Big investments needed in region’s renewable energy market

Pacific renewable energy market could require FJ$1,053 million in investment by Independent Power Producers (IPPs) as solar and wind energy capacity is projected to double in the next three to five years.

Areport released by the Pacific Power Association (PPA) and the Pacific Region Infrastructure Facility (PRIF) indicates a growing opportunity for the private sector to invest in renewable energy facilities within the Pacific.

Electricity utility chief executive officers from the region, participating in an investors forum during the annual PPA conference in Palau last week, expressed their need for additional support of investments.

This through the independent power producers (IPP) market as they continue to reduce reliance on diesel generation and meet the national renewable generation commitments they have made under the Paris Agreement.

With some 15 IPP developments already in place, a similar number is anticipated in the next 3-5 years.

The initial assessment of investment suggests that in excess of US$500 million (FJ$1,053m) could be invested in the IPP wind and solar photovoltaic system (PV) market alone.

It is anticipated a similar level will be spent by utilities in upgrading transmission and distribution networks, with storage capacity installed to cope with the intermittency of solar PV and wind generation.

Beyond this, larger scale hydro-electric developments in Papua New Guinea, Fiji and the Solomon Islands require an additional US$1 billion (FJ$2.11bn) of investment.

Renewable energy, particular solar PV installations, have become increasingly common across the Pacific.

In just five years, programmes supported by donor agencies have demonstrated the reliability of renewable resources and opened the door for an exciting market for private sector solar PV installations.

While limited in scale, solar PV “farms’’ of two-three Megawatts (MW) in capacity are increasingly common, and the dramatic drop in the cost of solar power technology has allowed commercially viable grid connected projects.

Under long term power purchase agreements (PPAs), investors offer generation facilities on a full turnkey basis, selling power to the national utility.