Electricity Generation in Fiji: Assessing the Impact of Renewable Technologies on Costs and Financial Risk

In recent years, renewable energy technologies have been advocated in Fiji on the basisthat they improve energy security and serve as a risk-mitigation measure against oil pricevolatility. Despite this, there have been few attempts to measure the impact of renewabletechnologies on energy security. That analysis is important if the benefits of renewableenergy technologies in Fiji are to be adequately evaluated. This paper develops andapplies a method for assessing the potential contribution of renewable technologies to thesecurity of electricity supply in Fiji. The method is based on an application of portfoliotheory, traditionally used in financial markets, to the electricity generation mix in Fiji.The results demonstrate the impact of different renewable technologies on both portfoliogeneration cost and risk for Fijian electricity grids.