Renewable Energy-Sector Policy Initiatives And UNDP’s Role In The Pacific Region: The Path Ahead

Renewable energy plays a crucial role in diminishing reliance on fossil fuels, lowering energy expenses, fostering local employment, and enhancing climate resilience, but only if well-designed policies are in place to address multiple barriers.

March 4, 2024, 10:41 a.m.

  1. Pacific Island Countries and the Renewable Energy Context

For generations, inhabitants of Pacific Island Countries (PICs) have relied on diverse renewable energy sources, including wind for sailing, sunlight for drying crops, and biomass for cooking. More modern technologies also exist. Hydroelectricity, although not widely prevalent, is produced in Fiji, French Polynesia, New Caledonia, Papua New Guinea (PNG), Samoa, the Solomon Islands, and Vanuatu. Wind energy is harnessed in Fiji, the Federated States of Micronesia (FSM), New Caledonia, Samoa, Tonga, and Vanuatu. Its applications range from micro to large-scale, but the focus is on grid-connected systems. Developments of marine energy, which encompasses tidal, oceanic, wave, ocean thermal energy conversion, and salinity gradient technologies, are still nascent. Biogas, though not the most effective of sources, presents opportunities to utilize existing waste products, while biomass, which is primarily sourced from wood, is utilized in Fiji and PNG. The Solomon Islands employ biomass to generate electricity.

According to ESCAP (2023), PIC economies depend heavily on oil imports. Indeed, oil imports constitute up to 80% of the region’s total energy consumption. Approximately 52% of this oil is used in the transportation sector and 37%in electricity generation. The remaining 12%has various applications, including process heating. Of the region’s 15 countries, only PNG and Timor-Leste have proven fossil fuel reserves. In 2020, nearly 10 million people across the Pacific lacked access to clean cooking; the majority of them, 8.1 million, resided in PNG. The Asia-Pacific Energy Portal (2021) estimates that the region spends USD 6 billion annually on fuel imports, and that per-country expenditure ranges from 5% to 15% of GDP, with 10% the average. Fiji spends the greatest proportion, 14%. Renewable energy initiatives contribute 20–40% of energy in countries such as the Cook Islands, Fiji, and Vanuatu, and efforts to increase production to 100%are ongoing. Despite these efforts, renewable energy currently accounts for only 17% of the total energy supply.

High energy costs exacerbate the existing challenges of poverty, marginalization, and frequent disasters that PICs face, and the supply and consumption of energy contribute to local environmental problems. The cost of generating power is very high due to the need to import diesel and distribute it to widely dispersed populations. There is, however, significant potential for renewable energy-based power generation, a measure that will alleviate the burden of tariffs and enhance the commercial viability of investments.

The hydroelectric potential in Fiji, PNG, Samoa, Solomon Islands, the FSM, and Vanuatu is considerable, and solar, as well as, to a lesser extent, wind energy resources hold promise for the entire region. A transformative shift is underway as PICs transition away from fossil fuels towards more environmentally sustainable forms of energy. In the PICs, renewable energy will play a crucial role in diminishing reliance on fossil fuels, lowering energy expenses, fostering local employment, enhancing climate resilience, and bolstering economic growth and energy security, making it a seamless fit for their future energy strategies.

2 Investment in the Renewable Energy Sector

The World Bank has significantly increased its support to the PICs by substantially boosting financing through its International Development Association (IDA). This assistance, which combines financing from the International Bank for Reconstruction and Development and IDA, as well as contributions from trust funds and co-financing arrangements, funds over 95 projects. The Asian Development Bank (ADB) reports that lending in the energy sector accounted for 20% of its total portfolio in 2011-2021. Within that sector, 52% of ADB's lending is directed towards clean energy initiatives, and the remaining 48% is allocated to transmission, distribution, and other related projects. Regarding climate mitigation financing, ADB allocates 60% to renewable energy, 39% to energy efficiency, and 1% to fuel switching and cleaner fuel initiatives. In addition, bilateral and vertical donors such as the Global Environment Facility (GEF) and the Green Climate Fund (GCF), actively support renewable energy projects in the Pacific region. The United Nations Development Program (UNDP) has initiated a USD 36.8 million project in collaboration with the Government of Japan to help four PICs—PNG, Samoa, Timor-Leste, and Vanuatu—achieve a green transformation of their economies. The objectives of this project include reducing reliance on fossil fuels, fostering sustainable economic growth, and enhancing resilience to climate change impacts.

