Fiji: Fiji Energy Sector Profile

Fiji Listen/ˈfiːdʒiː/, officially the Republic of Fiji (Fijian: Matanitu ko Viti; Fiji Hindi: फ़िजी गणराज्य Fijī Gaṇarājya), is an island country in Melanesia in the South Pacific Ocean about 1,100 nautical miles northeast of New Zealand's North Island. Its closest neighbours are Vanuatu to the west, France's New Caledonia to the southwest, New Zealand's Kermadec to the southeast, Tonga to the east, the Samoas, France's Wallis and Futuna to the northeast and Tuvalu to the north. The majority of Fiji's islands were formed through volcanic activity starting around 150 million years ago. Today, some geothermal activity still occurs on the islands of Vanua Levu and Taveuni.

Fiji has been inhabited since the second millennium BC. The country comprises an archipelago of more than 332 islands, of which 110 are permanently inhabited, and more than 500 islets, amounting to a total land area of circa 18,300 square kilometres . The two major islands, Viti Levu and Vanua Levu, account for 87% of the population of almost 850,000. The former contains Suva, the capital and largest city. Most Fijians live on Viti Levu's coasts, either in Suva or in smaller urban centres. Viti Levu's interior is sparsely inhabited due to its terrain. In the 17th and 18th centuries, the Dutch and the British explored Fiji.

Fiji was a British colony until 1970; British administration lasted almost a century. During World War II, thousands of Fijians volunteered to aid in Allied efforts via their attachment to the New Zealand and Australian army units; the Republic of Fiji Military Forces (RFMF) consist of land and naval units. Fiji is one of the most developed economies in the Pacific island realm due to an abundance of forest, mineral and fish resources. Today, the main sources of foreign exchange are its tourist industry and sugar exports. The country's currency is the Fijian dollar. Following a coup in 2006, Ratu Epeli Nailatikau became Fiji's president after a high court ruled that the military leadership was unlawfully appointed. Fiji's local government, in the form of city and town councils, is supervised by the Ministry of Local Government and Urban Development.

Energy sources

Total installed electricity capacity (2010): 205 MW

Total primary energy supply (2007): 1,058 ktoe
Total primary energy production (2008): 0.007 Quadrillion Btu
Total primary energy consumption (2008): 0.040 Quadrillion Btu

In 2010, the Fiji Electricity Authority (FEA) renewable power stations generated 420 GWh of electricity, thermal power stations 415 GWh and IPPs 20 GWh. The electricity generation by fuel source type was as follows:

Hydro: 48% (58% in 2009)
Industrial diesel oil: 34% (25% in 2009)
Heavy fuel oil: 15% (15% in 2009)
Wind: 1%
IPP installations (from Tropik Wood and Fiji Sugar Corporation): 2%

The significant increase in electricity generated from the thermal power stations by 105 GWh in 2010 was to cater for growth in electricity of around 6.8% and the low water level at the Monasavu Hydropower Station.

In addition to the national utility's installed generation capacity, the Department of Energy (DoE) has also installed roughly 600 diesel based systems in various rural communities.

According to the Reserve Bank of Fiji, the Fiji Electricity Authority (FEA) generated 587,004 MWh of electricity in the first three quarters of 2009. 

Currently, the contribution of the electricity sector to GDP is about 3.6%. This is projected to increase as a result of greater access to electricity in rural areas under the Rural Electrification Programme which, apart from the extension of the grid networks and diesel schemes, also encourages the utilisation of solar home systems in rural communities.

Reliance

The total reliance on imported fuel has been an obstacle to Fiji's development. Nearly half of Fiji's total energy is imported from Australia, New Zealand and Singapore. Australia and New Zealand were the major suppliers of petroleum products in the country. Mineral oil imports in 2008 totalled US$692.8 million, accounting for 33.9% of Fiji’s total national import bill. The transport sector is the main consumer of commercial fuel, mostly in the form of gasoline. In 2009, Fiji imported an estimated 18,850 bbl/day of oil (of which 1,857 bbl/day was exported) and consumed approximately 15,000 bbl/day in 2010.

Imported petroleum fuels account for an estimated 20% of commercial energy use which is exceptionally low comparing to other Pacific Island Countries (99%).

