Islands Renewable Energy Geoffrey Heal Columbia Business School
Islands & Renewable Energy Geoffrey Heal Columbia Business School
Renewables vs Fossil • In mainland US, wind & solar PV are less expensive than fossil energy* Wind $29 -56 m. Wh Solar PV $36 -44 Gas (combined/single cycle) $41 -74/152 -206 Coal $60 -143 * Lazard’s LCOE v 12
Renewables vs Fossil • On a low-latitude island, solar is more productive and wind has a higher capacity factor, so both are less expensive • Gas and coal however have to be imported and are more expensive than on the mainland • Tilts the playing-field further to renewables
Intermittency & Batteries Cost (US$/k. W. h) 3000 Development of Lithium Batteries 1970 -2015 300 Li-ion 2000 20 0 1000 0 1970 Gravimetric Energy Density (W. h/kg) • Battery storage cost falling fast • Large-scale storage now economically viable 100 Ni-MH Ni-Cd 1980 1990 Year 2000 0 2015 2010
Intermittency & Batteries • Battery prices still falling • Expected to be under $100/k. Wh within two years
Financing • Renewables + storage can provide power at lower cost than fossil fuel • But needs more investment up front: all costs are capital costs, no fuel or operating costs • Pay everything before any power generated, rather than 50% up front and the rest over the life of the project
Financing • Means privatization of power plants or raising capital from capital markets • Latter probably not possible • So need to bring in private capital to finance power plants
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