Abstract
We estimated system-wise levelized cost of electricity (LCOE) for a power grid with a high level of renewable energy using our grid optimization model. The estimation results of the system-wise LCOE are discussed in terms of the nexus of energy, environment, and economic growth for Small Island Developing States (SIDS) economies. While 100% renewable energy is technologically possible with the usage of electricity storage, the estimated LCOE is as high as 397 $/MWh which is substantially higher than electricity prices for residential consumers in the US and Japan. The susceptibility analyses imply that the estimated LCOE increase of 223% with a 100% renewable power grid corresponds to an as high as 11% decrease in economic growth. This decrease in economic growth would have a significant negative impact on SIDS economies. However, hydrogen production via the electrolysis of water using the excess energy supply from solar photovoltaics would reduce the LCOE, and therefore, higher economic growth would be attained with less {mathrm{CO}}_2 emission.
Highlights
The population size of Small Island Developing States (SIDS) is rather limited
The estimation results for the grid operation and system-wise levelized cost of electricity (LCOE) using the grid model described in Sect. 2.2 are shown and discussed in terms of the nexus of energy, environment, and economic growth for an SIDS economy
We estimated the system-wise LCOE for a power grid with a high level of renewable energy to discuss how the estimated LCOE affects the economic growth in a SIDS economy
Summary
The population size of Small Island Developing States (SIDS) is rather limited. SIDS have a combined population of approximately 65 million (UN-OHRLLS 2015), which is approximately 1% of the world’s population. SIDS are often said to be the most vulnerable areas to climate change due to the currently increasing CO2 emissions. The Intergovernmental Panel on Climate Change (IPCC) has reported that emissions resulting from human activities are substantially increasing atmospheric concentrations of greenhouse gases, resulting on average in additional warming to the Earth’s surface (IPCC 1990). Based on IPCC reports, policy makers in various countries, including advanced countries, emerging economies, and SIDS, have proposed energy policies to introduce as much renewable energy as possible to curtailing CO2 emissions. Skepticism persists due to the high cost of investment in renewable energy and its integration into power grids
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