From solar mini grids to green hydrogen, Papua New Guinea is looking to renewable energies to help meet its future energy needs – and there are sources of funding to get the ball rolling.

Technical components of a mini grid system. Credit: USAID

Renewable energy has an important role to play in getting power to more people in Papua New Guinea, especially in rural and remote areas.

One party driving investment in this area of the energy sector is the USAID-PEP (Papua New Guinea Electrification Partnership) – the United States’ contribution to the project to connect 70 per cent of PNG’s population to electricity by 2030.

To help accomplish this goal, USAID-PEP is focused on facilitating at least 220,000 new on- and off-grid household electricity connections. A key part of this will be deploying renewable solutions, such as solar mini grids.

‘We see mini grids within PNG as a way to advance access to energy, as well as energy security.’

DFC’s Geoffrey Tan during his presentation at the 2022 PNG Investment Conference. Credit: BAI/Stefan Daniljchenko

‘PNG is very well suited to mini grids and micro grids, given the geography and the highly disparate populations, they exist already but there is the opportunity and the need to do a lot more,’ says Geoffrey Tan, Managing Director Asia Pacific at the US International Development Finance Corporation (DFC), which is providing financial support to the project.

The key is making these niche grids viable for investors, he told the recent 2022 Business Advantage Papua New Guinea Investment Conference.

Tan said this viability follows what he calls an ‘ABC’ model.

It starts with an ‘anchor’: a large, financially sound company such as a telco or mining company to pledge to take the majority of the power produced. Then come smaller ‘businesses’ that need access to power and, lastly, a ‘community’ that is looking for reliable electricity.

Tan said PNG should be looking to solar mini grids as part of the PEP. ‘We see mini grids within PNG as a way to advance access to energy, as well as energy security,’ he said.

Turning to green hydrogen

The IFC’s Devesh Singh. Credit: BAI/Stefan Daniljchenko

Another option for renewable energy in PNG is the production of green hydrogen. Hydrogen is a key component of many industries, from transport and power to fertilisers and plastics but it is not currently ‘clean’.

‘The current global production of hydrogen is around 90 million tonnes with 99.6 per cent of that produced through fossil fuels,’ Devesh Singh, Operations Officer (Climate and Energy), South Asia & Pacific, International Finance Corporation, told the conference. ‘The hydrogen that is currently being produced emits around 8kgs of CO2 per one tonne of hydrogen production.’

Singh says that the IFC is actively seeking solutions, in partnership with the private sector, to help ‘defossilise’ these industries.

This presents an opportunity for countries to create green hydrogen hubs. One factor that makes PNG a sensible option for such a hub is its high annual rainfall.

‘The important aspect to this whole game is water. One kilogram of hydrogen requires 9 to 15 litres of water consumption, so it requires the availability of fresh water,’ he said.

Globally, over 40 territories have hydrogen strategies published or under development, including the European Union and Australia, which are expected to drive demand.

In PNG, Fortescue Future Industries is already exploring opportunities to produce ‘green’ or CO2-free hydrogen, and the past year has also seen the formation of the country’s first industry group for hydrogen, Hydrogen PNG. A government-led strategy to develop the sector further would undoubtedly open PNG up for further investment.