Integrating Renewable Energy in Pacific Island Countries

Abstract

The purpose of this thesis is to investigate the entry of renewable energy technologies into Pacific Islands' electricity markets, with particular focus on a new technology: the Pelamis, a wave energy converter. Pacific Islands are endowed with various types of renewable energy resources, yet they remain highly dependent on expensive fue1 imports for their energy requirements, using little renewable energy. This paradox is investigated by studying the characteristics of Pacific Islands' electricity markets, including a casestudy on the entry of a new renewable energy technology, the Pelamis, into the electricity market of Hawaii. The integration of renewable energy technologies into Pacific Islands' electricity systems is then analysed from the point of view of an energy planner. The recent application of portfolio analysis to energy planning has provided a new framework to evaluate the different electricity generating options available to energy planners. Taking both the generating cost and financial risk of each technology into account, portfolio theory has been applied to various European countries, by comparing actual generation portfolios to an efficient frontier showing the trade-off between energy security and the cost of electricity generation. This framework has clear relevance to Pacific Island Countries. However, the characteristics inherent to Pacific Island Countries have important implications on the operation of their electricity systems, which are not necessarily taken into account in portfolio analysis. In particular, geographical isolation inhibits these countries from connecting to larger intercontinental grids, which emphasizes the importance of reliability of supply. This thesis presents a mathematical model which establishes a method for computing an optimal intertemporal path for introducing renewable energy into a pre-existing electricity system. The model explicitly allows for the cost of maintaining reliability of supply as intermittent generators are integrated. The framework also incorporates concepts from Integrated Resource Planning and portfolio analysis. Finally, policies for accelerating renewable energy development are reviewed, and a discussion is provided on the policies which are likely to be most suitable to pacific Islands. One of the main conclusions of this thesis is that the amount of backup capacity for renewable energy can be optimally minimized by diversifying the mix of renewable energy resources in each island. In practice, this would require studying the complementarities and loading curves of the various renewable resources available, and comparing their total potential production, and the variability of this production, to electricity demand. This would allow energy planners to model the inclusion of a maximum amount of renewable energy using a minimum of backup capacity to maintain system reliability, potentially leading to a more efficient implementation and formulation of policies aimed at developing renewable energy generation in Pacific Islands.