According to the IEA, generating electricity on islands can cost up to 10 times more than on the mainland. With more than 730 million people living on 11,000 permanently inhabited islands around the world, and with the number of natural disasters having increased significantly in recent decades, meeting the energy needs of islanders in a safe, sustainable and affordable way is crucial. No easy task. But developments are underway on many islands. Often, these are tailor-made solutions that are found in a combination of energy storage technologies and increasing the share of renewable energy to create greener, more stable and resilient electricity grids. Such as those of the EU-initiated REACT project.
Challenges
Small and remote islands face a range of energy challenges , IEA finds. They are often isolated from mainland electricity grids, leading to difficulties in balancing supply and demand. They tend to rely heavily on imported fossil fuels, which can lead to high costs and risks to energy security. And despite their limited contributions to global emissions, they are disproportionately affected by the impacts of climate change, including extreme weather events.
This creates major inequalities. Electricity generation on islands can cost 10 times more than on the mainland and in countries. In 2021, island nations had the most expensive average electricity costs in the world; for example, in the Solomon Islands, electricity costs almost seven times more than in the United States, while electricity rates in Caribbean countries are more than double the US average. This can have a negative impact on socio-economic development. In the Pacific island nations, fuel imports accounted for 13% of GDP in 2019.
In particular, implementation often lags behind due to challenges in attracting the necessary investment. IEA estimates that to fully implement current Nationally Determined Contributions (NDCs) for small island developing States, up to USD 6 trillion would need to be invested in adaptation measures and clean energy technologies. The Regulatory Energy Transition Accelerator (RETA) and the UN Economic and Social Committee for Asia-Pacific (ESCAP) are promoting collaboration among energy regulators from small island developing States. This work under RETA will be continued in collaboration with the Global Green Growth Institute.
Geographical dependency
Geographic islands are highly dependent on the mainland energy market, found the four-year EU research and innovation project REACT (Renewable Energy for Self-Sustainable Island Communities) that ran from 2019 to 2023. Islands face multiple barriers in the traditional electricity grid model, impacting the island’s energy security and increasing energy costs, which can be up to 400% higher than on the mainland.
Barriers include:
- When islands are not connected to the grid, they are heavily dependent on fossil fuels;
- If islands have a grid connection, they are dependent on imported energy;
- Islands have highly variable seasonal load profiles due to tourism.
Pilot with concrete goals
REACT aimed to help island communities achieve energy independence. The aim was to strive for energy independence on the island through a combination of using local renewable energy sources, optimising consumption and storage of the generated energy and involvement with the islanders.
In concrete terms, the goal was to reduce greenhouse gas emissions and energy costs by 60% and achieve energy savings of at least 10%
To achieve these goals, a number of different islands were chosen of similar size but with different climate zones, energy needs and population densities:
- La Graciosa, Canary Islands (SPAIN) Climate: Marine west coast.
- San Pietro, Sardinia (ITALY) Climate: Mediterranean.
- Inis Mór, Aran Islands (IRELAND) Climate: Marine west coast.
The insights gained were then used to develop a technical and business model to demonstrate that these technologies can deliver economic benefits, contribute to the decarbonisation of local energy systems, reduce greenhouse gas emissions and improve environmental air quality.
The REACT project will develop a solution for three pilot islands to produce 100% of their electricity from renewable sources using a cloud-based ICT platform, decentralized production, storage devices and demand-side management. This solution will be tested and validated in these areas.
The pilot produced the following results:
- 100% potential energy autonomy;
- 60% potential reduction in greenhouse gas emissions and energy costs;
- 10% energy saving;
- A cooperative strategy for energy management.
For the islanders this has resulted in:
- Reduced energy prices;
- Involvement in cooperative communities;
- More reliable and safer energy supply.
IEA Mission
IEA has a specific mission to ‘help the world’s energy systems move towards a safe and sustainable future for all.’ Part of this is its focus on the situation in islands and remote areas. IEA is working on this through the Digital Demand-Driven Electricity Networks (3DEN) Initiative , supported by the Clean Energy Transitions Programme .
Policymakers can help raise awareness of the energy challenges facing islands and support the strengthening of a skilled workforce that can build and maintain clean energy systems, IEA says. Given that energy regulators in SIDS tend to be small and often relatively young , policymakers can also create conducive policy and regulatory frameworks and simplify, tailor and optimize procurement processes . They can also help reduce costs by buying large quantities of products and materials, or by reviewing high import duties. To achieve the urgent progress needed, IEA sees collaboration between the public and private sectors as crucial.
Distributed energy resources and energy efficiency can make energy systems cleaner and safer, according to IEA. Below is a summary of the developments.
Hubs of innovation
Precisely because small and remote islands often have abundant renewable energy resources, they have the potential to become hubs of clean energy innovation. (As the REACT research project has also shown.) Although a survey of 36 small island economies found that the majority now generated less than 10% of their electricity from renewable sources, encouraging trends are emerging.
Total installed renewable energy capacity in small island developing states more than doubled between 2010 and 2022 to 4.6 gigawatts (GW) – with ample room for further growth.
Small scale energy sources + BESS
Distributed energy resources – or small-scale energy resources typically located near locations where electricity is used, such as rooftop solar – can help deploy renewables on islands, increase the security, resilience and affordability of energy systems, and accelerate the decarbonisation of the economy.
This will also require additional technologies, such as an expansion of battery energy storage systems (BESS). These systems can help facilitate the integration of variable renewable energy sources (which is particularly complex on islands due to limited grid infrastructure), maintain grid stability and provide flexibility – supporting not only individual households but also larger renewable energy sources and plants.
Microgrids , or decentralized energy systems that can be isolated from the main grid, and virtual power plants (VPPs) – networks of decentralized power generation units, storage systems, and flexible demand – can also help optimize the allocation of distributed energy resources.
Digitalization
Electricity systems on small islands are often oversized, with high reserve capacity needed locally to respond to daily and high-low seasonal fluctuations.
Digitalisation can provide opportunities to optimise electricity systems at the local level through better planning, management and operation. So-called geospatial databases can make a contribution. These are specialised databases designed to store, manage and analyse data related to specific locations on Earth. This data can include, for example, coordinates, place names or addresses . One example is the UNDP Data Platform for Small Island Developing States, which can help policymakers harness data and analytics to make better-informed decisions.
AI applications can also provide benefits. For example, Curaçao is testing AI to predict renewable energy and the expected maintenance of the electricity infrastructure.
Larger islands and scaling challenges
The projects that REACT carried out on islands with a population of a few thousand inhabitants are not comparable in terms of technical and economic problems to overcome to those faced by islands with a population of several hundred thousand inhabitants.
This requires different solutions for larger communities. That is why the REACT project also included "follower islands". These are the island of Gotland, the prefecture of Lesbos, the Isle of Wight, the island of Mallorca and the island of Réunion. Scaling up for these will be investigated by means of simulations.
The aim for these follow-on islands is that the REACT solutions should facilitate the roll-out and integration of interconnected renewable energy sources such as solar and wind, which remain the main sources of renewable energy in most island areas. Ultimately, consumers can expect energy savings, which will improve their budget and environmental impact. And grid operators will benefit from more flexibility and improved grid stability.
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