Fiji's National Energy Policy: renewable energy and energy security in line with Fiji's climate change commitments and SDG 7

On 26 January 2024, and following broad consultation, Fiji’s Department of Energy launched Fiji National Energy Policy 2023-2034 (NEP) which sets out an ambitious implementation plan under the leadership and coordination of the Department of Energy to meet Fiji’s international climate change targets and align with Sustainable Development Goal 7 (SDG 7).

The NEP builds on Fiji’s existing and impressive record that includes around 98% of the population having access to electricity that generates approximately 55.25% of its electricity supply from renewable sources, mainly from hydro power. However, the NEP notes that Fiji retains a heavy reliance on imported fossil fuels, particularly in the transport sector. 

The NEP sets out a vision for Fiji’s energy sector as:

A resilient resource-efficient, cost-effective, accessible, reliable and environmentally sustainable energy sector for all Fijians.

The NEP central aim is to tap Fiji’s potential for indigenous renewable energy to increase Fiji’s energy security, and reduce its dependence on expensive and imported fossil fuels that cost the country more than FJ$1.2 billion in 2023 as well as to address climate and disaster risk.

Mr Daniel Lund the principal author of the NEP explains the pivotal nature of the NEP as follows:

’The endorsement of Fiji’s new National Energy Policy marks a significant policy shift towards a more holistic and balanced approach to the governance, decarbonisation, and resilient development of Fiji’s energy sector. The policy has a significant focus on strategies to improve the enabling environment for new investment in renewable energy and central to its implementation will be the upcoming review of the Electricity Act (2017) and the effort to update this legal framework to better comply with Fiji’s current and future energy needs’

The role of the NEP in this pivotal shift is to implement Fiji’s climate change ambitions as set out  in the National Development Plan, National Climate Change  Policy, and Climate Change Act to meet Fiji’s Nationally Determined Contribution under the UNFCCC Paris Agreement.

In order to meet its purpose of “providing the  overarching guidance required to increase efficiency, support  inclusivity and gender equity in relation to energy and the  energy sector, scale-up and diversify Fiji’s renewable energy  portfolio, and support Fiji’s long-term energy resilience and  security” the NEP adopts five Policy Pillars being:  

1. Energy Security and Resilience,  
2. Energy Access and Equity,  
3. Energy Sustainability,  
4. Energy Efficiency, and  
5. Energy Governance.  

All of the Policy Pillars and objectives recognise the ambition of the NEP and the requirement for close cross-sectoral and inter-governmental collaboration to implement its Vision.

The NEP therefore calls for various changes in approach for Fiji’s energy sector that include but are not limited to a leadership role for the Department of Energy that coordinates a government wide effort to:

• improve the enabling environment for  private investment in Fiji’s energy sector including the design and introduction of new standards and  regulation
• Increase the integration of renewable energy potential into government and key industry operations
• Ensure landowners receive more benefits from the use of their natural resources
• Develop an integrated government approach to assist renewable energy projects to ensure land and natural resources can be utlilised efficiently in line with the NEP
• Lead stakeholder consultation to implement the NEP
• Implement changes to the regulation of the energy sector
• Coordinate with relevant stakeholders to remove fossil fuel subsidies
• Develop a biofuel policy
• Work with the Department of Transport to decarbonise land and marine transport
• Increase the update of electrical vehicles (EVs) including appropriate infrastructure and implementing minimum government quotas for EVs
• Support the development of new building regulations to increase energy efficiency of buildings in Fiji
• Develop with other key stakeholders including relevant banking institutions and regulators to create investment incentives for implementation of the NEP
• Develop with the Department of Transport new guidelines for PPPs to implement/facilitate renewable energy projects 

In terms of the envisaged changes to the legal and regulatory framework, the Electricity Act, 2017 will be reviewed in line with the NEP, the specific focus of this legal review will be to:

• Clarify the importance of renewable energy sources for Fiji’s energy sector development in line with the NEP
• Consider and clarify the role of the Department of Energy and Department of Transport in Fiji’s energy sector development particularly in relation to increasing coordination for opportunities for renewable energy projects and their support
• Clarify transparent competitive procurement processes and licensing parameters for Independent Power Producers
• Include further details on the legal framework for power purchase agreements
• Clarify and support the role for off grid and mini-grid energy generators
• Improve the regulatory framework by ensuring the Regulator has appropriate autonomy, resources and oversight to:
  • Ensure competitive neutrality within the energy sector and promote a level playing field within Fiji’s energy market and fair competition between the relevant stakeholders

• Ensure a  transparent pricing methodology is applied when developing  tariffs and wholesale and retail fuel prices. 
• Promote an enabling environment for fair market competition and efficiency to promote innovation and support consumer interests, manage affordability and support the Regulator with adequate mechanisms.
• Increase transparency of regulation and encourage more collaboration amongst all stakeholders

Conclusion

Key to the support of the implementation of the NEP will be the creation of the right enabling environment for the low carbon transition that the NEP envisages. The Department of Energy and the Fiji Competition and Consumer Commission (FCCC) have a key role in terms of planning, creating incentives, developing budgetary support, reforming the pricing mechanisms, encouraging independent power producers, increasing energy efficiency, and implementing standards and good governance. Equally important will be to ensure that the legal and regulatory framework aligns with the NEP to support the right enabling environment to ensure certainty to investors.

Please note this legal update is not, and nor is it intended to be, legal advice. This legal update is provided for information purposes only. If you have any questions related to this legal update please contact the authors:

Atu Siwatibau - atu@sas.com.fj

Seini Tinaikoro - seini@sas.com.fj

James Sloan - james@sas.com.fj