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Tiny Island Nation to Host World’s Largest Microgrid
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The tiny Pacific island nation of Palau announced last week that it will soon become the home of the world''s largest microgrid, a development that could help it ramp up to 70 percent renewable energy over the next three decades.
ENGIE EPS recently launched what the company bills as the world''s largest microgrid project — a 100-MW solar-storage platform* that will be capable of meeting all of the Micronesian island of Palau''s power needs.
It isn''t surprising that the company chose Palau for the project. Island states struggle more than others to deal with the threat of rising sea levels.
Pacific island nations in particular have been at the forefront of global initiatives to reduce greenhouse emissions as they face rising temperatures and sea levels. The American Samoa island of T''au meets 100 percent of its power needs, and does so in zero- or low-carbon emissions fashion — using a Tesla-built microgrid.
Dubbed Armonia (Harmony), the Palau microgrid will feature dispatchable, solar photovoltaic (PV) and lithium-ion battery energy storage — 35 MW of solar PV and 45 MWh of energy storage. It will be integrated with 28 MW-peak of existing diesel-fueled generation, which will be called on for the residual portion of the load, according to an investor call presentation by the company October 15.
The microgrid''s solar capacity should meet more than 45 percent of Palau''s total demand for electricity, significantly reducing the island-state''s imports of diesel fuel for electricity and the associated greenhouse gas emissions. ENGIE EPS will build, own and operate the microgrid, selling the power to Palau''s utility distribution grid operator at competitive rates fixed as per the terms and conditions of a 30-year power purchase agreement (PPA).
Palau will become 45 percent renewable when it completes the project in 2019, according to ENGIE EPS, the new brand that emerged as a result of the acquisition earlier this year of Electro Power Systems (EPS) by global energy giant ENGIE.
A nation of just over 20,000 residents, Palau expects to generate substantial energy generation cost savings as a result of the PPA tariff, and further savings as a result of optimization of residual diesel generation, according to ENGIE EPS.
Dependent on diesel-fuel imports for 90 percent of their grid power, island energy consumers pay an average of US$0.24 per kilowatt-hour for electrical energy produced by diesel. As a nation, Palau spends approximately 12 percent of its $272 million GDP on fuel and related imports.
"The project will deliver the lowest tariff ever registered in islands, well below the current generation cost, while upgrading the current grid with energy storage to secure reliability and resilience," ENGIE EPS CEO Carlalberto Guglielminotti said in an interview. "This has been an unprecedented low tariff for ENGIE EPS and in the worldwide market, enabled by the bold Access to Energy strategy of ENGIE and by the strong support of the Palau Government coupled with a visionary role and care of people played by the National Congress."
A signatory to the United Nations Framework Convention on Climate Change (UNFCCC) Paris Climate Agreement, Palau set a goal of achieving 45 percent renewable energy by 2025, as well as reducing energy-sector greenhouse gas emissions 22 percent below 2005 levels. ENGIE EPS says that Palau will be able to achieve those goals more than five years ahead of schedule as a result of deploying the Armonia microgrid and carrying out a newly crafted national renewable energy transition plan.
New York-based GridMarket originally developed the basis for Palau to pursue the Armonia microgrid project within the context of a public-private partnership. Using a data-driven approach to distributed energy, GridMarket lent support to the preliminary design of a national, clean energy transition strategy for the Palau government. The company is applying its machine-learning platform and predictive analytics capabilities to map out a plan to achieve the 45 percent renewable energy goal based on the island state''s unique energy footprint.
GridMarket then selected ENGIE EPS to build, own and operate the microgrid based on the results of a competitive bidding process. ENGIE EPS is carrying out the project''s final sizing, geotechnical assessment and project execution plan in accordance with Palau''s legislativ and regulatory framework and PPUC, the Palau Public Utilities Corp. as off-taker. Construction is slated to begin by the end of this year. Commissioning is expected to take place before year-end 2019.
