A Least Cost Analysis of Electricity Supply Options on Kiritimati Island

J. Tollestrup, K. Syngellakis and K. Bureimoa
Deutsche Gesellschaft fuer Internationale Zusammenarbeit (GIZ) GmbH, (Secretariat of the Pacific Community, Kiribati Ministry of Public Works and Utilities), Fiji

Keywords: Diesel Generators, Solar, Storage, Wind Power, Financial Analysis

Typical of isolated Pacific communities, Kiritimati Island is solely reliant on diesel fuel for the production of electricity. Despite the high cost of operating diesel-generators, their low purchase price has often given them preference over renewable alternatives, which typically require a significant capital investment. The objective of this analysis was to identify the least cost electricity source for Kiritimati Island, based on the levelised cost of electricity (LCOE) over a 20-year period. Through a thorough financial analysis, this report compares the economic efficiency of the status quo to a solar installation with battery storage, and a solar-diesel and wind-diesel hybrid option, without storage. The analysis shows that at no reasonable discount rate, diesel price, or carbon value is the status quo more competitive than the solar and wind alternatives assessed. Indeed it is found that under standard assumptions, a 200 kW wind turbine paired with a 350 kW diesel-generator would most competitively satisfy Kiritimati Island’s 2000MWh annual electricity requirement. The analysis also calculates the band of diesel prices, wind speeds and solar radiation values for which the conclusions of this study hold, and thus provides a useful reference for other island communities contemplating the economics of renewable energy.

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