This policy has been developed by a working group with representatives from the Office of the President; the Office of Environmental Response and Coordination (OERC); the Ministry of Finance; the Ministry of Natural Resources, Environment, and Tourism; a member of the Senate and a member of the House of the 8th OEK; The Ministry of Public Infrastructure, Industry and Commerce; Ministry of State; Palau Public Utilities Corporation (PPUC); members of the Oil and Gas Taskforce; The Bureau of Public Works; Palau Chamber of Commerce; the Palau Community Action Agency (PCAA); the National Development Bank of Palau (NDBP); Shell Palau; the European Union (EU); the United Nations Development Program (UNDP); the Palau Automated Land and Resource Information Systems Office (PALARIS); the Japan International Cooperative Agency (JICA); Palau Community College (PCC); and the Chamber of Commerce (CoC).

This process began in April 2009 and was guided by an executive committee composed of members from Palau Energy & Water Administration (PEWA), PPUC, OERC, the Senate, the House of Delegates of the 8th OEK and the Office of the President. This document has been refined in a series of consensus building workshops. Additionally, consecutive drafts have been circulated amongst the working group members for review and input.

An energy sector review that was undertaken as an initial step in this project has shown that energy is a vital resource underpinning all aspects of our society and fundamentally influencing Palau’s environmental sustainability. Being almost 100% dependent on imported energy, Palau is highly vulnerable to international energy market movements and price volatility. Palau’s energy security is not guaranteed and energy supply interruptions undermine economic growth and social development. Palau is a small country lacking significant economies of scale and has dispersed outer islands’ populations that are difficult to serve.

In addition, environmental vulnerability through climate change is significant. Extreme weather events and sea level rise pose serious threats, particularly for the low-lying atolls. Environmental damage, habitat loss and pollution resulting from transport and use of petroleum products can have long-term negative effects on the country’s fragile island ecosystems, which at the same time provide the basis for economic development and prosperity of Palau’s citizens.

The development of renewable energy resources and energy efficiency has been limited by the availability of appropriate technology and insufficient institutional capacity. In addition, there has been a lack of appropriate and innovative financing that supports a market driven development of local, renewable energy resources.

Addressing energy sector issues requires collaborative leadership, adequate institutional arrangements, common goals, political will, and a shared national vision. This vision has been outlined in the Medium-Term Development Strategy which provides a general economic development framework for the Republic of Palau. This Energy policy is linked to government policies on economic development, sustainability, climate change; infrastructure, transport, resource management, and education, science and technology.

Around the world, there is a growing sense of urgency about the need to address the serious challenges of climate change. For Palau, there are four main climate change challenges. Palau needs to:

Prepare for, and adapt to, the impacts of changes in our physical environment, by responding to the risks and taking advantage of the opportunities they present
Control and reduce our own greenhouse gas emissions
Support international initiatives on greenhouse gas emissions, through implementation of the Kyoto Protocol and other climate change conventions
Achieve the objectives above at the lowest possible long-term cost

Another challenge is security of energy supply. Security has two key dimensions – reliability and resilience. Reliability means users are able to access the energy services they require, when they require them. Resilience is the ability of the system to cope with shocks and change. Diversifying energy sources, energy efficiency and demand-side management can help ensure both reliability and resilience.

For a small economy such as Palau, some circumstances, however, are too costly to insure against. A trade-off has to be made between different price levels and different levels of security and reliability. Finding the right balance is an ongoing task involving government, producers and users of energy. The government believes a combination of competitive markets with backstop measures and effective regulation of suppliers is the best means of protecting the security of Palau’s energy supplies. The government believes the principles and initiatives set out in this document for the five key policy areas will lead Palau to a sustainable, low emissions energy system for generations to come. Making the right choices today will enable Palau to provide a sustainable energy supply for its future.

The National Energy Policy (NEP) provides explicit framework within which public and private energy sector participants can make informed planning and investment decision. The policies also define the nature and extent of Government’s control and management of the energy sector.

The purpose of the Strategic Action Plan (ESSAP) is to restate Palau’s energy policies in the form of a more detailed action program including specific targets and guidelines. It will provide the blueprint for Government’s in planning and management of energy programs over the life of the policy statement. It also provides indicators to measure progress in the implementation of the NEP and the SAP. The SAP does not override existing strategic plans such as the Palau Energy Conservation Strategy (PECS) the Energy Efficiency Action Plan or PPUC’s Strategic Plan. These initiatives are seen as an integral part of this SAP and their progress and achievements will be monitored under the framework of the overall plan.

While some of the targets may take longer to achieve than others, it is important that Government remain committed to its National Energy Policy as a whole and, most importantly, provide the institutional and administrative resources necessary to achieve its policies.

