Power Sector Transition in Papua New Guinea – Navigating Challenges

Transitioning to Renewable Energy

Papua New Guinea (PNG) faces significant hurdles in transitioning its power sector away from fossil fuels and towards renewable energy sources. With only 13% of the population currently having access to reliable electricity, the country aims to increase that figure to 70% by 2030. To achieve this ambitious goal, PNG must navigate a complex landscape of climate vulnerabilities, financial constraints, and infrastructure challenges.

Papua New Guinea’s Nationally Determined Contribution (NDC) outlines the pressing climate impacts the country is expected to experience in the coming years, including more frequent and severe landslides, soil erosion, deforestation, biodiversity loss, and coastal flooding. These climate threats underscore the urgent need to shift towards renewable energy sources that can withstand the effects of global warming.

However, PNG’s transition is complicated by its heavy reliance on fossil fuels, which currently account for 87.7% of the country’s total emissions. The planned Papua LNG project, a $13 billion liquefied natural gas development, exemplifies the financial and environmental risks associated with continued investment in fossil fuel infrastructure. Experts warn that by the time the project comes online, the global natural gas market may be saturated, leading to lower-than-anticipated revenues. Furthermore, the project is projected to create over 220 million tonnes of lifetime carbon dioxide emissions, equivalent to the annual emissions of Bangladesh.

Renewable Energy Potential and Targets

Despite these hurdles, Papua New Guinea has significant untapped potential for renewable energy development. Estimates suggest the country has the capacity to generate 15 GW of hydropower, 1 GW of geothermal power, and 1 GW of solar power. The government has identified 15 renewable energy projects in the pipeline totaling 427.275 MW, as well as 21 proposed projects totaling 45.15 MW. If all these projects were to come to fruition, they could provide 78% of the country’s grid-connected electricity by 2030.

To harness this renewable energy potential, the Government of Papua New Guinea has set ambitious targets, including:

• Achieving carbon neutrality by 2050
• Increasing the share of renewable energy in the national energy mix to 78% by 2030
• Expanding electricity access to 70% of the population by 2030

These goals are supported by a comprehensive policy framework, including the National Energy Policy, the Climate Change (Management) Act, and the Public-Private Partnership Act. However, the implementation of these policies has faced significant challenges, underscoring the need for a multifaceted approach to power sector transition.

Navigating Challenges

One of the primary obstacles to PNG’s power sector transition is the lack of reliable and up-to-date infrastructure. The country’s existing transmission and distribution network is described as “deteriorating,” with many rural and isolated areas still relying on diesel-powered mini-grids. Upgrading and expanding this infrastructure will require substantial investments, estimated at $1.7 billion.

Securing the necessary financing is another major challenge. While development partners like the Asian Development Bank and the World Bank have provided support, a funding gap of approximately 400 million Kina remains to complete the proposed renewable energy projects. Grants-based financing is preferred over traditional loans, as it can address the high upfront costs of renewable infrastructure without requiring payback.

Community engagement and land rights also play a critical role in the power sector transition. The vast majority of PNG’s land (97%) is customarily owned by Indigenous communities, and securing land access for renewable energy projects has often led to conflicts with local residents. Ensuring free, prior, and informed consent from affected communities is essential, as is equitable benefit-sharing mechanisms.

Finally, skills development and capacity building are crucial to the long-term sustainability of the power sector transition. Training local communities, particularly women, in the installation, maintenance, and end-of-life management of renewable energy systems is essential to empowering them as active participants in the energy transition.

Navigating the Path Forward

To address these challenges and achieve its ambitious renewable energy goals, Papua New Guinea must adopt a multifaceted approach that combines policy reforms, strategic investments, and community engagement.

The government should continue to strengthen its policy framework, ensuring that regulations and incentives are aligned with the country’s renewable energy targets. This may include streamlining the licensing and permitting process, establishing feed-in tariffs or net metering schemes, and implementing carbon pricing mechanisms.

Securing sufficient and sustainable financing will be crucial. PNG should explore a diverse range of funding sources, including international climate finance mechanisms, development partner grants, and innovative public-private partnerships. Establishing a robust pipeline of bankable renewable energy projects will be essential to attracting private sector investment.

Meaningful community engagement and respect for land rights must be at the forefront of the power sector transition. The government and project developers should work closely with local communities to ensure their full participation and consent, and to develop equitable benefit-sharing arrangements.

Capacity building and skills development programs should be scaled up to empower local communities, particularly women, to participate in the installation, operation, and maintenance of renewable energy systems. This will not only ensure the long-term sustainability of these projects but also create new economic opportunities for marginalized groups.

By addressing these multifaceted challenges through a comprehensive and inclusive approach, Papua New Guinea can unlock its renewable energy potential and chart a path towards a sustainable, resilient, and equitable power sector. The https://jointactionforwater.org/ community stands ready to support PNG in this critical transition.