3 Role of the UNDP in Renewable Energy Sector Policy Initiatives

PICs have formulated policies, plans and strategies to decrease their dependence on fossil fuels and reduce greenhouse gas (GHG) emissions. These efforts include adopting nationally determined contributions (NDCs), national adaptation plans, and green national development plans. Countries such as Samoa, Fiji, Tonga, and the Solomon Islands have committed to transition towards 100% renewable electricity within the next 10 to 15 years. Furthermore, nations including PNG, Samoa, Timor-Leste, and Vanuatu have pledged to upscale their renewable energy production with the aim of achieving 100% renewable energy in the electricity sector by 2030.PICs are proactively pursuing a clean-energy future by adopting policies and technologies that position them on a trajectory towards achieving net-zero emissions. The UNDP offers support to bolster the climate ambitions of PICs, which, despite their minimal GHG emissions face escalating climate-related challenges, by advocating for the adoption of net-zero policies.

With GEF funding, the UNDP is executing several projects that advance sustainable energy initiatives indices. These include the Supporting Mainstreamed Achievement of Roadmap Targets on Energy (SMARTEN) project in Nauru, the Facilitation of the Achievement of Sustainable National Energy Targets of Tuvalu (FASNETT) project in Tuvalu, the Stimulating Progress towards Improved Rural Electrification in Solomon Islands (SPIRES) project in the Solomon Islands, and the Promoting Outer Island Development through the Integrated Energy Roadmap (POIDIER) project in Kiribati. In addition, the UNDP recently concluded the Public-Sector Buildings Energy Efficiency Project in FSM In Tuvalu; the Solar Home Systems for Funaota project is being implemented with financing from the India-UN Development Partnership Fund (UNDPF). Also with assistance from India-UNDPF, the UNDP is currently overseeing a project to solarize the residences of the heads of state of 10 member countries of the Pacific Island Development Forum (PIDF). These initiatives are just a few examples of UNDP’s efforts.

The above initiatives have significantly contributed to the attainment of the UN Pacific Strategy and SDGs, particularly SDG-7, which aims to ensure access to affordable, reliable, sustainable, and modern energy for all, and SDG-13, which relates to climate action. The countries involved have committed to achieving universal access to clean, reliable, and affordable renewable energy solutions by 2030. Most PICs have a long-term vision for achieving low-emission development and have outlined plans with either 5- or 10-year implementation periods. Tonga and Samoa use 2015 as their starting point, while the other PICs use 2020.

National climate change mitigation pledges primarily address significant sources of national GHG emissions, especially those related to power generation. All PICs have begun formulating decarbonization strategy documents, and some, including the RMI and Fiji, have already published such documents. Progress has been made towards meeting various short-, medium-, and long-term targets, but much work remains.

UNESCAP's "Pacific Perspectives 2022: Accelerating Climate Action," highlights the urgent need for a swift transformation of the Pacific region's energy sector in alignment with SDG 7 and global climate objectives. Pacific Island leaders agree: they consistently emphasize the critical importance of limiting global warming to 1.50C through prompt, substantial, and enduring reductions in GHG emissions.

