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Renewable Technologies and Risk Mitigation in Small Island Developing States (SIDS): Fiji’s Electricity Sector

Author

Listed:
  • Matthew Dornan

    (Development Policy Centre, Crawford School of Public Policy, The Australian National University)

  • Frank Jotzo

    (Crawford School of Public Policy, The Australian National University.)

Abstract

In recent years, renewable energy technologies have been advocated in Small Island Developing States (SIDS) in the Pacific as a risk-mitigation measure against oil price volatility. Despite this, there have been no attempts to measure the impact of renewable technologies on financial risk in these countries. This paper develops and applies a stochastic simulation model in order to assess the effect of renewable technologies on the financial risk and cost of electricity supply in Fiji. The modelling results support investments in some, although not all, renewable technologies. Investments in low-cost, low-risk technologies such as energy efficiency, geothermal, biomass and bagasse technologies are found to lower both portfolio generation costs and financial risk. This suggests the Government of Fiji should be encouraging further investment in these technologies, commensurate with increases in total electricity supply. It also suggests that the FEA should prioritise such investments over its planned expansion of hydro-power generation. Renewable technology investments in other SIDS in the Pacific are likely to involve similar risk mitigation benefits.

Suggested Citation

  • Matthew Dornan & Frank Jotzo, 2012. "Renewable Technologies and Risk Mitigation in Small Island Developing States (SIDS): Fiji’s Electricity Sector," Development Policy Centre Discussion Papers 1213, Development Policy Centre, Crawford School of Public Policy, The Australian National University.
    • Handle: RePEc:een:devpol:1213
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    File URL: http://devpolicy.anu.edu.au/pdf/papers/DP_13_-_RET_and_Risk_mitigation_in_SIDS.pdf
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    References listed on IDEAS

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    Cited by:

    1. Dornan, Matthew, 2014. "Reform despite politics? The political economy of power sector reform in Fiji, 1996–2013," Energy Policy, Elsevier, vol. 67(C), pages 703-712.
    2. Camilleri, Silvio John & Falzon, Joseph, 2013. "The Challenges of Productivity Growth in the Small Island States of Europe: A Critical Look of Malta and Cyprus," MPRA Paper 62489, University Library of Munich, Germany.

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    More about this item

    Keywords

    renewables; Pacific; Fiji; risk mitigation;
    All these keywords.

    JEL classification:

    • Q20 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - General
    • Q40 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - General
    • Q42 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Alternative Energy Sources
    • N57 - Economic History - - Agriculture, Natural Resources, Environment and Extractive Industries - - - Africa; Oceania

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