ISSUE 13 OCTOBER 2013 PacificEnergiser

OCTOBER 2013 ISSUE 13

NEWSLETTERE C O N O M I C D E V E L O P M E N T D I V I S I O NPacific Energiser

NEWSLETTERE C O N O M I C D E V E L O P M E N T D I V I S I O NPacific Energiser ISSUEOCTOBER 2013

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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.

In this issue:

Capacity development, planning,policy and regulatory frameworks

Access to modern energy services – Cooking for Life Initiative .........5

Key activities for the ‘Gender in Adaptation and Low Carbon Development – International Initiative for Climate Change’ project, SPC Energy Programme .......................................................................7

ICCC sets out bright future for Papua New Guinea’s electricity industry ...............................................................................9

Energy production and supply (petroleum)

Third quarter 2013 oil market report (July–September) ......................10

Pacific Fuel Price Monitor Q3 – 2013 ....................................................13

Price regulation and competition in the energy sector in small island states: An examination of the LPG pricing structure in the Fijian market...............................................................20

Energy production and supply (renewable energy)

Wind resource monitoring in the North Pacific ....................................22

How the North-REP project is improving livelihoods in remote communities in the North Pacific .........................................................23

End-use energy consumption

Vanuatu recruits Support Officer for PALS Project ..............................25

Other news

IRENA in the Pacific ..............................................................................26

Promoting the clean development mechanism in the Pacific .............28

Jesse Benjamin sets new direction for Vanuatu’s Department of Energy ..........................................................................30

A Pacific’s first ......................................................................................31

North-REP farewell ..............................................................................31

Pacific energy events calender (October 2013–September 2014) ..................................................32

Cover photo supplied by William Thorp, SPC.

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

Solomone Fifita

Editorial

Bula everyone

The last few months has seen very interesting developments in the energy landscape of the region.

In August, we had a series of events that were run back-to-back in an effort to save costs and minimise the absence

of national and regional experts from their offices and responsibilities.

First were the multi-partite review and project board meeting of the Secretariat of the Pacific Regional Environment Programme’s Pacific Islands Greenhouse Gas Abatement through Renewable Energy Project (PIGGAREP). These were followed by SPC’s energy data-base workshop, a petroleum pricing workshop and a project steering committee meeting for its Australia-funded Pacific Appliance Labelling and Standards (PALS) programme. The series ended with an International Renewable Energy Agency / Sustainable Energy Industry Association of the Pacific Islands / Pacific Power Association (IRENA/SEIAPI/PPA) workshop on Harmonised Technical Guidlines for Photovoltaic Systems in the Pacific Islands. While the exact financial benefits are yet to be determined, it is obvious that the spirit of cooperation under the banner of ‘many partners, one team’ is alive and well in the Pacific, at both national and regional levels.

The 44th Pacific Islands Forum meeting was held in Majuro in Marshall Islands on 4–5 September. Following on from the Pacific Leaders’ Energy Summit in Tonga and the Pacific Energy Summit in New Zealand earlier in the year, the Leaders supported the initiative by Tonga to establish a Pacific regional data repository for Sustainable Energy for All (SE4All).

I had the opportunity to attend the Vienna Energy Forum in June, where the SE4ALL Global Tracking Framework was launched. There is no doubt that, for our region to participate meaningfully in the SE4ALL initiative, we need major improvements in the quality as well as the accessibility of energy data. While this is an area that has been mandated to SPC, every effort to support this very important area is most welcome. Tonga’s leadership and vision to get the Leaders’ support, as well as having the declaration on establishing the Pacific regional data repository for SE4ALL

signed during the 68th UN General Assembly in New York, are very much appreciated.

The Leaders also welcomed the proposal by SPC and partner agencies to organise a Pacific Energy and Transport Ministers’ meeting in 2014. Given that 2014 is the beginning of the UN’s Decade of SE4All, this meeting is an opportunity to carry out a Pacific launch of the decade. Directly relating to this launch is the Leaders’ endorsement of the Majuro Declaration for Climate Leadership. The declaration is intended to highlight the Leaders’ strong political commitment to being a region of climate leaders, and is an effort to spark a new wave of climate leadership that accelerates the reduction and phasing down of greenhouse gas pollution worldwide. The declaration recognises the unique vulnerability of the Pacific Islands to climate change, the predicted catastrophic impacts on the security and livelihoods of its people, and the significant benefits that come with a transition to renewable, clean and sustainable energy sources. The Leaders confirmed their climate leadership in the form of energy and greenhouse gas emission targets. The Ministers’ meeting in 2014 is therefore seen as an opportunity to adopt some concrete regional commitments / targets as part of the launch of the Decade of SE4All which, when translated to adoption of the national level, will contribute to meeting the Leaders’ commitments.

Among the regional commitments under consideration are the following.1. The phasing out of inefficient incandescent light bulbs from

the PacificMany countries around the world have taken this option and the Pacific risks being a safe haven for these inefficient lights. 2. The removal of inefficient subsidies on fossil fuelsOne of the key constraints to investments in renewable energy and energy efficiency is the biased subsidies on fossil fuel. 3. The adoption of a regional guideline and standard for solar

photovoltaic systems

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EDITORIAL

IRENA, PPA and SEIAPI have worked hard on developing this standard and guidelines in order to ensure equipment used in the region meets a certain quality and performance standards and therefore avoid early systems failures. These three regional commitments will not only support the region’s SE4All effort, but they will also position the region to align with the current discussions and thinking in the post-2015 agenda.

In this issue of the Energiser, I am very much heartened by the contributions from the Independent Consumer and Competition Commission of PNG and its effort to shape the future of the electricity industry and facilitate accessible, reliable and affordable electricity for all in PNG. With the kind contributions from countries, SPC’s Petroleum Advisory Services continue to provide excellent analysis and

presentations of the petroleum prices across the region. The Fiji Commerce Commission has generously shared how they achieved a 20% reduction in LPG prices. The sharing of these best practices is very much welcome and acknowledged.

Finally, we farewell the three North REP Energy Specialists, Arieta, Emanuele and William. On the more positive side, we congratulate Benjamin Jesse on his appointment to be Vanuatu’s first Director of Energy and Tevita Tukunga of Tonga on being awarded with a PhD in Electrical Engineering. The Regional Energy Programme is proud to have been associated with the career and capacity developments of these two gentlemen.

‘Ofa atuSolomone

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CAPACITY DEVELOPMENT, PLANNING, POLICY AND REGULATORY FRAMEWORKS

Access to modern energy services – Cooking for Life Initiative

The Sustainable Energy for All (SE4All) initiative developed by the UN Secretary General and endorsed

by the global community at the RIO +20 conferences in June 2012 (which the Pacific Island countries participated in) has three interrelated goals to be achieved by 2030:■ Universal access to modern energy services; ■ Doubling the rate of improvement in energy efficiency;

and■ Doubling the share of renewable energy in the global

energy mix.

According to the United Nations and SE4All, 1.3 billion people lack electricity to light their homes or conduct business. Twice that number – nearly 40% of the world’s population of 7 billion – rely on wood, coal, charcoal, or animal waste to cook their food on antiquated stoves or open

fires, breathing in toxic smoke that causes lung disease and kills nearly two million people a year, most of them women and children.

The Secretariat of the Pacific Community (SPC) Energy Programme categorised the access to modern forms of energy into two types: access to modern forms of lighting and access to modern forms of cooking. According to 2009 SPC energy security indicators data for the 14 Forum Island countries, 662,798 households – around 38.4% of the total househols in these 14 countries – have access to modern forms of cooking. Hence, more than half of Pacific households (62.6%) are still cooking with traditional and dirty cooking fuels such as kerosene and open fires fuelled by biomass.

Source: SPC Energy Security Indicators Data

SPC has engaged with a global initiative called the Cooking for Life Initiative (CFL) to promote the use of cleaner cooking fuel such as LPG (liquefied petroleum gas). The CFL is a five-year global campaign to reduce death and illness caused by lack of access to clean cooking fuels. Another focus of the CFL is to assist in achieving Goal 1 under SE4ALL: universal access to modern energy services, in particular for cooking.

