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Why Is An Island Electric Utility Hindering Incredibly Cost-Effective Solar?

The Northern Mariana Islands are one of several island U.S. territories, lying three-quarters of the way from Hawai’i to the Philippines. Like most islands, their electricity supply has been almost entirely supplied by diesel-fueled generators, at enormous cost.

So why have islanders in the Marianas – such as the residents of Saipan – been struggling to install solar and other renewable power?

The utility, Commonwealth Utilities Corporation, has raised the same objections of mainland utilities, that technical barriers inhibit the reasonable uptake of variable renewable energy. But the cooperative utility serving Kaua’i island in Hawai’i is forecasting that 50% of its daytime electric demand will be met with solar by the end of next year. And California utilities are finding solutions to many of the purported technical barriers.

The economics are ironclad: switching from imported diesel to domestic clean energy would save a bundle. The following presentation explains.

[slideshare id=35057491&doc=solarforsaipanv2-140523150013-phpapp02]

The primary benefit of a switch to solar is cost. Upwards of $60 million per year is spent on diesel fuel for power generation, $1,100 per person on the islands. This expensive diesel-powered grid delivers electricity at a minimum cost of 26¢ per kilowatt-hour. Solar electricity would cut that cost by 25%, at a minimum. Savings from switching to solar would top $1500 per year for residential customers, and $350 per year for the utility!

Other analysis of a switch to solar (KEMA) suggests that the savings from getting 20% of peak energy from solar would be $3.3 million for the utility. At ~70% of peak energy from solar, savings are greater than $11 million per year.

For more on the Saipan island electricity system, see these resources:

Photo credit: Shell Vacations Hospitality

This article originally posted at ilsr.org. For timely updates, follow John Farrell on Twitter or get the Democratic Energy weekly update.

 
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Written By

John directs the Democratic Energy program at ILSR and he focuses on energy policy developments that best expand the benefits of local ownership and dispersed generation of renewable energy. His seminal paper, Democratizing the Electricity System, describes how to blast the roadblocks to distributed renewable energy generation, and how such small-scale renewable energy projects are the key to the biggest strides in renewable energy development.   Farrell also authored the landmark report Energy Self-Reliant States, which serves as the definitive energy atlas for the United States, detailing the state-by-state renewable electricity generation potential. Farrell regularly provides discussion and analysis of distributed renewable energy policy on his blog, Energy Self-Reliant States (energyselfreliantstates.org), and articles are regularly syndicated on Grist and Renewable Energy World.   John Farrell can also be found on Twitter @johnffarrell, or at jfarrell@ilsr.org.

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