In PNG, more than 90% of the population (mostly rural dwellers) have no electricity. There are three grids: one for Port Moresby, the capital; the Gazelle network, covering East New Britain, and the Ramu grid, which covers the cities of Lae and Madang, as well as the Highlands region. PNG Power, the national utility, operates three interconnected distribution systems, plus many provincial power systems. About a hundred small rural electricity systems (called C-centres) are operated by local authorities at government administration centres, powered by diesel generators, small hydropower facilities, and occasionally solar photovoltaics (PV). Responsibility for financing, management and planning rests with provincial authorities, however, many systems are badly managed and are inoperative. In 2008, the Japan Special Fund under the ADB provided a US$ 1.2 million grant to the Government of PNG, matched by US$ 300,000 of the Government's own money, to develop the electricity network of the islands.
The country’s Medium Term Development Strategy (MTDS) 2005–2010 recognises energy and power as critical ingredients for development and poverty reduction. The strategy invites the government to assist the disadvantaged to “lift themselves out of poverty by improving basic services, such as water and electricity.” The MTDS places high priority for government spending on non-revenue-generating infrastructure, such as roads and education, without making any financing provisions for electrification, the private sector having been expected to invest in the necessary power infrastructure requirements for development. Unfortunately, progress has been slow, and this has not yet occurred.The Papua New Guinea Government has initiated The National Strategic Plan 2010–2050, which has seven ‘pillars’. Natural resources, climate change and environmental sustainability are among the areas of focus. In March 2010, the Papua New Guinea Government announced the Development Strategic Plan (DSP) 2010–2030, which has five ‘pillars’—one of the pillars is ‘natural resources and environment’. The DSP 2010–2030 also set this goal: All households have access to a reliable and affordable energy supply, and sufficient power is generated and distributed to meet future energy requirements and demands.On October 2010, the Papua New Guinea Government announced its Medium Term Development Plan (MTDP) 2011–2015. The MTDP 2011–2015 will focus on increasing access to electricity for all households in the country. New investment from the private sector in solar technology is also expected during the period of the first MTDP. Comprehensive analysis is required into the cost effectiveness of various alternative sources of power.
The technical potential for renewable energy sources in PNG is enormous, but many of these resources are in remote locations with limited demand, and are not readily exploitable.Geothermal energyThe Geothermal Energy Association estimates PNG’s geothermal potential at 21.92 terawatt-hours; the association also categorises the country as an economy that could, in theory, meet all its electricity needs well into the future from geothermal sources alone. Installed geothermal capacity in 2010 was 56 MW.HydropowerPNG has significant hydroelectric potential. Its land area includes nine large hydrological drainage divisions (basins). The largest river basins are the Serpik (with catchment area of 78,000 sq km), Fly (61,000 sq km), Purari (33,670 sq km), and Markham (12,000 sq km). There are other catchments of less than 5,000 sq km, in areas that are very steep. On the mainland, the mean annual rainfall ranges from less than 2,000 mm to 8,000 mm in some mountainous areas, while the island groups receive a mean annual rainfall of 3,000–7,000 mm. The gross theoretical hydropower potential for PNG is 175 TWh per year. There is little economic potential for the expansion of large hydro, due to the lack of substantive demand near supply sources. However, greater potential exists for developing smaller hydro schemes, with over 10 new small hydropower schemes deemed as feasible in the 2009 Power Development Plan. Combined capacity for these new schemes exceeds 20 MW.Ocean Thermal Energy Conversion (OTEC)There is very limited knowledge of PNG’s potential for OTEC, tidal energy or wave energy. Near Port Moresby, the tidal range is 2.7 metres, compared to 1.1–1.6m in much of the country. Reportedly, there is a 6m range in parts of the Torres Strait. There have been very preliminary proposals to tap tidal currents (peaking at 7–11 km/hour) at Buka Passage, near Bougainville.Wind energy There have been no systematic estimates of wind energy potential since the 1970s, when the best potentials were assessed in portions of Central, Western, Milne Bay and New Ireland provinces, and the Port Moresby area. A pilot wind energy project is being installed in the Duke of York islands, jointly funded by the Papua New Guinean and Chinese governments.Solar energySolar energy is among the largest potential sources in PNG. Average insolation in much of the country is 400–800 W/m2, with 4.5 to 8 sunshine hours a day. Of 23 locations assessed, Port Moresby has the largest resource, with 2,478 sunshine hours per year. The lowest is Tambul, Western Highlands, with 1,292 hours. The best locations for solar PV are the offshore islands, and in the southern regions of the country. As of 2008, no electricity-producing installations were present in the country, although a solar home systems project for schools is in place, with help from the Sustainable Energy Financing Project from the World Bank/GEF.Biomass energyAlthough two thirds of PNG are covered with forest, much of it is inaccessible or unsuited for energy use. 58% of land is subject to strong or severe erosion, and 18% is permanently inundated or regularly flooded. The main practical biomass energy potential is in areas such as logging and agricultural production, using either the crop output or residues. Log exports are roughly 2 million m3 per year, but very little is processed locally, leaving only small amounts of biomass for energy production. There are 18 major wood-processing facilities, but the amount of residue produced and it's availability for energy use is unknown. Traditional rural use of biomass is still relatively high, due to the low level of electricity access for cooking, lighting etc.