Study Region

This report focuses on 16 Oceanian countries, including Australia, New Zealand, Papua

New Guinea, Fiji, Solomon Islands, Palau, Federated States of Micronesia, Marshall Islands,

1

Nauru, Vanuatu, Tuvalu, Samoa, Kiribati, Tonga, Niue, Cook Islands.

Illustration of Study Region of Oceanian Energy Interconnection

1

This report is not intended to advocate any position on the sovereign status of any territory, the boundary delimitation

of international borders, or the name, of any territory, city or area.

I

Contents

Study Region .........................................................................................................................I

Contents .................................................................................................................................I

1 Development in Oceania .................................................................................................. 1

1.1 Economy and Societ y .............................................................................................. 1

1.2 Resources and Environmen t .................................................................................... 2

1.3 Energy and Power .................................................................................................... 3

2 Challenges and Ideas of Sustainable Development in Oceani a .................................... 6

2.1 Development Challenges ......................................................................................... 6

2.2 Development Ideas .................................................................................................. 6

2.3 Development Prioritie s ............................................................................................ 6

3 Energy and Power Development Trends ........................................................................ 9

3.1 Energy Demand ....................................................................................................... 9

3.2 Power Demand ...................................................................................................... 10

3.3 Power Supply ......................................................................................................... 11

4 Development Layout of Clean Energy Resources ....................................................... 14

4.1 Distribution of Clean Energy Resources ............................................................... 14

4.2 Layout of Clean Energy Bases .............................................................................. 16

5. Power Grid Interconnectio n ......................................................................................... 19

5.1 Power Flow ............................................................................................................ 19

5.2 Power Grid Pattern ................................................................................................ 20

5.3 Main National Grid Interconnection ...................................................................... 22

5.4 Key Interconnection Projects ................................................................................. 24

5.5 Investment Estimatio n ........................................................................................... 25

6 Comprehensive Benefits ................................................................................................. 27

6.1 Economic Benefits ................................................................................................. 27

6.2 Social Benefits ....................................................................................................... 27

6.3 Environmental Benefit s ......................................................................................... 27

6.4 Political Benefits ................................................................................................... 28

7 Development Outlook of Achieving 1.5 ºC Temperature Control Target .................. 29

7.1 Situations and Requirements ................................................................................. 29

7.2 Implementation Paths ............................................................................................ 29

7.3 Scenarios and Schemes .......................................................................................... 30

I

Research and Outlook on Oceanian Energy Interconnection

1 Development in Oceania

1.1 Economy and Society

The macro economy maintains stable, mainly dominated by the service sector.

In 2017, Oceania's GDP totaled 1.57 trillion USD,¹accounting for 2% of the world's

total. In 2017, Oceania's GDP per capita was 39000 USD. Among its nations, Australia

and New Zealand accounted for 98% of Oceania's total GDP, with the share of the

service sector of 78.2% and 72.8%, respectively. Papua New Guinea is the only

Oceanian country with a relatively high proportion of secondary industries. Relying on

abundant tourism, marine and agricultural resources, the industrial base of other

Oceanian countries is concentrated in tourism and agriculture. Oceania had a

population of 40.15 million in 2017, accounting for only 0.5% of the world's population.

Among its countries, Australia has a population of 24.59 million. Papua New Guinea

and New Zealand have populations of 8.44 million and 4.7 million, respectively.

Together, the three countries account for 94% of the total population of Oceania.

According to United Nations (UN) forecasts, Oceania's population will grow steadily

in the future, reaching 49.46 million and 56.38 million in 2035 and 2050, respectively.

Regional cooperation has helped sustain multi-level, multi-track development.

In 2000, Oceanian countries initiated the establishment of the Pacific Islands Forum in

order to strengthen exchange and cooperation between member countries in the fields

of economic and trade, culture, infrastructure, politics and security. In recent years,

Forum member countries have become signatories to a series of regional cooperation

agreements including the Pacific Agreement on Closer Economic Relations, making

significant progress in the promotion of regional economic and social assistance, trade

liberalization, the management of climate change, and the improvement of

infrastructure connectivity.

Developed states accelerate industry upgrade, and developing states focus on

infrastructure implementation. In recent years, the Australian government has

issued a series of guiding documents, including the Industry Innovation and

Competitiveness Agenda and National Innovation and Science Agenda, to promote

scientific and technological innovation, and the integration of production, teaching and

1

Source: World Bank, World Development Indicator, 2018.

1

Research and Outlook on Oceanian Energy Interconnection

research in enterprises, and to accelerate the development of high-end manufacturing,

medical technology, sustainable energy and other industries. New Zealand launched

Tourism 2025 to further improve the competitiveness of its tourism sector, while

encouraging foreign investors’ active participation in investment in and development

of the tourism, food and beverage manufacturing, information and communication

technology, high-end manufacturing and infrastructure sectors. In recent years, other

Oceanian countries have issued medium and long-term strategic development plans.

Construction of infrastructure, such as electricity, energy, transportation,

communications, has become the area with the highest concern and priority.

1.2 Resources and Environment

Mineral resources are abundant. Oceania’s rich coal resources are mainly

concentrated in Australia. Australia has 6 billion tonnes of bauxite reserves and 49.6

billion tonnes of iron ore, together with proven economic reserves of non-ferrous metals,

such as lead, nickel, silver, ranking first worldwide¹. Papua New Guinea is rich in

copper, nickel, cobalt, bauxite, gold and other resources. The region’s proven coal

reserves amount to about 155 billion tonnes, accounting for 14.7% of the global total,

mainly concentrated in Australia. Oil and natural gas resources are scarce in the region,

however, with proven reserves of oil and natural gas of about 400 million tonnes and

2.4 trillion m³, accounting for only 0.1% and 1.4% of world reserves, respectively.²

Oceania’s total carbon emissions are low; the continent is vulnerable to

climate change. Major countries in Oceania have set emission reduction targets

for tackling climate change. In 2017, CO₂production due to fossil fuel combustion in

Oceania reached 440 million tonnes, accounting for a small but growing 1.4% of the

world total. Sea level rise and increases in heavy rains imply that its coastal areas and

island countries risk being submerged. Increasing temperatures are exacerbating the

risks of drought and fire, and rising ocean temperatures are undermining the marine

ecological balance. They have signed the Paris Agreement and formulated National

Determined Contributions (NDCs) and medium to long-term emission reduction

strategies to mitigate climate change. For example, Australia pledged a total reduction

of 26%—28%³of greenhouse gas emissions by 2030 compared to 2005 levels. New

1

Source: Country Investment Guide, the Ministry of Commerce of China.

