SUVA (Pacnews) — With fuel costs continuing to rise, the opening of the Butoni Wind Farm brings a sense of relief to the Fiji Electricity Authority.
Living on borrowed funds, the FEA has been struggling to “power” the nation and also cushion the effects of global fuel hikes.
Interim Prime Minister Frank Bainimarama opened the Butoni Wind Farm, which is part of FEA’s commitment to having 90 percent of the nation’s energy needs supplied by renewable sources by 2011.
The new wind farm has a capacity to generate 10 megawatts and an estimated production of 12 million energy units per year.
It is expected to save FEA about $3 million and cut diesel consumption by 2500 metric tons a year.
Costing FEA about $34 million, Butoni Wind Farm consists of 37 Vergnet wind turbines generating 10 megawatts of power.
FEA chief executive Rokoseru Nabalarua said the Butoni wind farm is an important milestone for the authority in achieving its renewable energy strategy and reducing dependence on expensive diesel fuel.
“Global warming is a major issue, particularly for the islands as vulnerable as ours in the Pacific region,” Nabalarua said. “At FEA, we are aware of diesel fuel’s contribution to this world-wide predicament and understand the urgency of moving away from the expensive diesel generation sources to utilizing our natural resources for energy.”
Nabalarua added, “Much planning has gone into this project. This location was selected after a comprehensive wind mapping research which identified consistent, ideal wind speeds and close vicinity to the customers.”
The turbines have been erected on guyed tilt-up poles, which can be lowered during extreme weather events.
Other renewable energy projects currently being carried out by FEA include the 40-megawatt Nadarivatu Hydro, expected to cost around $100 million.
From this month the fuel surcharge will increase to 3.23 cents from 1.88 cents. Since October last year, a fuel surcharge of 6.51 cents was imposed to address the high cost of fuel. This was reduced four times to 1.88 cents before its latest increase.
High cost of fuel is said to be chewing up FEA’s cashflow leaving the company to borrow to fund its day-to-day operations.
At the beginning of last year, the FEA had $50 million cash but this has been reduced to $1 million, most of it going to pay for diesel fuel.
From July to September alone, diesel expenses were about $12 million or an average $4 million a month. With sales or revenue much lower than expenses, the FEA is borrowing money for its day to day operations, instead of capital projects, a statement from the company said.
Diesel price has increased from $1,166 per ton in September to $1,236 per ton for October 2007 — a 6.1 percent increase.
The diesel volume has decreased from 7,334 tons to 5,583 tons — a 23.8 percent reduction — last month due to the reduced generation from FEA thermal power stations as a result of improved water level and hence increase in hydro generation.