The Republic of Nauru (2012)

Degree of reliance on imported energy:

Nauru is fully dependent on imported fossil fuels for electricity generation. Fuel imports were estimated at 14 million litres in 2003. In 2009, Nauru imported an estimated 1,044 bbl/day of oil and consumed approximately 1,300 bbl/day in 2010.  The fuel import bill for 2009 was estimated at AUD 4.7 million with the current GDP of AUD 29.2 dollars. 
 
Shortages have occurred due to a lack of cash and limited storage capacity and there have been times where voluntary rationing of petrol and rolling blackouts of electricity were the result.

Main sources of Energy:

Total installed electricity capacity (2006): 4 MW 
 
The installed capacity of the present power station is 15.5MW comprising of eight medium and high-speed diesel generators.  
 
The electricity was provided only half days, in blocks of 4 hours. Reliability of energy services equipment has improved recently so that the Nauru Utilities Authority (NUA) is almost capable of delivering a 24-hour service. However, until adequate demand management strategies and user-pays systems are in place, the cost in fuel for 24-hour operation is beyond Nauru’s resources. 
 
In 2008, the country produced an estimated 32 million kWh of electricity and consumed 29.76 million kWh. 
 
Power generation and transportation are 100% dependent on fossil fuels with the phosphate mining as the major consumer, which uses approximately 43% of the energy generated. 
 
There is limited use of LPG on Nauru, in particular in the domestic sector. Hotels and restaurants also use LPG for cooking purposes, though to a limited extent. This situation has arisen due to the long-term reliance on electricity as an energy source, which in the earlier days of the mining operation (pre-1990s) was free.

Country:

Nauru

Extent of the network:

100% of households and businesses are connected to the electricity grid through a circular grid.

Capacity concerns:

The poor quality of electricity services in Nauru is a major concern. The fact that the majority of the diesel generators are out of operation is an apparent indicator. This situation is largely caused by poor management, inadequate maintenance, low tariffs and low revenue collection. The largest defaulters include government agencies and state-owned enterprises.

Potential for Renewable Energy:

Solar energy 
As an equatorial country, Nauru has abundant solar resources according to a 2004 PIREP study. Measurements show an average of 5.8kWh/m2/day with only small seasonal variation.  However, unless very expensive electrical storage systems are included, the penetration of solar power into the grid is limited to around 15-20% of noon time demand. 
 
Solar energy offers the best alternative in Nauru, however limited solar water heating has been implemented in the past. Considering the high usage of electrical appliances, such as air conditioners, refrigerators and stoves, etc., the viability of adopting a solar-replacement policy would need to be carefully evaluated from an economic point of view. In addition, the environmental aspects of battery import and disposal may also create additional problems. 
 
Biomass energy 
Due to the extensive phosphate mining, the development of biomass as an energy source is limited unless extensive rehabilitation of the mined area is undertaken; and it is not likely for biomass to be considered as a sustainable energy source for the future. 
 
Wind energy 
The 2004 PIREP study noted that the wind resource is poorly known and a resource assessment for topside would be worth carrying out to determine the appropriateness of further development. 
 
In 2006, WINERGY NC of New Caledonia conducted a wind mapping exercise in Nauru in an effort to quantify the available wind potential. The wind atlas that was produced showed that Nauru has a good wind regime. The study identified that the best sites for wind projects are in the Northeast where a wind project at IJUW with wind speed of up to 6 m/s at 50m which can possibly provide around 25% of the domestic demand for electricity on the island. The study also found that moderate wind speed of 5.5 m/s at 50m could be found along the eastern coast. In addition, wind date have been measured at the Atmospheric Radiation Measurement (ARM) station in Denig district for over 10 years. 
 
Wind energy sources monitoring equipment has been installed at Anabar to test the potential of wind energy sources for power generation for Nauru, as part of PIGGAREP support for Nauru. 
 
Ocean power 
Ocean technologies (wave, tidal, OTEC) are still under development and do not have the proven reliability necessary for operation in remote environment. They are therefore not an option for the near future.  
 
The Japanese did a technical trial of OTEC in 1981 with an experimental plant on the west coast of Nauru that produced a net power of 15kW. The trials were mainly as engineering trials to gain experience with the technology and have not resulted in further development in Nauru.

Potential for Energy Efficiency:

There are gross inefficiencies in the way electricity is generated and used. For example, the cost of generating electricity using diesel generators is so high that it would be 50% cheaper for households to use propane gas for cooking. 
 