Resource: BP, Statistical Review of World Energy, 2019.

Data source: Australia, National Determined Contribution, 2016.

2

3

2

Research and Outlook on Oceanian Energy Interconnection

Zealand is committed to a 30%¹reduction by 2030, compared to 2005. New Zealand’s

Zero Carbon Act, mandates zero net emissions²of all greenhouse gases, excluding

methane emissions from agriculture and waste, by 2050. Papua New Guinea promises

to achieve zero net carbon emissions³in its power sector by 2030.

1.3 Energy and Power

Energy consumption is dominated by fossil fuels, with the share of renewable

energy increasing continuously. In 2017, Oceania’s primary energy demand reached

0.24 billion tce,⁴accounting for 1% of the world total. But per capita energy demand,

at 7.5 tce, was 2.7 times the global average. The share of fossil energy in primary

side reaches 80%, while the share of wind and solar energy continues increasing.

From 2000 to 2017, the share of clean energy increased from 16% to 20%. The share

of wind and solar energy increased from 4% to 11%. Final energy consumption is

dominated by oil, with the share of electricity increasing slightly. In 2017, the total

final energy consumption of Oceania was 0.14 billion tce, with the share of oil of 51%.

The share of electric power increased from 21% to 22% from 2000 to 2017, 3% higher

than the global average.

Figure 1-1 Primary Energy Demand Structure in Oceania in 2017

1

Data source: New Zealand, National Determined Contribution, 2016.

Data source: New Zealand, Zero Carbon Act, 2019.

Data source: Papua New Guinea, National Determined Contribution, 2016.

Primary energy equivalent calculation adopts the Partial Substitution method, same for the follows. In this

2

3

4

method, the primary energy equivalent of renewable energy sources of electricity generation represents the amount

of energy that would be necessary to generate an identical amount of electricity in coal-fired power plants.

3

Research and Outlook on Oceanian Energy Interconnection

Figure 1-2 Final Energy Consumption Structure in Oceania in 2017

The level of electricity consumption is generally high, but development is

uneven. In 2017, Oceania's total electricity consumption was about 279 TWh,

accounting for 1.2% of the world total. Of this, Australia and New Zealand accounted

for 84% and 14% respectively. The average electricity access rate is high, but regional

levels of development vary widely. Electricity access rates in Australia, New Zealand,

and Fiji have reached 100%, while in countries such as Papua New Guinea and Vanuatu,

electricity access is only about 30%. Annual per capita electricity consumption in

Oceania is 6940 kWh, about 2.3 times the world average. InAustralia and New Zealand,

the annual electricity consumption per capita reached 9510 kWh and 8250 kWh

respectively. The average annual electricity consumption per capita of some Pacific

island countries, such as Papua New Guinea, was far lower at about 550 kWh. Thermal

power is the major mode of power generation, but the proportion of clean

generation installed is increasing. In 2017, Oceanian total installed capacity was

76,970 MW, and the proportion of coal-fired generation was as high as 40%. But clean

generation such as hydro, wind and solar power has developed rapidly, and clean

installed capacity accounted for about 34% of the total, with a per capita installed

capacity of 1.9 kW, about 2.4 times the world average.

Table 1-1 Electric Power Development in Oceania in 2017

Electricity

consumption

（TWh）

Annual electricity

consumption per capita

（kWh）

Installed capacity

Peak demand

（MW）

Countries

（MW）

Australia

65725

9341

1014

890

233.8

39.0

3.3

9510

8250

384

37500

6100

550

New Zealand

Papua New Guinea

Other Island Countries

2.9

1140

800

Oceania

76970

279.0

6940

44950

4

Research and Outlook on Oceanian Energy Interconnection

Power grids in Australia and New Zealand are well developed, but the level

of grid development varies widely across Oceanian countries. Except for Australia

and New Zealand, there is no nationwide transmission grids established in other

countries in Oceania. Besides the Northern Territory, Australia has constructed

330/275 kV AC grids around the main power plants and load centers of the East and

West. New Zealand's North and South Islands have established 220kV main grids

covering major generation and load centers. By comparison with Australia and New

Zealand, the development of power grids in Pacific island countries is far behind.

Taking Papua New Guinea and Fiji as examples, their highest voltage level is

currently 132 kV, with a mostly 66/33 kV main power grid which does not yet cover

the country’s main load centers. Power supply capacity and system reliability are not

very high. Solomon Islands, Vanuatu, Samoa, Kiribati, Federated States of

Micronesia, Tonga have only built medium and low voltage distribution networks and

mini grids in some areas.

5

Research and Outlook on Oceanian Energy Interconnection

2 Challenges and Ideas of Sustainable

Development in Oceania

2.1 Development Challenges

Oceanian countries are highly polarized in terms of economic development,

with severe poverty problems in some countries. At present, only Australia and New

Zealand have achieved developed industrialized country status; all other Oceania island

countries remain in developing country status, most of them in the relatively early,

1

agrarian stage of economic development .Many Oceanian countries have

unbalanced, single industry-based economies. Australia and New Zealand are both

resource-abundant developed countries, with “dumbbell” economic structures.

