Palau reached the first 20% of its renewable energy goal on July 18th when the Solar Pacific Energy Corporation, Palau’s first Independent Power Producer, connected to the Palau Public Utilities Corporation’s (PPUC) power grid.
Palau Public Utilities Corporation’s renewable energy objectives fulfill Palau’s NDC targets. The Regional Pacific NDC Hub concluded the Annual Focal Point Meeting held from August 30th to September 1st, 2023, in Nadi, Fiji. Themed “A Climate Resilient Pacific: NDC Targets and the Way Forward.” Participants engaged in rigorous discussions, with a spotlight on their country’s progress towards NDC objectives and identifying pathways for future success. The discussions led to a deeper understanding of the Pacific commitment to NDCs and the Paris Agreement. (Pictured: Eden Ridep, Palau’s NCD Focal Point, responsible for tracking Palau’s Nationally Determined Contributions. Also in the photos are regional focal point representatives and media members as partners in “highlighting” progress in their respective countries. 
Anthony Rudimch, Civil Engineer at the Palau Public Utilities Corporation, confirmed yesterday that the solar power company is now connected to PPUC’s power grid, and “ it is running, but it is still being tested.”
“Testing and commissioning,” added PPUC Chief Operating Officer Frank Kyota, of operating and managing the two power systems on the same grid.
At the same time, PPUC is conducting a new tariff study for the hybrid power utility service.
PPUC CEO Kyota said that a new tariff is necessary. “There are now two different power sources, fossil fuel and renewable. One is fixed, and one fluctuates and therefore will have an impact on tariff.”
The new tariff still has to go through the PPUC Board, public hearings, and the Palau Energy & Water Administration (PEWA).
Other factors delaying the full implementation include ongoing upgrades of PPUC’s power grid. According to Mr. Rudimch, a Japan International Cooperation Agency (JICA) grid upgrade grant is currently happening, which causes delays. The grant grid upgrade includes 3 substation upgrades, 436 power poles, and one transmission line in Desbedall, Babeldaob.
These upgrades are ongoing PPUC programs that are not part of the IPP, but the timing coincides with the implementation of the IPP solar energy project.
“Based on progress, I would say, with absolute certainty, that by December it will be in full operation, but I think, the way things are progressing, it may be sooner, by October,” added PPUC’s Civil Engineer Anthony Rudimch of the commissioning of the new power source.
Before connecting with the IPP, about 6% of Palau’s renewable energy came from rooftop solar panels. With the solar farm, the total renewable energy now represents 20 to 25% of the total energy output.
In 2015, Palau’s Nationally Determined Contributions (NDC) in the energy sector included a 45% renewable energy target by the year 2025. President Surangel Whipps had raised this to 100% renewable energy by the year 2032.
Despite reaching half of the 45% renewable energy target in 2023, the task of reaching 45% by 2025 does not seem feasible, given the challenges faced. The current IPP, producing nearly 20 Gigawatt hours per year, costs nearly $30 million dollars to construct. PPUC, already bogged down by loans, refuses to take on any more debt.
Furthermore, more infrastructure upgrades are needed to take on additional renewable energy onto PPUC’s power grid. The diesel generator distribution systems must be “re-configured” to safely take on additional renewable energy. Said Mr. Rudimch; this will require substantial financial investment, which has to come by either grant or loan.
With a current goal to reach 100% renewable by 2032, Palau has 9 years to find financing and other means to achieve the remaining 80% renewable energy goal.