In collaboration with the Kiribati Energy Planning Unit, SPC is developing a Cooking for Life and Heating Strategy. The strategy is to include activities for phasing out use of kerosene with LPG and promoting improved biomass cooking stoves to replace open fire cooking. Promoting

improved stoves is included because a high percentage of households still rely on biomass sources for cooking.

A recent publication by SPC and Kiribati Energy Planning

Unit titled Kiribati Energy Statistics Year Book 2000–2009 showed an increase of 15.6% in energy end use consumption during the 10-year period. The residential sector end use consumption by type of energy source shows that biomass (coconut residue and wood waste) continues to have the highest energy value at 509 TJ, followed by petroleum products (26 TJ), electricity (22 TJ) and solar energy (1 TJ). Biomass is used for drying of copra and fish, cooking food and boiling water mainly on South Tarawa and Betio.

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As part of the process of developing the CFL and Heating Strategy, a household survey was conducted in May 2013. The preliminary analysis shows that the current dominant source of cooking fuel in South Tarawa and Betio is kerosene, followed by biomass and LPG. The 2010 census report stated that 4,158 households on South Tarawa and Betio – a high proportion (60%)of the total number of households – use kerosene for cooking, while 3085 (35%) use biomass and only 365 (32%) households use LPG. However, for the whole of Kiribati, (Gilbert Islands and the Line and Phoenix Groups) biomass is the predominant form of cooking.

Consultations with different stakeholders including the private sector, government ministries, and development partners and youth groups were conducted in the week of 9 to 13 September 2013 through face-to-face interviews, focus group discussions and a national workshop. A major challenge identified with respect to the use of LPG is the high start-up capital cost. Another challenge is the lack of understanding and awareness on safety and health measures relating to LPG for cooking. A third challenge is the accessibility of LPG for most households. While kerosene is readily accessible at the small shops in every village, LPG is usually sold at gas stations and is therefore not as accessible. The proposed strategy is therefore looking at activities to reduce these

challenges and identify actions to meet the proposed target to ‘reduce kerosene use to 2,000 households by 2015 (baseline year is 2010)’.

Open fire cooking is still a common practice in South Tarawa and Betio, and usually children are tasked with collecting firewood for everyday cooking. The Kiribati Energy Planning Unit highlighted the need for an appropriate improved cooking stove that could reduce the hardship of collecting firewood.

SPC is currently liaising with the EzyLife, a company that manufactures improved stoves, to procure samples for demonstrations in Kiribati and other interested countries. A proposed target on the use of energy efficient stoves is to reduce the use of open fire cooking by 2,000 households in favour of improved stoves by 2015.

For more information:Koin EtuatiEnergy Policy OfficerEnergy Programme, EDD, [email protected]

1. Kiribati woman filling kerosene2. National workshop on developing the cooking

for life and heating strategy3. Youth group discussion on cooking for life and

heating strategy

(photo courtesy: SPC)1 23

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Key activities for the ‘Gender in Adaptation and Low Carbon Development – International Initiative for Climate Change’ project, SPC Energy ProgrammeThe Gender in Adaptation and Low Carbon Development – International Initiative for Climate Change project currently being implemented by the Secretariat of the Pacific Community (SPC) Energy Programme implemented the following project activities for this quarter:

1. Co-facilitated with GIZ the gender session at the Fiji National Climate Change Summit

The 2nd Fiji National Climate Change Summit was held 12–16 August 2013. We are grateful to German international cooperation agency Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) and the Fiji Ministry of Foreign Affairs for inviting us to co-facilitate the gender sessions on 12 August. The gender session focused on training the participants on understanding gender and mapping the vulnerability level of each group in a community, and closed with an interactive session where participants shared best practices from their communities. A total of 24 participants were trained at the gender session. Both male and female participants were keen to learn more and found the session very informative. Participants viewed mainstreaming gender at the local level is the key tool for any community/village to successfully implement sustainable development initiatives.

2. Global Ideas, Deutsche Welle – Germany film to document project activities in Kiribati

and Fiji

Global Ideas, Deutsche Welle filmed project activities in Kiribati and Fiji, mainly focusing on how the capacity building gender training workshops have affected the livelihoods of women and men in the village and how they have put in practice lessons learnt from the training to be

positive agents of change in their community. Filming in Daku village was conducted on 1–3 September and showed how men and women of Daku are working together to fight the impacts of climate change. It also included the women’s leader ‘Virisila’ – one of our active participants, showing how through her leadership she is able to empower other women in Daku in the area of gender concepts and their relation to daily work and efforts to adapt to the impact of climate change.

Filming in Kiribati at one of the project sites focused on two school teachers who were trained in gender concepts and how to conduct classroom lessons for their students on climate change and the importance of boys’ and girls’ gender roles in adapting to its effects. The team was also honoured to have a special interview with His Excellency the President of Kiribati. The seven-minute documentary can be viewed on this link: http://www.dw.de/program/global-3000/s-11487-9798.The Fiji documentary will be available in November and both documentaries will be aired on Pacific Way.

3. Completion of the gender toolkit for community practitioners in climate change adaptation and energy projects and preparation for the launch in Cook Islands

Another project milestone was achieved during this period – the completion of the Toolkit to Mainstream Gender into


Filming team in Daku, Fiji(photo courtesy: Global Ideas Deutsche Welle)

The fight against climate change – Women from Daku Village builds on gender equality to fight against climate change

(photo courtesy: Global Ideas Deutsche Welle)


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Energy, & Climate Change Community Based Adaptation Projects in the Pacific. The toolkit aims to assist community practitioners to implement a gender inclusive energy and climate change project.

The toolkit recognises the varied capacities of community-based organisations and therefore it was designed around simple and practical learning techniques to communicate key guidelines and principles of gender inclusion and equity in energy and climate change adaptation projects. The toolkit aims to provide guidance to community practitioners in the Pacific region for the process of gender inclusion, providing them with case studies and practical tools to integrate a gender sensitive approach for the sustainability of community projects.

The toolkit consists of five training modules. The first two modules provide the basis for understanding gender concepts and mainstreaming gender. Modules 3, 4, and 5 look specifically at applying gender sensitive approaches in energy and climate change community-based adaptation. The final chapter introduces some practical tools and techniques commonly used to enable project implementers to successfully implement gender inclusive climate change adaptation and energy projects.

After intensive gender inclusive training, desk top reviews of related information and pre-testing of the draft toolkit with communities in Kiribati and Fiji, we are happy to launch the toolkit at the Gender and Climate Change side event during the Twelfth Conference of Pacific Women and the Fifth Pacific Ministers for Women meeting. The conference

takes place 20–25 October 2013 in Rarotonga, Cook Islands. The launch aims to get country officials and gender experts to review the toolkit and provide the countries a sense of ownership in using the training manual. Feedback from countries will be considered and the final copy will be printed for distribution in November.

In conjunction with the launch at the conference in Cook Islands, the toolkit will also be presented online on the project’s Global Learning Platform. The platform is part of the project and is implemented collaboratively by GenderCC (Germany), Center for Global Change (Bangladesh) and SPC. The platform provides an interactive forum connecting the international community and Pacific Island countries and territories on gender issues in relation to climate change and energy. This empowers Pacific women to expand their network by connecting with other women around the world working in the gender sector.

A printed copy of the toolkit will be available in November 2013.


For more information:Kuini RaboAssistant Energy OfficerEnergy Programme, EDD, [email protected]

(From left to right) SPC’s Kuini Rabo; Ana Tiara Passfield, Director of Climate Change of the Office of the Prime Minister (Cook Islands); Laura Cleary, UNWOMEN; Aliti Vunisea, SPC; Peniamina Leavai, SPREP; with New Caledonia participants during the launch of the tool kit in Cook Islands

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ICCC sets out bright future for Papua New Guinea’s electricity industryIn July, the Independent Consumer and Competition Commission (ICCC) worked on new regulatory arrangements for the electricity supply sector in Papua New Guinea (PNG) and has released two reports that it hopes will shape the future of the electricity industry in Papua New Guinea and facilitate accessible, reliable and affordable electricity for the population.