Manufacturing accounts for a low proportion of GDP. The remaining Oceanian island

countries have a weak industrial base, relying mainly on tourism, agriculture and

international assistance. Oceania is lack of infrastructure and interconnection. It is

estimated that 70% of the households in Oceanian island countries other than Australia

and New Zealand, have yet to gain access to electricity, and 85% do not use clean energy

for cooking. Oceania's connectivity via road, railway and power grid infrastructure has

been poorly achieved.

2.2 Development Ideas

To achieve sustainable development, Oceania must hold fast to green, low-carbon

development, while balancing the economic, social and environmental development

goals and needs of its countries. Drawing on its rich clean energy resources, Oceania

should strive to create new drivers of green economic development, promote social

integration and development, fully implement the Paris Agreement’s 2°C temperature

control target, and comprehensively coordinate its countries’ economic growth, social

progress and ecological protection.

2.3 Development Priorities

Fully leveraging clean energy resources and increasing the scale and speed of

clean energy development. In countries or regions with large-scale and centralized

resources, priority should be given to the development of large-scale solar energy, wind

1

Source: International Labour Organization. Improving labour market outcomes in the Pacific, 2017

6

Research and Outlook on Oceanian Energy Interconnection

power and hydropower bases. In other countries, the distributed development of

hydropower, solar energy, wind power, biomass energy, geothermal energy and marine

energy is the main focus. It will promote the diversified pattern of clean energy

development, and ensure clean and reliable energy and electricity supplies.

Speeding up electrification and continuously improve energy efficiency.

Speeding up electrification in industry, to promote industrial upgrading and improve

the efficiency of production. Speeding up electrification in transportation to reduce oil

dependence and cope with climate change. Speeding up the electrification in residential

and commercial service sectors to improve quality of life, promote a just and

harmonious social environment.

Strengthen the interconnection of power grids to realize large-scale, long-

distance allocation of energy and electric power. Through interconnecting with

Southeast Asian power grids, the benefits of interconnection could be fully leveraged,

and large-scale, long-distance, cost-effective transmission of clean energy can be

promoted. Australia, New Zealand, Papua New Guinea can speed up the

interconnection of regional power grids; Fiji, Solomon Islands, Vanuatu, Federated

States of Micronesia, and many other countries and islands can speed up the

construction of local transmission and distribution grid and smart micro grid, so as to

improve the power access and meet the power demand. This will further spur the

interconnection of regional infrastructure through construction of energy

interconnection, promote intra-regional trade and help achieve integrated and

coordinated development in Oceania.

Promote the co-development of “Electricity, Mining, Metallurgy,

Manufacturing and Trade” (Co-development Model), expanding Oceania’s

industrial chain. Together with these mineral resources, Oceania's abundant clean

energy could be used to promote interconnection of Co-development Model, forming a

win-win industrial chain distributing profits to industries both up and downstream. This

would create a virtuous “investment-development-production-export-reinvestment”

cycle, greatly increase the value added of Oceania’s natural resources, and transform

the region’s resource advantages into economic ones.

The construction of a clean, efficient, inter-regional, multi-functional

Oceanian Energy Interconnection, would eliminate heavy dependence on fossil

energy consumption and alleviate the unavailability of electricity in some island

countries. The interconnection of power grids would permit clean energy’s

7

Research and Outlook on Oceanian Energy Interconnection

synergy and complementarity to be leveraged in the cause of the sustainable

development of the economy, society, resources, environment, human beings and

nature.

8

Research and Outlook on Oceanian Energy Interconnection

3 Energy and Power Development Trends

3.1 Energy Demand

Primary energy demand will steadily decline. The primary energy demand in

Oceania will stabilize at about 233 million tce over 2017—2025, before beginning to

gradually decline, falling to 228 million tce in 2035 and 224 million tce in 2050,

representing an annual average primary energy decline of 0.2%. Per capita primary

energy demand is expected to decline continuously. Oceania’s per capita primary

energy demand will decrease 34%, from 6.3 to 4.2 tce.

Figure 3-1 Primary Energy Demand in Oceania by Countries

The energy structure will gradually shift from fossil energy dominance to

clean energy dominance. From 2017 to 2050, Oceania's coal demand will fall from 64

to 18 million tce, representing a 71% decline. Oil demand will peak at 75 million tce in

2025, before rapidly dropping to 29 million tce in 2050, representing a 61% drop.

Natural gas demand is slowly declining, and will fall to 39 million tce in 2050,

representing a 31% reduction. From 2017 to 2050, Oceania's clean energy will grow

about 2.5 times to reach 134 million tce, with the share of clean energy in primary

energy increasing significantly, from 17% in 2017 to 63% in 2050.¹In around 2045,

clean energy will surpass fossil energy to become Oceania’s dominant energy resource.

Oceania's final energy consumption will first increase and then decrease. The

share of electricity in final energy consumption will increase continuously, and in

around 2040, electricity becomes the largest final energy category. From 2017 to

1

When calculating the share of clean energy in total primary energy, fossil energy used for non-energy purposes

is excluded. The same is true for the following ratios.

9

Research and Outlook on Oceanian Energy Interconnection

2035, Oceania's final energy consumption will increase from 141 million tce to 150

million tce, representing an average annual growth rate of 0.3%. From 2035 to 2050,

the final energy of Oceania will decrease at an average annual rate of 0.7%, reaching

136 million tce in 2050. The average annual decline is 0.1% from 2017 to 2050. From

2017 to 2050, the share of the electricity in the final energy consumption will increase

from 24% to 45%¹.

Figure 3-2 Final Energy Consumption by Fuels and Share of Electricity in

Oceania

3.2 Power Demand

Power demand will continue its steady growth. Total electricity consumption

in 2035 and 2050 will be 1.4 times and 1.7 times that of 2017, respectively. Total

electricity consumption in Oceania should increase from 279 TWh in 2017 to 379 TWh

in 2035, and further increase to 474 TWh by 2050, with annual growth averaging 1.7 %

and 1.5% in 2017—2035 and 2035—2050, respectively. Peak loads should increase

from 44.95 GW in 2017 to 62.6 GW in 2035, and further increase to 80 GW by 2050,

with annual growth rates averaging 1.9% and 1.7% in 2017—2035 and 2035—2050,

respectively.

