Republic of Palau Creates Energy Efficiency Plan

Although Palau is not an Energy Development in Island Nations (EDIN) partner or project participant, it serves as an example of the ground breaking work islands around the world are doing to address the energy challenges they face. Palau is working to reduce its reliance on fossil fuel through energy efficiency measures and biodiesel production.

The European Commission and the Palau Energy Office have created the National Energy Efficiency Action Plan (EEAP) to reduce the nation's appetite for diesel. The plan relies heavily on efficiency measures as the most cost-effective method to reduce diesel use. The plan also includes incentives to purchase digesters for pig waste to augment the Bureau of Agriculture's biogasification pilot program. That program aims to produce biodiesel—an alternative fuel that can be manufactured locally.

Learn more about the project plan's:

Island Background

The Republic of Palau is an island nation that encompasses more than 200 islands, with a total land area of 458 square kilometers. In 2008, the nation's population was about 21,000, the majority of whom live on or near Koror, an island in the approximate center of the nation. The economy is primarily based on tourism, subsistence agriculture, and fishing, with the government as the major employer. The installed capacity through the Palau Public Utility Corporation (PPUC) in 2008 was 33.5 megawatts (MW) and electricity was produced solely through diesel generators. Many commercial and industrial users also have generators and it is estimated that those users produce an additional 10 to 25 MW (Pacific Power Association, 2006).  Distribution lines reach about 95% of the population on the main islands (Koror, Babeldaob, Kayangel, Anguar, and Peleliu). On Kayangel, Angaur, and Peleliu, the generation capacity exceeds the consumption by up to 300%. 

Project Partners

To reduce Palau's dependency on imported diesel, the European Commission has partnered with the Palau Energy Office to create the EEAP.

  • European Commission: Using Palau's 9th European Development Fund (EDF-9) allocation, the European Commission facilitated the development of the EEAP and will implement efficiency actions.
  • Palau Energy Office: A newly appointed Energy Planner, funded by EDF-9, will work within the Palau Energy Office to implement the EEAP.

Project Motivation

The average cost of electricity in December 2008 was $0.30 (U.S. dollars) per kilowatt-hour (kWh). The cost had peaked that year at $0.47/kWh.  Because all of the nation's electricity is produced by diesel generators, energy efficiency measures—which can be relatively easy and quick to implement—were determined to be the most cost-effective method to decrease Palau's import of diesel for power generation. 

Project Timeline

The National Energy Efficiency Action Plan was developed and implemented in 2008 and will continue to be implemented throughout 2009.

Project Strategy

An Energy Planner will implement the strategy. EDF will pay that salary for two years, after which the salary will be paid for by the Government of Palau.

  • Process to create EEAP:
    • The initial concepts were formulated by EDF-funded technical assistance staff
    • Those concepts were submitted to Palau Energy Office for feedback
    • The final concepts were integrated into EEAP, which was submitted to the Energy Office in February 2008.
  • Details of EEAP:
    • Residential buildings
      • Distribution of compact fluorescent light bulbs (CFL)  to households
        • Government Energy Office purchases CFLs in bulk and sells to consumers (2 to 3 per resident) at cost.  The program includes education, outreach, and evaluation.
      • Solar hot water heater/instant water heater after-purchase rebates
      • Rebate for ENERGY STAR® (or equivalent) certified appliances
        • The effort includes creating a fund for after-purchase rebates.  The Guam Energy Office had a similar program in the 1990s; Bonaire will look to Guam's experience and lessons learned.
    • Government buildings
      • Energy efficiency demonstration building
        • The Bureau of Public Works building had an energy audit as part of its designation as a demo building.  The recommended upgrading of the lighting system and building shell will now be implemented.
      • Capitol complex energy efficiency upgrades
        • Implement the recommended upgrades to the air conditioning system (i.e., controllers and timers) from the energy audit
      • Lighting retrofits
      • Painting roofs white
      • Window and door sealing and upgrades
    • Audit Koror-Airai water and sewage pumping system
      • Inspect water distribution system for leaks and areas in need of repair; create new cost structure for potable water and sewage to recover costs for audit
    • Decrease use of two-stroke gasoline outboard marine engines
      • Create a fund to subsidize boats with four-stroke gasoline outboard or diesel marine engines, which are more expensive, but also more efficient and cleaner than the commonly used two-stroke engines
    • Purchasing incentives for digesters for piggeries (pig farms)
      • Aid and build upon the Bureau of Agriculture's biogasification pilot program in piggeries
    • Electricity consumption reduction program for outlying states
      • Include demand-side efficiency (generating capacity is far greater than consumption), supply-side efficiency (cool roofs, CFL distribution, energy audits), and education and outreach efforts
    • Education and outreach
      • Awareness plan for the National Congress (Olbiil Era Kelulau [OEK])
        • Awareness campaign for members of OEK on the benefits of energy efficiency measures and the costs of not implementing them
      • Community workshops on energy efficiency and home energy audits


The project will be financed by the 9th European Development Fund, with subsequent financing from the Government of Palau or other donor agencies.

Lessons Learned and Major Hurdles

This EEAP is in the early stages of implementation; thus it is too early to identify major hurdles. Check the REP-5 Web site to follow the status of this project.


The following resources provided information about this project.

Philippe McCracken, project engineer, IT Power Group

The European Commission; Palau

Pacific Power Association, "United States of America Insular Areas Energy Assessment Report" 2006, pp. 396-443 Download Adobe Reader.