Overcoming Barriers to Renewable Energy Deployment

One of the key barriers to renewable energy deployment in Papua New Guinea is the country’s heavy reliance on fossil fuels, particularly diesel, for power generation. Diesel generators are approximately 150% more expensive than biomass-powered generators and 50% more expensive than paired solar-storage systems. This high cost of diesel-based electricity has been a major hindrance to expanding access to reliable and affordable power.

The lack of a robust and reliable transmission and distribution network has also been a significant obstacle. As mentioned earlier, the existing infrastructure is described as “deteriorating,” with many rural and isolated areas still relying on inefficient and polluting diesel-powered mini-grids. Upgrading and expanding this network will require substantial investments, estimated at $1.7 billion.

Land rights and community engagement are another critical challenge. With 97% of PNG’s land being customarily owned by Indigenous communities, securing access for renewable energy projects has often led to conflicts with local residents. Ensuring free, prior, and informed consent from affected communities, as well as developing equitable benefit-sharing mechanisms, is essential for the success of these projects.

Skills and capacity gaps also pose a significant barrier to the long-term sustainability of renewable energy deployment. Many local communities, especially women, lack the skills and knowledge necessary for the installation, operation, and maintenance of renewable energy systems. Investing in comprehensive training and capacity-building programs is crucial to empowering communities as active participants in the energy transition.

Strategies for Overcoming Barriers

To overcome these barriers and accelerate the deployment of renewable energy in Papua New Guinea, a multifaceted approach is required:

1. Policy and Regulatory Reforms:
2. Strengthen the existing policy framework, such as the National Energy Policy and the Climate Change (Management) Act, to ensure alignment with renewable energy targets.
3. Streamline the licensing and permitting process for renewable energy projects to reduce bureaucratic delays.
4. Implement financial incentives, such as feed-in tariffs or net metering schemes, to encourage private sector investment in renewable energy.

5. Explore the potential for carbon pricing mechanisms to incentivize the transition away from fossil fuels.

6. Financing and Investments:

7. Diversify funding sources, including international climate finance mechanisms, development partner grants, and innovative public-private partnerships.
8. Establish a robust pipeline of bankable renewable energy projects to attract private sector investment.

9. Explore blended finance models that combine grants, loans, and equity investments to address the high upfront costs of renewable infrastructure.

10. Community Engagement and Land Rights:

11. Ensure free, prior, and informed consent from local communities affected by renewable energy projects.
12. Develop equitable benefit-sharing arrangements that distribute the economic and social benefits of these projects to the surrounding communities.

13. Establish transparent and inclusive decision-making processes that give a voice to Indigenous and marginalized groups.

14. Capacity Building and Skills Development:

15. Invest in comprehensive training programs to equip local communities, particularly women, with the skills and knowledge necessary for the installation, operation, and maintenance of renewable energy systems.
16. Collaborate with vocational training institutions and technical colleges to incorporate renewable energy curriculum and hands-on learning opportunities.
17. Promote knowledge-sharing and best practices between communities, project developers, and policymakers to foster a culture of continuous learning and improvement.

By addressing these interconnected challenges through a holistic and collaborative approach, Papua New Guinea can unlock its vast renewable energy potential and chart a sustainable path towards universal electricity access and a low-carbon future.

Leveraging Partnerships and International Support

Achieving Papua New Guinea’s ambitious renewable energy goals will require strong partnerships and support from the international community. The country has already taken steps in this direction, participating in initiatives like the https://jointactionforwater.org/ and the PNG Electrification Partnership.

The PNG Electrification Partnership, launched in 2018, brings together PNG, Australia, the United States, New Zealand, and Japan to support the country’s goal of 70% household electrification by 2030. This partnership has the potential to mobilize significant financial and technical resources to address the power sector’s infrastructure and capacity gaps.

Additionally, PNG’s involvement in the Climate Finance Access Network can provide valuable advice on accessing international climate finance to support its renewable energy transition. Organizations like the Green Climate Fund, which has a portfolio of $13.5 billion, are potential sources of funding for PNG’s clean energy projects.

The country’s participation in global initiatives, such as the Organization for Economic Co-operation and Development’s (OECD) efforts to end export finance for oil and gas projects worldwide, can also help shape the international policy landscape in a way that favors renewable energy development.

Beyond financial support, international partnerships can also facilitate the transfer of technical expertise, innovative technologies, and best practices in renewable energy deployment. Collaboration with development partners, research institutions, and private sector leaders can help Papua New Guinea overcome the barriers it faces and accelerate its transition to a sustainable power sector.

Conclusion

Papua New Guinea’s power sector transition is fraught with challenges, but the country’s vast renewable energy potential and the growing international momentum for climate action provide a unique opportunity to chart a sustainable path forward.

By addressing the complex issues of infrastructure, financing, community engagement, and capacity building through a comprehensive and collaborative approach, PNG can unlock its renewable energy potential and deliver on its ambitious targets for universal electricity access and carbon neutrality.

The https://jointactionforwater.org/ community stands ready to support Papua New Guinea in this critical transition, drawing on global expertise and best practices to help the country navigate the challenges and seize the opportunities ahead.