Extend network

87% of the total number of urban households had access to electricity in 2002, and about 49% of rural households are electrified. It is estimated that about 57% of Fiji's total population have direct access to power supplied by the FEA. Electrification rate in 2009 is estimated to be 75%.

The Fiji Electricity Authority (FEA) has an extensive grid system on Viti Levu, and three smaller grids on Vanua Levu and Ovalau. Vanua Levu, the second largest island, has no widespread electricity grid, partly due to the high cost of diesel generation and sparsely spread population of the entire area. The Savusavu grid is powered by an 800kW hydro scheme and a 1.04 MW diesel plant. The electricity grid will not extend to other islands in the foreseeable future. This means that there are communities comprising about 26% of Fiji’s 837,000-strong population that could be served by off-grid solar systems.

The FEA’s operations on the three major islands – Viti Levu, Vanua Levu & Levuka (Ovalau), with a total peak load of about 138 MW, supplies about 740 GWh of energy per annum. It serves a total customer base of over 147,000 comprising of over 134,000 domestic customers and remaining belonging to Commercial or Industrial sector. The FEA’s prominent transmission and distribution assets include over 140 route km of 132 kV transmission lines, about 8,300 route km of medium voltage & low voltage distribution lines and over 70,000 poles, and 4,200 distribution substations (pole & ground mounted) with over 50 power transformers.
 

Capacity concerns

Electricity demand in Fiji has been growing at 5% yearly over the last five years, and is expected to continue to grow faster in the coming years. The FEA, however, faces a challenging uncertainty in terms of future load growth and the performance of their future capacity investments, which are directly influenced by the uncertain direction of Fiji’s economy.

Also, the value of Fiji’s imports has been increasing and reached the US$3 billion mark in 2006. A major contributing factor to this increase has been the importation of mineral fuel, which has increased in value from around US$400 million in 2004 to about US$1.2 billion in 2008. The heavy dependence of industry on imported fuel highlights the vulnerability of the economy to rising fuel prices. This is of particular concern considering that the increase in demand for power over the last decade has exceeded the Monasavu Hydropower Station capacity, and resulted in the FEA supplementing its energy capacity with diesel generation.

Power system reliability within the control of the FEA improved positively in 2010 as measured by two world-class reliability benchmarks. The controllable System Average Interruption Duration Index (SAIDI) improved from 920 minutes in 2009 to 794 minutes in 2010; and the controllable System Average Interruption Frequency Index (SAIFI) improved from 15.6 times in 2009 to 15 times in 2010.

FEA’s operational efficiency standards including system losses and diesel station fuel performance define regional best practice. The moving average system loss (network losses and auxiliary station usage) for the last 5 years ranges from 8.70% to 10.23%. These numbers compare favorably with the international benchmark of approximately 10.00%. The average specific fuel consumption (SFC) across all FEA diesel stations is 0.2419L/kWh with the station usage at 1.84% of total generation. These operational efficiency standards as well as a nearly 60% share of generation from hydro enable FEA to offer the lowest tariff in Pacific including Australia and New Zealand. 

Renewable energy

Biomass energy
The biomass resource supplies at least 50% of the energy consumed throughout Fiji. Rural households use firewood for cooking. There is also some trade in firewood in urban areas. Coconut residues are used for copra drying. The bulk of the bagasse available at the sugar mills is used to produce process heat and electricity for internal use. Current installed capacity is 5 MW at the Lautoka sugar mill, 4 MW at the Ba mill, 3 MW at the Rakiraki mill, and 4 MW at Labasa. In 2008, about 3% of the electricity consumed in Fiji was produced using bagasse and other biomass. Tropik Woods Ltd. uses forestry residue (9.3 MW capacity) and Fiji Sugar Corporation uses bagasse as feedstock. There are also IPP initiatives including Vuda Biomass with 17 MW capacity, iViti with 10 MW and Delta Renewable.

