Nauru signed a memorandum of understanding with Sydney-based Smart Commercial Energy on 7 May 2026 to explore an 18 MW solar and 40 MWh battery storage project aimed at reducing its dependence on imported diesel for electricity generation.
The agreement was signed during the Smart Energy Conference and Exhibition 2026 in Sydney. Smart Commercial Energy said it marks the start of technical and commercial investigations. The announcement did not establish a final investment decision or a construction timetable.
Proposed funding and ownership
Smart Commercial Energy is exploring delivery through a commercial power purchase agreement, or PPA. Under the company’s proposed model, it would fund, build and operate the system, while Nauru would purchase the electricity generated.
The company said the arrangement would include an option for Nauru’s government to buy out the infrastructure and take ownership. Final contractual obligations and buyout conditions remain unconfirmed.
Diesel reliance and electricity demand
Smart Commercial Energy estimates that Nauru consumes between 7 million and 8 million litres of diesel annually for electricity generation. The company says the proposed solar and battery system is intended to improve energy security and reduce electricity costs.
“The Pacific faces some unique energy challenges, particularly around diesel reliance and energy security,” said Smart Commercial Energy managing director and chief executive Huon Hoogesteger.
Nauru covers about 21 square kilometres in the South Pacific, roughly 3,300 kilometres northeast of Brisbane and just south of the equator.
Smart Commercial Energy puts Nauru’s annual electricity demand at approximately 40 GWh, with a standing load of around 2 MW and peak demand reaching 4.5 MW. These company figures have not been independently confirmed.
An undated statement on Naoero Utilities Corporation’s website gives a different account, referring to monthly maximum demand within a range of 5–6 MW over what it calls “the last 12 months.” The statement does not identify the calendar period or clearly define how the figures were measured. It therefore cannot be reconciled with the company’s figures for the May 2026 announcement or treated as evidence of a subsequent increase in demand.