Over 18 months, ENGIE EPS intends to work with government partners to convert Palau''s electricity grid to renewable energy. Doing so will cost Palau''s government and residents nothing in terms of upfront capital expenditures given the terms and conditions of the PPA and the project''s business model, according ENGIE EPS.
In addition, Palau, EarthX, Gridmarket, and the Global Island Partnership formed the Island Resilience Partnership to help other island nations shift towards sustainable and affordable energy.
ENGIE EPS noted that several other island states and countries have announced renewable energy transition plans. The Indian state of Tamil Nadu rolled out a renewable energy scheme earlier this year, while Togo announced Project CIZO last month. The latter aims to integrate solar energy into the African nation''s electrical grid, in many cases delivering energy to regions that previously lacked electricity.
Microgrids were the main driver of growth in ENGIE EPS'' project pipeline, which increased 53 percent, to $280.6 million as compared to 2017''s first half. Two-thirds of the company''s microgrid projects were in the Asia-Pacific region and about $80.5 million of its project pipeline is in the final stages of due diligence and development, with PPAs having been signed with off-takers, according to the corporation''s H1 2018 financial results.
*Editor''s note: Disagreement exists over who can claim the title world''s largest microgrid. For example, the term also has been applied to the University of Texas at Austin, which houses a 135-MW (62-MW peak) combined heat and power microgrid.
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The four key functions of the PCCC are Knowledge Brokerage, Applied Research, Capacity Building, and Innovation.
The small island nation of Palau in the western Pacific Ocean has moved a step closer to having what is said to be the largest ever microgrid spanning diesel, solar and battery energy storage.
A 30-year power purchase agreement (PPA) has been signed with France-based ENGIE EPS, a microgrid and energy storage specialist arm of power giant ENGIE. The project was originally developed by US-based distributed energy provider GridMarket.
The system, known as ‘Armonia’, will include existing diesel generation alongside up to 35MW of solar, for which land has already been secured, and up to 45MWh of battery storage. On completion the Palau grid will then have an installed power capacity of 100MW and renewables will account for more than 45% of the country’s demand. Much of the current diesel usage will be displaced, thus reducing carbon emissions and generating substantial savings on Palau’s energy bill.
Palau is targeting 45% renewables by 2025 and a 22% reduction in its energy sector emissions below 2005 levels and the new microgrid is expected to help the island nation reach that goal five years ahead of schedule. Thearchipelago of several hundred islands in Micronesiahad a population of 17,889 in 2017, according to an ENGIE EPS presentation.
GridMarket’s contribution to the project included deploying its machine-learning platform and predictive analytics to map out a national energy transition strategy specifically for Palau. It later selected ENGIE EPS to implement the project.
Construction is expected to begin by the end of this year with commissioning forecasted before the end of 2019. It has been funded by the International Renewable Energy Agency (IRENA) and Japan International Cooperation Agency (JICA).
Palau already has 12.4MW of diesel peak power across two stations, generating 87GWh/year, but this is expected to exceed 110GWh in 2025, said the presentation.
Palau president Tommy Remengesau said: “In the midst of the global energy transition, it is imperative that we address climate mitigation and climate adaption – at the same time. As we reduce our carbon footprint, so too should we reduce the vulnerabilities of our energy infrastructure in the face of rising seas and natural disasters. As we generate cleaner energy, it must also be reliable, accessible, and economical for those citizens of the world who live on the front-lines of climate change. Our partnership with ENGIE has accelerated Palau’s transition toward a renewable and resilient future.”
Paul Maguire, president and CEO ENGIE AsiaPacific, added: “Universal, affordable and reliable access to clean energy will be a reality in Palau in few months, and we have the ambition and the commitment to replicate this model all over the world thanks toENGIE's global reach.”
InJune 2017, the Cook Islands in the Pacific said it would playhost a5.6MWh lithium-ion battery energy storage systemalso for the integration of renewables and the displacement of diesel.
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