Biofuel
Biodiesel Group Co., Ltd. is currently the only one company making biodiesel with production capacity of 144,000 litres. Biofuel International is at research phase, and can produce 25 million litres of biodiesel (pongamia as feedstock) with the allocation of 5,000 hectares of land. Niu Industries has production capacity of 500,000 litres of renewable diesel (blend of coconut oil with diesel). In addition, the government funds mills in Koro, Rotuma and Cicia with production capacity of 170,000 litres each. The government aims to have ~20 such mills by 2013. Copra Millers (Fiji) Ltd. is also funded by the government and produces 2.2 million litres with production capacity of 26 million litres of coconut oil. With regard to bioethanol production, Fiji Sugar Corporation produces about 100,000 tonnes of molasses. Currently, 90% of molasses are exported. There is a potential for 34 million litres of ethanol annually. As average demand for E10 blend is 8 million litres, surplus (~26 million litres) can be exported.

Geothermal energy
There is some evidence of geothermal resources (in the form of hot rocks) in two Vanua Levu sites. Preliminary assessments by the Department of Energy (DoE) indicate that there is the potential for steam generation in Labasa, with an estimated sub-surface temperature at 500 m below ground of 125 ºC. Around Savusavu the estimate is 160ºC. Deep drilling is necessary to verify the estimated resource data, although the theoretical potential of this resource is very high. 14 potential feasible sites have been identified; and power volume from these sites is 38 MW (15 MW from Viti Levu and 23 MW from Vanua Levu). However, exploration costs to ascertain the resource are the challenges.

Ocean energy
The ocean surrounding Fiji has the resource to fuel an ocean-thermal energy conversion (OTEC) plant. A Japanese consortium determined that off the Viti Levu Coral Coast, the temperature difference between the surface ocean water and the deep ocean waters, at depths of at least 800 m, was on the average 22 ºC. They conceptualised a multiple purpose land-based 1 MW OTEC plant for Somosomo Bay, in March 1991.  Information is available in: Ocean Wave Energy in the South Pacific: the resource and its utilisation (Barstow and Falnes, November 1996, SOPAC Report 234).

Hydropower
The DoE is monitoring potential micro-hydro sites in rivers and creeks, to identify sites to produce electricity for communities not served by the FEA grid. The DoE has published preliminary data collected from roughly 200 sites around the country.  The total installed micro-hydro capacity is about 960 kW (84% at Wainikeu or Wainiqeu, a system operated by the FEA). It is estimated that the four additional sites where the DoE is planning to install monitoring equipment might represent a combined 500 kW potential.

A full feasibility study for the Qaliwana Hydro Project has been completed and has been evaluated against other potential hydro projects such as the Wailoa Downstream Hydro Project before the final development plan is drawn up. In September 2008, a contract to construct the 40MW Nadarivatu Renewable Hydro Power Project was awarded to Sinohydro Corporation Limited of China. When commissioned, the renewable generation output from the power station will greatly assist the FEA in moving towards achieving its renewable energy target of 90% from renewable resources by 2011.
The Nadarivatu Renewable Hydro Power station is expected to be commissioned by the end of 2011. It will add 40 MW of power capacity, generate 101 million of units of electricity in an average rainfall year, and reduce carbon dioxide emissions by 66,000 tonne each year.

Solar energy
There is continuing data being acquired from the Nabouwalu Hybrid Power Station (since 1996) with an annual average insolation of 4.5 kWh/m2/day.  In addition, there is a two-year record available for Vunatovau from the Southern Pacific Monitoring Project (1995-1996). The annual average insolation for this location is 4.8 kWh/m2/day.

To utilize the solar radiation, solar PV has been used to charge batteries and provide household solar lighting. During 1987, over 100 solar home systems (SHS) were installed in cane settlements in Viti Levu. They were maintained by the DoE with a monthly fee of F$4.50. Due to under-sizing of systems, customer dissatisfaction was high. However, currently there are about 1200 SHS installed in Vanua Levu and nearby Islands; and 2,000 SHS are to be installed in 2010. The system consists of a 100 W solar panel, lights (1 x 1W, 1 x 7W and 3 x 11W), and one 12 V power point, powered by 100 Amp-hours.