The first key document is the proposed 2013–2017 Power Regulatory Contract.This is a contract between ICCC

and PNG Power. It establishes the prices, service standards and capital works expenditure programme of PNG Power for the next five years. It is accompanied by a detailed draft report, which explains the proposed regulatory changes to improve the performance of PNG Power.

For the first time the contract ties price increases to the achievement of service standards. Other notable features of the contract are:

■ increased scrutiny of PNG Power’s operational and capital expenditure to ensure that imprudent expenditure is not passed on to customers;

■ increased transparency through a requirement for the development and submission of detailed regulatory accounts and publication of capital investment plans;

■ the introduction of penalties where the commission finds that PNG Power is not performing as efficiently as possible, not only to maximise shareholder returns but to provide electricity services of reasonable value and standards to the people of Papua New Guinea;

■ a range of options for the commission to investigate procurement for ‘value for money’; and

■ verification of demand projections.

PNG Power has agreed to these proposed new features of the contract.

The second key document published by the ICCC in July is the Draft Third Party Access Code. Developed with assistance from the World Bank, the code lays out the ground rules for potential new entrants for the generation and supply of electricity in Papua New Guinea. It is hoped that the code will facilitate the entry of independent power producers (IPPs) to increase the supply of electricity, reduce brown-outs and load shedding, and improve the reliability of the

network, while protecting the interests of existing providers and the public. The code achieves this by:

■ improving the reliability of electricity supply by supporting entry of IPPs to ensure sufficient generating capacity is available;

■ improving transparency with regard to power purchase contracting between IPPs and regulated retailers;

■ protecting transmission network operators’ commercial interests by clarifying how they are remunerated by third parties connecting to and using their network;

■ allowing third party retailers to use electricity networks to reach customers who would not otherwise have access to electricity; and

■ helping ensure that power is affordable for customers by increasing the range of potential supply options, thereby offering more opportunities to select a least-cost option.

In addition to its work with the electricity industry, ICCC continues to be active in the regulatory oversight of other industries vital to the lives of Papua New Guineans, including: post, ports, petroleum products, public transport, third party motor vehicle insurance, stevedoring, and water and sewage.

ICCC also remains vigilant in ensuring that the interests of consumers are protected through its work in product safety and consumer affairs.

Copies of the contract, the report and the code can be downloaded from the ICCC website www.iccc.gov.pg.For further clarification, please contact:


For more information:Jack TimiExecutive Manager-Regulated Industries DivisionIndependent Consumer & Competition Commission(ICCC), Papua New [email protected]


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ENERGY PRODUCTION AND SUPPLY | PETROLEUM

Third quarter 2013 oil market report (July–September)The Asia Pacific benchmark Dated Brent crude averaged USD 107.68/barrel in July, representing a gain of USD 4.81 over the previous month. Dated Brent continued to gain strength in August, averaging USD 111.40/barrel, but declined in September by USD 1.26 to USD 110.15. Compared to the second quarter of 2013, the price of Dated Brent crude in the third quarter increased from USD 102.75 to USD 109.65.

Petroleum product prices exhibited a mixed performance in July. In Asia, gasoline and gasoil (diesel) prices continued to rise on higher seasonal demands. Sentiments further improved due to temporary tight supply as a result of refinery outages in India and Malaysia. Jet/kerosene prices were supported by an increase in demand from the Middle East and Africa amid decreasing inventories in Singapore. Refinery margins in Asia continued at the level reached during the previous month, around an average of USD 4/barrel.

Unresolved oil supply issues in Libya and geopolitical concerns over Syria in August saw an increase in crude prices. While Asian gasoline prices decreased in August, jet/kerosene and gasoil prices increased. Asian gasoline prices dropped due to lower seasonal demand amid increasing supply in the market, causing gasoline price to decrease by not more than USD 4/barrel. On the other hand Asian gasoil prices increased due to steady demand from Africa and Asia amid reduced supply from North Asian refiners and refinery problems and low stock levels in Singapore. Attractive jet fuel price in the United States and Europe caused regional suppliers to divert their supply away from Asian markets towards the United States and European markets, resulting in jet fuel supply at Asian refineries becoming relatively tight, and in turn causing Asian jet/kerosene price to increase.

*Source: Platts Asia-Pacific/Arab Gulf Marketscan

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Easing geopolitical tensions with the aversion of a potential US-led military strike on Syria moved global crude prices lower in September. As a result, mean of Platts Singapore prices for all petroleum products decreased in September. Asian gasoline prices decreased as result of depreciation of currencies in emerging countries like India, Indonesia and Malaysia as well as due to weak Indonesian demand and drop in the United States gasoline market. Jet/kerosene prices continued to stay low as a result of excess supply and muted demand. Thin regional demand and increasing gasoil stock in the market resulted in Asian gasoil prices decreasing in September.

Middle distillate refining margins have been significantly higher than those for gasoline since July 2012, indicating that regional demand for jet and diesel fuel has been supporting petroleum product prices for the past year.


*Note: Dated Brent crude oil used for calculating refiners margin.

Refiners margin compared with Dated Brent price


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Freight rates

Freight rates strengthened in the third quarter of 2013. Clean spot freight rates fell by close to 8% in July but increased in August, with east of Suez spot rates climbing by 4%, and continued to increase in September by 11% as a result of port delays and increase in medium range tanker (MRT) activity in Singapore as MRTs were charted for short haul voyages. The average rate for this quarter stood at around 157WS, a decrease of close to 10% compared to the previous quarter.

Exchange rates

All the major Pacific Island currencies showed slight fluctuations against the US dollar in the third quarter. The Kina continuously depreciated against US dollar from July to September, while the Samoan Tala, Vatu and XPF remained relatively stable.

Source: Data and information in this article are sourced from Platts Asia-Pacific/Arab Gulf Marketscan (The McGraw-Hill Companies, Inc).

You can forward your queries and price data to:Pritanshu Singh | Assistant Petroluem Officer | Energy Programme, EDD, SPC | [email protected]


*Exchange rates were sourced from www.oanda.com

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Pacific Fuel Price Monitor Q3 – 2013Pacific fuel prices for July–September 2013 (Q3 – 2013)

Pacific fuel price monitor at a glance

For Q3 – 2013, American Samoa (AmSam) had the lowest retail Mogas prices in the Pacific Islands region. Before tax, the AmSam Mogas price is comparable with Australia and New Zealand prices. The highest Mogas prices were in Wallis and Futuna, Niue and Cook Islands.

For diesel fuel (ADO), the lowest price was in AmSam as well; however, pre-tax, New Caledonia had the lowest price, followed by Fiji, AmSam and Samoa, all of which were lower than Australia and New Zealand. The highest ADO prices were in Wallis and Futuna, Niue, Cook Islands and Vanuatu; however, pre-tax, Solomon Islands’ ADO price overtook that of Vanuatu for fourth highest.

Fewer Pacific Island countries and territories (PICTs) report kerosene prices; however, the lowest reported prices were in AmSam and Fiji, joined by Samoa before tax. Highest kerosene prices were in Wallis and Futuna and Niue both before and after tax.

The crude oil price during the July–September period was USD 109.65/barrel, an increase of 6.72% from the previous period.

1. Regional retail fuel prices (Including duty and taxes)

Figure 1: Retail fuel prices (including duty and taxes)


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2. Mogas prices

Figure 2: Retail Mogas prices (including tax and duty)

Key observations – Mogas

■ The Pacific-wide average pre-tax and after-tax retail price for Mogas was USD 1.24/litre and USD 1.67/litre respectively.■ Average pre-tax and after-tax wholesale price for Mogas was USD 1.04/litre and USD 1.36/litre. ■ Average MOPS price for Mogas 92 and 95 RON was USD 116.02/bbl and USD 118.83/bbl respectively.