The Energy Efficiency Action Plan (EEAP) for the Republic of Palau was developed under the Support to the Energy Sector in 5 ACP Pacific Island States (REP-5) programme, funded by the 9th European Development Fund. It provides actions for reducing the Republic’s energy consumption, both in the public and private sector. As part of the REP-5 programme funding for Palau, an Energy Planner has also been hired to implement the actions contained within the EEAP. The Energy Planner will work within the Palau Energy Administration for a period of two years, after which the Government of Palau is expected to fund the position permanently.

In order to better understand and evaluate the impacts of energy security efforts and the implementation of energy policies and plans, baseline energy security indicators have been established. These energy security indicators are used to assess or evaluate energy security efforts in future years. The established energy security indicators are the result of collaborative efforts involving representatives from local and regional organizations, both in the public and the private sectors.

Energy Framework, Energy Act and Energy Regulations
In order to guide the sustainable development of the energy sector in Palau, an energy framework, Energy Act and draft energy regulations are currently being developed. Consultations have taken place with numerous stakeholders including the NEC.

Wind and Solar Monitoring Masts
Three 34m-tall (112’ tall) wind monitoring masts have been commissioned and are now recording high quality wind and solar energy resource data. These masts are installed in Ngardmau, Melekeok and Ngaraard. A summary of data recorded to date will be presented in the next update report once a more useful quantity of data has been collected. PPUC RE staff will be involved in the next mast inspection, data collection and analysis process. Data will be collected and stored securely at least once every two months.

Grid-Connected Solar PV System
An RFP document is being finalized for the proposed 120 to 150 kW solar PV system on the roof of the Track and Field stadium. The RFP will be advertised in early June and the document will be made available to the NEC for its information. The system is expected to save roughly 50,000 liters of diesel per year.

Course Underway at PCC
Participants from PCC, PPUC and the private sector (via NDBP) are currently being trained to teach the North REP course entitled: Grid-connected solar PV design, installation, maintenance and troubleshooting. This is a for-credit course that will be integrated into the Electrical Technology degree course program at PCC. It is significant that this subject is being institutionalized in Palau and that this course is internationally recognized. The course will be completed by June 14.

An RFP was advertised at the same time for a similar type of course on energy efficient building construction and retrofit. Unfortunately there were no responses to this RFP so it will be re-advertised soon making sure that some specific organizations are informed.

Government Buildings Energy Efficiency Retrofits
Following the EE retrofitting of the Department of Public Works building in Koror, it is proposed that a number of other government buildings will have similar work done. EE viability assessment is expected to commence during June 2013. In addition to the direct power bill savings, the North REP EE activities are considered to be important stimuli for the development and sustainability of Palau’s EE equipment market and EE construction industry.

4th Project Steering Committee Meeting
PSC4 was held in Pohnpei, FSM on 22-23 May. Details of this meeting can be found at: www.spc.int/en/component/content/article/216-about-spc-news/1258-north-rep-holdsfourth-project-steering-committee-meeting-in-pohnpei.html

Project Visibility, Education and Capacity Building
North REP supported events such as Earth Day to keep RE and EE in the public consciousness and to gain visibility for the EU, and supports capacity-building workshops in a variety of RE and EE subject areas for Palau Public Utilities Corporation (PPUC) and private sector participants. Further sustainability through capacity building is expected to be achieved soon through the engagement of a North REP local counterpart, and the continuing involvement and training of PPUC staff in activities such as the design of hybrid systems for the outlying islands.

NDBP – Energy Loan Programs
National Development Bank of Palau (NDBP) in collaboration with the Palau Energy Administration have launched three Energy Loan Programs to help residents succeed in their housing projects. The energy loan programs are designed to provide subsidies to new or current home or business owners who are looking into building, renovating, and/or incorporating energy efficient equipments to their establishments.

Education & Awareness/Advocacy
The Palau Energy Administration in partnership with various agencies continue to support public education and awareness activities that promotes energy efficient products and equipments. Such activities include participation in the annual Earth Day Program and encouraging the showcasing of energy efficient product from various hardware stores and supporting educational awareness presentations by the Palau Public Utilities Corporation.

Key Partners and Stakeholders
The Palau Energy Administration works diligently with local and regional partners and donors to address two major energy challenges that the country faces. The first is to deliver clean, secure, and affordable energy for all citizens of Palau while treating the environment responsibly. The second is to respond to the risks of climate change by adaptation to changes and by mitigation through reducing the greenhouse gases caused by the production and use of energy. In addition, Palau faces a challenge that it shares with other small island countries, namely it’s extremely high dependence from imported fuels. The Palau Energy Administration actively works in collaboration with the following various entities to address Palau’s energy challenges:

• National Development Bank of Palau
• Palau Public Utilities Corporation
• Palau National Government
• SPC North-Rep
• GEF-UNDP (SEDREA)
• Palau Community College
• Palau Chamber of Commerce
• Representative of the House of Delegates
• Representative of the Senate
• Representative of the office of the President
• Palau Conservation Society
• Office of Environmental Response & Coordination