Islands & Renewable Energy Geoffrey Heal Columbia Business School Verdana 10 minutes max

Renewables vs Fossil In mainland US, wind & solar PV are less expensive than fossil energy* Wind $29-56 mWh 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 Li-ion Development of Lithium Batteries 1970-2015 Gravimetric Energy Density (W.h/kg) Cost (US$/kW.h) 3000 2000 1000 300 200 100 Year 2015 1970 1980 1990 2010 Ni-MH Ni-Cd Battery storage cost falling fast Large-scale storage now economically viable

Intermittency & Batteries Battery prices still falling Expected to be under $100/kWh 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