Figure 3: Retail Mogas prices (excluding tax and duty)

Mogas price excluding tax and duty

Mogas price including tax and duty

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3. Automotive diesel prices

Figure 4: Retail ADO Prices (including tax and duty)

Key observations – diesel fuel

■ The Pacific-wide average pre-tax and after-tax retail price for ADO was USD 1.24/litre and USD 1.59/litre.■ Average pre-tax and after-tax wholesale price for ADO was USD 1.03/litre and USD 1.28/litre.■ Average MOPS for gasoil 10 ppm and 500 ppm was USD 125.58/bbl and USD 123.59/bbl respectively.

Figure 5: Retail ADO prices (excluding tax and duty)

ADO prices including tax and duty

ADO prices excluding tax and duty

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Figure 6: Retail kerosene prices (including tax and duty)

4. Kerosene prices

Key observations – kerosene

■ The Pacific-wide average pre-tax and after-tax retail price for kerosene was USD 1.21/litre and USD 1.46/litre respectively.■ Average MOPS for Asian dual purpose kerosene was USD 123.17/bbl.

Figure 7: Retail kerosene prices (excluding tax and duty)

Kerosene price excluding tax and duty

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5. Petroleum imports (excludes re-exported volumes)

The graphs in Figures 8 and 9 plot the Q3 – 2013 average prices against the annual volume of that fuel. The size of the ball represents the annual total volume of all fuels, an indicator of the import economies of scale available. (Note: PNG total volume includes Interoil refinery production.)

Figure 8: Mogas retail prices Q3 – 2013 and annual volume

Figure 9: Diesel retail prices Q3 – 2013 and annual volume

Key observations – fuel volumes

■ AmSam and Samoa are clearly achieving good economies of scale for both Mogas and ADO. Solomon Islands, with a total market size similar to AmSam, is significantly underperforming in terms of achieving low fuel prices.

■ Fiji, with its significantly larger total import volume, does not seem to be fully achieving available economies of scale. ■ PNG, the largest Pacific Island fuel market, reports very high fuel prices relative to its market size.


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6. International market trends

Asia petroleum product prices in the third quarter exhibited mixed performances, with prices fluctuating from July to September. In Q3 – 2013, Singapore free on board (FOB) prices for gasoline 92 (ULP) increased by 3.46%, kerosene surged by 6.09% while diesel (10 ppm) and (500 ppm) increased by 5.78% and 5.14% respectively.

In comparison to crude oil prices, Singapore prices for Mogas (gasoline), jet/kerosene and gasoil (diesel) during the third quarter were as follows:

USD/barrel Dated Brent Gasoline 92 RON

Gasoline 95 RON

Jet/Kerosene

Gasoil 10 ppm

Gasoil 500 ppm

Average: July 107.68 118.79 121.73 121.18 124.43 123.14

Average: August 111.40 114.67 117.11 124.73 126.37 124.14

Average:September 110.15 114.28 117.31 123.87 126.09 123.57

Figure 10: Comparison – Singapore gasoline, jet/kerosene, diesel and crude oil prices

PICTs are part of the Asia Pacific fuel market, with Singapore being the recognised regional refining and distribution centre. The relevant pricing benchmarks in the PICT fuel market are Singapore prices for diesel (10 and 500 ppm), gasoline (92 and 95 RON) and jet/kerosene prices. Prices for diesel, gasoline and jet/kerosene are provided by Platts.

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Conversions

Litres/US gallon (USG) 3.785Litres/bbl 159USG/bbl 42

You can forward your queries and price data to:Pritanshu Singh | Assistant Petroluem Officer | Energy Programme, EDD, SPC | [email protected]


Singapore gasoline, jet/kerosene and diesel price less the Dated Brent crude oil price

Figure 11: Difference between market prices

The refiner’s margin is the difference between market prices for gasoline, diesel and jet/kerosene and Dated Brent prices.

7. Glossary and conversions

Abbreviations and definition of key termsADO Automotive diesel oil or diesel fuel After-tax price Prices including tax and dutybbl Barrel (of oil), approximately 159 litres DPK Dual purpose kerosene (i.e. jet fuel and household use)FOB Free on boardGasoil Refinery designation of diesel fuel kl KilolitresMogas Motor gasoline – normally unleaded MR Medium range tankers, generally 20,000–30,000 metric tonnesPacific-wide All surveyed Pacific Island countries (excluding Australia and New Zealand)Pump price Refer to retail pricePre-tax price Price excluding tax and dutyRetail price Fuel price at retail/service stations, also called pump priceRON Research octane numberS Sulfur content (usually in diesel fuel)ULP Unleaded petrolUSD/l US dollars per litre

Disclaimer*The Secretariat of the Pacific Community has taken care in preparing these analyses. However, noting that the data in the analyses has been provided by third parties, SPC gives no guarantee as to its accuracy and reliability.** Figures 10 and 11 are generated using MOPS data sourced from Platts Asia-Pacific/Arab Gulf Marketscan.

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Price regulation and competition in the energy sector in small island states:An examination of the LPG pricing structure in the Fijian market

The provision of regular and reliable energy supply is critical to the functioning of any economy. Availability and reasonable cost of appropriate forms of energy are needed to attract private productive investments that create employment, alleviate

poverty and increase exports.

Island states such as Fiji are facing the dual pressures of requirements for economic growth and environmental protection in the 21st century. An affordable and stable supply of energy is a mainstay of the economy and of social development.

The liquefied petroleum gas (LPG) industry plays an important role in Fiji. LPG is an energy source used in many ways in Fiji, including by the business, industry, transportation, education and household sectors.

LPG is a gaseous hydrocarbon which is liquid under pressure. Its main components are normally butane and propane; however, the LPG imported and sold in Fiji is mainly butane.

World LPG prices generally move in line with crude oil prices and, in recent years, the Saudi Aramco LPG Contract Price (CP) has been widely used as a reference price on which producers and wholesalers base negotiations.

Source: http://lpgaustralia.com.au/site/industry_data.php LPG in Fiji consists of 100% butane

In recent years, price hikes for LPG have become a major concern for island states, compounded by domestic factors such as few market players. To manage domestic LPG prices, the Fiji Commerce Commission via Order 2012 (Control of Prices for the Supply of LPG in Fiji) determines margins after allowing for the operational costs of wholesalers and retailers.

The Commission determines LPG prices based on a cost-plus pricing methodology. The allowable cost components, apart from FOB (free on board) butane are: freight, insurance, clearance charges, operating costs and taxes.

Price restatements are done on a quarterly basis to ensure that frequent variations in prices do not have major impacts on the cash flow and profitability of suppliers’ operations. Price stability also enables consumers to make better informed decisions on consumption and allocation of their resources, which contributes to financial stability in the community.

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Source: Fiji Commerce Commission

Since the introduction of price control in Fiji, the Commission has conducted two quarterly price re-statements, in August 2012 and October 2012, and three restatements in 2013. The overall change in costs compared with the situation prior to price control has resulted in a significant price reduction of 20% for cylinder and 30% for bulk supply, and minor changes in the price for auto gas.

The implementation of price control and quarterly price restatements to stabilise prices has contributed substantially to achieving Fiji’s broader economic goals, such as higher standards of living, increased economic activity and more jobs.


For more information:Narend PrasadSenior Research OfficerFiji Commerce [email protected]

Joel AbrahamSenior Research FellowFiji Commerce [email protected]

Donish LalSenior Research OfficerFiji Commerce [email protected]

or or

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ENERGY PRODUCTION AND SUPPLY | RENEWABLE ENERGY

Wind resource monitoring in the North Pacific

Reliable and up-to-date resource data that is publically accessible is critical to private sector investment in renewable energy in Pacific Island countries and territories.

Effective planning for a sustainable energy sector is not possible in the absence of high-quality data. Data

can take a long time to gather so measurement must be initiated well in advance of when it is needed.

The European Union-funded North Pacific ACP Renewable Energy and Energy Efficiency (North-REP) continues to work on improving the quality of life and reducing dependency on fossil fuels in the outer islands of the Federated States of Micronesia (FSM), Palau and the Republic of Marshall Islands (RMI).

As part of the project, seven wind resource monitoring masts have been installed in FSM, Palau and RMI.

