Cleantech Market Intelligence
In the Islands, Renewable Energy Scales Up Rapidly
Renewable energy project developers are touring islands these days, salivating at the opportunity to displace diesel-powered electricity systems that can cost as much as $1/kWh with significantly lower-cost clean power. Prominent examples include Iceland, where, according to the country’s National Energy Authority, roughly 84% of primary energy use comes from indigenous renewable energy sources (the majority from geothermal); Hawaii, where energy costs are 10% of the state’s GDP and where the state government has set a goal of reaching 70% clean energy by 2030; and Scotland (part of a larger island), with a goal of 100% renewable energy by 2020. Several smaller, equally interesting island electrification initiatives present great opportunities for companies looking for renewable energy deployment opportunities that are truly cost-effective for customers and developers.
These opportunities include:
- In Equatorial Guinea, a 5 MW solar microgrid planned for Annobon, an island with 5,000 inhabitants off the west coast of Africa, is intended to supply 100% of the power for residential needs. The project is funded by the national government with power produced at a rate 30% cheaper than diesel, the current primary fuel source. It is scheduled for completion in 2015 and is being installed through a partnership between Princeton Power Systems, GE Power & Water, and MAECI Solar.
- The Danish island of Samsø is the first net zero carbon island, where 34 MW of wind power generate more electricity than is consumed on the island. Fossil fuels are still utilized, so Samsø is not truly a 100% renewable energy island as often reported. The project was conceived and designed as part of a 10-year process begun in 1997, following the Kyoto climate meeting in Japan.
- The island of Tokelau, an atoll in the South Pacific, is home to 1,500 inhabitants and produces up to 150% of its electrical needs with solar PV, coconut biofuels-powered generators, and battery storage – displacing 2,000 barrels of diesel per year and $1 million in fuel costs.
- El Hierro, the westernmost of Spain’s Canary Islands, is home to 10,000 residents. With an innovative combination of wind power and pumped hydro acting in tandem, the island is projected to generate up to 3 times its basic energy needs. Excess power will be used to desalinate water at the island’s three desalination plants, delivering 3 million gallons of fresh water per day.
- The Clinton Global Initiative has a specific Diesel Replacement Program for islands, focused on deploying renewable energy projects and strategies tailored to the unique needs of its 20 island government partners. The objective is not only to create cost-effective solutions to reduce carbon, but also to help many of these island nations reduce the often enormous debt that results from relying on imported diesel fuel for electricity.
There are many more opportunities, including Crete, Madeira, Bonaire, La Reunion, the U.S Virgin Islands, and the Philippines (7,127 islands) – which last summer set a 100% renewable energy target within 10 years.
Not all of these projects, particularly the more sophisticated ones, have gone smoothly. The logistical challenges of island construction add to the overall cost of the projects. The risk of extreme tropical weather events is always present, including the risk of actually being underwater if sea levels rise as anticipated. Thus far, financing for many of these projects has come from public-private partnerships, and as I’ve written previously, the coming avalanche of adaptation funding means those avenues are expected to be around for the foreseeable future. But given the strong economic arguments for residential systems, resorts, agriculture, and other energy-intensive applications that often rely on diesel power for electricity, onsite distributed projects often pencil out without public assistance.