Japan International Cooperation Agency

ENERGY POLICY TRAINING, TOKYO, (23RD JUNE - 20TH JULY) 2024
COUNTRY REPORT PRESENTATION – PAPUA NEW GUINEALOCATION : South of Japan & Northof Australia
LAND AREA: 452,860 sq km
CLIMATE:

Tropical, Wet & Dry

POPULATION:11.8 Million
GDP: 31.15 Billion US Dollars
GDP per Capita: 3,057 US Dollars
LANGUAGE: 839 Known Languages

Content /Presentation Outline
12345Papua New Guinea Overview
Historical Energy Demand & Supply
Energy Demand & Supply Outlook (2030 - 2050)
PNG’s Current Energy Policy
Expectations From The Energy Policy Training Program

PAPUA NEW GUINEA OVERVIEW
Geography
Island country comprises of the eastern part of the island of New Guinea (mainland) andother 600 smaller offshore islands in the southwestern Pacific Ocean.
Society- Estimated Population of 11.8 Million comprise of Melanesian, Micronesia or Polynesia- Official languages are English, Pidgin and Motu and it has over 860 native languages
making it a linguistically diverse country in the world.
- The bulk of the population, some -80 – 85 percent live in traditional village based and15-20 percent of the population live in urban areas.
- Population growth is estimated to have been 1.9 per cent in 2022 (World Bank) withmore than half of the population under the age of 23.
- Urbanization or rural urban shift is causing a lot of stress on the service
infrastructures in urban areas.

Politics and Government• PNG a Member of the Commonwealth with the head of the state being King Charles II
and a parliamentary democracy System.
• Members of parliament are elected through general elections every five (5) years,Parliaments elects Prime Minister who appoints ministers (cabinet)

EconomyMade up of two distinct economies including (1) a modern, formal economy and (2) atraditional, subsistence economy.
• The two main economic drivers are the export-earning sector (minerals extraction andenergy) and the labor-intensive sectors (agriculture, fishing, and forestry).
• LNG production facility, completed in 2014, is a significant factor in PNG’s economic• The GDP growth rate has been increasing at an average rate of 1.8% every year since2000 and was hit hard by covid pandemic and reduced by 3.5% between 2019 and 2020
as illustrated by the graph below.

Papua New Guinea Gross Domestic ProductPNG GDP GROWTH TREND
200,000.0
180,000.0
160,000.0

GDP Billion Kina

140,000.0

120,000.0
100,000.0
80,000.0
60,000.0
40,000.0
20,000.0
-

2,010

2,011

2,012

2,013

2,014

2,015

Year

2,016

2,017

2,018

2,019

2,020

2,021

2,022

Energy Institutions & Governance- Energy policies historically focused on developing its rich natural resources but focus has
shifted recently towards strengthening the governance and institutional frameworks- National Energy Authority (NEA) was established to coordinate the policy reforms andregulate the Fossil fuels and renewable energy resources

HISTORICAL ENERGY SUPPLY & DEMAND-The Sector has three key energy resources: (i) electric power, (ii) fossil fuels (includingpetroleum, and natural gas) and iii) renewables (including biomass, geothermal, Solar PV,Hydro energy sources)

Energy Supply By Energy Source
12000

UNIT: KTOE

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2000

0
2010

2011

2012

2013

2014

2015

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2018

2019

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2021

ENERGY SOURCECrude OilGeothermal

Natural Gas
Solid BiomassHydro

The completion of the LNG production facility in 2014 is a significant factor causing the spike in theNatural gas supply from 2014 onwards.

ENERGY CONSUMPTIONPNG's energy demand is dominated by oil 39% and renewables 51% of which isfirewood. Electricity consumption was 10% of final energy demand and is mostly
consumed by the industrial sector
ENERGY CONSUMPTION BY SECTOR

Energy Consumption by Energy Source

2500
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UNIT: KTOE

UNIT: KTOE

2000
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200002010

20112012

2013

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20172018

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2010

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20122013

2014Transport sector

Other (Res, Comm, Pub Serv, Agri)

2016

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2021

Energy Source

ENERGY SECTORIndustry sector

2015

Petroleum products

Solid biomass

Electricity

Renewable energy, mostly firewood, contributes the largest share of final energy consumption, partially due tolimited access to electricity. The National Electrification Rollout Plan is expected to reduce traditional biomass use
as access to electricity increases
Use of renewables is especially high because PNG relies more on firewood for heating and cooking in buildings,
compared to electricity, gas and coal, which are much more efficient, in other economies.

Electricity Generation
PNG’s electricity network is relatively undeveloped. Only around 15% of the population have accessto the grid due to poor infrastructure, network and the rugged topography
Electricity Generation by Energy Source❖An Important Government Objective is toincrease access to electricity to 70% of thepopulation by 2030 and 100% by 2050
❖Developed the The National Electrification
Rollout Plan with assistance from APEC
Members❖This will help to stimulate economic activityand quality of life throughout the economy.

