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World Bank Document ReportNo. 10441-EAP Pacific RegionalEnergy Assessment Overview Report Public Disclosure Authorized July31, 1992 The World Bankin Cooperationwith The UNDP/ESCAPPacific Energy Development Programme The AsianDevelopmnt Bank and the ForumSecretariat Energy Division FOR OFFICIAL USE ONLY Public Disclosure Authorized MICROFICHE COPY Report No.:10441-EAP Type: (SEC) Public Disclosure Authorized Title: PACIFIC REGIONAL ENERGY ASSE"S Author: LIEBENTHAL, A Ext.:82507 Room:A10067 Dept.:EA3IE 12 VOLUMES TOTAL Public Disclosure Authorized Documentof theWorld Bank Thisdocument has a restricteddistribution and may be usedby recipients only in the performanceof their official duties.Its contents may not otherwise be disclosedwithout World Bankauthorization. ACRONYMS AND ABBREVIATIONS ADB Asian DevelopmentBank ADO automotive diesel oil AIDAB Australian InternationalDevelopment Assistance Board EC European Community ECU European Currency Unit EIB European Investment Bank .:com PNG ElectricityCommission EPC Electric Power Corporation (Western Samoa) ESCAP Economic and Social Commission for Asia and the Pacific FEA Fiji ElectricityAuthority FINAPECO Fiji National Petroleum Comipany FS Forum Secretariat FSED Forum SecretariatEnergy Divisivn FSM Federated States of Micronesia GTZ Gemeinschaftfur Technische Zusammenarbeit IDO industrial diesel oil IFO industrial fuel oil IOC internationaloil company NZ New Zealand OTEC ocean thermal energy conversion PEDP Pacific Energy DevelopmentProgram PICHTR Pacific InternationalCenter for High Technology Research PNG Papua New Guinea PPA Pacific Power Association PREA Pacific Regional Energy Assessment PV photovoltaic PWD Public Works Department RECM Regional Energy CommitteeMeetings RPU Regional Petroleum Unit SOPAC South Pacific Applied GeosciencesCommission SPEC South Pacific Bureau for Economic Cooperation SPIRE South Pacific Institute for Renewable Energy SPREP South Pacific Regional Environment Program TSECS Tuvalu Solar Electricity CooperativeSociety UNELCO Union Electrique du Vanuatu MEASUREMENTS Unless otherwise indicated, the notation "$" signifies the U.S. dollar. bbl barrel - 159 liters bbl/d barrels per day kgoe kilograms of oil equivalent kV kilo volts kW kilowatt kWh kilowatt-hour kl kiloliter mmtoe million tons of oil equivalent MW megawatt mt metric ton mtoe thousand tons of oil equivalent toe tons of oil equivalent FOR OMCIAL USE ONLY ACKNOWLEDGEMENTS The Pacific Regional Energy Assessment (PREA) is a collaborative effort of the World Bank (WB), the UNDP/ESCAP Pacific Energy Development Program (PEDP), the Asian Development Bank (ADB) and the Pacific Forum Secretariat Energy Division (FSED). Twelve countries requested to participate and have been included: Cook Is., Fiji, Federated States of Micronesia, Kiribaci, Marshall Is., Palau, Papua New Guinea, Solomon Is., Tonga, Tuvalu, Vanuatu and Western Samoa. This report is r.mainlybased on the findings of a January/February/March 1991 mission carried out by four teams: Central Team (Fiii. Tuvalu. Kiribati): A. Liebenthal (Team Leader, WB), M. Manzo (WB), C. Filiaga (PEDP), W. Matthews (WB cons.), M. Charleson (WB cons.), D. Macdonald (WB cons.) and H. Wade (WB cons.). Melanesia Team (Vanuatu. Panua New Guinea): K. Jechoutek (Team LeaAer, WB), S. Khwaja (WB), K. Venkataraman (ADB), G. Baines (WB cons.), M. Mendis (ADB cons.) and S. Tsukahara (WB cons.). Micronesia Team (Marshall Is.. Fed. States of Micronesia. Palau): P. Johnston (Team Leader, PEDP), C. Cheatham (PEDP), G. Tavanavanua (WB cons.), V. Morup-Petersen (WB cons.) and R. Lucas (FSED cons.). Polynesia Team (Tonoa. Western Samoa. Cook Is.): T. Holtedahl (Team Leader, WB cons.), P. Hunt (ADB), D. Cleland (PEDP) and J. Morgan (FSED). The Solomon Is. were covered as a separate but coordinated activity under the Joint UNDP/World Bank Energy Sector Management Assistance Program (ESMAP). The Overview Report was prepared by A. Liebenthal, P. Johnston, C. Cheatham and S. Mathur (WB cons.) with inputs from D. Cleland, C. Filiaga, M. Lawrence (FSED), G. Tavanavanua, H. Wade, G. Baines, M. Charleson and M. Mendis. A grant from the South Pacific Facility of the Australian International Development Assistance Bureau (AIDAB), which made it possible for the World Bank to participate, is gratefully acknowledged. The World Bank's contribution was also supported by the Danish, Japanese and Norwegian Consultant Trust Funds. The mission wishes to express its special thanks 1:0 the energy ministers, secretaries and officials of the Pacific island countries, too numerous to name, for their generous cooperation and assistance in the course of the visits. Without their gracious sharing of their extensive knowledge of and experience with the energy sector in the islands, this work would not