Meta Data
Draft: 
No
Revision of previous policy?: 
No
Draft Year: 
2010
Effective Start Year: 
2010
Effective End Year: 
2020
Scope: 
National
Document Type: 
Overarching Policy
Economic Sector: 
Energy, Power, Transport, Building, Multi-Sector, Other
Energy Types: 
All, Oil, Power, Gas, Renewable, Bioenergy, Hydropower, Solar, Wave and Tidal, Wind, Other
Issued by: 
Government of the Republic of Palau
Overall Summary: 
The Palau National Energy Policy expresses the Government's policy vision to form the basis of a strategic action plan. The vision is for a reliable and resilient energy sector delivering Palau sustainable, low emissions energy services. The policy addresses the following aspects: 1. Improved institutional arrangements for energy sector management; 2. Energy efficiency and energy conservation; 3. Renewable energy; 4. Imported fuels and hydrocarbons; 5. Electric power. In particular, targets are set to achieve a 30 % reduction in overall national energy consumption by 2020, as well as to provide a minimum of 20% of electrical energy generated through renewable energy by the end of 2020. 
Access
Energy access priorities: 
Laws and regulations will be introduced to ensure security, reliability and efficiency of electricity supply. [...]----It is in Palau’s longer-term economic and environmental interests to meet increases in electricity demand through an economic mix of renewable energy sources that will meet our security objectives. Some initiatives to improve the security of Palau’s electricity system would cost more, such as paying for additional levels of reserve generation to be available for peak demand or for unscheduled outages of generators. These costs will have to be weighed up against the benefits to consumers and the wider community
Clean cooking solutions: 
In order to protect consumers of LPG/propane a pricing study will be arranged to determine benefits and costs of a mechanism to establish allowable wholesale and retail price margins, and develop clear pricing and price monitoring system for Koror, Babeldaob and outer islands. In addition, proper technical regulations shall be implemented to ensure the safe operation of all LPG/propane distributors.
Consumer subsidies: 
PPUC will be allowed to recover the total costs of supply in all island systems by establishing a tariff structure with a lifeline tariff that benefits low-income and outlying state consumers without adversely affecting PPUC income.
Efficiency
EE priorities: 
Recognizing that improving the efficiency of energy use has greater short term value on reducing consumption of fossil energy than any other action, taxes and policies will be revised.
EE targets: 
The policy target is set at a 30 % reduction in overall national energy consumption by 2020. --- The government expects measurable and substantial improvement of energy efficiency by 2020, in at least 80% of households, businesses and government buildings.
EE action plans: 
To encourage the import and sale of appliances, vehicles and boats having the highest energy efficiency; develop energy efficiency standards for new buildings and renovations including homes, businesses and government premises. --- It will be ensured that the stock of more energy-efficient equipment within government, businesses, and private homes (e.g. refrigeration, air conditioning, appliances, lighting) is continuously expanded and improved. The government will take the lead in a nationwide effort to improve energy efficiency by purchasing energy efficient equipment. --- To show technical options for energy efficiency measures in the housing sector all new and refurbished government buildings will incorporate energy-efficient designs such as shading and orientation of buildings to reduce heating of buildings and reflective roof paint and attic heat radiation barriers to reduce the need for air conditioning. --- The inclusion of solar water heating and other energy efficiency measures will be promoted and encouraged and eventually mandated in all new buildings when applicable. --- Ongoing activities such as the Palau Energy Conservation Strategy will continue to promote the replacement of inefficient appliances.
EE standards for appliances: 
Introduction of mandated energy labels for appliances such fridges, freezers, air conditioners and washing machines.
EE transport standards : 
Key areas for reducing fossil fuel consumption in the transport sector include: significantly increasing vehicle efficiency, using more efficient modes of transport. This requires a fleet of energy-efficient vehicles that are well-maintained and are constantly improving. In order to monitor the energy profile of the transport system a database of all operational vehicles by class, make and fuel usage will be mandated. Practical guidelines will be established and enforced for the efficient use and maintenance of the Government vehicle fleet and ships. --- The establishment of energy efficient public transport system for urban and rural areas with particular emphasis on reducing energy consumed commuting to the new Capitol facilities will be promoted and encouraged.
