http://www.renewableenergyworld.com/articles/2015/12/renewable-energy-freeing-island-nations-from-fossil-fuel-prices.html
[From the article: “National savings are expected to be in the order of
$300 million a year,” Spencer Thomas, lead climate change negotiator,
said in an e-mail. “Substituting renewables for fossil fuels will
enhance food and energy security, and improve balance of payments.”]
December 11, 2015
By Alex Morales, Bloomberg
Renewables are beating fossil fuels on cost in island nations from the
Pacific to the Caribbean, where governments are seeking to limit their
exposure to volatile market prices.
“We’re so far-flung from the sources of fossil fuels that by the time
they reach us, with all the shipping, you pay a substantial cost,” said
Tommy Remengesau, the president of Palau, whose nation is located almost
1,000 miles (1,600 kilometers) east of the Philippines in the Pacific
Ocean. “It’s an economic advantage for us to go for renewables.”
The remarks in an interview at the United Nations climate summit in
Paris underscore the economic concerns of island nations. For many of
them, obtaining and paying for fuel is a costly struggle that they must
manage along with the threat of rising sea levels and more violent
storms predicted because of global warming. That explains why these
countries are among the more enthusiastic adopters of clean energy.
Palau is seeking to cut a $40 million-a-year fuel bill that consumes
about a sixth of its economy, and it’s not alone. In the South Pacific,
Fiji and Vanuatu are planning to generate 100 percent of their power
from solar, wind and biomass by 2030. In the Indian Ocean, the Maldives
is looking to renewables to reduce its almost total reliance on imported
fossil fuels, and the Seychelles have set a 20 percent clean power target.
‘Fuel-based Economy’
“We’re looking at options such as solar energy, wind energy and other
technologies, because we are very much a fuel-based economy,” Maldives
Foreign Minister Dunya Maumoon said by phone from the country’s capital
Male. “We should be able to see a dramatic increase in the use of
renewable energy.”
The Maldives’ climate plan shows why it’s hard for poorer countries to
realize their ambitions. “High investment costs pose a major challenge
to the introduction of solar,” the government said in its submission to
the UN. The pledge doesn’t quantify the finance it needs.
Goals from each nation are spelled out in pledges submitted before the
UN talks, where 195 countries are working on a deal to reduce greenhouse
gases. While emissions cuts in small islands aren’t enough to even put a
dent in the global total, economically they can pay off.
Grenada’s Plan
In Grenada in the Caribbean, they’ve done the math. Their carbon-cutting
program through 2025 has a $161 million price tag. For that, officials
hope to get 40 percent of energy from geothermal, 15 percent from solar
and 4 percent from wind. They expect the plan to pay off.
“National savings are expected to be in the order of $300 million a
year,” Spencer Thomas, lead climate change negotiator, said in an
e-mail. “Substituting renewables for fossil fuels will enhance food and
energy security, and improve balance of payments.”
Tumbling costs make the transition easier. Solar panel prices have
fallen to 64 cents per watt this year from about $2 at the end of 2010,
according to Bloomberg New Energy Finance. The cost of polysilicon, the
raw material used in most panels, last month fell to $13.98 a kilogram,
a record low that’s a quarter of the price in December 2009.
“Anywhere where you are competing for electricity generation with bunker
or diesel fuel – except for places like Greenland or Iceland – you are
better off with solar,” former U.S. Energy Secretary Steven Chu said in
an interview. “If you are in an isolated place in a developing country
you can use solar to charge your cell phone, to run your LED lights at
night, to pump and purify water, to do a lot of things.”
There are still hurdles. The up-front capital costs can be prohibitive
for small countries with limited budgets. According to Yvo de Boer, the
former UN climate chief who now heads the Global Green Growth Institute
in Seoul, for many investors, projects that are smaller than $50 million
are hard to finance because transaction costs are too high.
“They are too small to deal with from a financial perspective,” de Boer
said. “The up-front capital cost of renewables is high, but the
operating cost is very low. You need to get over that hurdle.”
Some are moving ahead. Vanuatu expects to get power from solar, wind and
coconut oil. In the Marshall Islands, almost 90 percent of energy needs
are met by imported petroleum projects. It has been pushing renewables
since 2008, when a price surge prompted a state of emergency.
“The fossil fuel era must draw to a close, to be replaced by a clean,
green energy future,” Christopher Loeak, president of the Marshall
Islands, said in a speech in Paris. “Carbon pollution is harming our
health, stunting our growth, and suffocating our planet.”
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