Pacific Island states have committed to ambitious targets to reduce their reliance on fossil fuels to generate electricity. The Cook Island’s commitment is to have 100% renewable generation by 2020, Samoa is also targeting 100%, but by 2025, and Tonga is seeking to generate 50% of its electricity from renewable resources by 2020. As a result, large-scale renewable generation facilities are being constructed.
In these three states, at least on main islands, electricity is generated in centrally located power stations and then distributed via lines to users. The renewable generation capacity is delivered via these networks.
If current trends in the price, efficiency and capacity of distributed electricity generation continue, then in time it may be possible for electricity distribution networks to become redundant: low-cost solar panels, combined with high-capacity batteries, will be able to generate and store all the electricity needs of some consumers, especially at the household level.
The New Zealand Institute for Pacific Research commissioned NZIER, the University of Auckland and Nexgen Energy Solutions to prepare a report on the impact of renewable energy on electricity grids in Polynesia.
This first report contains the first stage of this project, which is desk-based research conducted in New Zealand on whether distributed generation has the technical and economic potential to replace distribution networks. If that potential exists, then further study of the impact of such systems on grids is justified. This first stage can be likened to a “proof of concept”: if we find sufficient evidence of potential, then completing all of the research and asking the main research question – the potential impact on grids – is more than just a theoretical exercise.
We find variable, but positive, net present values for a range of different types of solar installations. These positive results will get better as technology improves and the costs of solar and batteries continue to decline. These results signal economic potential. If investment were to occur and these economic returns were realised, island communities would benefit from sustainable renewable sources of electricity, protecting their economies from uncertainties related to movements in international oil prices and unreliable shipping.
We consider that these results justify further analysis in the three states in question. This analysis will allow more detailed assessments of the possible effects on existing distribution grids.