1

When calculating the share of clean energy in total primary energy, fossil energy used for non-energy purposes is

excluded. The same is true for the following ratios.

10

Research and Outlook on Oceanian Energy Interconnection

Figure 3-3 Forecasts for Oceanian Power Demand

Per capita electricity consumption should grow steadily, increasing

significantly in developing countries. Before 2035, with increased urbanization and

gradual improvements in power infrastructure, electricity access rates for island

countries should reach over 90%, resolving the current of lack of electricity access

afflicting some 6 million people. By 2035, annual electricity consumption per capita in

Oceania should increase from 6940 kWh in 2017 to 7670 kWh. By 2050, annual per

capita electricity consumption in Oceania should further increase to 8414 kWh.

By sector, with the progress in Electricity Replacement and electric vehicles,

the industrialization of Pacific island countries and the re-industrialization of

Australia should ensure that transport and industry are the main sectoral drivers

of power consumption growth. By 2050, electricity consumption in industry,

commercial and services, transport, residence and agriculture should reach 184, 116,

64, 107 and 15 TWh respectively, with a 90 TWh increase in industry sector accounting

for 42% of the overall increase in consumption, and a 56 TWh increase in transport

sector consumption accounting for 26% of the overall increase in consumption.

3.3 Power Supply

Rapid development of clean power generation technologies and significant

reductions in their power generation costs will drive gradual replacement of

thermal power in Oceania, with solar and wind power becoming dominant power

generation sources. The increasing of development and utilization costs will drive

increases in the internal and external costs of traditional fossil energy’s utilization.

Meanwhile the benefits of large-scale clean energy power generation are increasing,

while costs continue to decrease. The photovoltaic and onshore wind power costs fall

11

Research and Outlook on Oceanian Energy Interconnection

to 2 and 3 US cents/kWh, respectively, making Oceania's photovoltaic and onshore

wind power more competitive than coal and gas power by 2025.

Figure 3-4 LCOE Trends in Oceania

Oceania has good potential for large-scale pumped storage development,

providing a regulating reserve for large-scale intermittent renewable energy

integration. At present, Oceania uses natural gas power generation as its main peak

load and frequency containment reserve. However, the rising natural gas prices of

recent years make pumped storage regulating reserves a more economical option.

Oceania has rich pumped storage resources that could support future large-scale

renewable energy interconnection¹.

In future, Oceania’s power structure should gradually shift towards a model

of hydro, solar and wind energy developing in coordination, with a greatly reduced

proportion of thermal power in installed capacity. In 2035, Oceania total installed

capacity should reach about 140 GW, 1.9 times that of 2017. Meanwhile, per capita

installed capacity should reach 2.9 kW, 1.5 times that of 2017. The proportion of clean

energy in installed capacity should increase from 34% in 2017 to 67%. In 2050, the

total installed capacity of Oceania should reach approximately 220 GW, 2.9 times that

of 2017. Per capita installed capacity should reach 3.9 kW, 2.1 times 2017’s level. The

proportion of clean energy installed capacity should continue to increase, reaching 83%.

By 2035, Oceanian clean energy generation should reach 205 TWh, with the proportion

of increasing from 25% in 2017 to 51%. The proportion of fossil energy generation

would drop significantly, with the proportion of coal-fired generation dropping from

52% in 2017 to 25% by 2035. By 2050, Oceanian clean energy generation should

further increase to 355 TWh, with its share of total generation increasing to 71%. The

1

Source: ANU, An atlas of pumped hydro energy storage, 2017.

12

Research and Outlook on Oceanian Energy Interconnection

proportion of coal-fired generation should further reduce from 25% in 2035 to 10%,

significantly increasing cleanliness of the power supply pattern.

Figure 3-2 Outlook for Power Generation Installed Capacity in Oceania

13

Research and Outlook on Oceanian Energy Interconnection

4 Development Layout of Clean Energy

Resources

4.1 Distribution of Clean Energy Resources

Hydro Energy. In theory, Oceania’s potential for hydro energy production is about

658 TWh/year.¹The theoretical hydro resource reserves of Australia, New Zealand and

Papua New Guinea account for 40%, 31% and 27% of the total for Oceania, respectively.

Wind Energy. Wind energy resources in Oceania are plentiful, with theoretical

potential of 100 PWh/year²and annual average wind speed of about 2—12 m/s at 100

m above ground.³Many areas in Oceania, mainly distributed in Australia and New

Zealand, have an annual average winds speed higher than 7 m/s. In southern Australia,

with its high annual average wind speed of up to 10 m/s⁴. Annual average wind speed

in the most areas of New Zealand exceed 7 m/s, and reach up to 12 m/s⁵.

Figure 4-1 Illustration of Annual Average Wind Speed in Oceania

Solar Energy. Solar resources in Oceania are abundant, with theoretical potential

of about 22500 PWh/year⁶, global horizontal irradiation (GHI) ranging over 800—

1

Data source: World Energy Council, World energy resources, 2013 survey.

Source: Liu Zhenya, Global Energy Interconnection, 2015.

Source: VORTEX, Wind Energy Resource Information Database.

Source: AEMO, South Australia Renewable Energy Status Report, 2017.

Source: AWEA, Wind Facts-New Zealand.

Data Sources: Liu Zhenya, Global Energy Interconnection, 2015.

2

3

4

5

6

14

Research and Outlook on Oceanian Energy Interconnection

2300¹kWh/m², and direct normal irradiation (DNI) of 800—2500 kWh/m². Areas in

Oceania with GHI and DNI in excess of 2000 kWh/m²are mainly located in Northern

and Midwest Australia.

