GNUT targets 25% reduction over three years
The Government for National Unity and Transformation (GNUT) has announced its goal to reduce electricity tariffs by 25% over the next three years.
Currently, Solomon Islands consumers pay around 80 cents per kilowatt-hour (kWh), among the highest electricity rates in the world.
Prime Minister Jeremiah Manele confirmed this target during the National Energy Summit held at the Kitano Mendana Hotel on Thursday.
“Agriculture may be the backbone of our country, but energy is its lifeblood,” said Manele.
“It powers our homes, fuels our industries, and drives national growth and prosperity. However, we face unique challenges in the Solomon Islands,” he added, referring to the country’s archipelagic geography, which complicates the development and reach of conventional energy infrastructure.
Manele stressed that this lack of reliable and affordable energy is more than just an inconvenience—it is a significant barrier to development, education, healthcare, and economic growth.
Permanent Secretary of the Ministry of Mines, Energy and Rural Electrification (MMERE), Dr. Christopher Vehe, acknowledged the difficulty in reducing tariffs due to the current monopoly held by the Solomon Islands Electricity Authority (SIEA).
“SIEA is both a player and the referee,” said Vehe, explaining that the Electricity Act of 1969 grants SIEA exclusive control over generation, transmission, distribution, licensing, and tariff setting.
Solomon Islands Chamber of Commerce and Industry (SICCI) Chief Executive Officer, James Dolarii, highlighted the toll high electricity costs take on businesses.
“Many small and medium enterprises (SMEs) have been forced to close because they couldn’t afford to pay for electricity,” Dolarii said.
He emphasized the private sector’s hope that the government reforms undertaken by MMERE will lead to a focus on renewable energy, which could offer more cost-effective solutions for businesses.
However, Dr. Luke Forau, Governor of the Central Bank of Solomon Islands (CBSI), pointed out that not all the blame should be placed on Solomon Power, as external factors also contribute to high tariffs.
“Solomon Power is a price taker, not a price setter,” said Forau.
He explained that fuel prices on the international market significantly impact local energy costs, with fuel accounting for 50% of Solomon Power’s total expenses.
The National Energy Summit, themed “Shaping the Future: Sustainable Transformation through Innovative Transitioning of Sustainable Energy Pathways in Solomon Islands for a Secure Energy Sector,” aims to outline clear goals to transform the energy landscape in the Solomon Islands.
The GNUT Government has set key targets to be achieved by 2030.
1. Increase in Energy Access:
Urban Households: A 50% increase in grid connectivity by 2030, based on the 2023 Solomon Islands Electricity Authority (SIEA) baseline report. Currently, the Honiara grid operates below 30 MW, and the combined capacity of 11 provincial grids (excluding Rennell and Bellona) is 4 MW.
Rural Households: A 10% increase in rural household connectivity by 2030, compared to the 2019 national census baseline.
Off-Grid Solutions: A 30% expansion of off-grid solar and hydropower connections for both urban and rural households by 2030, using 2019 as the baseline.
2. Reduction in Electricity Costs:
Fuel Costs: Implement measures to reduce fuel costs by 5% annually from the 2023 baseline.
The two-days Summit ended on Friday.
By EDDIE OSIFELO
Solomon Star, Honiara
