Energy Fiji Ltd (EFL) spent $193 million on fuel for its diesel-powered generators in 2023, the highest amount in the company’s history, according to CEO Hasmukh Patel’s statement in their 2023 annual report presented in Parliament last week.
Patel reported that due to insufficient diesel power generation capacity to meet the rising electricity demand, approximately 65 megawatts of containerised diesel generating sets were rented and deployed around Viti Levu from June 2023 until the end of the year at an additional cost of 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,” Patel stated.
“This had a negative impact on EFL’s financial performance for 2023, resulting in monthly financial losses from May to December 2023.”
“As a result of the high fuel costs, management had to reassess operations by deferring most of the Capital Expenditure programs planned for 2023 and implementing cost-cutting measures wherever possible to keep the company viable.”
EFL adopted a strategy to conserve water at the Monasavu Dam from mid-April 2023 by reducing the generation output from the Wailoa Power Station to around 25 percent of the total Viti Levu demand to ensure the water at the catchment could last till the end of the year if below-average rainfall persisted.
“As a result, EFL continued to consume expensive thermal fuel and recorded monthly financial losses from May to December 2023,” Patel elaborated.
“EFL carefully implemented this strategy considering the worst-case scenario where the Monasavu Hydro Scheme might need to be shut down if water levels fell below safe operating levels.”
“However, EFL ensured its critical function of delivering safe and reliable electricity to customers without significant disruptions.”
The growth in electricity demand was driven by high humidity in the first five months of the year, record visitor arrivals, activity growth in key sectors, and the construction of rural electrification schemes funded by the Government.
“Additionally, increased electricity demand also led to higher fuel costs due to the greater use of expensive diesel fuel to meet the demand,” Patel concluded.