Energy Fiji Ltd (EFL) spent $193 million on fuel for its diesel-powered generators in 2023, marking the highest expenditure in the company’s history, according to CEO Hasmukh Patel in their 2023 annual report presented in Parliament last week.
Patel noted that due to insufficient diesel power generation capacity to meet the growing electricity demand, approximately 65 megawatts of containerized diesel generating sets were hired and deployed across Viti Levu from June 2023 until the end of the year, costing around $21 million.
“This also contributed to an all-time high fuel cost of $193 million for 2023, the highest ever in EFL’s history,” he said.
“The high fuel costs had a negative impact on EFL’s finances for 2023, resulting in monthly financial losses from May to December 2023.”
Due to the high fuel expenses, management had to review its overall operations, deferring most of its Capital Expenditure program planned for 2023 and implementing cost-cutting measures across the business to keep the company afloat.
Starting in mid-April 2023, EFL adopted a strategy to conserve water at the Monasavu Dam by reducing the generation output from the Wailoa Power Station to around 25 percent of Viti Levu’s total demand. This measure was designed to ensure the water at the catchment would last until the end of the year, in case of below-average rainfall. As a result, EFL continued to use expensive thermal fuel, resulting in monthly financial losses from May to December 2023.
EFL meticulously adopted this strategy to prepare for the worst-case scenario, where the Monasavu Hydro Scheme might need to be shut down if the dam levels dropped below the safe operating threshold. Despite these challenges, EFL remained committed to delivering safe and reliable electricity without major disruptions to its customers.
The key factors driving the increased electricity demand included high humidity in the first five months of the year, record visitor arrivals, growth in other key sectors, and the construction of rural electrification schemes funded by the government. Additionally, the rising electricity demand further increased fuel costs due to more fuel consumption required to meet the demand using expensive diesel.