Renewable Energy in Small Island States

1 Background

1.1 Small Islands and Energy Vulnerability

Security, carbon neutrality and affordability are the parameters forming what is known as the energy trilemma, and nowhere is the energy trilemma more widely pronounced than in the confined space of remote and isolated islands [1]. Islands usually are locked into expensive fossil fuel imports in isolated markets, leading to low fuel mix diversity and high carbon and other emissions relative to their economic growth, which makes them perform worse than their inland counterparts.

In addition, their economy and lifelines often depend on the tourism industry and connections with a mainland country. Geographical distance and geopolitical affairs with main distributing countries are crucial parameters for their accessibility to primary energy sources. Energy dependence is often extremely high because islands cannot take advantage of their renewable energy potential, especially solar and wind, because of poor grid infrastructure.

However, islands lend themselves to excellent testing case studies for innovative energy solutions, which could set the example for larger-scale, on-grid applications. Their remoteness, relative small size and flexible governance makes them potentially adaptable to change and capable of significant shifts, unlike large regions with monolithic energy governance.

Prioritising energy security against climate change mitigation policies and vice versa can directly impact a country’s energy roadmap and hence large-scale investment decisions. In this context, it is necessary to evaluate the resilience of existing energy systems as the availability of energy resources and their accessibility is considered essential to the sustainability of a country’s economy. Although there is a broad agreement on the themes covered by energy security, no widely adopted definition exists.

While resource availability has been the most crucial element of energy supply security in past decades, a pattern that has gradually given space to diversity and, more recently, to sustainability parameters of security is identified. The concept itself is context-dependent and multidimensional and has been integrated and developed through the years. The four main pillars are placed along the 4 A’s, namely 1) availability, 2) accessibility, 3) affordability and 4) acceptability. The specific dimensions are then incorporated into other dimensions, including and not limited to infrastructure, governance and efficiency.

Most of those dimensions are interrelated, and some are the cause or effects of the interplay between them. For example, low availability may be the leading cause of lack of affordability as scarcity can lead to higher prices; equally, when affordability is low, accessibility might also be restricted to privileged users, as it happens in developing countries with a lack of universal access to energy. Technological advances, awareness of climate change effects and a turn to green sustainable practices changed the nature of the term energy security to a multidimensional, dynamically evolving issue since core solutions of the past (e.g. abundant access to oil) do not fit with today’s low carbon energy planning for the future.

1.2 Renewables in the Small Islands’ Context

The importance of energy resiliency raises more issues on accessibility, availability, acceptability, and affordability, all magnified in small island states’ contexts. Most small islands are well placed geomorphologically and geographically to benefit from solar and wind potentials, as well as tidal and oceanic energy sources, and sometimes even geothermal and hydropower.

The clean energy transition in small island states can be accelerated through the following:

• Technical and financial cooperation.
• Capacity building for the private sector, utilities, local policymakers, and financing institutions.
• Enhanced policy, regulatory and advisory services.
• Investing in project bankability increases investor interest in financing energy transformation.
• Sharing information, knowledge, lessons learned, and good practices through platform access.

Small island developing nations historically have been reliant on imports of fossil fuels (https://sdg.iisd.org/commentary/guest-articles/renewables-and-energy-transitions-in-small-island-states/). Fuel importation has a significant negative impact on national budgets in countries with high levels of financial debt, such as Palau (28% of GDP), Guyana (21%), and the Maldives (19% of GDP). The sectors of transportation and power production continue to use the most energy. Numerous islands with economies reliant on tourism and hospitality need high energy intensities to support these sectors and others like manufacturing and agriculture.

IRENA’s goal to put more effort into every aspect of renewable energy resulted in the foundation of a collaborative framework on ocean energy and offshore renewables. According to IRENA projections [2], ocean energy and offshore wind global installed capacity could reach 10 GW and 228 GW, respectively, by 2030, and will play an essential role in small islands’ energy transformation. The initial meeting of the framework, moderated by Tonga’s Permanent Representative to IRENA, welcomed participation, support, and insights from the Ocean Energy Europe (OEE) and Global Wind Energy Council (GWEC).