The UNDP has significantly expanded its presence in the Pacific. It implements regional programs, offers technical advice, and provides policy support. Through initiatives like the Climate Promise, the UNDP helps PICs achieve their NDCs. The UNDP’s persistent advocacy efforts have ensured that commitments to renewable energy are integral components of PIC’s policies and plans. The impacts of UNDP assistance have been profound. Its initiatives include training local experts in design, engineering, and installation and providing financial incentives to adopt renewable energy and energy-efficient technologies. The UNDP ensures that energy access and technology meet the needs and preferences of women from impoverished and vulnerable families, and fosters South-South cooperation to facilitate financing and affordability.

4 Major Challenges and a Way Forward

The ADB’s 2023 Energy Policy & Portfolio identified key energy challenges in the Asia-Pacific region, including energy access and security and environmental sustainability. Approximately 350 million people still lack adequate energy, including 155 million who lack electricity. Another 1.6 million lack clean cooking facilities. The International Energy Agency (IEA) projects that by 2040 cumulative investments of USD 6.0 trillion in renewable energy and USD 6.4 trillion in electricity grid will be needed to meet the projected doubling of electricity demand. To ensure that there will be a more climate-resilient green future in the Pacific, the following initiatives should be considered.

a Build the capacities of multiple stakeholders

Operation and maintenance (O&M) of renewable energy projects must be routine and the scarcity of adequately trained personnel must be addressed as relying on external expertise for the construction and upkeep of renewable energy infrastructure is economically inefficient. The capacities of local communities, government officials, energy professionals, and university students must be enhanced through comprehensive training and technical support programs and local communities must be involved in renewable energy initiatives from stage 1 to ensure that their needs and concerns are adequately addressed. To strengthen the solar production value chain and prevent potential malfunctions, robust O&M practices must be adopted. Establishing and reinforcing a multi-faceted approach through public-private partnerships will also enhance sustainability and effectiveness.

b Foster an inclusive approach in the renewable energy sector

Despite extensive advocacy for inclusivity, female participation in the energy sector remains disproportionately low. Women, as experience demonstrates, play a crucial role, so it is crucial that they involved by actively promoting technical education and leadership positions for them. More scholarships should be made available to young women to encourage them to pursue degrees in electrical and mechanical engineering and technical training. Reducing disparities in skilled human resources, mitigating high turnover rates, addressing climate change concerns, transforming the energy landscape, and creating local-level green jobs can significantly benefit women.

c Invest in appropriate technologies that suits the local context

Establishing renewable energy infrastructure and connecting remote Pacific islands to the grid present significant challenges. The task of integrating remote, highly dispersed communities into a centralized power grid is both complex and costly. Logistically, installing solar photovoltaic (PV) systems in remote locations and ensuring their periodic O&M pose significant challenges. Moreover, the intermittent nature of solar and wind energy makes having reliable energy storage solutions such as batteries essential. Promoting the adoption of a range of appropriate renewable energy technologies, including solar PV systems, wind turbines, micro-grids, and energy storage solutions, can help. Of course, all these technologies should be tailored to the unique geographic and environmental conditions of PICs.

d Leverage more sources to upscale green technologies and invest national resources

The insufficiency of financial resources is a primary concern. According to calculations by the International Renewable Energy Agency (IRENA), PICs need to install an additional 1.8 GW of renewable energy capacity at a cost of approximately USD 5.9 billion to meet their NDC targets. However, the high upfront costs associated with renewable energy installations often deter potential investors despite the numerous long-term benefits of investment. Since the lack of private-sector involvement in the region contributes to the high initial costs of renewable energy deployment, the private-sector entities and donor agencies must be engaged through policy measures aimed at attracting additional grants and investment. National resources should also be allocated towards renewable energy development to reduce dependence on fossil fuels and combat climate change. In addition, partnerships among development banks, international organizations, and private investors should be strengthened. Mobilizing various financial mechanisms, including grants, soft loans, and subsidies, can help make renewable energy projects financially viable.