Wind energy
Prasad (1999), in a study on wind power in Fiji, determined that the average wind power flux over the windiest areas is between 42 and 140 W/m2 (wind speeds between 4 and 6 m/s). There is good potential for the use of small scale wind turbines, using battery storage to provide power to remote communities and for remote telecommunications. There is another wind resource analysis, carried out for two major islands in the Fiji, using wind data from July 1993 to June 2005 from NASA data base. Annual seasonal variation in wind speed, direction and power density were analysed for various locations. The average yearly wind speed for Fiji is between 5 and 6 m/ s with average power density of 160 W/m2. Site specific validation showed no significant relationship between NASA and experimental data. The wind resource at Laucala Bay has a power density of 131 W/m2 at 55 m. The expected annual energy produced from a 275 kW GEV Vergnet wind turbine is 344 MWh. The capacity factor of the turbine is expected to be 14.3% with an overall efficiency of 37%. The electricity generated would cost $FJ 0.27 per kWh. The system will payback its worth in 12.2 years.

Currently a wind farm has been setup in Butoni, Sigatoka, which consists of 37_275 kVA Vergnet wind turbines connected to the grid. The total capacity of the wind turbine is 10MW, anticipated to produce annually 11.5 GWh of electricity for FEA. The Butoni wind farm performed satisfactory in 2010 with a total generation output of 6.42 million units of electricity, resulting in thermal fuel cost savings of about $2.06 million and reducing GHG emissions by about 4,211 tonnes in 2010 alone.

Energy efficiency

According to a study conducted to determine energy efficiency in Fiji Islands during 1970-2005, there were four major energy crises during this period due to oil shocks. Using the energy output ratios at the aggregate levels and three major sub-categories of energy use, the study was able to establish that Fiji made significant energy efficiency gains in response to the energy crises and by and large a significant proportion of this achieved by market forces causing increases in energy prices.  

Several opportunities still exist for improving energy efficiency in the country. Notable avenues of action include the reduction of petroleum consumption through the utilisation of low-energy technologies in the residential and industrial sectors, as well as improving energy efficiency in the country's lucrative hotel and tourism sector.

The FEA has a Demand Side Management Team; and the Team completed two energy audits for the Rewa Dairy Factory and the Warwick Hotel on the Coral Coast in 2010. Whilst past energy efficiency efforts have been limited to energy audits, current trends in the country are towards setting up Energy Efficiency Service Companies, in an effort to promote private-sector involvement in the improvement of Fiji's energy efficiency. This was proposed through the Pacific Subregional Renewable Energy and Energy Efficiency Plan, financed by the Asian Development Bank (ADB).

In terms of final energy consumption, the transport sector has continually consumed over 40% of the total energy supplied, followed by the commercial sector, industrial and domestic sector. There was a significant increase in the demand for electricity, increasing by an overall 6.8%, from 715.2 million units in 2009 to 764.2 million units in 2010. The main increase in electricity consumption was in the industrial sector, with demand increase by 10.2%, from 172.3 million units in 2009 to 189.9 million units in 2010. Demand in the residential sector grew by 3% whilst demand in the commercial sector also grew significantly by 7.7%.

Ownership

Electricity market
The Fiji Electricity Authority (FEA, www.fea.com.fj) established in 1966, is responsible for the generation, transmission and distribution of electricity in Fiji. The state-owned FEA generates almost all electricity in Fiji.  However, the government plans to restructure the FEA to encourage private sector participation through Independent Power Producers (IPPs). The government is also considering separating FEA’s regulatory functions from its commercial activities. The overall goal is to achieve efficient, cost effective and environmentally sustainable energy development.

The FEA operates through a hydropower-based Viti-Levu-Interconnected-System (VLIS) and the isolated Rakiraki diesel system in Viti Levu. In Vanua Levu there are two isolated systems: Labasa and Savusavu. In Ovalau there is the diesel system in Levuka. Presently, the FEA includes a relatively small 10 kW PV array connected to the VLIS at the Navutu Depot in Lautoka. In addition to the major Wailoa (Monasavu Dam) 80 MW hydropower system, there is a 0.8 MW hydropower plant in Waineqeu (Savusavu, Vanua Levu). The FEA also purchases electricity, for the VLIS and Labasa grids, generated by the Fiji Sugar Corporation (FSC) using bagasse.

Oil and gas market
Three international oil companies (Mobil, BP and Total) import petroleum products into Fiji, distribute their products at wholesale and retail levels, and re-export to other Pacific countries (PICs). Supply is provided by medium-range tankers from refineries in Australia, Singapore and New Zealand. Currently the Government of Fiji itself is supplied by Total through a five-year contract with the Public Works Department (PWD).

