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Vanuatu ranked 2nd in most expensive electricity charges in the world

SMART METER BECOMING TOO EXPENSIVE IN VANUATU WHILST VNPF OWNS 49% SHARES IN UNELCO

In a Comparison of average electricity prices in select countries around the world by World Atlas, Vanuatu is ranked as the second most expensive after the Solomon Islands.

A World Atlas report states “The Pacific island nation of Solomon Islands has the highest electricity cost in the world, at a staggering 99 US cents per kilowatt-hour.”

Other countries with high energy prices are primarily tropical islands like Vanuatu, the US Virgin Islands, the Cook Islands, and Tonga.

Some European countries such as Germany, Denmark, and Belgium also experience high electricity costs.

In Vanuatu, nearly 3/4 of the population do not have any access to electricity.

Although Vanuatu has a grid electricity system in place, government taxes make the cost of electricity prohibitively expensive.

Many residents are often given no choice but to resort to fire hazards like kerosene lamps. 

In August 2009, Vanuatu’s only electricity company, Unelco, introduced trials for the Prepayment Meter or Smart Meter as it is known in Vanuatu but since its introduction till now 2020, the prepayment cost have skyrocketed and low-income earners that were introduced to the system have seen dramatic differences in spending on Smart Meter compared to the normal meter electricity bill every end of the month.

The Unelco Vanuatu website states “small domestic customers will now have the choice to install a prepaid meter, either from a new connection or change from the existing postpaid meter to prepaid metering. There are no upfront costs and no deposit required.”

Unelco further says “customers can choose the amount of electricity they wish to purchase, the first purchase must be a minimum of 300 vatu but subsequent purchases after that can be done as often as you want or need with a minimum purchase of 100 vatu.”

Information by Unelco do not mention any charge rate but do say “customers simply need to buy credit with their prepaid card, insert it into the prepaid meter and power is available. The meter functions set will flash a warning sign when the meter is running low on credit so you are aware if you want to top up.” 

The Prepaid Smart Meter, however, is becoming expensive by experience and Efate resident Morris Horry provides an example, “I paid VT3,000 for Smart Meter and it lasted three days”

Another customer by the name of Josiane Tarosa says she pays VT3,000 a week on the Smart meter and same goes for other users who spend the same amount per week.

Brownly Savwa, however, topped the notch when the freezers he uses started to cost him to nearly VT24,000 a month and he says this never happened when he was using the normal monthly billed electricity meter.

Jason Tabiaga is a graduate in Electrical Engineering from the University of Technology in Sydney and he has made the following comments, “Smart Meter only operate well if the wiring in homes is done properly and it is a fact that 80% of homes in Vila or Efate have not been wired properly like Luganville or Santo.”

Mr Tabiaga says “in Santo VUI does inspection to wiring in homes before they turn on the power and this is one reason why residents in Santo pay lower electricity bills than anywhere else in Vanuatu.”

“With Port Vila or Efate Unelco does not inspect wiring so it is possible the Smart Meter detects any short circuits inside the homes and this tells the Smart Meter to keep on running even though the customer is not using the electricity”

On a YTS discussion, Mr Tabiaga says the “Smart Meter detects faults or short circuit more than the normal meters and it will bill a customer on power consumption even though the customer is not using power.”

“It is important Unelco check wiring inside homes if bills continue to rise as they are the service provider,” says Tabiaga.

While Vanuatu does not as some countries rely heavily on renewable energy sources such as hydropower, wind power, or solar power,  coal energy, the consumer cost of electricity is dependent on a variety of factors including access to energy sources, local tariffs, and the privatization of resources.

The URA in its 2017 report stated that “electricity in Vanuatu continues to remain one of the costly goods after the high cost of importing diesel into the country and the great reliance on diesel base generation.”

The report by URA has said the “electricity prices charged in the UNELCO concessions is computed monthly to track changes in the diesel cost and other parameters such as changes in the material cost, labour cost and renewable penetration in the overall generation mix.”

However, to YTS News understanding, fuel prices did drop a few times and during those periods, the electricity charges on the Smart Meter did not change.

The Vanuatu National Provident Fun or VNPF also owns shares in Unelco and not just some share but a staggering 49%.

Before January 2018, VNPF had 14.40% shares with Unelco then increased that percentage to 40% and later purchased another 9% in January 2020 to give VNPF 49% shares in Unelco.

The VNPF GM told media at that time “by purchasing shares in UNELCO, it is also supporting members to ensure they have decent water and electricity,” however the reality is far from decent.

Even the 49% ownership of Unelco by VNPF does not constitute any decent effort to control the skyrocketing prices faced by consumers especially low-income earners who are starting to become victims to the cost.