Members also aimed attention at 13 spotlight topics for the collaborative framework around the areas of sustainability, market incentives, technology development, research and innovation. The subjects include analyses on grid integration, resource mapping, accelerating technology cost reduction, and coupling of offshore renewables with power-to-X equipment. Tonga’s active role as co-facilitator for the framework ensures that small islands continue to play a critical role and serve as a fundamental guide to the agenda of future debates, to expand offshore technologies to insular governments and move beyond the European context.

1.3 Current State of Affairs

Small islands are still working to solve their energy problems and promote sustainable economic development despite the Covid-19 pandemic. Energy efficiency improvements and renewable energy technologies can potentially have profound socioeconomic effects [3]. Nevertheless, there is a substantial difference between relying solely on renewable energy sources and a more diversified energy portfolio or even a complete switch. By the end of 2019, all marine states had installed renewable energy totalling around 5.3 GW, roughly 30% of that built since 2014. More than 1.1 GW of solar PV, 380 MW of wind, 215 MW of biofuel, and 60 MW of hydropower were among the new installations.

Researchers looked at whether energy aid to combat climate change supported the deployment of more renewable energy sources and discovered that it was unevenly distributed among SIDS, both overall and per capita, with little correlation between the quota allocated to different countries and their income or energy access gaps. Electricity access improvements were also associated with low disbursement rates, which suggested implementation issues. In conclusion, adding more money to the problem has not provided a solution [4].

Many insular nations have heightened their voluntary Nationally Determined Contributions (NDCs), which are action plans to adapt to climate impacts and slash emissions that each party to the Paris Agreement must establish every five years. The acceptance of a country’s NDCs is becoming more linked to the availability of international climate assistance. They also act as a market signal to investors and donors about the government’s long-term commitment to clean energy transitions.

Again, the degree of ambition varies. On the aggressive end, one might mention Barbados, which seeks to be the first fossil–fuel free and 100% green island state in the world, while Jamaica is targeting between 25% and 29% reduction in emissions by 2030 [5, 6].

2 The Case for Global Islands

2.1 The Caribbean

A shifting climate regime poses various hazards to the area. Many Caribbean island governments have now seen firsthand the effects of catastrophic events, notably on energy security and resilience, which has strengthened efforts for a greener energy transition.

Several of the Caribbean islands have zero diversity or 100% concentration. Specifically, Barbados, Cayman Islands, Montserrat, Saint Lucia, Turks and Caicos and US Virgin Islands have zero power sector diversity as they rely only on oil. The oil-producing Trinidad and Tobago had had zero diversity since 2009, when biomass ceased to exist as an electricity fuel mix option, but is having a nascent energy policy strategy and transition to renewables.

Eastern Caribbean currently possesses vast untapped power resources beneath the islands where geothermal energy can be used to generate electricity. The St. Vincent Geothermal Project phase I Exploratory Drilling Social and Environmental Impact Assessment has positioned St. Vincent and the Grenadines along the pathway toward integrating a 10 MWe geothermal power plant into the island’s electric grid [7].

2.2 The Pacific & The South China Sea

The transition to renewable energy sources benefits the Pacific islands from a historical standpoint. In addition to having hydroelectric potential in Fiji, Papua New Guinea, Samoa, the Solomon Islands, the Federated States of Micronesia, and Vanuatu, the region has significant potential for solar and, to a lesser extent, wind energy sources. The Pacific is perfect for renewable electricity generation because it doesn’t require costly long-distance fuel transportation.

