There is a lot of interest in the idea of 100% renewable energy both from a political and technical perspective. To understand some of the issues surrounding this goal it is useful to look at smaller systems where high penetrations of renewables are starting to become more common. It may be that 100% renewable energy is more reasonable goal for a small microgrid, rather than on a large national or regional grid. At HOMER Energy we have been analyzing the economics of integrating different penetrations of renewable power into microgrids for decades. This is often to provide energy access in remote areas that haven’t traditionally had access to reliable electricity, or any at all. We were recently tasked by the World Bank to look at power options for a small village in the Solomon Islands, and asked to compare the costs of a 100% renewable power system that had no diesel generator for backup, with a system that had a backup generator.
It turns out there are important economic advantages to including a relatively small amount of non-renewable backup power in a renewable system that might include solar and/or wind plus battery storage. And, this result shows up frequently in HOMER Pro, in many types of system configurations. In other words, backing off from the 100% renewable goal – even just slightly – can produce dramatic cost savings. The reasons are fairly technical but easy to observe in the context of HOMERⓇ Pro software.
The Solomon Islands are located in the western Pacific, east of Papua New Guinea and have a population of about 600,000 people scattered among the many islands. More than 75% of the people are engaged in subsistence and fishing. Most goods, including diesel fuel for energy generation, have to be imported at considerable expense. Eighty-seven percent (87%) of the rural population or 495,000 – are without access to electricity. As a result, renewable energy offers the promise of important cost savings to the people of the Solomon Islands.
The Solomon Islands have an excellent solar resource, but like many islands and other parts of developing countries, they have a hard time supplying reliable and affordable power. The loads are either too small or too isolated for an extension of a larger grid to make economic sense. Their challenge is shared by islands and developing countries around the world. In many parts of the developing world the national utility is not supplying reliable and affordable power even to the main cities, but supplying reliable, affordable power with conventional technologies to the smaller, more isolated areas is even harder.
Fortunately, due to advances in renewable power, power electronics, and storage, these smaller more isolated areas now have new options that require new ways of thinking. Instead of simply installing a diesel generator that is relatively cheap to install but very expensive to operate, a system getting the bulk of its energy from solar (or wind) is relatively expensive to install but very inexpensive to operate. It is also a more complicated system because solar and wind do not stand on their own. They require some combination of storage, load management, and/or backup generation to provide consistent, reliable power.
One of the big advantages of these more complex systems is their ability to supply 24-hour power. All around the world there are small diesel systems that only supply part-time power because a diesel generator sized to meet a peak load is horribly inefficient for supplying smaller loads.
The challenge for designing a 100% renewable system comes during the exceptional periods when there are multiple cloudy days in a row. A system large enough to continue delivering the same level of service during those periods would have substantial excess capacity during the other 95% of the time. Alternatively, the level of service could be reduced during those periods. That would require either sophisticated load management or behavior changes on the part of the end users.
We modeled these alternatives, including an all-diesel case for comparison, and given the capital costs, operating costs, fuel consumption, and carbon emissions of these alternatives, the system with large renewable energy penetration and diesel backup – for those cloudy periods – clearly outranks the 100% renewable system for economic performance.