Climate Change and Renewable Energy the Pacific Way

By Rene Karottki, Secretary General. Forum for Energy and Development, and INforSE- Secretary . Rene Karottki visited the South Pacific in July - August of 1995.

The environmental and socio-economic constraints of Small Island Developing States (SIDS) have been discussed at a number of major international conferences over the past few years.

The SIDS reports to these events have painted a rather gloomy picture of small island countries, which are subject to the devastating impacts of global warming, as well as to the constraints caused by remoteness and small sizes.

Visiting small island states in the Pacific confirms these reports. Coastal erosion and coral bleaching, as well as the increased number and intensity of tropical cyclones, are just a few visible impacts of climate change.

Electricity from Diesel

- a Headache for National Budgets An important problem relates to production and consumption of electricity. Due IO remoteness and small economies, production costs in Pacific SIDS average US Cents 20 per kWh, appr. 4 times higher than the average costs of electricity known in industrialised countries. On many smaller 'outer islands', production costs reach US Cents 100 per kWh.

In most places, electricity tariffs do not reflect these costs. The average revenues from sales of electricity are about US Cents 16 per kWh, often with a fixed tariff independent of location. End-users are heavily subsidised, with the largest subsidies going to the outer islands.

These subsidies are a burden on national budgets. Justified as they are on economic development and social grounds, it is politically difficult for the governments and the power corporations to let tariffs reflect true production and distribution costs. Consequently, most of these governments should be keen on reducing electricity consumption at the end-user level by promoting energy efficiency and introduce mature renewable energy systems that often can compete successfully with diesel fuels.

In addition to the purely economic considerations there is a political agenda as well, related to the International Climate Negotiations. Even though the SIDS emissions of greenhouse gases, such as CO, are insignificant on a global scale, a sustainable energy policy reducing those emissions and showing the world that the SIDS themselves are moving along the way, they want the industrialised countries to take, will give the SIDS more leverage in future negotiation processes.

Renewable Energy

- Failures and Successes

In the 1980's many donors were active in funding renewable energy projects, including biomass and photovoltaics.

Unfortunately, most of the projects failed, because they were narrowly technology-oriented, and did not address the crucial institutional aspects.

Most of the technologies were unproven, and were spread out over a large number of countries and islands. Since pilot technologies need a close hand in operation and monitoring, the lack of organisational back-up was disastrous. They imposed on the governments costs that exceeded the benefits, and consequently created a lot of resentment towards renewables.(l)

In addition, the donor organisations became sceptical of the viability of renewables in substituting as replacements for diesel fuels in power generation.(2)

The trial-and-error process with photovoltaics in the 1980's revealed problems with inappropriate designs, unreliable components, improper installations, and poor maintenance. On the other hand, these experiences led to improvements in the technologies. Decentralised Solar Home Systems (SHS), comprising PV panels, batteries, and controller, can now be regarded as a mature technology.

According to a recent World Bank report (3), SHS are now competitive in narrow economic terms with stand alone diesel systems, considering the full life-cycle costs, provided that diesel generation costs are in the range of US Cents 50-65 per kWh, as on many outer islands.

Another, even more important, development has taken place on the institutional side. One particularly interesting case is the Tuvalu Solar Electric Cooperative Society (TSECS), formed in 1984 as a commercial enterprise with the objective of providing electricity to outer islands.

The end-users are shareholders in the TSECS and are represented through an elected island "Branch Committee" and through a national "Management Committee" whose members are the chairmen of the island committees. The Management Committee acts as the board of directors, led by a Chairman, and is responsible for policy, annual reviews, and the setting of monthly fees.(4)

After several years of trial and error, TSECS is now providing reliable electricity to 415 households on the outer islands, equivalent to 42% of outer islands' households, with another 180 households on request.