In 2000-2001, domestic use of electricity amounted to 18.4 GW. With 1677 households enumerated in 2002, electricity use per household is one of the highest in the Pacific with an average use of 915 kWh/month. In 2003, electricity consumption was estimated to be 21 GWh. 
 
The high electricity consumption situation in Nauru has been attributed to access to very cheap electricity during the years when the economy was doing well from phosphate mining – historically, it was access to free electricity when the Nauru Phosphate Company was operating. This has been further constraint with the limited electricity generation capacity coupled with other issues such as the limited cash-flow situation and no tariff structure, resulting to residential customers paying a flat rate of AUD5.00 per month despite the amount of electricity consumed (later increased to AUD50 per month). In addition, there is a general lack of understanding of the issues surrounding energy generation and consumption among the public; and many customers were not metered or not metered regularly.   
 
Opportunities abound for the introduction of demand-side management and energy efficiency in Nauru, in particular in the government and domestic sectors where there is high usage of air conditioners, electric water heaters, electric water pumps and electrical appliances.

Ownership:

The production and distribution of electricity has traditionally been a side business of a wholly government owned Nauru Phosphate Company (NPC). It was dismantled in 2007 into several state-owned enterprises, one of which is the Nauru Utilities Authority (NUA). The NUA is the public-owned sole electricity supplier for the entire country and is the sole agency responsible for power generation in Nauru. 
 
The Nauru Phosphate Company (NPC) is responsible for the bulk importation of all petroleum fuel and products to Nauru, and supplies all petroleum fuel for domestic use such as diesel oil (ADO), petrol, dual purpose kerosene (DPK), lubricants, solvents and LPG. A number of small businesses individually also import lubricants, solvents and small amounts of LPG for which records were not readily available.

Structure / extent of competition:

There are no other companies/utilities except the Nauru Utilities Authority. 
 
The power sector in Nauru is entirely vertically integrated and controlled by the Nauru Utilities Authority (NUA).

Existence of an energy framework and programmes to promote sustainable energy:

A National Sustainable Development Strategy (NSDS) 2005-2025, which sets out strategies for economic, social, infrastructural and cross-cutting sectoral reforms, was announced in 2005. It was reviewed in 2009 while keeping its long-term vision, “A future where individual, community, business and government partnerships contribute to a sustainable quality of life for all Nauruans”. 
 
According to the NSDS, the energy sector goal is to provide a reliable, affordable, secure and sustainable energy supply to meet socio-economic development needs through implementing a National Energy Policy Framework (NEPF), which addresses (i) cost effective, secure and sustainable procurement and supply of fuel, (ii) reliable and efficient energy supply and distribution, (iii) management of demand focusing on consumption efficiency and conservation, and (iv) increased use of renewable energy and other alternative forms of energy. 
 
Since 2007, the National Energy Policy Framework (NEPF) was being developed by the government with help of the Secretariat of the South Pacific Applied Geoscience Commission (SOPAC) through PIEPSAP project. The NEPF was approved by cabinet in mid-2008. 
 
According to the NSDS, the medium term targets (2015) for the energy sector are: 50% of energy demand covered by alternative energy sources, including renewable; electricity losses and leakage reduced to less than 10% of power production and distribution; and electricity power demand reductions maintained at least 30% levels. 
 
The Strategic Action Plan for Renewable Energy in Nauru’s Energy Framework has a policy of a “10% increase in the share of renewable in the energy mix of Nauru by year 2020.” This is to be achieved through various means including the harnessing of Nauru’s wind resources. 
 
Nauru started a Nauru Energy Efficiency Training and Public Awareness Campaign as part of an overarching project with the primary objective of poverty alleviation by improving access to electricity to ameliorate living conditions. The specific aim of the campaign is to improve the demand side efficiency of the energy sector in Nauru, and has been structured to: commence an energy efficiency awareness raising and public education programme; conduct energy audits at Government buildings and selected residential houses; and build capacity of local agencies including the training of the Energy Efficiency Officer to carry out energy efficiency programmes such as information dissemination and public awareness activities with energy audits and implementation. 
 
An Energy Efficiency Action Plan (EEAP) 2008-2015 has been developed as part of the campaign by EDF-9 funds managed and implemented by it-Power of UK through REP-5, and executed by the South Pacific Applied Geoscience Commission (SOPAC) and Live & Learn. It has been developed through a consultative process involving stakeholders from the public sector, private sector and civil society groups in order to contribute to the improvement of the energy sector and livelihoods in Nauru. The overarching vision of the EEAP is as in the Nauru National Energy Policy vision statement: “Secure and sustainable energy, enabling the social and economic development of Nauru”. 
 
