Richard Branson’s Necker Island has signed a contract to slash its diesel fuel use by 75% by building a renewable energy-powered micro-grid.
The project leader NRG Energy says the Virgin Group will save money by making the shift, and that islands across the Caribbean similarly can reduce energy costs by installing solar.
The reason for this is that Necker Island, part of the British Virgin Islands, generates electricity with diesel generators, as most island nations do.
Because of their reliance on imported diesel and heavy fuel oil, islands have some of the highest electricity prices in the world.
In that part of the Caribbean, the cost of power can exceed 40 cents per kilowatt-hour. The national average in the mainland United States is 11 cents per kilowatt-hour.
75% diesel reduction
The Necker Island project is meant to be a demonstration showing that transitioning island nations off fossil fuels is feasible and cost effective. It is part of the Ten Island Renewable Challenge, an initiative organized in part by the Carbon War Room, a nonprofit co-founded by Branson to achieve gigaton-scale greenhouse gasemissions reductions.
In the first phase of the project, by the end of this year NRG will install 700 kilowatts of solar, which is about 5,000 or 6,000 solar panels. It also will install two shipping-container-size lithium-ion batteries that will act as a baseload power source to ensure a steady flow of electricity.
At full capacity, the solar panels will generate more power than the island normally consumes and the excess power will flow into the battery for use during cloudy times or at night. In the next phase, three 100-kilowatt wind turbines will be installed in 2015.
The contract signed between the Virgin Group and NRG Energy is different from the power purchase agreements corporations typically sign when installing large solar arrays. Instead, NRG has committed to reducing fuel consumption by at least 75% through a combination of onsite solar, wind and batteries.
Wholesale energy provider NRG Energy’s primary business is running centralized power plants, but the company believes there is a tremendous marked for micro-grids. There are 400 million people for whom solar is the right and cheapest source of power. The Caribbean is an unsubsidized market with great solar and wind resources.
By doing this micro-grid project, which will require working with at least seven technology providers and engineering groups, the company hopes to gain skills that it can apply both in other Caribbean nations and Fortune 500 companies.
To replace 15-25% of islands electricity with solar is fairly easy. It can be done with large solar arrays placed in a few locations without fear of disrupting how the grid currently runs.
However, getting to 75% renewable power, as Necker Island intends to, requires a more sophisticated control system to manage the variations in power flow and big battery banks.