Rethinking Island Energy Transitions

Islands occupy a paradoxical position in climate negotiations. People view them as both the most vulnerable to climate impacts and the most promising sites for clean energy transitions. On one hand, these places face severe risks from climate change and are often called the “front line” in the war against climate change. On the other hand, many perceive their smaller electricity grids as ideal candidates for rapid decarbonization—a notion that has become overly simplified and, at times, misleading. People now often refer to islands as “renewables laboratories,” reflecting an experimental attitude focused more on testing an aesthetic idea than on urgently implementing the best clean energy grid solutions.

In many ways, this linkage between island energy and renewables is a continuation of a philosophy of “turning back to nature” to right our wrongs against the planet through climate change. Renewables, like solar and wind, are perceived as more “natural” compared to non-renewable energy systems, like nuclear power, and are therefore preferred clean energy sources. Islands, widely known for their wealth of flora and fauna, become “ideal case studies” for 100%-renewable energy transitions, although their geographical traits—isolated, small land masses often in disaster-prone areas-—can make these transitions even more difficult relative to larger nations. To clarify, associating renewables with island clean energy systems makes sense given the high renewable potential typical of these places. However, this does not mean 100%-renewable grids must be the end-all-be-all for islands. Like larger nations, islands face increasing energy demand, especially as their economies grow, and no amount of overbuilding renewables can fully address the need for reliable, firm generation.

The myth that transforming island grids can and must be done with renewables only has hindered real progress by overlooking unrealistic assumptions in island clean energy transitions. In July, we critically analyzed two renewable studies on Puerto Rico, one by the U.S. Department of Energy (DOE) and the other by LUT University. The comparison underscores the urgent need for more accurate and nuanced conversations to guide the clean energy transitions of islands worldwide.

Island Energy Transitions Will Be Very Hard

Island nations have several factors limiting energy transitions. Their lower energy demand compared to large nations like the U.S., and the common narrative of cheap renewable energy, creates the idea that island decarbonization can be easily achieved with renewables. While islands indeed have high renewable potential, this raises the question: why do these islands’ clean energy grids need to be 100%-renewables? Surely, island-specific challenges impose the need for even more flexibility with clean generation technologies. The fact that the clean energy community infrequently asks this question shows these challenges are underestimated.

The unique economic barriers that islands face, combined with localized issues, makes integrating clean energy grids more costly and arduous. Aesthetic preferences like 100%-renewable grids only makes these energy transitions more difficult and longer to achieve. Moreover, this tunnel vision often fails to account for all the challenges of integrating renewable energy systems on island grids.

One of these challenges includes installing and preparing the infrastructure needed to integrate renewable sources. The PR100 study notably stated researchers need to conduct more in-depth analysis on the grid upgrades required “to bring the system to “industry-acceptable” level,” including identifying any system vulnerabilities that make integrating renewables more difficult. For example, the report finds that widespread installation of rooftop solar on Puerto Rico will require a combination of major upgrades to distribution systems and localized storage. Other costly challenges include acquiring the equipment required to complete such massive infrastructure plans, and securing the expertise and workforce necessary to transform plans into large-scale projects.

Most islands’ limited size creates inherent challenges for renewable deployment. Competing land priorities further reduce renewable capacity, forcing distributed solar to become a main electricity generation option beyond a certain threshold of land scarcity. Additionally, the growing share of renewables on the grid brings challenges that may differ across islands. The smaller the land area, the less reliable solar and wind energy systems become, as there is less spatial variance in weather conditions to balance out periods of low solar or wind generation. These physical and technical challenges are only part of a more complex picture.

Beyond the challenges of installing renewables, lies a deeper issue regarding the high uncertainty of estimating clean energy project costs for island nations and regions, which presents difficulties for confident and accurate planning.

Advocates should be cautious not to underestimate island technology costs, especially when invoking successful renewable energy cost declines in large nations like the U.S. The DOE PR100 study highlights that even when the levelized cost of electricity (LCOE) for projects in Puerto Rico aligns with the average U.S. estimate, costs tend to fall on the higher end of the spectrum. While declining LCOE in large nations might suggest cost reductions across the board, islands face unique capital cost barriers that significantly hinder their ability to adopt renewable technologies at similar rates. High capital costs pose significant barriers for these islands, many of which already face limited fiscal capability. While improving LCOE is often cited as a reason for islands to transition to renewables, this trend doesn't capture the full picture of energy costs. Although renewables may have a lower LCOE, this overlooks the additional costs of grid upgrades to make room for renewable systems and storage, as well as the flexibility challenges that still make fossil fuels the dominant choice for island grids. Such cost considerations pose challenges considering these islands’ small economies. Even with lower renewable energy costs, they likely still require large quantities of external funding to accomplish the massive infrastructure transformation required for a clean energy grid. All of these points emphasize the importance of including thorough, island-specific considerations in energy modeling and analyses—considerations which often make or break how useful the results are for informing clean energy policy.