The EEAP provides a guideline for the development and implementation of energy efficiency strategies for short-term priorities for 2008-2010 and a medium to long-term plan for 2010-2020. The latter includes strategies to establish a Demand Side Management Team within the Power Utility, conduct loss-analysis of the electricity transmission and distribution, build capacity of local personnel, promote and demonstrate EE and conservation measures, conduct energy audits, strengthen legal and regulatory frameworks, and promote the use of alternative/EE technologies. 
 
The EU-funded Support to the Energy Sector in five ACP Pacific Islands Countries (REP-5) supported Nauru to achieve the overall objective of poverty alleviation by improving the access to electricity and thus the living conditions through energy efficiency and renewable energy activities, and was completed in 2009. 
 
With regard to RE activity, a 40 kWp grid-connected PV system has been  installed at Nauru College; and the PV system has been generating 4,500 kWh per month on average since its installation in October 2008 which translates to a fuel saving of 1,325 L per month at the power station. As for EE, over 1,800 prepayment meters were installed by August 2009 for all residential and commercial customers and the prepayment metering system came online. The prepayment meters were supplied to the NUA as part of its reform strategy, which aims at recovering its generation costs through a mix of demand-side management and a user-pays tariff structures. 
 
Within the EE projects, the REP-5 formulated a new tariff schedule that gradually increases in the tariffs to move towards a cost-recovery regime. The tariff structure was approved by Government in July 2008, and came into force in August when the prepayment system was activated. To assist customers to adjust to the new system, an extensive energy efficiency awareness campaign is underway. At the same time, an overall Energy Efficiency Action Plan for Nauru is being developed and renewable energy is being introduced. In addition, an Energy Efficiency Officer was recruited in November 2007, and oversaw the energy efficiency actions contained in Nauru's Energy Efficiency Action Plan (EEAP) until May 2009. External technical assistance was contracted in March 2008 to develop the EEAP in conjunction with the Energy Efficiency Officer. The EEAP was finalized in December 2008, and the activities contained within were implemented until June 2010 by two new Energy Efficiency Officers hired in July 2009. The Nauru Energy Efficiency Community Awareness Programme was launched in August 2009. 
 
Nauru signed the financing agreement for the European Union’s 10th EDF in October 2007 to implement a Renewable Energy Programme worth €2.3 million. EDF 10 involves activities in EE and RE projects as well as distribution/transmission line review and refurbishment.  
 
Nauru participates in the Pacific Islands Greenhouse Gas Abatement through Energy Project (PIGGAREP) of the Secretariat of the Pacific Regional Environment Programme (SPREP). In 2008, IGGAREP introduced its assistance for Nauru to expand the Nauru RE market beyond those provided through the REP-5 and EDF 10. It includes key activities: a study of the potential productive uses of solar energy for desalination, laundry and catering purposes at the hospital and in fisheries; wind power feasibility study at the highest areas of Nauru (the topside); and strengthening the capacity of the NUA. The study of the potential use of solar energy is timed to take place after the adoption of the tariff study under REP-5 (in mid-2009) since the power tariff has a significant impact on the commercial viability of the solar energy applications. The strengthening of the capacity at NUA involves three activities including a small island states capacity building workshop on renewable energy technology applications, local training workshops on renewable energy, and extension of the employment of the Energy Officer at NUA which was financed by the REP-5. 
 
Nauru has endorsed the UNFCCC and is an active participant in the Pacific Islands Climate Change Action Program (PICCAP). It is also a full member of an independent, intergovernmental, regional organisation established by South Pacific nations in order to provide geotechnical services, the SOPCA, and of the Secretariat of the Pacific Regional Environment Programme (SPREP).

Current energy debates or legislation:

In 2007, a Technical Assistance (TA) on utilities reform by the ADB was completed and formed the basis of the Government’s utilities reform strategy. The key element of the strategy was a move away from the current practice of supplying free electricity to residential consumers to a cost recovery framework. The ADB’s TA also involved a review of draft legislation to establish utilities as a separate state owned enterprise.

Major energy studies:

The Pacific Islands Renewable Energy Project (PIREP) is a good source of reference, although a little outdated.  ADB made a thorough analysis of the current electricity and water provision system in Nauru.  The United Nations Development Program (UNDP) keeps an overview on current project in the Pacific related to energy and climate change.