In RMI, masts were installed for the Action for the Development of Marshall Islands Renewable Energies (ADMIRE) project in Jaluit and Wotje in 2012. In 2013, three masts were installed in Palau for the North-REP project at Ngardmau, Melekeok and Ngaraard. Two further masts were installed for the North-REP project in the FSM islands of Chuuk and Tonoas in September 2013. The masts are expected to be in place for at least two years.

‘The masts are 34 m tall, tubular and of guyed design. Each mast has three anemometers, one wind vane, pyranometers for measuring solar radiation and temperature sensors. The two RMI masts also have pressure sensors. The statistics gathered from each of these sensors include maximum 3-second, mean, minimum 3-second and standard deviation (to measure wind speed). These are all recorded every 10 minutes,’ said William Thorp, North-REP Energy Specialist for Palau.

‘Two anemometers are mounted at the top of the mast (one redundant) and one is mounted at approximately 20 m, with the boom aligned in the same direction as one of the top anemometers,’ added William Thorp.

Consequently, the wind statistics can be predicted at heights other than the measured heights. The mast locations were selected for their expected exposure to the best wind resource, for their future potential as wind energy generation sites and for practical reasons, including land ownership, ease of access, etc.

Accurate predictions of a site’s mean wind speed over longer periods of time are only possible after at least one year of monitoring. At this time, only the RMI masts have been in place for a full year. Viable wind energy production using commercial wind turbines generally requires a minimum of about 6 m/s. The wind resource recorded at these masts is particularly encouraging.

The wind data gathered can be used in conjunction with flow-modelling software, digital elevation and land-use maps to predict wind resource maps of the regions in which the masts are situated.

William Thorp, who is responsible for North-REP’s wind resource monitoring activities, has trained staff at the countries’ utility companies (Marshalls Energy Company, Palau Public Utilities Corporation and Chuuk Public Utilities Corporation in FSM) to inspect the equipment, collect and securely store the data, and also provide summary reports on the data.

The North-REP programme aims to improve the overall efficiency of the energy sector through energy efficiency and grid-connected renewable energy in RMI, FSM and Palau, and to increase access to reliable renewable electricity services for remote populations in RMI and FSM.

*Installation reports and summaries of the RMI data are presented at www.mecrmi.net/renewable%20energy.htm under the heading ‘Wind Systems’. A summary of the data collected by CPUC is presented at www.cpuc.fm/renewable-cpuc/wind-power/.

Wind mast installation in Tonoas, FSM (photo courtesy: SPC)

Pacific energiser

For more information:Rupeni MarioNorth-REP Team LeaderEnergy Programme, EDD, [email protected]

North Pacific ACP Renewable Energy and Energy Efficiency Project

NORTHREPFUNDED BY THE EUROPEAN UNION

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How the North-REP project is improving livelihoods in remote communities in the North PacificFor the first time, some communities in the outer Marshall Islands are connected to an electricity supply. The North Pacific ACP Renewable Energy Efficiency Project (North-REP) is providing access to grid-connected electricity in households, schools, and dispensaries. North-REP is also training staff at government ministries and utility companies in energy efficiency, and setting up maintenance programmes to ensure the equipment can be locally maintained and repaired. The work is improving energy security by increasing access to a reliable supply and reducing growth in demand through energy efficiency measures.

Many rural households on the outer islands of the Republic of the Marshall Islands (RMI) do not have

access to safe, clean and affordable electricity. This has wide socio-economic consequences, such as restricting hours of income opportunities in which productive work can be performed, and affecting health and education services – children cannot study in the evening and medicines cannot be refrigerated. Access to affordable and reliable modern energy services is, therefore, considered one of the key enablers of sustainable livelihoods in developing countries and progress towards the Millennium Development Goals.

From the start, the project has identified clear outcomes and indicators of success, to ensure implementation is focused on delivery of the desired energy services and planned benefits

are delivered to communities. To measure the impact of the project on livelihoods, verify the achievements of meaningful long-term socio-economic improvements, and monitor the sustainability of the installations, household surveys were conducted by the Secretariat of the Pacific Community (SPC) in conjunction with the Ministry of Resources and Development and Marshalls Energy Company. This was funded by the United Nations Development Programme (UNDP) Action for the Development of Marshall Islands Renewable Energies (ADMIRE) project. The surveys collected data on population demographics, current energy usage, attitudes towards improved access to electricity, and how households anticipate making use of energy services, to inform a full evaluation of the project after implementation. In total, 181 households were surveyed revealing interesting

Solar home system installation in, RMI (photo courtesy: SPC)


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patterns in energy use amongst communities surveyed, and the scope for the project to make a real impact on livelihoods.

Prior to implementation, the majority of households were only meeting their most basic energy needs – cooking and lighting – and were restricted in the amount of light they used. This has had impacts for household members participating in the economy, as well as on education and health care. Health centres can only operate limited hours and do not have electricity to power refrigerators for storing medicine.

The most common forms of energy were biomass — used almost universally for cooking — and car batteries. Sixty-four per cent of households already had access to some form of solar energy, provided by earlier donor-funded projects, and fewer than 20 per cent of households reported using diesel, kerosene, or gasoline. Interestingly, households that had access to solar home systems (SHS) were more likely to use car batteries than those without SHS. The two are often used to complement each other, rather than solar power substituting for car battery power, as 81 per cent of households with SHS use solar power to charge their car batteries.

The survey also provided information on energy usage. Energy for power and appliances was limited by the restricted availability of modern energy services. Thus, lighting was overwhelmingly the most common use for car batteries, with these commonly being used for 10–12 hours a day from around 7:00 pm. Similarly, SHS were used mostly for powering lights, though most households still used only one or two lights. It is expected that the project will deliver significant improvements in lighting availability.

The only appliances reported as being used by more than 10 per cent of households were radios and televisions, though only by a small minority. Large appliances such as washing machines, refrigerators and freezers were used by few households, possibly due to affordability, as well as lack of access to energy. Almost half of households expressed a preference for a washing machine if sufficient power was available. However, few stated a desire for a refrigerator or freezer — in contrast to urban areas where a very high percentage of demand for household electricity use is for food cooling.

Encouragingly, almost all respondents reported that they were satisfied with maintenance of the solar systems. Over

80 per cent reported that they maintained their systems themselves, a strong endorsement of the training provided and the suitability of the systems for these communities. However, 32 per cent of respondents said that it did not provide sufficient electricity. This will be an important indicator to track with new installations – to ensure that lessons have been learned, such as ensuring systems can cope with the tropical environment.

After implementation of the scheme, further surveys will enable an assessment of actual effects on household energy use and livelihoods. For instance, ‘Are more lights powered, and for longer hours?’ ‘Are more appliances owned and operated?’ ‘Do patterns of income earning activity change?’ ‘Are there effects on gender equality and opportunities for women?’

The evaluation carried out on the earlier REP 5 project observed that in Ailinglaplap, women were reported to have increased their production of handicrafts, with demonstrated growth in income. It is hoped similar improvements will be observed in this project, and that the evidence provided by these surveys will help support delivery of small-scale renewable energy to other communities where it can be the most effective means of providing quick and long-lasting access to modern services.

Article by: Neil Allison, former Energy/Transport Economist, Economic Development Division, SPC

Pacific energiser

For more information:

Rupeni MarioNorth-REP Team LeaderEnergy Programme, EDD, [email protected]

North Pacific ACP Renewable Energy and Energy Efficiency Project

NORTHREPFUNDED BY THE EUROPEAN UNION

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END-USE ENERGY CONSUMPTION

Vanuatu recruits Support Officer for PALS ProjectThe Department of Energy in Vanuatu, with financial assistance from the Secretariat of the Pacific Community (SPC), recruited a Support Officer in July 2013 to provide assistance to the National Coordinator for implementation of the ‘Pacific Appliance Labeling and Standards’ (PALS) project in Vanuatu.

The Department of Energy recently moved from the Ministry of Lands to the newly established Ministry

of Climate Change, Meteo, Geohazard, National Disaster Management Office (NDMO), Energy and Environment. The National Coordinator of the PALS project has been appointed to the post of Director of the Energy Department and is in need of effective support for PALS activities.

