Electrification in Oceania: Case Study of the Solomon Islands

The Solomon Islands is largest island nation in Oceania in terms of land area, and the second largest nation by population (excluding Australia, New Zealand, and Papua New Guinea). It also is the least electrified. Less than 20% of the population of Solomon Islands has access to electricity. Those who do have access often have to deal with unreliable and inconsistent power supply at exorbitantly high costs.  The lack of electrical access poses a major problem for long term development, increases inequality, and exacerbates the impact of crisis associated with climate related disaster. In response the World Bank has partnered with the Solomon Islands Electrical Authority (SEIA) to improve both quality of life and resilience through mini-grids and interconnection subsidies. Should they succeed, it should export these plans as a blueprint to energy access throughout the rest of Oceania.

Image result for map of solomon islands

The Islands principal generating units are diesel fueled power generators.  Approximately 80% of generating capacity and 87% of all energy generated came from diesel facilities. SEIA also operates a number of outstations (mini-grids) that are traditionally defined by diesel generation, but may also include a small number of photo-voltaic facilities.

Station Type Capacity (MW) Capacity Percentage GWh Generated (2018) Generation Percentage
Lungga Power Station Diesel 10 61.82% 81.75 84.90%
Honiara Power Station Diesel 3 18.55% 2.46 2.55%
Outstations (mini-grids) Mixed 2.126 13.14% 11.17 11.60%
Henderson Solar Solar 1 6.18% 0.89 0.92%
Ranadi Solar Solar 0.05 0.31% 0.015 0.02%
Independent Power Provider 0.00% 0.00%
Sum 16.176 96.285

Table 1. Information compiled from SEIA’s 2018 annual report.

Power consumption in the various sub-regions correlates with population. Accordingly, the province of Guadalcanal, where the capital city of Honiara is located, is the largest load consuming province SEIA services. Peak power demand has increased from 9.3 MW in 2003 to 15.5 in 2016, representing an annual growth rate of approximately 4%.

According to the SEIA’s 2018 annual report, the average cost of power was approximately $0.26 USD per kWH, though its highest prices range at $0.82 USD. For comparison, the average price of electricity in the US is $0.12 USD, and $0.11 USD in the ERCOT ISO of Texas. Because of the SEIA’s generation mix, fuel accounted for 48.5% of the cost. SEIA considers fuel prices to be the greatest risk to profitability.

The narrative set out is not an objectively negative one, but it highlights the predicament small islands face. Lacking the financial resources to develop large projects, small islands with disparate populations are stuck in a loop of small diesel generators to meet the needs of a localized load. After the diesel unit is built, resources are spent to maintain and build it, expertise is structure around that, and when the time comes for new generation, another small diesel unit is built to meet the incremental demand. The end result is a piecemeal hodgepodge of generation projects that cannot operate as part of a long term efficient system.

The Solomon Islands, however is looking to transform what it means to operate an island grid, and its success could help shape a path for others in the region. The Solomon Islands’ 2016-2035 National Development Strategy acknowledged the long term maintenance problems with diesel generation but understood that renewables have high up-front costs. Furthermore, the small renewables projects that had taken place did little to improve access to electricity. The plan works in two parts. First, it calls for a focus on large renewable projects, principally hydro, on the main island that will reduce the need for diesel fuel imports.

The second part looks at improving access in rural areas and remote islands through several strategies. First, it will redevelop the outstations through the development of renewable hybrid mini-grids. Candidate areas are determined by population density, public facilities, and “anchor” loads such as tourism or commercial operations. Second, it will interconnect low income areas by offering one time subsidies to interconnect into the main grid on Guadalcanal or into one of the outstations.  Third, it calls for the development of grid-connected (large scale) solar facilities to further displace fossil fuel exposure. Lastly, the plan calls for financing aspects of management and implementation to address inequality in terms of both income and gender.

This transformation of course, comes with costs. The Tina River Project (Part 1 of the plan) costs an estimated $240 million. While SEIA closed several major financing hurdles in September of 2019, it still only has 20% of the required financing. Interestingly, part 2 of the plan, which calls for more tangential mini-grids and subsidized interconnection, only costs bout $20 million and has achieved nearly 50% of its financing goals from international partners.

This is significant for two reasons. First, it suggests that investors believe advanced mini-grids are both economic and feasible solutions for small islands. Second, this model of development is exportable to other island states. While not all islands have the same water resources available to build a hydro power damn, nearly all small islands have small isolated populations, disconnected from the grid, with limited or no ability to interconnect.

If mini-grid funding works and is successful for the Solomon Islands, there may finally be a renewable mini-grid model that breaks the the traditional diesel loop island nations get stuck in. Not only would this be a huge economic boon for island states, which would no longer be exposed to the costs of fuel and transmission lines associated with diesel generation, it would also be a moral high ground in the face of climate change. Island states stand to be the most effected climate change, yet they are stuck with mostly fossil fuel resources. If countries like the Solomon Islands can implement innovative and economic clean power solutions, why can’t the rest of the world?

Christopher Matos is a current student at the University of Texas seeking a Masters in Global Policy Studies at the LBJ School of Public Affairs and a Masters in Energy and Earth Resources at the Jackson School of Geosciences. An energy industry professional, Christopher has 5 years of electric utility experience. He has worked for a variety of companies including rural electric cooperatives, state agencies, and large multinational power developers. Chris specializes in market based solutions to energy problems, while keeping consumer, public, and environmental interests in mind. His research interests include energy security with particular emphasis on new technologies and policy.

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