e Increase access to renewable energy to reduce electricity tariffs

Approximately 40% of the petroleum fuel in PICS is used to produce electricity. According to a 2020 study by the ADB, the transportation sector accounts for three-quarters of petroleum imports due to the vast distances and dispersed populations involved. This long-standing reliance on diesel generation has constrained PICs' efforts to electrify and maintain a stable energy supply. High electricity tariffs limit usage among low-income households, particularly in the Solomon Islands, resulting in electricity consumption significantly below actual needs. Such low energy consumption as well as the problems of intermittency and storage capacity presents challenges for transitioning to green energy. Mitigating these challenges should entail improving energy access by harnessing solar energy and deploying stand-alone solar home systems, preferably using public-private partnership models. Conducting feasibility studies and effectiveness assessments is essential to expand renewable energy coverage, reform power utility management, and promote private-sector involvement.

f Take advantage of disaster-resilient technologies

PICs are seen as a "disaster supermarket" because loss and damage due to natural calamities is escalating. PICs are highly susceptible to the various adverse effects of climate change, including rising sea levels, ocean acidification, extreme weather events, and natural calamities. Alarmingly, the Sixth Assessment Report by the Intergovernmental Panel on Climate Change indicates that weather extremes are growing more intense and more frequent. For the Pacific region, this trend is likely to result in recurrent Category 5 cyclones and floods. In April 2020, for example, a significant cyclone wreaked havoc in the Solomon Islands, Vanuatu, Fiji, and Tonga. Disasters repeatedly disrupt renewable energy infrastructure and pose additional challenges to investment in the energy sector. To withstand the impacts of disasters, it is crucial to conduct thorough site assessments before installing systems and to design renewable energy systems with climate-resilience features so they can endure extreme weather events. For instance, in 2018, solar farms on the island of Tongatapu withstood Cyclone Gita because they had proper anchoring and were made of durable materials. Incorporating resilience measures such as elevation and redundancy and including disaster preparedness plans in system designs are essential measures to enhance the ability of energy infrastructure to withstand adverse conditions.

g Adopt a strong knowledge management system

The data, information, and knowledge generated by various agencies, including PICs, regional organizations, UN agencies, development partners, civil societies, academia, and private sectors, is often fragmented. To create more cohesive input, there must be comprehensive documentation of best practices and lessons learned before memory of them fades away. The numerous innovations already in existence should be replicated in new areas and by other agencies. Sharing learning and best practices is crucial for cross-pollinating knowledge and promoting resource-leveraging. Furthermore, facilitating the sharing of knowledge by exchanging best practices, lessons learned, and technical expertise enables both a more holistic approach to addressing common challenges as well as the scaling up of best practices.

h Formulate policies and develop mechanisms for their enforcement

While there has been some progress in the development of renewable energy-related policy provisions at both the national and regional levels, such provisions fall short of adequately reforming the energy sector. Inconsistent and insufficient policies and regulations hinder the growth of the renewable energy sector. To accelerate the transformation of energy policies and ensure their effective implementation, it is essential to secure political commitment, formulate sectoral policies, and allocate adequate capital, resources, and technical assistance. Well-designed policies can address various fiscal, financial, regulatory, market, technical, and informational barriers to the development of renewable energy. It is crucial to prioritize the formulation or reform of policies and regulatory frameworks that promote mechanisms such as feed-in tariffs and net metering, as well as those that aim to achieve renewable energy targets. Streamlining permitting processes can also help overcome barriers. Extending the partnership with UNDP to advance policy refinement will decrease emissions, promote greater adoption of renewable energy, and strengthen resilience to climate change.

(Dr. Gautam, an Independent Evaluator and Researcher with a focus on Asia and the Pacific, holds senior positions as a Research Fellow at the National Disaster Risk Reduction Centre Nepal and as an Adjunct Fellow at HADRI/Western Sydney University. The views expressed in this article belong solely to the author and do not necessarily represent the official stance of any organizations mentioned. For inquiries, contact Dr. Gautam at drrgautam@gmail.com)

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