EE financial incentives: 
Innovative financing mechanisms and incentives through the banking sector for energy efficiency investments by households and businesses will be established and improved. --- An import tax scheme will be developed and introduced that provides incentives for the importation of efficient equipment and discourages the import of inefficient appliances, vehicles and machinery.
Renewable Energy
RE priorities: 
Promotion of renewable energy use will continue with the aim to completely substitute all fossil fuel use on the long term, reducing Palaus carbon footprint to a minimum.
RE targets: 
Renewable energies will therefore be promoted so that such energy will provide a minimum of 20% of electrical energy generated in Palau the end of 2020. --- It will be mandated that proven renewable energy technologies be integrated in all outer island energy development by 2020.
RE action plans: 
All options for promoting renewable energy will be explored including net metering programs, feed-in tariffs and portfolio standards such as the 20:20 target.
RE prioritization, portfolio standards: 
Renewable energies will therefore be promoted so that such energy will provide a minimum of 20% of electrical energy generated in Palau the end of 2020.
RE feed-in tariffs: 
In order to promote decentralized renewable energy generation within the PPUC system, appropriate technical standards and regulations for private electricity generation through renewable energy sources and feed-in procedures will be developed. It will be ensured that feed-in programs operate under appropriate and economically sound conditions that cover costs to PPUC and the private generator.
Net metering: 
Decentralized, renewable energy generation will be promoted through net metering [...]. Net metering will be introduced in such a way that the power utility PPUC is not financially disadvantaged.
RE heat obligation/mandate: 
The inclusion of solar water heating and other energy efficiency measures will be promoted and encouraged and eventually mandated in all new buildings when applicable.
RE public awareness/promotional programmes: 
In order to prepare a nationwide renewable energy promotion, the national potential for all renewable energy sources (biomass, hydro, ocean, solar, waste, wind, etc.) needs to be fully understood based upon current and reliable data and information that will be made available to Government, households, businesses and investors.
Cooperation in RE: 
In order to facilitate co-operation a list of priority projects will be developed and presented to Palau’s development partners in order to maximize benefits of renewable energy investments for Palau.
Mandatory connection: 
Decentralized, renewable energy generation will be promoted through net metering and grid access legislation backed by the development of a list of eligible equipment and guidance for developers in terms of what types and sizes of projects can be accommodated in Palau’s small electricity system.
Environment
Decarbonization strategy: 
Promotion of renewable energy use will continue with the aim to completely substitute all fossil fuel use on the long term, reducing Palaus carbon footprint to a minimum.
Pricing
Energy pricing: 
PPUC will be allowed to recover the total costs of supply in all island systems by establishing a tariff structure with a lifeline tariff that benefits low-income and outlying state consumers without adversely affecting PPUC income. [...] In order to ensure revenue collection in a fair and equitable way all PPUC customers will be converted to pre-paid metering. PPUC will hand over cost savings achieved through the pre-paid metering program to the consumers.
Energy Supply and Infrastructure
Energy supply priorities: 
Recognizing the cost of total national dependence on imported petroleum fuels, international standards will be developed and enforced for any storage, handling and transport of petroleum products. [...] Safe and environmentally sound storage and distribution of petroleum products including effective spill and containment response procedures and required product industry standards and safety measures will be mandated and maintained all the time. All possibilities to optimize future fuel supply by considering issues of Government and private sector owned fuel terminal and storage facilities will be explored. [...] In close coordination with the activities aiming to establish an institutional framework for oil and gas exploration expertise will be developed within the government as appropriate to tender, negotiate and monitor petroleum supply contracts. ---It is in Palau’s longer-term economic and environmental interests to meet increases in electricity demand through an economic mix of renewable energy sources that will meet our security objectives. For the foreseeable future, a secure electricity supply through fossil fuel based generation and an increased use of new renewable sources will be maintained. Some initiatives to improve the security of Palau’s electricity system would cost more, such as paying for additional levels of reserve generation to be available for peak demand or for unscheduled outages of generators. These costs will have to be weighed up against the benefits to consumers and the wider community
Energy mix: 
Renewable energies will therefore be promoted so that such energy will provide a minimum of 20% of electrical energy generated in Palau the end of 2020.