Figure 4-2 Illustration of Global Horizontal Irradiance (GHI) in Oceania

Figure 4-3 Illustration of Direct Normal Irradiation (DNI) in Oceania

1 Source: SOLARGIS, Solar Resource Information Database.

15

Research and Outlook on Oceanian Energy Interconnection

4.2 Layout of Clean Energy Bases

Oceania’s clean energy resources are suited to both centralized and

distributed modes of exploitation. In Australia, New Zealand and Papua New Guinea,

where resources are relatively concentrated, large-scale clean energy bases should be

developed in sparsely populated areas. Meanwhile, distributed power sources can be

built in areas rich in distributed resources, such as the ends of the power grids and on

rooftops. Countries such as the Solomon Islands, Fiji, Vanuatu, Samoa, etc, should

focus on the development of distributed power sources and reasonably allocate flexible

power sources such as energy storage based on clean energy resources such as local

hydro energy, solar energy, wind energy, biomass energy, geothermal energy and marine

energy. Flexible generation resources, such as energy storage should be allocated as

well.

Based on the distribution of clean energy resources, conditions for development

and the status of existing development, Oceania should prioritize development of 4

hydropower, 5 wind power and 5 solar power bases. In this way, by 2050, the

region’s installed capacity for each of these clean resources would reach 30 GW, 26

GW and 44 GW, respectively.

Hydropower Bases. Based on the characteristics and distribution of hydro energy

resources, development of hydropower bases should be focused on Australia’s Murray-

Darling River and on Tasmania, on New Zealand’s South Island, and on Papua New

Guinea’s midwest. The total installed capacity of Oceanian hydropower bases should

reach 16.5 GW by 2035, and 30 GW by 2050, with an exploitation rate of 50%.

Table 4-1 Projected Hydropower Bases in Oceania

Unit: GW

Installed

capacity by

2035

Installed

capacity by

2050

S/N

Base site selection

Country

1

2

3

Tasmania

Murray-Darling River Basin

South Island

Australia

4

8

New Zealand

Papua New

Guinea

4

Midwestern

Total

4.5

6

16.5

30

Wind Power Bases. Based on the characteristics and distribution of wind energy

resources, 5 large wind power bases should be built, in western Australia, southern

Australia and Tasmania, and in southern and eastern New Zealand. These would offer

total technical exploitable capacity of about 36 GW, of which 14.2 GW could be

16

Research and Outlook on Oceanian Energy Interconnection

installed by 2035, and 26 GW by 2050.

Table 4-2 Projected Wind Power Bases in Oceania

Unit: GW

Technically

exploitable

capacity

Installed

capacity by

2035

Installed

capacity by

2050

#

Base name

Site location

Western

Australia

Southern

Australia

1

WA, Australia

10

4

8

2

3

SA, Australia

14

8

6

3

10

6

Tasmania

TAS, Australia

Wellington

District, New

Zealand

Otago District,

New Zealand

Eastern New

Zealand

4

5

2

0.6

1

South Island,

New Zealand

2

0.6

1

Total

36

14.2

26

Solar Power Bases. According to the characteristics and distribution of solar

energy resources, 5 solar energy bases should be built, all located in Australia, in the

Northern Territory, northern Queensland, southern Queensland, South Australia and

Western Australia. Their total technical exploitable capacity is about 80 GW, and

installed capacity could reach 20 GW by 2035, and 44 GW by 2050. These would first

aim to meet Australia's own power needs, but exportation of solar power to Indonesia

could convert this Australian resource advantage into an economic benefit.

Table 4-3 Projected Solar Power Bases, Australia

Unit: GW

Technically

exploitable

capacity

Installed

capacity by

2035

Installed

capacity by

2050

#

Base name

Country

1

2

3

4

5

Northern Territory

Northern Queensland

Southern Queensland

South Australia

Western Australia

Total

20

15

80

2

4

10

8

Australia

4

8

4

8

6

10

30

20

Countries such as Fiji, Samoa, Solomon Islands, and Vanuatu have relatively

good hydro energy resources, with the potential of small and medium-sized hydropower

development, and the technology can develop about 700 MW of installed capacity. Fiji,

Tonga, Samoa, Vanuatu have high latitudes, with an average wind speed of about

6—8 m/s, and have the conditions for building distributed wind power. In countries

like Fiji, Solomon Islands, Vanuatu, and Samoa, the annual total horizontal solar

17

Research and Outlook on Oceanian Energy Interconnection

radiation intensity is about 1400—1800 kWh/m², and distributed photovoltaic power

generation can be built.

18

Research and Outlook on Oceanian Energy Interconnection

5. Power Grid Interconnection

5.1 Power Flow

Taking the development of power generation, distribution of power demand and

layout of clean energy development into account, the roles of the major countries and

regions of Oceania can be proposed as follows.

Australia will focus on developing large scale solar and wind energy bases, and

building cross-border power interconnection with Papua New Guinea and inter-

continental power interconnection with Indonesia to achieve power complementation

between local solar power and hydropower overseas.

New Zealand will focus on developing hydropower and wind energy bases. The

North Island is the load center of New Zealand, and it will receive clean energy from

the South Island.

Papua New Guinea will develop large-scale hydropower bases. Papua New

Guinea will achieve power complementation with the solar energy in Northeast region

of Australia, through cross-border power interconnection.

Other Countries such as Fiji, Solomon Islands, Vanuatu, Federated States of

Micronesia, and many other countries, will achieve self-power balance based on their

own clean energy development.

The power flow pattern of Oceania will demonstrate “The Hydropower of Papua

New Guinea Complementing the Solar Energy of Australia, and the Solar Energy

of Australia Complementing the Seasonal Hydropower of Southeast Asia”.

By 2035, intercontinental and cross-border power exchange will reach 1 GW.