have been possible. The preliminary results of the PREA were presented in July 1991 at the Third Pacific Energy Ministers' Conference, sponsored by the PEDP/Easty West Center in Honolulu, Hawaii. Draft country reports were presented and dis¢ussed in October 1991 at the PREA Energy Policy and Planning Workshop, organized in conjunction with the 1991 Regional Energy Committee Meeting in Apia, Western Samoa. An overview of PREA findings was discussed at the Third Meeting of CEOs of Pacific Power Utilities, held October 1991 in Pago Pago, American Samoa. In addition, a Briefing for Aid Donors, sponsored by the Forum Secretariat, was held in October 1991 in Suva, Fiji. This document has a restricted distributionand may be used by recipients only in the performance of their officialduties. Its contents may not otherwise be disclosed without World Bank authorization. PACIFIC REGIONAL ENERGY ASSESSMENT OVERVIEW REPORT TABLE OF CONTENTS EXECUTIVE SUMMARY .... ... ... I. INTRODUCTION .1... II. INDIGENOUS RENEWABLE RESOURCES: VIABLE OPTIONS . .11 Recent Experience with Renewable Scourcesof Energy . Solar Energy .... 13 Hydropower .... 19 Biomass. .. 20 Other Renewable Resource Technologies . 23 Energy Conservation .... 24 Rural ElectrificationOptions . 26 Ilu. PETROLEUM IMPORTS: EFFICIENT MANAGEMENT . 32 Role of Petroleum in Pacific Island Economies . 32 Petroleum Product Costs and Prices ... 32 Receiving Facilities and In-country Distribution . 35 Quality and Safety Issues .... 37 Implicationsfor Governments'Role . 39 IV. POWER SUPPLY: PERFORMANCEIMPROVEMENT . 41 Inadequate Technical Performance ... 42 Inadequate Financial Performance ... 44 Planning and Evaluation of Power Investments . 48 Need for InstitutionalReform .... 51 Need for Training and Regional Cooperation . 54 V. INSTITUTIONALAND POLICY PRIORITIES FOR GOVERNMENTS . 56 Constraints on the Developmentof the Energy Sector . 56 Streamlining the National Energy Offices . 56 Staff Developmentand Training ... 57 Addressing Environmentaland Social Concerns . 60 ImprovingManagement of Donor Resources . 65 Potential for Regional Cooperation ... 67 Tables 1.1: PaciEic Islands: Physical Characteristics. 2 1.2: Pacific Islands: Development Indicators . 4 1.3: Pecific Islands: Petroleum Imports . .. 8 1.4: Pacific Islands: Petroleum Demand Shares by Sector . 9 1.5: Pacific Islands: Petroleum Demand by Product . ... 10 2.1: Comparison of Alternative Technologiesfor Rural Electrificationin Pacific Island Countries ..................... 31 3.1: Pacifi(.Islands: Petroleum Product Prices . 34 Figures 1.1: GDP and Commercial Energy Consumption . .5 1.2: Pacific Islands: Primary Energy Sources (1990) . 6 4.1: Pacific Island Electric Utilit:es:Rate of Return . 47 Boxes 2.1: Comparison of Costs of PV Solar and Diesel Mini-Grid Systems . 15 2.2: Tuvalu Solar ElectricityCooperative Society . 18 2.3: Benefits of Energy Efficient Lighting in Urban Households . 25 Statistical Appendix . 69 ?aI I,BRD23443 Annexes (Issued seRarately) A: Cook Islands: Issues and Options in the Energy Sector B: Federated States of Micronesia: Issues and Options in the Energy Sector C: Fiji: Issues and Options in the Energy Sector D: Kiribati: Issues and Options in the Energy Sector E: Marshall Islands: Issues and Options in the Energy Sector F: Palau: Issues and Options in the Energy Sector G: Papua New Guinea: Issues and Options in the Energy Sector H: Tonga: Issues and Options in the Energy Sector I: Tuvalu: Issues and Options in the Energy Sector J: Vanuatu: Issues and Options in the Energy Sector K: Western Samoa: Issues and Options in the Energy Sector PACIFIC REGIONALENERGY ASSESSMENT OVERVIEWREPORT EXECUTIVESUMMARY Obiectives 1. The PacificRegional Energy Assessment (PREA) reviews issues and options associatedwith energy developmentin the Pacific island countries.Twelve countriesare covered:Cook Is., Fiji. FederatedStates of Micronesia(FSM), Kiribati,Marshall Is., Palau, Papua New Guinea (PNG), Solomon Is., Tonga, Tuvalu,Vanuatu and WesternSamoa. The main objectiveis to definea strategyfor the managementof the energysector in each countrythat would serveas ths basis for planning and implementingrecommended policy measures, institutional strengtheningpriorities and investmentsin the sector.The RegionalOverview highlightsfindings and recommendationsof regionwideinterest. Main Findingsand Recommendations 2. Four major findingsemerge from the PREA: (a) Disappointingresults of new technologicaloptions: In spite of high expectationsfrom the developmentof indigenousrenewable energy rRsources using nonconventionalapproaches (wind power,wave power, ocean t'iermal energyconversion (OTEC), biogas digestors, biomass gasifiers, plantes'on- basedpower plants, solar cooling), these technologies have largelyfat' d to developinto
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