Policy Approaches and Tariff Structures to Maximise Renewable Energy Uptake in Pacific Island Grids

Pacific Islands are at the forefront of the trend towards high or even 100% renewable energy penetration of their electricity grids. Many have been highly or totally reliant on imported diesel fuel, with associated price uncertainties and GDP impacts. Countries like Fiji are highly reliant on hydro power and become vulnerable in periods of low rainfall, such as during El Nino events, when diesel use increases. All Pacific Islands are prone to cyclones, making technology choice and installation requirements harder. In addition, transport of equipment, installation and maintenance can be extremely challenging, and further limit feasible options. Renewable energy-based electricity has the potential to improve the quality of life in many remote islands and also to stabilise power costs across the region. Many Pacific Island countries have introduced renewable energy targets or support policies and some, such as Tokelau, have successfully moved to 100% renewable supply, with a PV/battery system. Policy approaches across the region vary and are often complicated by reliance on aid funding, which in turn has its own drivers. In this paper we propose criteria for assessing the viability of renewable energy support programs, discuss some options suitable for use in Pacific Islands and examine the implications for electricity tariff setting.