There are two factors behind a transition to more climate-friendly forms of energy. First, only Timor Leste and Papua New Guinea out of the 15 nations in the region have confirmed fossil fuel reserves [8]. That means the area has been largely dependent on fossil fuel imports to keep the lights on, which has been expensive and inefficient due to the region’s isolation. Second, although the Pacific region does not produce much GHG, the growing threat of natural disasters in the region makes it even more important to minimise carbon emissions.

These islands used to have 0 diversity until the 2010s, relying exclusively on oil for power generation. This group contains the majority of the smallest islands globally, including Nauru, the smallest, by surface, inhabited island in the world at 8 square miles and a population of 9642. Any diversity that appears in their electricity generation is sourced mainly by wind or solar energy, depending on the islands’ natural endowment. In Vanuatu, for instance, wind energy has boosted diversity.

2.3 The Atlantic & The Mediterranean

Roughly 50,000 people live on the islands in the North Atlantic, north of Scotland and between Norway and Iceland. The islands are constrained to being self-sufficient in terms of electricity generation due to their lack of connections to any significant grid networks. Hitachi Energy was contracted by the Faroese utility company SEV to supply a 6MW / 7.5MWh Battery Energy Storage System (BESS), which will integrate a 6.3MW wind farm onto the local grid at the Faroe’s southernmost island, Suðuroy [9]. The project is expected to be used by the utility to assess how wind energy, in combination with energy storage, could be used to achieve the renewables target.

Fernando de Noronha, located about 545 km from Recife, the capital of Pernambuco, needs to implement clean and smart energy solutions in response to the challenges of generating and distributing energy in a delicate ecosystem. Due to its nutrient-rich waters, the ecological sanctuary is a location of great importance for the feeding and reproduction of sea turtles, tuna, sharks, and different marine mammals. These Brazilian Atlantic islands are also home to the largest aggregation of tropical seabirds in the Western Atlantic.

The Noronha I and Noronha II solar power facilities provide up to 10% of the electricity used on the archipelago.

• With 1,644 photovoltaic panels, Noronha I launched in July 2017. This renewable energy project has an installed capacity of 400 kW and generates about 600 MWh per year over an area of about 5,000 m2.
• For its part, Noronha II was dedicated in 2018. The system produces roughly 800 MWh per year and has an installed capacity of 550 kW.

Malta and Cyprus are the EU’s countries with the least diverse power sector as they rely excessively on imported oil. Recent solar energy growth in Malta improved the electricity diversity, which still depends only on two options, while Cyprus introduced three more options, wind, solar and biofuels, in its electricity fuel mix portfolio. Both are managing to improve their power sector diversity gradually.

2.4 The Indian Ocean

Islands in the Indian Ocean are highly dependent on fossil fuels, and renewables are starting to play their role in transitioning the energy system in these islands. For instance, Seychelles has been entirely reliant on imported fuel until around 1.354 MW of solar PV systems and 6 MW of wind power were added to the energy mix, representing 2.1% of the energy production, which reduced the fuel oil import by around 2 million litres in 2016.

So far, electricity production from non-hydro renewables is quite limited. Including hydro, renewables in Madagascar represented around 40% of electricity generation in 2016, 21.8% in Mauritius, 5% in Comoros and 2% in Seychelles. Still, all four countries in the region have introduced an explicit target for renewable energy share in their energy generation mix. Mauritius aims for 35% renewables by 2025, Madagascar 85% by 2030, Seychelles 15% by 2030 and Comoros 55% by 2033 [10].

Even though Sri Lanka is not considered a “small island”, its case is worth mentioning. It was one of the fastest-growing economies of the last decade, especially after the end of the civil war in 2009. The increase of 45.24% in the country’s purchasing power parity was linked to an energy demand increase of 3.1 TWh [1]. The demand was met by fossil fuels in the fuel mix, particularly the opening of the Lakvijaya Coal Plant in 2011, which resulted in diversity improvement and decreased carbon emissions.

