The price of petroleum products in 2012 is anyone's guess, but the effort to promote sustainable energy and energy security must continue, said Solomone Fifita, head of the SPC Economic Development Division's Energy Programme.Pacific Island countries and territories (PICTs) have embraced renewable energy and energy efficiency as a means of shielding their economies from the impacts of volatile oil prices. Most aim to increase the amount of energy they get from renewable energy sources. Cook Islands' target is 50% by 2015 and 100% by 2020; Marshall Islands aims at 20% by 2020; Nauru aims at 50% by 2015; Samoa aims at an additional 20% by 2030; Tonga is aiming at a 50% increase and Vanuatu a 25% increase, both by the end of 2012; and Tuvalu's target is a 100% increase by 2020. Setting targets is a reflection of these countries' political commitment, said Fifita. They must, however, go even further and include the adoption of fiscal, financial and regulatory measures that can set the enabling environment for meeting these targets.
SPC's Energy Programme therefore, welcomed the Reserve Bank of Fiji's introduction of the Agriculture and Renewable Energy Loans Ratio. Effective from 29 February 2012, commercial banks in Fiji are required to hold two per cent of their deposits and similar liabilities in loans to the renewable energy sector.
Across the region, the Energy Programme is currently assisting PICTs to analyse the status of their energy sector. Following the Framework for Energy Security in the Pacific, SPC is about to complete the calculation of the baseline energy security indicators for each PICT, using 2009 as the base year. These indicators are broadly grouped under access to energy, affordability of energy, efficiency and productivity of the energy sector, and the environmental sustainability of the sector. The country analyses will contribute to the formulation of effective and meaningful renewable energy and energy efficiency policies.
Last year, experts from the Energy Programme provided in-country technical assistance to eight SPC member countries and, next week, they will go to Marshall Islands and then Palau. After that, they will join forces with the Secretariat of the Pacific Regional Environment Programme (SPREP) and the European Union/African and Caribbean Pacific Group of States (EU ACP) Business Climate Facility to provide similar assistance to Solomon Islands and Papua New Guinea. The United Nations declared 2012 the International Year for Sustainable Energy for All and SPC and its partners plan to also raise awareness about this theme in the Pacific Island countries and territories they visit.
Fifita cautioned that current developments around the world could have an impact on the price of oil in 2012. While oil is presently hovering around USD 100 per barrel, events such as the European debt crisis, the economic performance of the USA, the continued unrest in the Middle East and the diplomatic wrangling over Iran's nuclear programme could easily trigger a return to the 2008 prices, which hovered around USD 150 per barrel. In that year, Fiji's import bill increased by almost 25% due to the higher cost of fuel; Palau's economy contracted by 3%; inflation rates in Kiribati and RMI soared by 18.6% and 17.5% respectively; the GDP ratio of remittances in Samoa and Tonga were exposed and were recorded at 25.2% and 35.8% respectively; and the value of the Marshall Islands Compact Trust Fund and the Kiribati Revenue Equalizer Trust Fund declined by an estimated 20%.
While renewable energy has been promoted for many years now, Fifita reckons that Fiji and Samoa have made the most significant advances. Fiji began investing in renewable energy with its Monasavu hydropower scheme in 1978 and its share of renewable energy is now around 54 per cent, while Samoa began with its Afulilo hydro power scheme in 1987 and is now reported to have a renewable energy share of 43%.