TSECS now provides electricity to as many households as does the diesel utility, the Tuvalu Electricity Corporation. TSECS employs on each island a local technician, who is responsible for a monthly technical check-up and for fee collection. The installations are owned by TSECS, not by the users, thus providing flexibility and the ability to change or upgrade systems without user investment. The endusers (and shareholders) pay an initial entrance fee of USD 40 and a monthly fee of USD 5 for a single panel system and USD 6.1 for a two-panel system. Whereas the investment are provided by international donors, the running costs (including battery replacement after 5-7 years and the salary of a technician on each island) are recovered via the fees. Over time, the fees may also be sufficient to replace the PV-panels, which may have a lifetime of 20-25 years.

The Tuvalu experience, together with similar experiences from countries such as Kiribati (where the PV-systems are owned and maintained by the utilities), clearly shows, that the Pacific has come a long way in addressing one of the key problems related to decentralised off-grid electrification.

In the Pacific context, PV-systems for households can thus be regarded as a mature! technology that is ready for dissemination on non-electrified islands and to rural areas outside of the grid.

Renewables on Diesel Grids

In many Pacific Island Developing States, a large share of the population is connected to a diesel grid. In these countries, grid-connected renewables, used to replace diesel for demand on the power stations, may be even more attractive than off-grid applications.

This may be a future avenue for PV systems that could be feasible on islands, where the present generation costs are excessive. Apart from the diesel savings, grid-connected PV, as an alternative to individual systems, could also address the problem for the end-user of being forced to use lowvoltage appliances.

Other mature renewable energy systems may be even more promising in the short term. Some experience already exists with hydro power stations. A number of micro hydro installations are planned. Biomass for electricity generation (mainly gasifiers and steam power generation from bagasse) has also been tested. The experiences are mixed, and the problems are mainly related to financial and institutional issues.

The potential of grid-connecled wind turbines has not been considered systematically in the Pacific. The Forum Secretariat recently initiated a wind energy data collection program on Cook Islands, Niue, Fiji, Tonga, and Vanuatu, where the wind speeds seem promising. Some time is still needed before there are sufficient data for evaluation. Given the diesel generation costs of from 15 up to US Cents 100 per kWh, even a medium annual average wind speed of, e.g., 6 m/s could make wind power feasible. On larger islands, grid-connected wind turbines can operate just as they do now in, e.g., Europe and the US. In addition, recent experience from small island grids indicates that up to 50 % of the power could be supplied from wind turbines, using standard components and control systems.

A New Era for Renewables?

Since diesel generation costs remain high, the availability of mature solar, biomass, hydra, and wind power technologies may open up a new era for renewable energy in the Pacific. The fragile economies of the small island states still call for donor involvement, e.g., in providing capital on soft loan terms as well as assistance in institution building and in training.

The Pacific area is important on a global scale. Some small islands already have 100 % coverage with electricity from solar energy. Within the short- to medium term, many more small- and medium-sized islands could have a large share of their electricity from renewables. The technical, institutional, and financial experiences from this development will be very important for other regions of the world, where renewables have an increasing potential as the costs of renewables, such as PV-panels, decline in the future.

The Pacific Island States may be among the first regions in the world to demonstrate how a modem society can be based on renewable sources of energy. As such, they will also be able to maintain and strengthen their role as forerunners in, e.g., global climate negotiations.

1. An evaluation of the European Community's Lome II Pacific Regional Energy Programme. Final report, August 1994 Prepared by Peter C. Johnston for the Energy Division, South Pacific Forum Secretariat, Fiji.

2. Pacific Regional Energy Assessment. Volume 1, Overview. The World Bank, in cooperation with UNDP/ESCAP Pacific Energy Development Programme, The Asian Development Bank and the Forum Secretariat Energy Division. August 1992.

3. Solar Energy. Lessons from the Pacific Island Experience. By Andres Liebenthal, Subodh Mathur and Herbert Wade. World Bank 1994.

4. Photovoltaic Electrification in Rural Tuvalu. James Conway, Ministry of Finance & Economic Planning, Funafuti, Tuvalu, and Herbert A. Wade, Asian Institute of Technology, Bangkok, Thailand. Paper presented during UNDP-GEF workshop, Nadi, Fiji, August 1995.