In terms of cross-border power flow, the hydropower of Papua New Guinea will be

delivered to Cairns and other northeast load centers of Australia to complement the

solar power in the northeast. By 2050, intercontinental and cross-border power

exchange will increase to 10 GW. In terms of intercontinental power flow, the

Northern Territory will export 8 GW of solar power to Indonesia. In terms of cross-

border power flow, the power flow from the hydropower base in Papua New Guinea

to Queensland in Australia will increase to 2 GW.

19

Research and Outlook on Oceanian Energy Interconnection

Figure 5-1 Illustration of Power Flow in Oceania by 2050

5.2 Power Grid Pattern

In the future, the development of the Oceanian power system will be focused

on vigorously developing intercontinental, cross-border and cross-regional grid

interconnection, supporting the large-scale development of solar, wind and hydropower,

and achieving wide area complementation, thereby realizing clean energy and power

transmission, and sustainable economic and social development. Except for the small

Pacific Island countries, Oceania will form 5 major synchronous power grids: the

Australia East Grid, Australia West Grid, New Zealand North Island Grid, New

Zealand South Island Grid, and Papua New Guinea Grid. Fiji and other small

island countries will build domestic interconnected power grids. The Northern

Territory and Tasmania of Australia will build large clean energy bases,

respectively.

20

Research and Outlook on Oceanian Energy Interconnection

Figure 5-2 Illustration of Overall Grid Interconnection Pattern in Oceania

By 2035, Oceanian Energy Interconnection will be basically formed. Both the

east and west of Australia will develop 500 kV main grids, the North and South Island

of New Zealand will develop 400 kV main grids, and the Papua New Guinea will

develop a 400 kV main grid. Inter-regional power grid interconnection in each country

will be greatly improved. Australia and Papua New Guinea will achieve cross-border

power grid interconnection.

By 2050, Oceanian Energy Interconnection will generally maintain the

pattern of 5 major synchronous power grids: the Australian West and East Grids,

New Zealand North and South Island Grids, and Papua New Guinea Mainland Grid. In

terms of intercontinental power flow, the solar energy of the Northern Territory of

Australia will be transmitted to the load centers of Indonesia. In terms of cross-border

power flow, the power exchange between Papua New Guinea and Australia will be

further increased.

21

Research and Outlook on Oceanian Energy Interconnection

Figure 5-3 Illustration of Grid Interconnection in Oceania by 2050

5.3 Main National Grid Interconnection

In the future, the east and west coastal regions of Australia will fully develop 500

kV looped grids, a ±660 kV HVDC will be built between Loy Yang of Victoria and

Devonport of Tasmania. In terms of cross-border interconnection, a ±400 kV HVDC

will be built between Woree and Daru of Papua New Guinea. In terms of

intercontinental interconnection, a ±800 kV UHVDC interconnection will be built

between Darwin and Bali Island, Java Island of Indonesia.

22

Research and Outlook on Oceanian Energy Interconnection

Figure 5-4 Illustration of Grid Interconnection in Australia by 2050

In the future, in the North Island of New Zealand, the 400 kV transmission corridor

from Wakamaru to Otahuhu will be extended to Oakland in the north, and to Wellington

in the south, and the 200 kV transmission line between Wakamaru to Bunnythorpe will

be upgraded to 400 kV to form an “8-shaped” backbone grid. In the South Island, the

220 kV transmission corridor from North Makearewa to Kikiwa, passing Roxburgh,

Benmore and Islington, will be upgraded to 400 kV.

Figure 5-5 Illustration of Grid Interconnection in New Zealand by 2050

23

Research and Outlook on Oceanian Energy Interconnection

In the future, in Papua New Guinea, a 400 kV transmission corridor from Daru

to Port Moresby, passing Kerema, and another 400 kV transmission corridor will be

built from Port Moresby to Port Daru, passing Lae City and Mt. Hagen, thus a 400 kV

looped network will be formed. Cross-border wise, a ±400 kV HVDC will be built

between Daru and Woree of Australia.

Figure 5-1 Illustration of Grid Interconnection in Papua New Guinea by 2050

5.4 Key Interconnection Projects

Intercontinentally, a three terminal ±800 kV UHVDC with 8 GW transmission

capacity will be built to deliver power to Southeast Asia. Cross-border wise, a ±400

kV HVDC with 2 GW transmission capacity will be built to take power from Papua

New Guinea.

Table 5-1 Key Cross-border and Intercontinental Power Interconnection Projects

Investment Transmission

Voltage Capacity

Length

(km)

No.

1

Project

(billion

USD)

Cost (US

Cents/kWh)

(kV)

(GW)

Darwin, Australia—Bali

Island, Indonesia—Java

Island, Indonesia

Daru, Papua New

Guinea—Woree,

Australia

±800

8

2500

1000

7.7

1.5

2.76

1.9

2

±400

2

The key power interconnection projects of the major countries include the

Australia East 500 kV AC and West 500 kV AC interconnection projects, the ±660 kV

HVDC interconnection between Tasmania and the main island of Australia, New

Zealand North Island and South Island 400 kV AC interconnection projects, and Papua

New Guinea 400 kV AC Interconnection Project.

24

Research and Outlook on Oceanian Energy Interconnection

Table 5-2 The Key Power Interconnection Projects in the Major Countries

Investment Transmission

Voltage Capacity

Length

(km)

No

Project

(billion

USD)

Cost (US

Cents/kWh)

(kV)

500

(GW)

Australia East 500 kV

AC Interconnection

Australia West 500 kV

AC Interconnection

Tasmania, Australia—

Victoria, Australia

HVDC Interconnection

New Zealand North

Island 400 kV AC

1

2

1

6400

6000

3.2

2.8

-

3

4

±660

400

4

440

1.28

0.5

1.6

-

0.8

1300

interconnection

New Zealand South

Island 400 kV AC

interconnection

Papua New Guinea 400

kV AC Interconnection

5

6

400

0.8

1100

2800

0.43

0.8

-

5.5 Investment Estimation

From 2019 to 2050, the total investment amount of Oceanian Energy

Interconnection will be about 259 billion USD, of which generation investment will be

about 165 billion USD, accounting for 64%. Power grid investment will be about 94

billion USD, accounting for 36%.

