Government reviewing electricity tariffs to balance investment and affordability

The Government is currently reviewing the national electricity tariff framework, aiming to strike a balance between financial viability for landowners and investors, and affordable electricity for Fijian households and businesses.

Deputy Prime Minister and Minister for Finance Professor Biman Prasad confirmed this in Parliament today, in response to a question from Opposition MP Faiyaz Koya regarding the rate at which Energy Fiji Limited (EFL) purchases renewable energy from independent power producers (IPPs).

Koya says this has been a bit of an obstacle for landowners to invest in the renewable energy sector.

Professor Prasad says the tariff review is being conducted in collaboration with the Ministry of Finance, the Ministry of Public Works, and the Fijian Competition and Consumer Commission (FCCC), among other stakeholders.

While customer electricity tariffs are regulated by the FCCC, Professor Prasad says feed-in tariffs for independent power producers are determined by EFL through an allowable revenue-based methodology and a competitive tender process.

He says these tariffs consider the costs of generation, transmission, and long-term system requirements.

He also noted that landowner-led renewable projects remain a priority, but warned that simply raising feed-in tariffs would not be enough to encourage meaningful investment.

Responding to Opposition MP Premila Kumar on whether residential solar panels is included in the 2025-2026 National Budget, Professor Prasad says it is and it aligns with Fiji’s goal of achieving 100 percent renewable electricity by 2035.

He says the government has launched a $2 billion green energy transition plan over the next four years, with half of the investment directed toward developing 165 megawatts of solar capacity.

Other projects include a 21 mega watts solar facility in the Western Division, hydro potential exploration on Viti Levu, and studies into geothermal, wind, and other renewable energy technologies.

He says the government is prepared to provide loan guarantees for well-structured projects, as long as they align with national fiscal and debt management frameworks.

As of 2024, Fiji’s electricity generation mix comprised of 51.73 percent hydro, 42.9 percent diesel, 0.07 percent solar and wind, and 5.23 percent from biomass IPPs, such as Tropic Wood Industries, Fiji Sugar Corporation, and Nabou Green Energy Limited.