The Republic of Maldives, an island country situated in the Indian Ocean is mainly known for its natural beauty with stunning landscapes and vibrant marine ecosystems. The country’s economy relies substantially on tourism, fishing, and some limited agriculture. Thereby, it makes the country’s economy very vulnerable to external shocks, particularly climate change amidst rising sea levels globally. As Maldives has no established fossil fuel reserves of its own, its energy demands are primarily satisfied through imports that can be a big challenge for energy security in the country. Diesel is mostly utilised in power generation in Maldives where it is deployed for industrial processes and maritime transport. Also, petrol is primarily used for road transportation, LPG for cooking, and aviation fuel for aeroplanes. However, achieving energy independence through increased domestic production is also difficult especially for a small island country like Maldives.
Fortunately, Maldives is geographically blessed with abundance of renewable energy resources, including solar, wind, and ocean, as well as an ability to manufacture green hydrogen fuel. The country can also replace a portion of its diesel consumption with cheaper, more efficient and less polluting small-scale liquefied natural gas. As per IRENA’s Renewable Capacity Statistics 2023 report, total renewable energy capacity installed in Maldives as of 2022 was 37 MW. Such less capacity of power reflects untapped potential of renewables in a country blessed with natural resources. With so much scope to harness clean energy, the country has a lot more potential to produce and generate renewable power.
Potential for renewables
The Maldives’ government advocates for effectively managing climate change risks, climate risk planning and enabling renewable energy adaptation for the country’s development strategy and planning frameworks. Hybrid systems combining renewable energy and energy storage system technologies are crucial for the Maldives’ transition to low-emission development. In a report titled “A Brighter Future for Maldives Powered by Renewables: Roadmap for the Energy Sector 2020–2030”, the country aims to increase the diversity of renewable energy technologies in the national energy mix by 2030.
The roadmap further highlights that the excess renewable energy produced on the islands can be transformed to hydrogen and oxygen by electrolysis. Green hydrogen can be an ideal option for diesel-powered ferries and jetties that have been retrofitted. However, it is important to reduce the cost of electrolysis or other separation processes for green hydrogen production. Another significant hurdle in showing feasibility is obtaining advance market commitments in which energy customers contract for long-term hydrogen purchases.
Furthermore, in a joint study conducted by the World Bank and Energy Sector Management Assistance Program (ESMAP) in 2019, some key critical measures were highlighted as a way forward to boost the renewable energy sector in the country. Over the research period of study from 2020 to 2040, solar power investments are recommended to offset continued diesel fuel purchases and reduce carbon dioxide emissions. In addition, battery energy storage systems (BESS) combined with solar PV has the potential to significantly lower the prices of power for customers and utilities across Maldives. Also, according to the study, the value proposition is greatest where BESS can enable the integration of solar PV. To further replace diesel in the Maldives, floating solar PV or other renewable alternatives like green hydrogen will be necessary in lieu of limitations of space for land-based solar PV.
To promote renewable energy technologies in Maldives, the country’s government has incorporated different measures in its ‘Maldives National Energy Policy and Strategy 2010’. The policy highlights that renewable energy sources such as solar, wind, and biomass have the ability to meet the Maldives’ energy needs. Further, to assist the development of the renewable energy sector, there will be different incentives introduced with access to green funds that will attract private sector participation in the clean energy space. Tax incentives by the government can also be availed to encourage adoption of commercially feasible and renewable energy alternatives. Other strategies include incentives for power sector development by making subsidies, concessional financing, and duty concessions available to ensure the affordability of energy supply.
In addition, it includes abolition of import duties on renewable energy products. Thereby, local and international private investors have developed interests towards the energy sector of Maldives’. Commercial enterprises, such as resort operators, are now implementing clean energy technologies for lighting and other uses with facilities of duty exemption and regulation benefits for local and foreign investors.
Progress so far
The country has been actively securing investments for its expansion plans to establish renewable energy projects. In December 2020, World Bank authorised a $107.4 million project to assist the Maldives in accelerating its transition to renewable energy. The ‘Accelerating Renewable Energy Integration and Sustainable Energy’ (ARISE) project and ‘Accelerating Sustainable Private Investments in Renewable Energy’ (ASPIRE) initiative have been implemented to attract private investments for increasing renewable energy capacity in the Maldives. Both projects are intended to address the climate-related issues and vulnerabilities that the Maldives faces as an island nation. Also, in November 2020, Asian Development Bank (ADB) announced that it approved a concessional loan worth $7.74 million and a project grant worth $2.73 million to advance the existing ‘Preparing Outer Islands for Sustainable Energy Development (POISED)’ project in the Maldives. Thus, the government has been actively promoting investments from public, private and multilateral institutions to boost the clean energy sector in the county.
In terms of setting up projects in the country, the government has been announcing tenders for green energy projects. Recently, in May 2023, the Maldives’ Ministry of Environment, Climate Change, and Technology issued a tender for the installation of 20 MW of solar PV across 20 islands in the country. According to the tender guidelines, the ADB will assist the solar projects and they will be established on a design, build, finance, own, operate, maintain, and transfer basis. The project will be established under a public-private partnership model.
Also, the country has an upcoming waste-to -energy plant in Thilafushi in its pipeline which is scheduled to be commenced in 2023.This waste-to-energy plant will be able to generate 10-12 MW of electricity and will be connected to the main power grid of the Greater Male’ Region. The Waste Management Corporation Limited, Maldives stated that policies will be implemented, to transfer waste from waste transfer stations to Thilafushi.
In addition to several tenders and projects to be implemented in the country, the government has been collaborating with other countries as well to enhance its green energy supply chains. In April 2022, India’s Ministry of Power announced that India and Maldives plan to set up a transmission interconnection to facilitate the transport of renewable energy between the two countries. The proposal was discussed during the meeting between the Indian Minister of Power and New and Renewable Energy and Maldives’ Minister of Environment, Climate Change and Technology in New Delhi.
The foresight and climate-proactivity of Maldivian government coupled with development financing from multilateral institutions like the World Bank and ADB will help the country to achieve its ambitious energy transformation targets. The renewable energy sector in Maldives does face some barriers such as lack of capacities for development, lack of infrastructural resources for design, implementation and management, lack of financing, as well as lack of trained workforce to deploy and establish clean energy technologies.
Going forward, Maldives has great potential to produce and sustain its operations through domestically produced renewable energy. However, with adequate technologies, trained manpower and sufficient funds, the country would be able to pace up its renewable energy capacities.