Vanuatu's dependency on imported petroleum fuels
Vanuatu is an archipelago nation that heavily relies on imported petroleum fuels to meet its energy requirements. With a population of around 318,000 spread across 83 islands, the country has historically faced some of the highest energy prices in the world, affecting both urban and rural communities. While biomass and kerosene are common energy sources for many Ni-Vanuatu, especially in rural areas, grid-connected electricity is available primarily in four major urban centers. These centers, including Port Vila and Luganville, benefit from electricity supplied by two private companies, yet significant portions of the population remain without reliable access to power.
Petroleum products constitute a significant share of Vanuatu's imports, making the economy particularly vulnerable to fluctuations in global oil prices. Efforts to improve energy access are underway, with organizations like the Vanuatu Renewable Energy and Power Association promoting small-scale renewable energy initiatives. Additionally, there are ongoing projects to harness renewable resources such as solar and hydropower, aimed at reducing dependency on imported fuels and achieving the nation's goal of 100 percent renewable energy by 2030.
Subject Terms
Vanuatu's dependency on imported petroleum fuels
Official Name: Republic of Vanuatu.
Summary: Biomass and kerosene are the primary fuels in Vanuatu, although grid-connected electricity is available. Vanuatu is highly dependent on imported petroleum fuels and energy prices in the country have historically been among the highest in the world.
Vanuatu’s predominantly rural population of about 318,007 (as of 2024) is dispersed across an archipelago of 83 islands spanning approximately 807 miles (1,300 kilometers) from north to south. Urbanization and strong ties to home islands—combined with deep-rooted traditions of seafaring and interisland trade—result in significant consumption of petroleum for air and water transportation.
Petroleum products account for a significant portion of all imports to Vanuatu. Prices for diesel, kerosene, and liquefied petroleum gas (LPG) have historically been among the highest in the Pacific. Vanuatu’s dependence on petroleum fuels, combined with these high costs, has contributed to making the Vanuatu economy highly vulnerable to changes in oil prices.
Rural Energy
For the majority of Ni-Vanuatu (the Melanesians who form the nation’s population), the primary energy sources are wood and other biomass for cooking, along with kerosene for lanterns and disposable dry-cell batteries for flashlights. Small diesel generators and solar photovoltaic (PV) panels are also common for commercial, community, and institutional facilities in rural areas, and to a much lesser extent for household energy.
A notable actor in improving rural energy services is the Vanuatu Renewable Energy and Power Association (VANREPA), a Port Vila-based nongovernmental organization (NGO). VANREPA partners with local communities, government, regional organizations, and donor agencies to facilitate small-scale renewable energy generation and energy-efficient lighting projects throughout the country.
Urban and Periurban Energy
Approximately 34 percent of the population of Vanuatu had access to grid-connected electricity in 2014, which is available in the country’s four largest centers: Port Vila, Luganville, Lakatoro, and Lenakel, on the islands of Efate, Espiritu Santo, Malakula, and Tanna, respectively. The total installed generation capacity is just over 30 megawatts. There is very limited access to electricity outside these four communities. Two private energy companies, Union Électrique du Vanuatu Limited (UNELCO) and Vanuatu Utilities and Infrastructure Limited (VUI), supply grid-connected electricity to these four centers. UNELCO, a subsidiary of GDF Suez, has operated in Vanuatu since 1939, when the island group was known as the New Hebrides Condominium, and has concessions for Port Vila, Lenakel, and Lakatoro. Prior to 2011, UNELCO also had the concession for Luganville, which is now held by VUI, a subsidiary of Pernix Group.
While a majority of urban households are connected to the electricity grid, kerosene is also used in many urban and periurban households for lighting, and LPG is frequently used for cooking.
By 2024, with an estimated 30 percent of households still lacking access to electricity, some island communities were benefiting from renewable energy sources. For example, about three hundred residents of Loltong on the island of Pentecost were hooked to a hybrid solar and hydropower minigrid. In addition to about one hundred houses, the minigrid provided power to two schools, a clinic, community buildings, and retail shops. Solar power was added to other islands, such as Emae, where fish markets powered by solar energy were finally able to refrigerate their wares.
Production
There is no domestic production of petroleum, natural gas, or coal. Imported diesel oil supplies the vast majority of electricity generated in Vanuatu, with significant contributions from hydropower, wind power, and biodiesel fuel based on coconut oil. The 1.2-megawatt Sarakata River Hydroelectric Power Station supplies 41 percent of grid-connected electricity to the town of Luganville. The project was built with funding from the government of Japan, initially as a 600-kilowatt power station and with a doubling of capacity in 2009.
The 2.75-megawatt Devil’s Point Wind Farm on the island of Efate supplies electricity to the capital, Port Vila, on the island of Efate. The wind farm consists of eleven turbines and was completed in 2008.
Given the central role of copra production in the economy of Vanuatu, there is significant local interest in coconut oil as a fuel for automobiles and for electricity generation.
Regulation
For several years, Vanuatu’s electricity rates were among the highest in the world. This prompted the Electricity Tariff Review by the Vanuatu Utilities Regulatory Authority (URA), which concluded in 2010, calling for significant reductions in electricity tariffs, including a 6.8 percent reduction for most consumers and a 49 percent reduction for domestic consumers using less than 50 kilowatt-hours of electricity per month. Although the decision of the review was disputed by UNELCO and was taken to arbitration, the 49 percent reduction for the smallest domestic consumers was implemented.
Vanuatu has set 2030 energy goals under its National Energy Road Map. It plans to achieve 100 percent rural electrification and use renewable energy for all its energy needs.
Bibliography
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United Nations Development Programme, Asia-Pacific Regional Energy Programme for Poverty Reduction (REP-POR). Pacific Rapid Assessment and Gap Analysis (Draft Final Report). Bangkok: UNDP Regional Centre, 2005.
United Nations Development Programme (UNDP), Regional Energy Programme for Poverty Reduction. Energy and Poverty in the Pacific Island Countries: Challenges and the Way Forward. Bangkok: UNDP Regional Centre, 2007.
US Energy Information Administration. “Country Analysis Brief: Vanuatu.” www.eia.gov/international/overview/country/VUT. Accessed 8 Aug. 2024.
Utilities Regulatory Authority. “Utilities Regulatory Authority.” www.ura.gov.vu.
"Vanuatu." The World Factbook. Central Intelligence Agency, 7 Aug. 2024, www.cia.gov/the-world-factbook/countries/vanuatu/. Accessed 8 Aug. 2024.