Although it is one of the most diverse islands, high reliance on hydro and fossil fuels often disrupts the country’s supply security as both sources are associated with a wide range of weather and geopolitical vulnerabilities. A potential increase in wind and solar energy could provide the power sector with higher diversity and lower reliance on incumbent resources as the islands with greater variety and lower concentration in their electricity sector.

3 Conclusions: Opportunities and Barriers

While there waits substantial work to do, there has been increased recognition by the international community that the RE transition in small islands can be hastened through both financial and technical cooperation:

• through capacity building for the private sector, local policymakers, utilities, and financing institutions;
• by access to platforms to share information, knowledge, lessons learned, and good practices;
• through enhanced policy, regulatory and advisory services for greater uptake of renewables through roadmaps, resource assessments, grid stability analysis, project planning, identification and execution; and
• through investments in terms of ensuring project bankability, which in turn attracts more investors to support energy transformation.

Implementing sustainable energy at the utility-scale continues to be the top priority for small islands and the best chance for long-term energy security. Power utilities and regulators are being strengthened by continued capacity building of the power generation sector in preparing and negotiating bankable PPAs and contracts. These will ultimately result in private cash effectively committing to implementing renewable energy projects [11].

Bankable PPAs are long-term agreements between power suppliers and consumers that outline each party’s obligations, rights, risks, and remedies to enable investment. PPAs are crucial in the power sector for all forms of generation technologies, but especially for new renewables. The challenges in most islands are establishing guaranteed take-off, stimulating confidence in predictable long-term revenues, and mitigating possible curtailment events within an appropriate regulatory framework.

However, given the relatively small size of islands, renewable energy projects also typically tend to be modest and may not draw the right developers. The pipeline of anticipated future renewable energy projects also becomes constrained; the majority are projected to be stand-alone due to their high prices and weak financial viability. Additionally, a lack of funding security or guarantees poses concerns for the private sector’s adoption of renewable energy. Investors find it difficult to commit due to limitations in reliable and accurate energy data for planning and forecasting.

4 References

[1] Ioannidis, A., Chalvatzis, K. J., Li, X., Notton, G., & Stephanides, P. (2019). The case for islands’ energy vulnerability: Electricity supply diversity in 44 global islands. Renewable Energy, 143, 440-452.

[2] https://islands.irena.org/

[3] Shah KU, Raghoo P, Surroop D (2021). An institutional-Based Governance Framework for Energy Efficiency Promotion in Small Island Developing States. MDPI Climate, 9(6), 95.

[4] Atteridge A & Savvidou G (2019). Development aid for energy in Small Island Developing States. Energy, Sustainability and Society, 9:10, 1-16.

[5] Government of Barbados (2021). Update of the First Nationally Determined Contribution. Available at: https://www4.unfccc.int/sites/ndcstaging/PublishedDocuments/Barbados%20First/2021%20Barbados%20NDC%20update%20-%2021%20July%202021.pdf,

[6] Government of Jamaica (2020). Update of Nationally Determined Contribution (NDC) of Jamaica to the UNFCCC. Available at: https://www4.unfccc.int/sites/ndcstaging/PublishedDocuments/Jamaica%20First/Updated%20NDC%20Jamaica%20-%20ICTU%20Guidance.pdf

[7] https://www.frontiersin.org/articles/10.3389/fenrg.2021.546367/full

[8] https://www.adb.org/results/pacific-islands-push-renewable-energy

[9] https://www.energy-storage.news/hitachi-energy-7-5mwh-bess-project-to-help-faroe-islands-towards-100-renewables-by-2030/

[10] https://cadmus.eui.eu/handle/1814/61249

[11] Timilsina, G., & Shah, K. Economics of Renewable Energy: A Comparison of Electricity Production Costs Across Technologies. Oxford Research Encyclopedia of Environmental Science. Retrieved 5 Apr. 2022, from https://oxfordre.com/environmentalscience/view/10.1093/acrefore/9780199389414.001.0001/acrefore-9780199389414-e-693.