Figure 5-7 Scale and Structure of Oceanian Energy Interconnection Investment

From 2019 to 2035, Oceanian Energy Interconnection investment will be

approximately 134.5 billion USD. Power generation investment will be about 80.3

billion USD, accounting for 60%, of which distributed power generation investment

will be about 12 billion USD, accounting for 15% of total generation investment. Grid

investment will be about 54.2 billion USD, accounting for 40%, of which investment

in power grids of 400 kV or above will be about 8.6 billion USD, and investment in

25

Research and Outlook on Oceanian Energy Interconnection

power grids of 330 kV or below will be about 45.6 billion USD.

From 2036 to 2050, Oceanian Energy Interconnection investment will be

approximately 124.5 billion USD. Power generation investment will be about 84.7

billion USD, accounting for 68%, of which distributed generation investment will be

about 10.2 billion USD, accounting for 12% of total generation investment. Grid

investment will be about 39.8 billion USD, accounting for 32%, of which investment

in power grids of 400 kV or above will be about 6.3 billion USD, and investment in

grids of 330 kV or below will be about 33.5 billion USD.

26

Research and Outlook on Oceanian Energy Interconnection

6 Comprehensive Benefits

6.1 Economic Benefits

Promoting resource development and clean transition. Oceania will accelerate

the large-scale development and efficient utilization of clean energy to achieve clean

and sustainable energy supply. It is estimated that Oceania will generate 51% of its

electricity from clean energy in 2035, increasing to 71% in 2050. Giving full play to

interconnection benefits and promoting investment development. The cumulative

power investment in Oceania will reach 259 billion USD from 2019 to 2050, and the

annual average contribution rate to economic growth can reach 0.4%. Promoting

industrial upgrading and improving the trade level. The construction of Oceanian

Energy Interconnection will effectively drive the development of new energy,

intelligent manufacturing, electric vehicles, information and communications, and other

emerging industries.

6.2 Social Benefits

Creating jobs. It is estimated that by 2050, a total of about 5 million jobs will be

created. Reducing energy supply costs. It is predicted that in 2050, the average cost

of power generation in Oceania will be reduced by about 25% compared with the

current level. Reducing poverty. The construction of Oceanian Energy Interconnection

can solve the problem of energy supply, meet the production and living needs of

Oceanian island residents, and achieve inclusive economic growth and balanced

regional development.

6.3 Environmental Benefits

Reducing greenhouse gas (GHG) emissions. Oceanian Energy Interconnection

can help to reduce CO₂emissions from the energy system to about 110 million tonnes

of CO₂per year in 2050, 79% lower than that in the BAU scenario. Reducing air

pollutant emissions. By 2050, the Oceanian Energy Interconnection scenario can

reduce sulfur dioxide by 800 thousand tonnes, nitrogen oxides by 3.1 million tonnes

and fine particulate matter by 330 thousand tonnes per year compared with the BAU

scenario. Increasing the value of land resources. Compared with the BAU scenario,

the Oceanian Energy Interconnection scenario will increase the value of land resources

by 310 million USD per year by 2050.

27

Research and Outlook on Oceanian Energy Interconnection

6.4 Political Benefits

Promoting the coordinated development of the Oceanian region. The

construction of Oceanian Energy Interconnection can give full play to the

complementary advantages of resources in various countries, promote cooperation in

the energy and electricity fields, provide strong impetus for regional economic

development, and solve the problem of unbalanced regional development caused by the

uneven distribution of resources and limited geographical conditions. Strengthening

mutual political trust among Oceanian countries. The construction of Oceanian

Energy Interconnection can strengthen deeper cooperation among countries through

energy connectivity, realize the optimal allocation of clean energy on a wider scale,

ensure the safety of the energy systems of all countries, link Oceania more closely

together, build a solid partnership, and enhance mutual political trust in the region.

28

Research and Outlook on Oceanian Energy Interconnection

7 Development Outlook of Achieving 1.5 ºC

Temperature Control Target

7.1 Situations and Requirements

According to the research of IPCC¹, achieving the 1.5°C temperature control

target is of great significance for global sustainable development and the well-

being of all countries. Achieving 1.5°C temperature control target can reduce the risks

of the global climate system, and ensure safer natural and human systems. Compared

to the 2°C temperature rise scenario, under the 1.5°C scenario, the risks caused by

climate change on the overall global economic development will decline, and the

proportion of population threatened by poverty will be reduced. Oceania is in an

urgent needs to implement climate action from all aspects to achieve the 1.5°C

temperature control target. Besides building Oceanian GEI, the Oceanian countries

shall speed up carbon emissions reduction, accelerate electricity replacement in energy

consumption, and properly utilize carbon capture and storage technologies, to strive to

achieve net zero emissions by 2050, and to assist the global 1.5°C temperature control

target.

7.2 Implementation Paths

The “Clean Replacement” will be accelerated in the energy supply side. Clean

Replacement methods include making full use of the opportunities brought by the rapid

development of new generation technologies and fast economic upgrading, formulating

policies to support the development of the clean energy industry, establishing

mechanisms that are more conducive to the scale-up, intensive development and large-

scale complementation and utilization of clean energy, further accelerating the

complementarity of hydropower, wind and solar energy, as well as multi-country

collaborative development, increasing the development and utilization of biomass and

geothermal energy, rapidly increasing the proportion of clean energy in Oceania's power

generation, and rapidly reducing the proportion of fossil energy and greenhouse gas

emissions.

Enhancing Electricity Replacement on the energy consumption side. Policies

1

IPCC stands for Intergovernmental Panel on Climate Change.