The Ministry of Commerce regulates wholesale and retail prices of motor spirit (also called gasoline or petrol), kerosene and automotive diesel oil (ADO), and influences to some extent the technical specification of fuels. The prices of fuel are reviewed on a monthly basis. Prices vary in different geographical areas. Large consumers such as the FEA negotiate bulk contracts.

Liquid petroleum gas (LPG) is imported and marketed by two companies, Fiji Gas which has operated in the country for several decades and Bluegas, which began in 1989. LPG is not under government price control.

Competition

The supply of electricity to consumers in Fiji is split into that supplied by the FEA and that supplied to rural consumers by the PWD, operating small power grids at five provincial centres. The former is by far the largest, accounting for all major grid areas in the main islands. The FEA is a state-owned organisation, with the monopoly on the transmission and distribution of electricity via the national grid, and is a vertically-integrated organisation.

Management reforms introduced by the FEA in 2001 have been effective in enabling a substantial increase in the contribution to generation of IPPs, for which provision (under signed agreements) has been made in the 10-year development plan. The participation of IPPs in the electricity generation sector has been increasing with the revised Initial Electricity Energy Fee (IEEF) approved by the Fiji Commerce Commission.

The Government through the Ministry of Public Enterprises had engaged the law firm of Minter Ellison to coordinate the re-structure of the FEA and arrange for listing of the FEA on the South Pacific Stock Exchange. This exercise includes the transfer of the Regulatory functions from FEA to an appointed Government department.

Energy framework

Fiji does not have laws that deal specifically with energy; however, moves are under-way to have an Energy Legislation in place by around 2011. At the moment, there is a National Energy Policy that provides the guiding principles with respect to the energy sector. Fiji also has an Environment Management Act (EMA – 2005) that deals with issues pertaining to the protection of the environment.

National Energy Policy (2006)
The development and approval in 2006 of the National Energy Policy (NEP) by the cabinet has provided a common framework for both the public and private sector to work towards the optimum utilisation of energy resources, for the overall growth and development of the economy. The policy focuses on four key strategic areas, that include;

• National Energy Planning,
• Energy Security,
• the Power Sector, and
• Renewable Energy Development.

With challenges confronting the sector, summarily the approach intends to strengthen the energy supply sources, and simultaneously manage the demand for energy. Thus, the government further plans to develop energy legislation based on the NEP.

Fiji has a Biofuel Program including some standards. Diesel standards has been amended to allow 5% (max.) biodiesel to be blended with diesel (E5); and Gasoline standards has been amended to allow 10% (max.) of ethanol to be blended with gasoline (E10). They are currently voluntary as the lack of production capacity prevents the mandatory status.

Fiscal incentives for Renewables include: lower duty for diesel which is used for blending with biodiesel; 10 year tax holiday for a taxpayer undertaking a new activity in processing agricultural commodities into bio-fuels from 2009 to 2014; and vat exemption for items necessary for biofuel and renewable energy production. In addition, there were two tariff increases implemented in all categories in 2010, approved by the Cabinet and the Fiji Commerce Commission. Together with the tariff increase, the government VAT subsidies for Domestic customers were also removed and full vat was charged on all domestic bills from November 2010.

DoE is working on Net Metering and Feed in Tariff.

Rural Electrification Policy
In 1993, the Cabinet endorsed a revised Rural Electrification Policy. Under the policy, any rural village or settlement is entitled to request government assistance for electrification. A Rural Electrification Unit (REU) was set up within the DoE to facilitate the implementation of the policy. Since 1993, approximately 900 villages have applied to the DoE for electrical services. In 2010, 45 REPs funded by the government were completed and commissioned.

The majority of villages and settlements that cannot be served by FEA line extension could be served with solar-home-systems (SHSs) with the government stations, and surrounding villages and settlements with hybrid power systems (HPSs). In addition, there are a few villages with appropriate hydro resources and relatively modest needs, which could also be provided service using the model under evaluation for SHSs. Under the 1993 policy there are three electrical service choices:
(1) The extension of the FEA grid or a government station mini-grid to provide 24 hours per day service;
(2) A diesel generator with a mini-grid system for evening lights and small electrical appliances; and
(3) Renewable energy systems: solar photovoltaics (PV) or small hydro for evening lights.