In welcoming Alfred Joel, the new PALS Support Officer, the National Coordinator and Director of Energy, Jesse Benjamin, said he will provide advice to the Support Officer to ensure the successful achievement of the national activities described in the annual work plan for the project. Mr Benjamin said the target for 2013 is to complete all drafting of regulations and legislation for Minimum Energy Performance Standards (MEPS) and Labelling (L) of selected electrical appliances in Vanuatu, ready for tabling in parliament.

Since the recruitment of the Support Officer, a number of presentations have been made in secondary schools and colleges around Port Vila. Raising public awareness is an important phase of the project’s activities, which mainly cover on-grid areas of Port Vila and Luganville Town in Santo.

Currently, the project is recruiting a legal consultant to assist in drafting the legislative regulations for standards and labelling for the selected appliances. According to

recommendations from SPC and the Government of Vanuatu, the regulations will firstly target refrigerators and freezers. The regulations will also ensure there is room for changes to allow regulations to be applied to other electrical appliances in the future.

The National Energy Road Map (NERM) for Vanuatu, approved in June 2013 at the 12th Ordinary Council of Ministers meeting, highlights energy efficiency and conservation as one of its key strategic areas to promote efficient supply and use of electricity in Vanuatu.

This government initiative bore fruit when the Council of Ministers concurrently approved the PALS project for Vanuatu. Establishing standards and labelling through the PALS programme is a significant start in achieving efficiency targets because it will greatly promote better use of electricity in Vanuatu, while potentially improving the level of convenience and cost effectiveness provided by the selected electrical appliances.


Alfred JoelPALS Support OfficerDepartment of Energy, [email protected]

PALS Support Officer, Alfred Joel (far right, back row) with staff and year 12 students of Sorovanga Secondary School after giving a talk on the project. (photo courtesy: NDMO)


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OTHER NEWS

IRENA in the Pacific Workshop on Harmonised Technical Guidelines for Photovoltaic Systems in the Pacific Islands

The International Renewable Energy Agency (IRENA), in collaboration with the Secretariat of the Pacific

Community (SPC), Pacific Power Association (PPA) and the Sustainable Energy Industry Association of the Pacific Islands (SEIAPI) conducted a three-day workshop on Harmonised Technical Guidelines for PV Systems in the Pacific Islands, in Nabua, Fiji on 27–29 August 2013.

The event, held at the SPC Pasifika conference room, brought together over 40 participants from electricity utilities, government departments, financing organisations, training institutions, development partner representatives and private businesses from Fiji, American Samoa, Australia, the Cook Islands, Kiribati, the Solomon Islands, Samoa and Tuvalu. The workshop focused on technical guidelines for solar photovoltaic (PV) systems, both grid-connected and off-grid, that have been jointly developed by SEIAPI and PPA. The guidelines provide simple and practical approaches commonly that have been adopted as the best practices in the industry for PV systems design, installation, repair and maintenance; consider necessary actions for taking forward technical guidelines and harmonizing existing standards where possible.

Commander Francis Kean, Fiji’s Permanent Secretary for the Ministry of Works, Transport and Public Utilities, said he hoped the guidelines would enable Pacific islands ‘to ward off the infiltration of inferior equipment in our markets and also ensure that we continue to maintain a level of competitiveness’.

Acknowledging the collaborative effort by IRENA, SPC, PPA and SEIAPI, he encouraged all stakeholders to continue learning from each other’s experiences in the continuing scale-up renewable energy.

Since 2008, the installation of grid connected solar PV systems across the region has accelerated rapidly, with installed capacity today reaching 3 megawatts (MW), expected to triple by 2015. Increasing investments in solar, wind, hydro, biomass and other renewable technologies comes in response to heavy dependence on imported petroleum fuels, which cost the region over one billion dollars annually.

Tokelau is the first island in the Pacific region to achieve of power generation from renewable energy. The Cook Islands and Tuvalu are also aiming for 100% renewable power generation. Other Pacific islands have set targets for renewable energy ranging from 20% to 90% of the energy mix in the medium to long term.

The increasing integration of renewable energy in the region, however, has drawn attention to technical complexities, such as grid stability and standards. Rapid growth also brings new players into the market, whether through net metering arrangements, independent power producer (IPP) frameworks or public-private partnerships, all of which require new thinking and new ways of doing things.

Most Pacific Island countries do not have standards in place to regulate the market. Where there are guidelines used, these are project specific and often outdated. Workshop participants noted the region’s strong reliance on Australian and New Zealand standards.

Technical standards help to ensure the quality of products and services, maintain safety at all times, and make projects bankable, leading to affordability and customer satisfaction. But these benefits will be difficult to achieve in the immediate term, due to the absence of a regulatory framework and

Participants from the Workshop on Harmonised Technical Guidelines for Photovoltaic Systems in the Pacific Islands(photo courtesy: SPC)

Pacific energiser

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OTHER NEWS

limited capabilities, including the lack of appropriate mechanisms and processes at national and regional levels.

Utilities have a critical role in the adoption and implementation of technical standards. However, national governments, the private sector, training institutions and the development community can also contribute significantly. Workshop participants called for the establishment of a ‘Pacific Standards Capacity and Networking Framework’, as well as further training at country level, including certification schemes for industry technicians.

Knowledge about technical guidelines and standards for solar PV installations is notably low across the Pacific region. Raising awareness and education the general public about the importance and benefits of adopting and implementing technical standards is essential to ensure better performance and system sustainability.

The workshop on harmonising technical standards for solar PV was part of a range of IRENA initiatives in the Pacific Islands. IRENA has conducted a Renewable Readiness Assessment workshop for Kiribati and is engaged this year in grid assessments for selected Pacific utilities. The global intergovernmental agency is also engaged in renewable energy roadmap development for Nauru, in partnership with the German International Cooperation Agency (GIZ) and the International Union for the Conservation of Nature (IUCN), with more islands to follow.

IRENA’s work supports national renewable energy strategies and the regional Framework for Action on Energy Security in the Pacific.

UAE Pacific Partnership Fund

The applications for the UAE Pacific Fund closed at the end of August. Eight project proposals were submitted from the governments of Fiji, Kiribati, Nauru, Palau, Samoa, Solomon Islands, Tonga, Tuvalu and Vanuatu. Technologies proposed were predominantly to accelerate the deployment of solar, wind, biomass and hydro in the region and a number of these projects have been bundled.

In March this year, at the Pacific Energy Leaders’ Summit in Auckland, the Government of the United Arab Emirates announced its support to the Pacific Island countries by converting USD 50 million of previously announced soft loans into untied grants. This announcement was followed by call for proposals in May and IRENA was instrumental in informing public and private operators including community groups about the benefits and terms of the Fund.

A minimum of USD 10 million will be available for the first cycle. The UAE’s renewable energy technical agency, Masdar, is currently conducting calls with each applicant so that ‘dry lab’ pre-feasibility studies can be completed by mid-October. In late October and November, it is anticipated that feasibility studies will start with a handful of governments, with a view to signing an MOU and disbursing funding by

the IRENA Assembly / Abu Dhabi Sustainability Week in January 2014.

The UAE government is committed to signing with a minimum of two countries, based on their ‘readiness’ for renewable energy, and it expects to support projects with all sovereign countries by the end of the fund lifecycle. Priority is given to countries with renewable energy policies/roadmaps and leadership commitment to deployment, including membership in IRENA.

Pacific Lighthouses: Renewable Energy Roadmapping for Islands

A set of reports has been published on the status of the renewable energy sector in 15 Pacific Island countries and territories: Cook Islands, Fiji, Federated States of Micronesia, Kiribati, Marshall Islands, Nauru, Niue, Palau, Papua New Guinea, Samoa, Solomon Islands, Tokelau, Tonga, Tuvalu and Vanuatu. The work captures each island’s progress in shifting to a renewable energy future through setting targets and taking advantage of the rich variety of renewable energy sources available locally.

The reports lists key concepts, challenges and best practices for each island can guide policy makers, private operators and the community in taking further steps towards a renewable energy economy.

