Cook Islands : Renewable Energy Sector Project

Energy / Renewable energy generation - solar

The Renewable Energy Sector Project will support the government's policy to increase power generation from renewable sources and enhance the government's institutional capacity for implementing the Cook Islands Renewable Energy Chart Implementation Plan (CIRECIP), 2012-2020, which sets a target of supplying electricity from renewable energy sources on all inhabited islands by 2020. It will construct new solar photovoltaic power plants on up to six islands of Cook Islands' southern group. The project will result in annual savings of 1.09 million liters of diesel consumption and annual reduction of 2,930 tons of carbon dioxide emission, for greater energy security and sustainability in the Cook Islands.

The impact of the project will be increased energy security in an environmentally sustainable manner. The outcome will be an increased access to a higher share of electricity generated by renewable energy sources.

Socioeconomic Context and Sector Performance.

The Cook Islands is a Pacific island country divided into two island groups with an estimated total population of 18,600 people. The northern group consists of seven low-lying and sparsely populated coral atolls, while the southern group consists of eight fertile volcanic islands. About 92% of the population lives in the southern group, which includes the main island of Rarotonga. Economic development is hindered by the country's limited size, isolation and distance from markets, lack of natural resources, periodic devastation from natural disasters, and inadequate infrastructure.

The Cook Islands depends heavily on imported fuels. Its total fuel import bill in 2012 was $29.8 million, or 25% of total imports and 9% of gross domestic product. The total installed power generation capacity in the Cook Islands is 11.75 megawatts. Diesel-powered generators constitute about 99% of the total electricity generating capacity. More than 99% of all households are grid connected, 5.5% have additional solar photovoltaic home systems, and 1.0% use small diesel generators. According to the CIRECIP, current electricity demand in the Cook Islands is about 33.0 gigawatt-hours, and is forecast to grow modestly to 38.5 gigawatt-hours by 2020. The southern group is the dominant load center, accounting for 98% of current and future load demand.

Delivery of energy services is undertaken by a state-owned utility on Rarotonga, and by island administration committees on the other outer islands in the northern and southern groups. They are vertically integrated electricity authorities in charge of generation, transmission, distribution, and retail sales of electricity. Assets for energy services are administered and managed by the Cook Islands Investment Corporation, the government's holding company that groups the state-owned enterprises.

Sector Challenges and Opportunities.

Electricity costs in the Cook Islands are among the highest in the Pacific. The reliance on imported fuel is reflected in the high average electricity tariff charged, which was $0.63 per kilowatt-hour (kWh) in 2013. Such a high tariff translates into 4% of annual household expenditure and 15% of annual business entity expenditure. Under the regulations, the utilities can pass on fuel costs directly to consumers and charge an inflation-indexed nonfuel tariff. In Rarotonga, the current tariff is $0.70 per kWh. On the outer islands, due to limited affordability, the government subsidizes a part of the electricity generation cost so the average electricity tariff is $0.57 per kWh. Both are above regional average tariffs.

Volatile diesel fuel prices and heavy reliance on imported diesel fuel for power generation significantly affects the economy and living standards in the Cook Islands. Changing diesel-based power generation to renewable energy sources is expected to reduce the cost of generation by up to 40% and diesel consumption for power generation by up to 95%, and will contribute to sustainable social and economic development. Average annual solar irradiation of around 1,900 kWh per square meter constitutes a major renewable source for power generation.

In 2011, the government issued the Cook Islands Renewable Energy Chart, which sets a target of supplying 50% of inhabited islands with power from renewable sources by 2015, and 100% of the inhabited islands by 2020. It also launched the CIRECIP in 2012, which incorporates a development schedule for electricity generation from renewable sources.

Institutional Framework.

The government has a coherent institutional framework to guide renewable energy development. The National Renewable Energy Committee was formed in 2010 to lead the renewable energy project and ensure timely achievement of the government's renewable energy policy.8 A Renewable Energy Development Division (REDD) was established in 2010 within the Office of the Prime Minister and is responsible for implementing the CIRECIP. REDD is under the supervision and guidance of the Office of the Energy Commissioner (OEC), which is responsible for energy sector planning and management, including electricity tariff regulation and standardization of electricity services.

Increased energy security in an environmentally sustainable manner

Increased access to a higher share of electricity generated from renewable energy sources

1. Solar PV power system development for four Phase 1 and for one Phase 2; BESS subprojects developed; and additional installation of 3 units of BESSs with a preliminary capacity of 3.0 MW and 12.0 MWh

2. Institutional strengthening and project management support