Trade
Standard power production and purchasing agreements: 
In order to streamline administration for renewable energy investments a standard power purchase agreement for larger independent power producers will be developed.
Import taxes and fee exemptions: 
An import tax scheme will be developed and introduced that provides incentives for the importation of efficient equipment and discourages the import of inefficient appliances, vehicles and machinery.
Investment
Energy sector investment priorities: 
Investment should occur in energy efficiency measures where this is cheaper than the long-term costs of building extra generation capacity, including environmental costs.
Independent power producers: 
Setting targets and regulating prices alone will be not sufficient if a green, renewable energy system is the long term goal. Concessionary finance and targeted subsidies may be required for household investors and independent power producers. --- In order to streamline administration for renewable energy investments a standard power purchase agreement for larger independent power producers will be developed.
Investment climate development: 
In order to facilitate co-operation a list of priority projects will be developed and presented to Palau’s development partners in order to maximize benefits of renewable energy investments for Palau---Private sector participation in electricity supply will be encouraged through a transparent enabling framework.
Public Private Partnerships: 
All possibilities to optimize future fuel supply by considering issues of Government and private sector owned fuel terminal and storage facilities will be explored. --- Private sector participation options in electricity supply will be carefully studied and encouraged whenever appropriate and economically sound.---Capacity within both private and public sectors to analyse, plan, develop, implement and manage renewable energy systems will be improved through education, training and knowledge management.
Governance
Energy management principles: 
Capacity within both private and public sectors to analyse, plan, develop, implement and manage renewable energy systems will be improved through education, training and knowledge management.
National policy structure: 
In order to create an adequate institutional framework an Energy Act to determine functions and authority required for effective Energy Administration will be developed and enforced. The Act will be based on the National Energy Policy and determine roles and responsibilities in the energy sector. --- Practical guidelines will be established and enforced for the efficient use and maintenance of the Government vehicle fleet and ships. .../A framework and road map to promote the development of an effective hydrocarbon sector through continuous cooperation with the World Bank will be produced. .../A high priority will be given on developing the legal framework and capacity to ensure that Palau’s benefits from hydrocarbon exploration and production are maximized. .../A hydrocarbon code, model agreements, and related environmental, operational, and tax regulations, taking into account any existing or proposed legislation will also be prepared. .../Laws and regulations will be introduced to ensure security, reliability and efficiency of electricity supply.
Energy institutional structures: 
Provide an Energy Administration with the authority and support required for effective and transparent implementation of the National Energy Policy and the related Strategic Action Plan. --- The creation of a National Energy Committee (NEC) will assist in the implementation of the National Energy Policy. --- In line with the recommendations of the Oil and Gas Task Force the institutional set up for the management and oversight of the sector, including its financing staffing, technical assistance and capacity building needs will be established.
Public database availability: 
In order to prepare a nationwide renewable energy promotion, the national potential for all renewable energy sources (biomass, hydro, ocean, solar, waste, wind, etc.) needs to be fully understood based upon current and reliable data and information that will be made available to Government, households, businesses and investors.
Technology
Clean energy technology deployment: 
In order to avoid disappointing performance of technologies it will be required that technologies for use in Palau be certified by the Palau Energy Administration. To qualify for promotion, technologies need to be commercially proven in tropical islands through installations of a similar type and size as those to be deployed in Palau.