Pacific Lighthouses: Renewable Energy Roadmapping for Islands consists of a main regional report along with 15 reports on specific islands. The full set is available for download at www.irena.org.

Islands Roadmap Analyst

Mr Emanuele Taibi joined IRENA at the beginning of September 2013 as Island Roadmaps Analyst. He is based at the IRENA Innovation and Technology Center in Bonn, Germany. His role is to assist island countries in the development of roadmaps for the transition to renewable energy.

Prior to joining IRENA, he was an Energy Specialist with the Secretariat of the Pacific Community (SPC). He has ten years of experience in the energy sector, with a focus on renewable energy, and has been working for the United Nations, large private energy companies and as a researcher. He has a M.Sc. in Management Engineering and is a chartered industrial engineer in Italy. Mr Taibi can be contacted at:[email protected].


Apisake SoakaiIRENA Pacific [email protected]


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OTHER NEWS

Promoting the clean development mechanism in the Pacific

Background

In 1997, the clean development mechanism (CDM), one of three carbon trading mechanisms, was developed under the Kyoto Protocol of the United Nations Framework Convention on Climate Change (UNFCCC) to offset greenhouse gas (GHG) emissions from Annex 11 countries. Tasked with evaluating climate change issues, the UNFCCC started the global negotiation on reducing global warming through GHG emissions. While the UNFCCC has no binding agreement for industrialised countries and economies in transition to reduce their GHGs by 5% below 1990 emission levels in 37 countries, the Kyoto Protocol was established with binding targets during the its ‘first compliance period’ 2008–2012.

The two other carbon trading arrangements developed through the Kyoto Protocol are: (1) emissions trading with Annex 1 countries, with

targets; and(2) ‘joint implementation’, whereby industrialised

countries invest in emission reduction projects.

CDM has been commended for its inventiveness in promoting sustainable development practices in non-industrialised countries by providing additional funds to developing countries for sustainable development. CDM is an incentive-based carbon emissions reduction (CER) programme, whereby the investor in an Annex 1 country can reduce its CER, while host countries benefit through additional funding and technology transfer. Investor countries (Annex 1 countries) are able to meet their international emission reduction targets by investing in sustainable development projects in host countries (Non-Annex 1 countries2). This provides investor countries with a fiscal benefit, as the cost of implementing projects in their own countries is more capital-intensive compared to investing in developing countries. Simply, one can say that CDM aims to achieve a reduction of GHG emissions and contribute to the implementation of sustainable development.

Potential for CDM in the Pacific region

The causes of climate change have scientifically been proven through International Panel of Climate Change reports relating to the increased use and burning of fossil fuels in the 1970s to date. The impact of climate change is evident and many Pacific Island countries (PICs) have started to feel it.

Since most PICs depend on fossil fuel to meet their energy demand across a range of sectors, including agriculture, transport and energy, escalating fuel prices add to unwanted pressure on developing island economies. While CDM provides incentives for PICs to align themselves to exploring renewable energy options to reduce the dependence on imported and expensive fossil fuels and to obtain the benefits offered, such as funding and technology transfers and sustainable long-term developments, there has been limited participation by PICs.

As parties to the Kyoto Protocol, the 14 PICs are entitled to partake in CDM projects if certain standards are met (UNFCCC, 2013). Since the registration of projects started for the first compliance period, only two countries have participated.

The Wainikasaou and Vaturu Small Hydro Plants, Fiji (Project ID–0089), registered on 1 October 2005 with combined capacities of 9.5 MW (Wainikasaou plant – 6.5 MW; and Vaturu plant – 3 MW), was developed in 2004–2005 by FEA/Pacific Hydro as a CDM project. This is a fully bank-implemented, carbon-credit project with UK’s Sustainable Energy Limited, ABN Amro Bank N.V: London branch. It has combined reduction targets of 24,928 metric tonnes CO2 equivalent per annum. Similarly, the Lihir Geothermal Power project, Papua New Guinea (Project ID–0279), registered on 29 May 2006, started in 2003 with a 6 MW pilot plant and a capacity of 55 MW subject to full commission. It is anticipated to produce 422 GWh annually, with reduction targets of 278,904 metric tonnes CO2 equivalent per annum (CDM UNFCCC).

The Wainikasaou and Vaturu Small Hydro Plants and the Lihir Geothermal Power project are two registered CDM projects in the Pacific, and there is a lot to learn from them. They could be seen as a stepping stone for more, similar renewable energy (RE) and energy efficiency (EE) projects to involve the Pacific region in the carbon trade initiative at the global level.

A few PICs have received technical assistance through the UNEP EU-funded Project Pacific regional CDM capacity-building project, which also identified potential projects. Table 1 summarises potential RE/EE CDM projects for PICs, highlighting countries’ CER targets and project status. These projects depict immense potential of RE/EE-based projects for carbon trading in Fiji and other PICs.

1 Annex 1 countries are industrialised countries that were members of the Organisation for Economic Co-operation and Development in 1992.2 Non-Annex 1 countries are mostly developing countries.

Pacific energiser

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OTHER NEWS

Table 1: List of some potential RE and EE CDM projects in PICs

Project title Country(s) Description Type Size CERs/year Status

Disseminating solar lamps and efficient cook stoves

Solomon Islands, Fiji, PNG, Vanuatu

Support use of solar lamps and efficient cook stoves

Solar light and efficient cook stoves

Small scale

First CPA: 3,790 tCO2e/year

Feasibility study finished

Small-scale hydropower plants

Solomon Islands

Small scale run-of-river hydropower plants

Electricity generation from hydro

Small scale

First CPA: 10,160 tCO2e/year


Upolu Wind Power Project

Samoa Build and operate seven 275 kW grid-corrected wind turbines

Grid-connected electricity generation from wind power

Micro-scale

2900 tCO2e/year

Selected by Samoa DNA for PIN development, feasibility study finished

Qaliwana Hydropower

Fiji A run-off-river hydropower plant

RE – hydro-power

Large 138,023 tCO2 in the period 2015–2022


Tropik Biomass Power Generation

Fiji Utilise wood waste for electricity generation

Electricity generation using wood residue from timber processing

Small scale

21,000 tCO2e/year

In operation

(Source: UNEP RISO CENTRE CD4CDM)

Moving on from RE ventures, it is interesting to note all the businesses from different backgrounds coming in to reduce the carbon footprint of the region and partake in EE ventures. Two examples: the Fiji Tourism Energy Efficiency Investment project aims to replace inefficient technologies, such as chillers, lighting and air-conditioning, with energy efficient technologies and measures in order to build an energy-efficient hotel sector in Fiji, with reduction targets of 48,473 metric tonnes CO2 in the period 2013–2022. Secondly, the Energy Efficient Lighting (still in development phase) project aims to distribute about 100,000 LEDs to replace incandescent lamps in residential, commercial/industrial and street lighting in Fiji, with reduction targets of 173,000 metric tonnes CO2 in the period 2016–2026.

These projects have the potential to develop and fully integrate CDM structure. Regional organisations, in collaboration with development partners and donor agencies, could help small island developing states to overcome institutional loop holes and identify a developed country with which to start up a new CDM-based project. Existing RE/EE projects in the region also have the potential to develop into fully functional CDM ventures.

To conclude, one has to think about the capacity of PICs to engage in such global mechanisms, where monitoring and verification procedures of the CER are cumbersome. Doing business in the remote and scattered islands, and the limited scales of economies, are two of the challenges that have limited the participation of PICs. However, as PICs make only a small contribution to global GHG emissions, participation in RE and EE projects is more related to reducing reliance on imported fuels, improving trade deficits and improving energy security than on reducing emissions. The potential for CDM has been demonstrated by RE and EE projects being implemented by PICs.

RE projects, such as hydro and solar uses and technologies, are proven technologies and can be demonstrated. CDM is a prospective area, and more stakeholders needs to collaborate, map efficient pathways and explore possibilities of developing GHG-reducing ‘green projects’ which can integrate into functional CDM projects.