Energy debates

The Government of Fiji, with funding from the German Government, intends to undertake a review of the national energy policy and the accompanying strategic action plan. The review would include an analysis of the existing legislative framework and recommendations for legislative changes to facilitate the future development of the energy sector. This exercise is intended to be carried out with full consultation and participation of key actors (private sector, public institutions, NGOs, financial institutions, development partners, civil society representatives, etc.).

Energy studies

Fiji is involved with the Pacific Power Association through this. The PPA is an inter-governmental organisation dedicated to promoting co-operation between Pacific island power companies in technical capacity building, improving the quality of power service in the region, and acting as a mediator between national utilities and the private sector.

Fiji is also a member of the Secretariat of the Pacific Community (SPC) – Applied GeoScience and Technology Division (SOPAC)  ), whose activities include the assessment of hydrological and other natural resources for energy production in member states, as well as the promotion of renewable energy services, particularly through natural oceanic resource development.

Role of government

The Department of Energy (DoE) was established in 1981, tasked with the responsibility of safeguarding, through planning and the development of strategies, the nation’s energy sector following the oil crises of the late seventies.

The DoE is responsible for the overall National Energy Policy and for off-grid rural electrification. The Ministry of Trade and Commerce is responsible for establishing and enforcing maximum petroleum fuel prices, but private oil companies import and distribute fuel products.  The DoE comprises of four Sections; i) Research and Development, ii) the Rural Electrification Unit, iii) the Biofuel Unit and iv) the Accounts and Administrative Section. 
There are numerous governmental bodies and other organisations with responsibilities which include some aspects of energy, including the Ministry of Finance, which prepares the national strategic plan (which establishes the framework for energy) and the national budget (which provides or withholds funds for implementing relevant policies and projects).

Government agencies

For RE, an important institution is the Native Land Trust Board (NLTB), which administers all customary (native) land for the benefit of indigenous landowners for both current and future generations. Because about 90% of all land is native, and land lease issues have been contentious in recent years, the success of most large-scale (and many small-scale) RE systems in Fiji will be dependent on the policies of NLTB and attitudes of traditional landowners.

Energy procedure

Fiji continues to seek alternative energy sources to supplement its heavy dependence on imported fuel. The FEA has committed to having 90% of the nation’s energy needs supplied by renewable sources by 2011. The government is offering generous tax incentives to promote the use of renewable energy and more energy efficient technology. In 2009, the FEA, together with the Chinese state-owned Sinohydro Corporation, started construction on a hydro-power plant. The project cost US$150 million, and for  41.7 MW power capacity and shall save the FEA around US$25 million (F$44 million) annually in fuel costs. This hydro-project has been commissioned the 14 September 2012.

The country also aims to have 30% of the fuel used in transport to be in the form of biofuels, Liquid Petroleum Gas (LPG) or Liquefied Natural Gas (LNG) by 2010.  Fiji has also adopted the 2004 Pacific Islands Energy Policy (PIEP) and the Pacific Islands Energy Strategic Action Plan (PIESAP) as the basis of its National Energy Policy, and the Strategic Action Plan that was endorsed by the cabinet in November 2006. In 2006, the cabinet also approved the establishment of an independent and over-arching regulator that would cover electricity, telecommunications, and water services (including sewerage).

FEA completed the review and compilation of the Power Development Plan 2020; and the Plan was presented to key stakeholders in Government for their input. The Plan shows the road map which will enable the achievement of FEA’s target of 90% renewable energy by 2015. It incorporates both the generation and transmission capacity building over the next ten years, and the associated investment level required. It has indicated the important role the IPPs play in the power generation sector in order to achieve the 90% renewable energy target by year 2015. It is envisaged that IPPs will invest some F$350 million into the power generation sector through renewable sources over this period. Currently Fiji Sugar Corporation (FSC) and Tropik Wood Industries Limited (TWIL) are the two IPPs who are supplying electricity to FEA. IPPs are now incentivized to participate in the power generation sector with the attractive Initial Electrical Energy Fee approved by the Fiji Commerce Commission during the year. FEA is working closely with key stakeholders including the Fiji Trade and Investment Board (FTIB) to streamline the processes to ensure that investors in the energy sector are supported continuously so that they are confident and committed in establishing their renewable energy sources in Fiji at the earliest possible time. If the IPPs delay the establishment of their renewable power plant, FEA will not meet the target of 90% renewable energy by 2015 and will continue to rely on the expensive thermal fuel even more.