Role of government:

Energy and energy efficiency are currently not clearly assigned to a single government department. Until a few years ago, all energy related decisions were made by the National Phosphate Company (NPC). Now, the Ministry of Commerce, Industry and Resources is responsible for the implementation of the new National Energy Policy Framework (NEPF), and the Aid Management Unit and the Ministry of Foreign Affairs are also involved. 
 
The Ministry of Utilities is foreseen to provide the lead role in the implementation of the Energy Efficiency Action Plan.

Government agencies in sustainable energy:

The Ministry of Commerce, Industry and Resources is responsible for energy policy and also in charge of the Environment Division. In that capacity, this ministry is in the best position to advocate for sustainable energy.

Energy planning procedures:

Some of the donor supported programs related to energy, such as the Pacific Islands Energy Policy and Strategic Action Planning (PIEPSAP), have a strong focus on energy policy, planning and management. Reportedly, the planning and management of energy has already improved over the last some years, following the formulation of the NSDS and NEPF.

Energy regulator Date of creation:

There is no independent energy regulator. The Nauru Utility Authority (NUA) functions as a form of regulator as it is the only player in the energy sector of Nauru. The NUA was established in 2007 as part of its reform strategy.

Degree of independence:

NA

Regulatory framework for sustainable energy:

NA

Regulatory roles:

NA

Role of government department in energy regulation:

The Ministry of Commerce, Industry and Resources is currently in charge of utilities and thus in charge of energy regulation.

Regulatory barriers:

Until customers start paying the actual cost of electricity, grid power will be cheaper for the end-user than power from sustainable energy.  Although the government is interested to reduce its fuel expenditures, there is no incentive from a user's perspective. Moreover, since a large part of the economy is financed by donor funds, people expect donors to balance the costs of renewable energy. 
 
There are a number of foreseen challenges that could be of hindrance to the success of the proposed activities particularly, in the sustainability of energy efficiency and conservation programmes in Nauru due to the lack of incentives, policies and plans, to name a few. 
 
Land rights are difficult to obtain in Nauru. Land cannot be bought and sold, only leased. The risk to install a PV park or a wind turbine is high, since the system owner would have little protection against the landowner barring access to the property or increasing land leases. Non-payment of electricity bills is an additional risk for investors.

References:

CIA (2011) The World Factbook: Nauru. Available at: <a href="https://www.cia.gov/library/publications/the-world-factbook/geos/nr.html... [Accessed 13th september 2013] 
 
SPREP (2008) Pacific Islands Greenhouse Gas Abatement through Renewable Energy Project (PIGGAREP) - Nauru Interventions. Available at: <a href="http://www.sprep.org/Pacific-Islands-Greenhouse-Gas-Abatement-through-Re... 13th September 2013] 
 
SOPAC (n.d.) Country Profile: Nauru. Available at: <a href="http://ict.sopac.org/VirLib/CP0007.pdf">http://ict.sopac.org/VirLib/CP00... 13th September 2013] 
 
SPC (2012): Country Energy Security Indicator Profile 2009 –Nauru. Available at: <a href="http://www.spc.int/edd/en/download/finish/11-reports/651-nauru-country-p... [Accessed 13th September 2013] 
 
SPREP (2008) PIGGAREP Consultancy Opportunity (requested 2008): Request for Quotations - Nauru Wind Power Feasibility Study. Available at: <a href="http://archive.iwlearn.net/www.sprep.org/www.sprep.org/vacancies/NauruWi... 13th September 2013] 
 
REP-5 (2010) Support to the Energy Sector in Five ACP Pacific Island Countries: Nauru. Available at: <a href="http://www.rep5.eu/node/5">http://www.rep5.eu/node/5</a> [Accessed 13th September 2013] 
 
Republic of Nauru (2009) National Sustainable Development Strategy 2005-2025 Review, October 2009. Available at: <a href="http://www.ausaid.gov.au/Publications/Pages/nauru-sustdevstrat2005%E2%80... [Accessed 13th September 2013] 
 
RECIPES (2006) Country energy information: Nauru, Renewable Energy in emerging and developing countries, September 2006. Available at: <a href="http://www.energyrecipes.org/reports/genericData/Pacific/061129%20RECIPE... [Accessed 13th September 2013] 
 
Government of Nauru (2008) Nauru Energy Efficiency Action Plan 2008 – 2015, Draft as at November 2008. Available at: <a href="http://www.rep5.eu/files/pages/file/Nauru/EEAP%20-%20Final%20Draft%20as%... [Accessed 13th September 2013] 
 
Government of Nauru, Aid Management Unit (2010) Donor-Sector matrix (March 2010)

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