29

Research and Outlook on Oceanian Energy Interconnection

such as providing financial subsidies and tax reductions should be implemented. The

research and development of the related technologies should be further accelerated, so

as to support the development of electrification industry, and stimulate the potential of

electricity replacement. Based on these approaches, the economic feasibility of

Electricity Replacement will be improved, the scale of electricity consumption will be

rapidly expanded, and the structure of final energy can be modified.

The application of carbon sequestration and reduction technologies should be

promoted. Based on greater efforts to promote Clean Replacement on the energy

supply side and Electricity Replacement on the energy consumption side and to reduce

GHG emissions, more supportive policies are needed to promote research, development,

commercialization and large-scale application of carbon sequestration and carbon

reduction technologies, which will directly reduce GHG in the atmosphere.

7.3 Scenarios and Schemes

Oceania will significantly accelerate “Clean Replacement” on the energy

supply side, aiming to ensure fossil energy demand reaches peak ahead of schedule

and then declines rapidly. As for the energy consumption side, Oceania will forge

ahead with in-depth “Electricity Replacement” and seek enhanced energy

efficiency, thereby reducing the final energy demand and securing a remarkable

increase in the proportion of electricity in total final energy consumption.

Regarding primary energy demand, according to the partial substitution method,

the primary energy demand will grow slowly from 2016 to 2035, reaching 223 million

tce, and then remain stable. The demand for coal, oil and natural gas will peak around

2020, and then fall rapidly. “Clean Replacement” in Oceania will continue to accelarate,

lifting the share of clean energy in primary energy to 57% and 88% by 2035 and 2050,

respectively.

30

Research and Outlook on Oceanian Energy Interconnection

Figure 7-1 Primary Energy Demand in Oceania Achieving the 1.5℃ Temperature

Control Target

Regarding final energy consumption, it will decline from 2017 to 2050, with an

average annual decline rate of 0.4%. Final energy consumption will reach 129 million

tce and 124 million tce in 2035 and 2050, respectively. The fossil energy consumption

will record a sharp decline to 55 million tce and 16 million tce in 2035 and 2050,

respectively. In-depth “Electricity Replacement” will accelerate in the final energy

using sectors. It is estimated that the share of electricity in the total final energy

consumption will reach 47% and 68% in 2035 and 2050, respectively. The

electrification rates of industry, transport and building sectors will reach 46%, 19%, 63%

in 2035, and 64%, 58%, 76% in 2050, respectively.

Figure 7-2 Final Energy Consumption in Oeania Achieving the 1.5℃ Temperature

Control Target

The total demand for electricity will reach 458 TWh in 2035, with an average

annual growth rate of 2.8%. The peak load will be 74 GW, with an average annual

growth rate of 2.8%. The annual per capita electricity consumption will reach 9260

kWh. In 2050, the total electricity consumption in Oceania will be about 656 TWh, with

31

Research and Outlook on Oceanian Energy Interconnection

an average annual growth rate of 2.4%. The peak load will increase to 110 GW, with an

average annual growth rate of 2.0%. The annual per capita electricity consumption will

rise to 12000 kWh.

Figure 7-3 Forecast of Electricity Consumption in Oceania to Achieve the 1.5℃

Temperature Control Target

Oceania's total installed generation and clean energy installed capacity will

increase significantly. In 2035, the total installed capacity of Oceania will reach 210

GW, of which clean energy installed capacity will reach 160 GW, accounting for 78%,

up from 34% in 2017. The clean energy generation will reach 390 TWh. The proportion

of clean energy generation will increase from 25% in 2017 to 70%. In 2050, the total

installed capacity of Oceania will increase to 230 GW, of which clean energy installed

capacity will reach 210 GW, accounting for a further increase to 91%. The clean energy

generation will reach 630 TWh, with the proportion further increasing to 92%.

Figure 7-4 Outlook of Power Generation Installed Capacity in Oceania to Achieve the

1.5℃ Temperature Control Target

Regarding power grid interconnection, under the 1.5℃ scenario, it is necessary

to develop Australia's Northern Territory solar energy base, South Australia wind power

base, Tasmania hydropower base, and New Zealand and Papua New Guinea

32

Research and Outlook on Oceanian Energy Interconnection

hydropower bases, further strengthen the transmission corridors of large clean energy

bases, and improve the cleanliness of generation, in order to achieve the coordinated

development of power generation, grids and transmission and distribution networks,

improve the smartness of power grids, and meet the requirements for large-scale, high

proportion clean energy consumption. Strengthening cross-border and inter-regional

power grid interconnection will promote a wider range of complementary energy and

the optimal allocation of clean energy. Australia — Indonesia intercontinental

transmission capacity will increase to 16 GW, Papua New Guinea—Australia cross-

border power interconnection will increase to 4 GW, and Australia Tasmania—Victoria

and New Zealand South Island—North Island cross-regional power transmission

capacity will reach 10 and 4 GW respectively.

To help achieve the global 1.5℃ temperature control target, Oceania needs

to further strengthen its determination and efforts to deal with climate change,

give full play to the advantages of clean energy resources, comprehensively

accelerate the clean and low-carbon transformation of energy and electricity,

strengthen the interconnection of power grids across continents, and enhance the

ability to deal with climate change. Compared with the 2℃ scenario, the 1.5℃

scenario will reduce fossil energy consumption by 59% in primary energy by 2050. The

proportion of clean energy exploitation needs to be increased, and the proportion of

clean energy installed capacity needs to increase by 17% by 2050. “Electricity

Replacement” needs to be accelerated, with electrification increasing by 23 percentage

points in final energy consumption by 2050. Grid interconnection needs to be

strengthened by increasing the inter-continental and cross-border power flow by 10 GW.

Investment needs to be increased, as investment in clean energy exploitation and grid

construction will increase by 25% cumulatively by 2050.

33

Research and Outlook on Oceanian Energy Interconnection

Figure 7-5 Analysis and Comparison of Energy and Power in Oceania under the 2°C

and 1.5°C Scenarios

34