The Fijian Competition and Consumer Commission (FCCC) has reaffirmed its support for Energy Fiji Ltd’s (EFL) renewable energy ambitions, saying the long-term benefits outweigh current financial and operational challenges.
Presenting submissions on EFL’s 2023-2024 Annual Reports to the Parliamentary Standing Committee on Economic Affairs this week, FCCC general manager people, culture and corporate services Vinitesh Kumar outlined the rationale behind the regulator’s 2023 decisions regarding electricity tariffs and energy investments.
Mr Kumar said FCCC had considered “the long-term investment requirements for renewable energy developments, the capital expenditure and funding model constraints, financial sustainability concerns with the high borrowing levels, and dependency on private investment and risk of high gearing ratios”.
He also pointed to the impact of global events on Fiji’s energy sector.
“Considering the current fuel crisis in the Middle East, which had affected the global economies, with Fiji being no exception as a price-taker, this global geopolitical event also has a bearing on EFL’s cash flow whereby the fuel cost significantly increased by 71 per cent from budgeted fuel cost,” Mr Kumar said.
Despite these pressures, FCCC believed Fiji must continue investing in renewable energy projects.
“EFL should be allowed to continue to invest in renewables with support provided by government in securing land for development of renewable energy projects.”
He also revealed that FCCC would maintain weekly oversight of EFL’s generation mix and proposed an enforceable undertaking between FCCC and EFL to ensure renewable energy projects linked to the 2025 tariff application are delivered.
“The projects will generate enormous amount of economic activities in Fiji and as well as ensure Fiji’s electricity sector is independent from external threats from global fuel price volatilities.”
Mr Kumar said FCCC remained committed to promoting efficiency, fairness, transparency and the long-term interests of consumers while ensuring the sustainability of regulated industries.