50004500
4000

Unit: GWh3500
30002500
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50002010

2011

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Energy Source
ThermalHydro

Geothermal

Others

2019

2020

2021

About two-thirds of electricity generation in PNG iscarried out by auto producers, such as mining
facilities, which are quite far away from urban
centres and are therefore not connected to the grid.

The economy depends heavily on fuel oil for electricity generation followed by Hydro and currently Policy
objectives are drafted to tap into more use of renewables.

C02 Emissions
The majority of PNG’s emissions currently come from electricity generation (40%), transport (20%)
and industry (20%). The emissions from burning firewood are not considered
CO2 EMISSION BY ENERGY

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9000

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UNIT: kt CO2

UNIT: kt-C02

CO2 EMISSION By SECTOR

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02010

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ENERGY SOURCE2019

ENERGY SECTOR
Coal & Coal Products

Industry Sector

Transport Sector

Residential & Commercial

Crude Oil & Petroleum Products

Gas

Other fossil fuels

OtherOn Average, 90% of PNG’s CO2 emission comes from Crude oil and petroleum energy sources with others
making up 10%.

ENERGY DEMAND & SUPPLY OUTLOOKPNG is a relatively small economy dominated by mining and as such, a single mine closure
or opening can have a huge immediate impact on energy demandPrimary Energy Supply by Source &Energy Source• Papua New Guinea’s primary energy
supply in the 2020s–2035 period is
projected to grow at an annual rate of4.5%.
• Oil, which was the predominant form ofenergy will be increasingly supplementedwith natural gas and new renewableenergy (NRE) (mainly geothermal).

Primary Energy Consumption by
Sector & Energy Source• Industry Energy demand is projected toincrease at an average annual rate of 4.4%
which will account for 59% of final demand in2035, driven by the LNG projects.
• demand in the transport sector is expected toincrease at an average annual rate of 2.3%
over the outlook period. This demand will be
met almost entirely by oil-derived fuels.
• The final energy demand in the ‘other’ sector,
which includes residential, commercial andagricultural users, is projected to increase atan average annual rate of 4.8% over theoutlook period.

Electricity Generation by Energy Source• Electricity in PNG is generated by PNG Power Limited (PPL), the national electricity
provider and a wholly government-owned through Kumul Consolidated Holdings(KCH)• There are vague plans Electricity generation is projected to grow by 4.9% annually
over the outlook period and to reach 12.2 TWh in 2035.
CO2 Emission by Sector & Energy Source• PNG emitted about eight million tonnes of CO2 in 2020, but this is only about one
thousandth of APERC’s total emissions. PNG’s low amount of emissions is expected togrow quickly over time as the economy increases power generation, as well as industrial
and transport activity.
• Papua New Guinea’s CO2 emissions from the combustion of fuels are projected to reach
14.8 million tonnes in 2035, which is almost a 2.8 times increase from the 2010 level of 5.5
million tonnes.

PNG’s CURRENT ENERGY POLICIESPNG’s Energy Policies have been focused on developing its natural resources until recently the focus has shiftedto strengthening the governance and institutional capacity building and framework to develop the resources in asustainable manner and meeting future challenges such as climate change.

Current Energy Policies & Measures

Major Difficulties & Bottlenecks
Encountered• The National Energy Policy (NEP) 20182028• The Power Sector Development Plan
• Promoting Rural Electrification• Over Dependent on Imported Expensive Oil• Urban Power Shortages• Lack of Rural Electrification/Connectivity

For PNG as a whole, a continued lack of rural electrification presents a severe challenge to economic growthand equal opportunity and indirectly puts pressure on local forests as fuel wood collection continues toconstitute a major factor in deforestation.

EXPECTATIONS FROM ENERGY POLICY TRAINING PROGRAM
From this KCCP Program for Energy Policy Training, we would like to gain substantial understanding and in
depth knowledge on the process of policy formulation through to delivery. The policy formulation, planning anddelivery process in Japan, the numerous field trips, sharing experiences through dialogue and collaboration
among industry experts and partners being built in to the training program gives us that confidence.

PNG Power’s plan going forward is to reduce the cost of power production by moving away fromburning expensive imported fuel oil and utilize appropriate technology to tab into clean renewableenergy resources that are available in abundance including; hydro, natural gas, geothermal and evensolar photovoltaic. This can only be achieved with the assistance from other development partners like
JICA through sponsoring such Programs and technical assistance.
We expect to integrate the energy transition models used in Japan or any other partner country thatsuits our needs and that is workable. We are confident of supporting the established institutions todeliver energy policies through applying effective planning processes and appropriate strategies andmethods. And most importantly, we will support and coordinate with key agencies to address thechallenges to deliver policies.

“ARIGATO GOZAIMUS”
THANK YOU