Energy Fiji Ltd reported an unprecedented expenditure of $193 million on fuel for its diesel-powered generators in 2023, according to CEO Hasmukh Patel in the company’s annual report presented in Parliament last week.
Patel noted that due to a lack of sufficient diesel power generation capacity to meet the growing electricity demand, the company had to hire and deploy 65 megawatts of containerised diesel generating sets around Viti Levu from June 2023 until the end of the year, at a cost of approximately $21 million.
“This contributed to the record-high fuel cost of $193 million for 2023, the highest in EFL’s history,” he said.
“The high fuel costs negatively impacted EFL’s financials for 2023, with the company recording monthly financial losses from May to December 2023.”
As a result of the steep fuel costs, the management had to reassess overall operations, deferring most of its planned Capital Expenditure program for 2023 and implementing cost-cutting measures across the business to ensure the company’s survival.
“In an effort to conserve water at the Monasavu Dam, EFL reduced generation output from the Wailoa Power Station to around 25 percent of the total Viti Levu demand from mid-April 2023 onward. This strategy was employed to ensure the water at the catchment could last through the year, should below-average rainfall persist,” Patel explained.
Consequently, EFL continued to use expensive thermal fuel, leading to monthly financial losses from May to December 2023. Patel emphasized that this approach was a precautionary measure to avoid the potential shutdown of the Monasavu Hydro Scheme if dam levels fell below safe operating thresholds.
Despite these challenges, EFL maintained its critical function of delivering safe and reliable electricity to its customers without any major disruptions.
The growth in electricity demand was driven by high humidity in the first five months of the year, record visitor arrivals, growth in other key sectors, and Government-funded rural electrification schemes.
“Additionally, the increased electricity demand resulted in higher fuel costs due to greater fuel usage to meet the demand using expensive diesel,” Patel concluded.