WE have recently been witnessing in the mass media, claims and their being countered that we are close to an energy crisis.
The Fiji Electricity Authority has said that low rainfalls and high diesel costs, amongst other things, are causing it problems. And it needs an increase in the electricity surcharge, which the interim Government recently granted, to cope.
FEA chief executive officer Hasmukh Patel in an interview last Saturday, said more than $14million had been spent to buy diesel in three months. That has been what it has cost the Fiji Electricity Authority to meet the electricity demands of its consumers on Viti Levu.
Mr Patel said they spent $6.1m in September, $2.7m in October, and were projected to spend around $6m for November. He said the bill was markedly lower in October because they used more hydro instead of diesel to generate electricity.
Amidst all this, Mr Patel says the organisation is on target to fulfiling one of its missions which is to generate electricity from renewable sources by the year 2011. He said July of that year was when the Nadarivatu hydro-electricity scheme was scheduled to come on line. Work he said had already begun by the State-owned Chinese company Sino Hydro Corporation.
That he said was one approach FEA was using to address Fiji's energy needs. "Some people say we do not do our planning. Yes, we do our planning." Mr Patel said his organisation was serious about engaging with other companies to generate and sell electricity to FEA, which it would in turn, buy and pass on to customers.
The concept of independent power producers, he said, was not new or in any way restricted to Fiji or countries producing electricity solely or largely from diesel. He said: "It's not a concept which is peculiar to Fiji because it is used the world over."
This is a practice indulged by the most advanced of societies.
He gave an example that was already in existence where the FEA, after signing a power purchasing agreement or PPA, buys electricity from Tropik Woods in Lautoka. And also from the Fiji Sugar Corporation. He said they had negotiated with Tropik to supply FEA with nine megawatts of electricity. However, because of what he termed, teething problems, Tropik had been able to contribute to FEA's power grid 6-7 megawatts. He said FEA was already buying power from FSC mills in Labasa and Lautoka for six months of the year that corresponded to the crushing season.
These arrangements he said had been expanded.
Tropik Woods, according to him were looking at setting up another plant at Qeleloa in Nadi which would also sell power to the FEA. FSC was also looking at developing a plant in Rarawai, Ba that will supply power to the FEA for 48 weeks in a year.
The remaining four weeks will be dedicated to maintenance works and anything else necessary to enable the plant to sustain a dependable supply throughout the year.
IPPs and PPAs are very much to the FEA's advantage as Mr Patel said the costs are borne by the companies. FEA only paid for what is or will be generated. The only problem with IPPs was, or would would be when the concerned company did not live up to its promise. In this case, the FEA would then have to look around for another to take the place of the defaulting company.
He said business is only conducted with IPPs who will be or are using renewable sources. These can be either, wind, bio-mass which he said in Fiji's case is basically using wood chips, and harnessing geo-thermal activity to produce electricity.
After the signing of the PPAs, the FEA gives its partner six to nine months to meet certain conditions. Within this timeframe, FEA also is on the lookout to see that the IPP has engaged in action that will result in clean energy being generated from renewable sources.
The coming to fruition or realisation of all these plans, Mr Patel said would culminate in 80-90 per cent of Viti Levu's electricity needs being supplied through clean and efficient sources. He said FEA, because of dropping water levels at the Monasavu dam exacerbated by low rainfalls, had to rely on its diesel generators to produce 70 per cent of Viti Levu's needs.
Using diesel, it costs 51 cents to generate, deliver or transmit, and retail a unit of electricity. The FEA is charging 23c. Using hydro power, that is Monasavu, it would cost the FEA 15c.
Mr Patel said Fiji consumers had been on the winning side. He said we paid 13 cents for a unit of electricity in 1983 and 25 years later are paying 23 cents.
Asked on why successive governments had not seen it fit to raise the cost of electricity to match FEA's costs, Mr Patel in response, wrote on his whiteboard the figure, 800,000. Tapping on this figure he said: Government needs to think of this. Government is not a business. It has a social responsibility to the people." When asked if FEA's awareness campaigns aimed at driving consumption down or at least keep them at 'reasonable levels' so as to help with FEA's power bills, Mr Patel answered by shaking his head and posed a rhetorical question. He said: "Why do you think people do not care? It's because electricity is cheap. That's why." He said businesses, that had their own generators, among them the larger hotels, found it cheaper to use power supplied by the FEA.
He said it was a combination of the above factors that had seen FEA run up losses in the millions. Losses which he said the FEA could not sustain and said needed a surcharge increase to stay afloat.
The Consumer Council of Fiji has, however, been very vocal in its resistance to any increase.
Council CEO Premila Kumar has been specifically critical of FEA's saying its high costs can be directly attributed to it having to use more diesel because of low water levels at Monasavu.
A council statement signed by Mrs Kumar dated November 4 reads: "According to the 2007 FEA annual report, the Authority made $15.1 million in the year from fuel surcharge alone and therefore contributing to the financial profit for FEA for the year at $14.7 million before tax. This is despite the fact that 64.8 per cent of energy was generated through hydro in 2007 with 35.2 per cent generation from diesel. Why then were consumers asked to pay fuel surcharge given the hydro to diesel generation ratio for 2007?
"Furthermore, 2004 was the worst year for rainfall figures in the country at 3425mm because of the drought experience. Even then, FEA was able to produce 57 per cent of energy from hydro in a year of poor rainfall. Surely, Mr Patel cannot say that 2008 is a worse off rainfall year when compared to the drought experience year of 2004."
The council on October 9 said FEA "...has confirmed the completion of some of its major renewable energy projects that namely the Wainakasou Hydro Station 6.6MW, Nagado Hydro Station 2.8MW, Butoni Wind Farm 10MW, Tropik Drasa IPP 9.3MW. These projects are understood to compensate for Fiji's reliance on diesel-generated energy. Hence, if Monasavu dam is said to be performing poorly, these other projects are up and running and should ensure that a higher percentage of energy is produced from renewable sources than from diesel usage."
Mrs Kumar on Friday commented that the price of oil now stood at 2005 levels. The council also, while quoting the Fiji Meteorological summary report for September, said the Monasavu dam area received above average rainfall between July and September.
It noted that the Commerce Commission in October 2007 had raised with FEA its observations of negligence at the dam.
This the commission said led to the loss of 5MW or $2m because of dam overflows which was the result of maintenance work for the upkeep of the dam not being done.
