Ppp cook islands

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How PPPs can deliver improved access to renewable, reliable and affordable electricity in the Cook Islands What is the infrastructure problem that the PPP is trying to solve? The Cook Islands, in similarity with the majority of the Pacific Island Countries, rely heavily on imported non-renewable fuels such as petrol and diesel to meet their energy needs. In fact, recent data show that 28% of the country’s GDP is represented by fossil fuelsi. This in combination with i) complex fuel delivery logistics; ii) costly supply chains; and iii) limited capacity to store fuel; make the country one of the most vulnerable economies to price volatility in the regionii. Moreover, the cost of supplying electricity is high. On average, households paid US$ 44 cents per kWh in 2014. This corresponds to two and a half times the average tariff rate in the neighbouring country Fiji during the same time periodiii. High electricity tariffs are a major obstacle for long-term growth and particularly challenging for poor households who are more hard-hit by price increases. Accordingly, the country has strong incentives to transfer from conventional to new types of technologies with the potential to deliver clean, reliable and affordable electricity, whilst also minimising its carbon footprint. To date, renewable energy contribution remains low in the Cook Islands. Despite the ambitious energy target of 100% renewable

energy generation by 2020iv, only 1% of total output came from renewables in 2014v. On the other side, access levels to electricity are high across the islands. Nearly all households in the Cook Islands are connected to grid electricity. In addition, the 15 islands have an abundance of renewable resources. Solar and wind power are currently the two most cost effective technologies in the region. These two aspects combined – high access to electricity and natural resources, are of great importance as it allows the government to emphasis on grid-based renewable investments that may help replace diesel generators.

What services are to be provided and are these services affordable? Provision of electricity and services related to electricity has traditionally been carried out by the public sector in the Cook Islands. Specific tasks such as maintenance have been contracted to the private sector but overall management services have remained within the public entity. When looking at renewable energy technologies, new infrastructure is needed to take advantage of site specific resources. For example, when looking at solar energy, solar panels must be produced, installed, operated and maintained to provide sufficient energy output. The same applies to wind turbines that need to be designed and installed to cope with seasonal wind speed variations, high humidity, salty air, and proneness to cyclones. The private sector is generally better at providing this type of services and have, in many cases, previous experience of delivering projects in similar environments. However, small communities are normally not capable to afford the upfront cost for this type of infrastructure investment even though they would benefit from lower tariff rates and clean energy in the long run. Development


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