By Rafayil Abbasov,
ADB Senior Energy Specialist
The Pacific region confronts significant challenges in energy regulation that require a unified approach to capacity building, information sharing, and policy harmonization. These efforts are vital to enabling the transition to sustainable energy and ensuring energy security.
The Pacific region is acutely vulnerable to the impacts of climate change, including sea-level rise and extreme weather events and is unusually susceptible in terms of widely dispersed locations, high supply chain costs, energy supply and needs.
The experiences of Pacific Island nations serve as a crucial case study to understand and address global climate challenges, including needs for a collaborative approach in creating an enabling regulatory environment for accelerated transition to clean and sustainable energy.
These experiences illustrate not only the complex challenges of regulating energy in climate-vulnerable regions but also the significant hurdles posed by limited regulatory capacity, information asymmetry, and unharmonized regulations among developing countries in the Pacific.
The regulatory bodies in these nations often face constraints in terms of expertise, resources, and infrastructure, which hampers their ability to effectively oversee and implement energy policies.
Information asymmetry among regulators further exacerbates these challenges, as the sharing of best practices, data, and knowledge across the region is often insufficient, leading to inconsistent regulatory approaches.
The lack of harmonization in regulations across the Pacific also complicates efforts to create a cohesive energy strategy, as different countries may have divergent standards, policies, and priorities.
This fragmentation makes it difficult to achieve regional cooperation and coordination, which are crucial for addressing shared energy challenges and facilitating the transition to sustainable energy.
To achieve energy security and the successful transition to clean, affordable and reliable energy in the Pacific, the following initiatives should be pursued:
Capacity building. Pacific regulators are mostly understaffed and have very limited capacity to address power sector challenges in a timely way. It adversely impacts the sector’s performance and transition to cleaner and renewable energy.
There is a need to strengthen the capacity of regulators through a structured and planned training program and country assistance to support the regulatory capabilities in a more programmatic way.
This includes working with groups like the National Association of Regulatory Utility Commissioners and building resources to support the Pacific regulators with the necessary skills development and knowledge management activities on the continuous basis that help to improve the overall effectiveness of energy regulation in the region.
Information sharing. Pacific regulators are keen not only to strengthen capacity but also learn from each other’s experience in creating a private sector friendly environment and accelerating energy transition.
However, many Pacific regulatory authorities operate in silos, with limited interaction or coordination with other similar agencies, leading to fragmented information sharing. With restricted resources, the regulatory authorities do not have sufficient capacity to develop and sustain communication practices that facilitate information sharing.
Energy regulators need to exchange information and practical experiences, including sharing the latest changes in the regulation legislation, tariffs, country studies and recommendations, and valuable practices related to private sector participation in the renewable energy generation.
Through regular meetings, workshops, and conferences, regulators can work with their partners to create a momentum for dialogue and mutual learning, helping regulators to stay informed about the latest trends and developments in the energy sector.
Policy harmonization. With ambitious targets for energy transition, Pacific countries recognize the urgency of regulatory reforms as a key enabler for greater private sector participation in clean and renewable energy generation.
Going forward, a unified regulatory framework should be developed to attract investment and facilitate the deployment of clean energy technologies at more affordable cost.
Advocacy and representation. Pacific countries need a collective voice for energy regulators, advocating for their interests at regional and international forums. By representing the region’s unique needs and priorities, this would ensure that Pacific countries have a say in global energy discussions and decision-making processes.
This advocacy helps to secure support and resources from international and bilateral development agencies for regional energy initiatives.
To cope with these unique challenges, a group of Pacific countries formed a network of Pacific states’ regulatory authorities organized as the Office of Pacific Energy Regulators Alliance (OPERA). The group aspires to create a harmonized regulatory environment in the Pacific that facilitates the integration of renewable energy sources, promotes energy efficiency, and ensures that all Pacific communities have access to reliable and affordable energy.
The Pacific region faces a complex interplay of geographical, economic, technical, and social challenges that make effective energy regulation difficult. This new alliance of regulators is part of the solution that requires a multifaceted approach, involving capacity building, policy coordination, and community engagement.
