, Koror

SPC

William Thorp (WilliamT@spc.int)

19–20 June

Solomon Islands National Energy Forum

Honiara, Solomon Islands

SPC

Koin Etuati (KoinE@spc.int) Makereta Sauturaga (MakeretaS@spc.int)

24–28 June

SPC-USP joint community workshop – climate change adaptation and gender mainstreaming. Global Ideas Germany – to film documentary report of the ICI project work in Fiji – pre-test of the gender toolkit

Kuini Rabo (KuiniR@spc.int) Nadave, Fiji

SPC/USPECCA Project

Leone Limalevu (leone.limalevu@usp.ac.fj) Sainimere Veitata (sainimere.veitata@usp.ac.fj)

26 June

National workshop on development of for appliance labelling and standards

Tonga

SPC

Makereta Sauturaga (MakeretaS@spc.int)

27 June–1 July (tbc)

Global Ideas Germany – to film documentary report of the ICI project work in Kiribati – gender mainstreaming into adaptation activities

Kiribati

SPC

Kuini Rabo (KuiniR@spc.int)

July

Finalisation of grid connected PV systems & EE building construction & retrofitting courses & certification

Palau Community College, Koror

SPC

William Thorp (WilliamT@spc.int) Rupeni Mario (RupeniM@spc.int)


Pacific energy events calender (May–December 2013) Date

Event

Venue

Responsible agencies

Officer responsible

July (tbc)

Nauru Energy Roadmap national workshop

Nauru

GIZ-CCCPIR SPC / IRENA

Katerina Syngellakis (Katerina.syngellakis@giz.de)

1–5 July

IPCC Assessment Report 5: Lead Authors Meeting 4

Addis Ababa, Ethiopia

SPC

Solomone Fifita (SolomoneF@spc.int)

8–12 July

Pacific Climate Change Roundtable Meeting including the Mitigation Working Group

Nadi, Fiji

SPC/SPREP

15–19 July

Pacific Power Association 2013 Conference

Koror, Palau

PPA

Gordon Chang (gordonc@ppa.org.fj)

July (tbc)

PALS in-country consultation

Tuvalu

SPC

Makereta Sauturaga (MakeretaS@spc.int)

Nauru

SPC/USPEUGCCA Project

Kuini Rabo (KuiniR@spc.int)

August (tbc)

Nauru National Climate Change Workshop – gender mainstreaming in energy and climate change policies for parlimentarians

August (tbc)

Subregional workshop on compilation of 2010 and 2011 energy security indicator profile

Suva, Fiji

SPC

Frank Vukikomoala (FrankV@spc.int)

5 August

Smaller Islands States Official meeting

Suva, Fiji

PIFS

Scott Hook (scotth@forumsec.org.fj)

6–7 August

Placific Plan Action Committee meeting

Suva, Fiji

PIFS

Scott Hook (scotth@forumsec.org.fj)

8–9 August

Forum Officials Committee meeting

Suva, Fiji

PIFS

Scott Hook (scotth@forumsec.org.fj)

August (tbc)

3rd Steering Committee Meeting for PALS Programme

Suva, Fiji

SPC

Makereta Sauturaga (MakeretaS@spc.int)

August (end)

Conclusion of installation of solar PV equipment & commissioning

Outer islands of Chuuk & Yap, FSM

SPC, YSPSC & CPUC

Emanuele Taibi (EmanueleT@spc.int)

September

Energy Symposium (North-REP)

RMI

SPC

3–6 September

44th Pacific Islands Forum Leaders meeting

Majuro, RMI

PIFS

Scott Hook (scotth@forumsec.org.fj)

October (tbc)

Regional Petroleum Workshop

Suva, Fiji

SPC

Pritanshu Singh (PritanshuS@spc.int)

12–16 November

43rd CRGA

Suva, Fiji

SPC

Solomone Fifita (SolomoneF@spc.int)

December (tbc)

Meeting of the Pacific Energy Advisory Group

Suva, Fiji

SPC

Solomone Fifita (SolomoneF@spc.int)

December

Commissioning of the Nanpil Hydro Power Plant

Pohnpei, FSM

SPC & PUC

Emanuele Taibi (EmanueleT@spc.int) Rupeni Mario (RupeniM@spc.int)

Solomone Fifita (SolomoneF@spc.int) Netatua Pelesikoti (NetatuaP@sprep.org)

Abe Aremwa (abe.aremwa@rocketmail.com)

Rupeni Mario (RupeniM@spc.int) Arieta Gonelevu (ArietaG@spc.int) Rupeni Mario (RupeniM@spc.int)

energy Programme Economic Development Division Secretariat of the Pacific Community Private Mail Bag, Suva, Fiji Email: energy@spc.int | Telephone: +679 337 0733 Fax: +679 337 0146 | Website: www.spc.int/edd


Pacific energiser issue 11