Energy regulator

The responsibility for electricity generation, transmission and distribution, and its regulation in Fiji, is vested with the Fiji Electricity Authority (FEA), established under the Electricity Act 1966.  The FEA also has responsibility for the development and extension of electricity nationally where financially viable. It currently operates only in those three islands with sufficient demand and population density to justify grid systems: Viti Levu, Vanua Levu and Ovalau.

Economic regulation is currently handled by the Fiji Commerce Commission for all public utilities (telecom, water and energy).

Degree of independence

The FEA is a wholly government-owned, statuary body. The Director of the Energy Department is present in the Board of the FEA as the representative of Ministry of Works and Energy.  Funding for the FEA comes from a state-allocated budget, as well as operational revenues. The Members of the FEA are appointed by the Government. The Chief Executive Officer is an ex-officio Member and is responsible to the Members for the FEA’s management and for the execution of its policies. The powers, functions and duties of the FEA under the Electricity Act are for the basic purpose of providing and maintaining a power supply that is financially viable, economically sound, and consistent with the required standards of safety, security and quality.

A uniform tariff rate is charged for electricity used by each consumer group. The tariffs are fixed according to government policy, and approved by the Fiji Commerce Commission.

The Authority is entrusted with enforcing the Electricity Act and regulations, setting standards, examining and registering electricians, and is empowered to approve and license suppliers to serve certain areas. The Authority is also governed by the requirements under the Public Enterprises Act.

Regulatory framework

Electricity Act (Cap. 180) 1966
This Act establishes the FEA as a corporate body responsible for energy supply, whose general functions include the promotion and encouragement of energy generation with a view to the economic development of Fiji, to secure the supply of energy at reasonable prices, and to advise the Energy Minister on all matters relating to the generation, transmission, distribution and use of energy.

EMA 2005
The Environmental Management Act (EMA) provides the legislative framework for the sustainable development of land and water resource management. However, there have been a number of constraints in implementing the EMA, such as inadequate resourcing of the Department of Environment, outdated subsequent legislations and regulations, the absence of accredited laboratories and poor coordination among agencies.

Regulatory roles

The technical regulation and enforcement of the Electricity Act for the Electricity Industry in Fiji falls under the responsibility of the Regulatory arm of the FEA, FEA Regulatory Unit. The responsibilities of the FEA Regulatory Unit include:

• the registration and licensing of electricians & electrical contractors,
• ensuring industry compliance, in accordance with the Electricity Act and Australian/New Zealander wiring standards,
• the approval of imported electrical appliances and fittings used in Fiji,
• the licensing of new Independent Power Producers (IPPs).
   

Energy regulation role

The FEA fully supports the proposed transfer of the regulatory function that it currently administers to an independent entity within the government. In order to facilitate and expedite this transfer, the Regulatory Unit has been ring fenced within the FEA’s organisational structure for the last four years. During 2010, the FEA held several meetings with the government on their plans and possible time-lines for the transfer.

Other government departments with an interest in energy regulation include the Land Transport Authority (LTA), which deals with motor vehicle regulation, licensing and inspections. The LTA has a potential role in improving energy efficiency while reducing GHG emissions, which is a stated government objective in the energy sector. Also, the Commerce Commission must consider any FEA tariff increase or change in its tariff structure prior to its approval.

Regulatory barriers

The barriers to the implementation of RE in Fiji can be grouped under three categories: (i) commercial viability; (ii) financial feasibility; and, (iii) appropriate service fees or tariffs. Another primary barrier to RE systems implementation is the absence of adequate financing from international development agencies. In addition, the lack of appropriate and enforceable tariffs impedes the widespread use of RE in Fiji. The private organisations identified as potential RESCOs, for example, must compete with subsidised service provided through the government. The establishment of fair and level tariffs for all market actors would improve the conditions for private-sector actor entry into the energy market in Fiji, and potentially improve the conditions for RE uptake in the country.