A research article by: Atishma Lal, Information Assistant, EDD, [email protected]


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For more information:Chris SimelumPetroleum/LPG OfficerDepartment of Energy, Mines and Mineral Resources, [email protected]

Jesse Benjamin sets new direction for Vanuatu’s Department of Energy Vanuatu’s new Director of the Department of Energy, Mines and Mineral Resources, Mr Jesse Benjamin, is a graduate of the University of Technology, Sydney (UTS), Australia. The Department of Energy is one of five departments that make up the newly established Ministry of Climate Change Adaption.

Mr Benjamin first joined the Energy Unit in 2006 as an electrical engineer after graduating from the University

of the South Pacific. In 2010, he pursued a master’s degree in engineering at UTS, majoring in energy policy and planning. On his return, he joined forces with the Principal Energy Officer since 1988, Mr Leo Moli.

As a member of the government, Mr Moli recognised the importance of energy for a developing country and granted approval to upgrade the Energy Unit to a department. This was a major milestone as preparations were already underway for the launch of the Vanuatu National Energy Road Map.

The Department of Energy and the Government of Vanuatu congratulate the former Acting Director and Principal Energy Officer for spearheading the transition in 2009, which was finally achieved in 2011 when the structure of the new department was approved by the government.

The many achievements under Mr Moli’s leadership include the success of the first-ever commercial hydro power station in Vanuatu, which generates 1.2 MWs of power for more than 1000 households on Luganville, Espiritu Santo, and the first nation-wide solar technology application.

In the same period, the Rural Electrification Policy, National Energy Policy, National Energy Road Map, Amendment of the Electricity Supply Act and the Utilities Regulatory Act were all produced. Mr Moli successfully worked with development partners to set up major projects, setting a well-established framework for his protégé, Jesse Benjamin.

Mr Benjamin assumed the role of Director on Monday 16 September 2013. Five new senior staff will join the department in October – another boost for realising the goals of the energy sector under the National Energy Roadmap.

The vision of the Energy Road Map is ‘to energise Vanuatu’s growth and development through the provision of secure, affordable, widely accessible, high-quality, clean energy services for an educated, healthy, and wealthy nation’. The road map has five priority components that the Government of Vanuatu seeks to achieve – Access, Affordability, Petroleum Supply, Energy Security, and Climate Change.

The strategic document was compiled with assistance from the World Bank and AusAID and was endorsed by the Council of Ministers in June 2013. The first task for the new Director is to prepare for the formal launch of the road map by the Prime Minister, the Honorable Moana Carcasses Kalosil.

OTHER NEWS

Mr Leo Moli – former Director of the Department of Energy

Newly appointed Director of the Department of Energy, Mr Jesse Benjamin

Pacific energiser

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A Pacific’s first

The Pacific Energiser would like to welcome back Dr

Tevita Tukunga to the Pacific’s energy family. Tevita used to be the Head of the Tonga Energy Office, holding the position of Energy Specialist in the Ministry of Lands,

Survey, Natural Resources and Environment. Due to his outstanding performance in steering Tonga’s energy sector, he was awarded an Australian scholarship in 2009 to study for a PhD in electrical engineering at the University of New South Wales in Sydney. He was also selected as one of the first five recipients of the Greg Urwin Award.

The Greg Urwin Award was established in 2008 in memory of the late Secretary General of the Pacific Islands Forum Secretariat (PIFS), with the support of the Government of Australia. It is awarded annually

by PIFS to emerging Pacific Island leaders in a range of fields. The award provides recipients with the opportunity to gain professional experience in their chosen vocational fields through short term attachments and placements in relevant organisations.

Tevita’s research was on Capacity building for sustainable electricity services in the Tongan electricity industry. He completed his studies in August 2013 and has joined the Tonga Energy Roadmap Implementation Unit (TERM IU).

‘It is a challenging time at TERM IU, as we are currently in the midst of implementing the roadmap. Tevita’s return with his wealth of skills and expertise is a blessing. Cometh the hour, cometh the man,’ was how ‘Inoke Finau Vala, CEO of TERM IU, summed up Tevita’s return.

Congratulations and welcome back, Dr Tukunga.

North-REP farewell

SPC’s Energy Programme would like to warmly farewell and thank its Energy Specialists in

the North-REP team for all their hard work and outstanding contributions.

Vinaka vakalevu Arieta, Emanuele and William. As colleagues we deeply appreciate all of your efforts and we wish you all the best in your future endeavors.

North-REP represents a special delivery model where

three SPC member countries (Palau, Republic of Marshall Island and Federated States of Micronesia) have entrusted SPC with the responsibility of implementing and managing their national indicative programmes under the EU EDF 10. The model includes the placement of Energy Specialists on ground at Pohnpei, Majuro and Koror to strengthen local capacity. Local counterparts are then recruited and trained and groomed by the Specialists for the eventual takeover at the end of North-REP.

OTHER NEWS

Arieta Gonelevu Emanuele Taibi William Thorp


Date Event Venue Responsible agencies

Officer responsible

7–11 October North-REP NPSC and workshop to finalise EDF-11 NIP project document Chuuk, FSM SBOC and R&D,

FSM and SPCRupeni Mario ([email protected])

16 October Fiji National Energy Seminar Suva, FijiPIFS Fiji Department of Energy

Peceli Nakavulevu ([email protected])

OctoberNational workshop on legislation development for electrical appliance labelling and standards

Vanuatu SPC Makereta Sauturaga ([email protected])

October Online GSES course – design and install grid connect online IRENA/SEIAPI Geoff Stapleton ([email protected])

October end High level round table – Green Economy Solomon Islands IUCN Anare Matakiviti

([email protected])

28–30 October Nauru Energy Road Map technical assistance team mission Nauru SPC/GIZ &

IRENA

Katerina Syngellakis([email protected]) Apisake Soakai ([email protected])

12–16 November 43rd CRGA Suva, Fiji SPC Solomone Fifita ([email protected])

November–December (tbc)

Certification training with SEAIPI and IRENA tbc PPA/IRENA/

SEAIPIAndrew Daka ([email protected]) Geoff Stapleton ([email protected])

2 – 6 Dec Meeting of the Pacific Energy Advisory Group Suva, Fiji SPC Solomone Fifita ([email protected])

2 Dec PIGGAREP Board Meeting Suva, Fiji SPC Silia Kilepoa Ualesi ([email protected])

5 – 6 Dec Experts Group Meeting on the Pacific Regional Data Repository for SE4ALL Suva, Fiji UN ESCAP Timothy Westbury ([email protected])

December (tbc) Nature Round Table Suva, Fiji

Fiji Department of Energy, SPREP, IUCN

Peceli Nakavulevu ([email protected])

Anare Matakiviti ([email protected])

December Commissioning of the Nanpil Hydro Power Plant

Pohnpei, FSM SPC & PUC Rupeni Mario ([email protected])

20 January–7 February

USP/ASU VOCTEC Solar PV Train the Trainer workshop Suva, Fiji USP Atul Raturi ([email protected])

27–31 January (tbc)

Life-Long Learning for Energy Security Project (LEAP) Kick-Off meeting Suva, Fiji USP Anirudh Singh ([email protected])

31 March –4 April Energy and Transport Ministers Meeting Nadi, Fiji SPC Solomone Fifita ([email protected])

9–10 April Annual European Meeting on Marine Energy

Cherbourg, France THETIS MRE www.thetis-emr.com

10–11 July Thetis Pacific: Renewable Energy ForumPapeete, French Polynesia

French Polynesia Government Sylvie ([email protected])

July (tbc)International Conference on Renewable Energy and Climate Change – Focus on the Pacific

Suva, Fiji USP (PACE-SD) Aliti Koroi

1–4 September

Global Conference for Small Island Developing States Apia, Samoa SIDS DOCK Al Binger

Pacific energy events calender (October 2013–September 2014)

Energy ProgrammeEconomic Development Division Secretariat of the Pacific CommunityPrivate Mail Bag, Suva, FijiEmail: [email protected] | Telephone: +679 337 0733Fax: +679 337 0146 | Website: www.spc.int/edd

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ISSUE 13 OCTOBER 2013 PacificEnergiser

Documents