In the red, Vanuatu goes green

By Eric Watkins

LOS ANGELES, April 6 – The Pacific Island nation of Vanuatu, like many other nations of the region, is turning to the production of energy based on renewable resources as a way of balancing the budget.

In case you don’t know it, the Republic of Vanuatu is an island nation in the South Pacific Ocean – an 83-island archipelago located about 1,000 miles east of Brisbane, Australia and south of the Solomon Islands.

As budgets go, Vanuatu’s is in the red – like many budgets around the world these days. According to the International Monetary Fund, at yearend 2011 Vanuatu had a negative trade balance of $45.4 million, based on exports of $61.9 million and imports of $107.3 million.

IMPORTED OIL

How much of that imbalance results from expenditures on imported oil is anybody’s guess, but the Asian Development Bank claims that developing countries in the Pacific region are “extraordinarily dependent” on oil, particularly diesel, which makes them highly vulnerable to rising oil prices.

According to the International Union for Conservation of Nature, “Solar power for lighting purposes is a cheaper and more reliable option for remote villages as compared to diesel power generators.”

That’s why Vanuatu is turning to solar power, among other options.

In Vanuatu, the cost benefits of switching to renewable resources are understood, even in small villages where solar power is now being used in schools – with positive results.

“We save a lot of money that we spend on fuel,” said Polikau Salerua, headmaster of Tata School, adding that the savings on diesel costs enable more money for school supplies.

SMALL-SCALE EXPERIMENTS

Small-scale experiments in solar energy on Vanuatu are now leading to more intensive development, as underlined in a recent announcement by WPCS International Inc., a frontrunner in engineering services for communications and energy infrastructure.

Last month, WPCS said it had been selected by the government of Vanuatu to design and deploy one of the first solar renewable energy systems for Espiritu Santo, the largest island in Vanuatu.

“The Republic of Vanuatu received funding for this project from the Asian Development Bank,” WPCS said, adding that the project consists of 40kw solar arrays that will be racked, mounted and connected to the electrical utility grid.

“Being one of the first such projects on the island of Espiritu Santo, it is important that we provide our highest level of design-build engineering capability to ensure a successful project outcome,” said WPCS CEO Andrew Hidalgo.

But the WPCS project is just part of the renewable energy story now emanating from Vanuatu.

Another part concerns a new project involving South Pacific BioFuels plc which has just received funding of $50 million to buy and develop 75,000 acres of biofuels plantations in the South Pacific, starting in Vanuatu.

75 MILLION LITERS

According to South Pacific BioFuels, the financing has a maximum term of 15 years and provides the flexibility to maximize growth of the projects to achieve a forecast production of up to 75 million liters a year of biofuels.

South Pacific BioFuels said it is targeting production from the fully developed 75,000 acre plantations to be completed over the next 10 years, beginning with 2,500 acres and nursery facilities.

The firm said the goal is to replace the domestic consumption of foreign imported petroleum-based diesel in Vanuatu.

Achieving that goal will require production of 30 million liters of biodiesel per year – a goal Sun Pacific BioFuels expects to achieve by 2020, as part of the overall Pacific region distribution of the 75 million liters.

In its effort to save a lot of money, Vanuatu is at the cutting edge of energy developments in Asia-Pacific. Its experiments in renewable energy are enabling import substitutions that could serve as a model for other countries in the region – large and small.

© Glamma Productions 2012

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About Eric Watkins

Eric Watkins is a consultant specializing in oil diplomacy. A former journalist, Mr. Watkins's work has appeared in numerous leading publications including The Wall Street Journal, The Economist, The Financial Times, and specialist media such as Oil & Gas Journal, Middle East Economic Survey (MEES), and Lloyd's List.
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