The DOE PR100 study underscores the substantial research effort required to estimate renewable costs for an island and to properly analyze the best grid configuration to make this newly transformed system work. The widespread data scarcity issue further complicates the task of assessing economical clean energy roadmaps for many such islands. In some cases, obtaining accessible, current data from island utilities or renewable developers for thorough energy modeling and analysis proves difficult, and in other cases, no such data exists yet. Many sources that provide data such as the International Renewable Energy Agency (IRENA) often group island data with large continental regions, resulting in categories like “Central America and the Caribbean.” Such data, potentially weighted towards mainland projects, distorts the picture of Caribbean island clean energy progress and cannot inform real planning or research. These issues serve as a sober warning against broadly assuming the affordability of renewable installations and operations on islands. Island grids face additional challenges that make clean energy integration more difficult.

While the PR100 study clarifies the challenges of achieving a 100%-renewable grid, some may still scrutinize the significance of each of these barriers. For instance, one could argue that not all island grids require as much investment as Puerto Rico to bring them up to standard. This may be true, but Puerto Rico should not be seen as an exception when it comes to the high levels of investment needed for island grids. Most small islands, especially those in the Caribbean, are located in disaster-prone regions and regularly endure devastating impacts from hurricanes and storms. For many of these islands, financial resources aren’t always readily available to restore the grid to normal operations. Over time, these deteriorating conditions compound, creating much larger existing problems before any new generation projects can be added. Challenges arise from having to tackle both resiliency and clean energy goals at the same time. While high investment and disaster vulnerability present significant challenges for island grids like Puerto Rico’s, the need for long-term resilience is undeniable. In addition, transitioning to clean energy is crucial for enhancing energy security and economic stability in these regions.

Despite such daunting challenges, the global urgency to decarbonize island regions remains limited, largely due to their small share of emissions. Indeed, islands collectively contribute less than 1% of global emissions. Despite emitting relatively little, they still aim to transition to clean energy grids in the hopes of increasing energy security and affordability. It is also smarter for small island states to follow this path rather than continue relying on fossil fuels, which are forcibly becoming less economical for long-term use. Even in a world where carbon emissions didn’t affect a nation’s energy system choices, islands would still need to overhaul their energy systems. Long-standing energy cost and energy security problems have hampered islands' economic development and resilience, exacerbating the extreme weather vulnerability of these territories.

Overall, the classic activist claim that “we have all the technologies we need to decarbonize, all we lack is political will,” simply doesn’t reflect the reality of the global energy transition. Islands face higher costs to implement clean energy sources, which reduce the flexibility of clean energy options. For islands long seeking to reduce expensive fossil fuel imports, the clean energy transition has moved well beyond the question of political will. Rather, now is the time for the climate community to more critically assess how clean energy options really fit into each country’s energy transition. A more objective problem-solving approach will identify crucial considerations to achieve island clean energy grids such as mismatches between solar and wind variability and local demand as well as land limitations. Meeting island electricity demand requires a diverse array of generation assets that can respond flexibly to changes in load. Achieving this goal requires both low-cost assets and higher-cost, firm sources like nuclear and geothermal energy that can fill in the supply gaps during lower renewable generation, and can easily ramp up and down according to changing electricity demand.

What Island Clean Energy Systems Need

Many island clean energy conversations overlook the role of flexible, firm (non-variable) generation. Such resources often get left out of all-renewable discussions because they reintroduce the challenge of meeting rising energy demand while addressing the challenges of renewable variability. Kalim Shah, a prominent island energy expert and director of the Island Policy Lab at the University of Delaware, recently acknowledged this, stating that with the challenges of renewable intermittency and storage, “there is not realistically a pathway forward with 100% renewables.” Firm generation becomes an inevitable necessity, “potentially in the form of solar-diesel hybrid systems.”

The DOE PR100 study clearly illustrates such realities. Limited potential for wind energy and hydropower deployment severely limits Puerto Rico’s 100%-renewable grid, essentially narrowing it down to two options. The clean energy grid can either consist mostly of an ambitious solar-storage portfolio backed with some clean firm generation, or rely entirely on clean baseload sources such as hydropower, geothermal, or nuclear energy. Without the clean, firm source of energy necessary for both approaches, the islands will need to maintain diesel generators to provide the flexibility that renewables cannot. One study shows this remaining diesel share could range between as low as 15% and as high as 37% of annual generation for El Hierro of the Canary islands. Such results show that smaller island populations do not eliminate renewable variability as an issue or allow a simple fix with storage. Islands still clearly need firm energy sources as a reliable backstop.

Firm renewable options like hydropower and geothermal offer great potential, but their availability depends on each island’s geography. Recent advances in geothermal technology are creating new opportunities for islands that can access this resource by digging deeper and more precisely, though it will likely take more time before these techniques become commercially available at lower capital costs, particularly for islands. While small modular reactors (SMRs) and microreactors may make nuclear energy more accessible for islands like Puerto Rico, they are still expensive. Even still, including these technologies may make the total grid operations cheaper than a system requiring overbuilt solar and storage paired with vast consumption of imported low-carbon biodiesel.

Insistently portraying small island grids as idealized testbeds for 100%-renewable energy systems is not only misleading but harmful to their real-world energy transitions. These grids, though smaller in size, face the same if not greater demands for resilience, reliability, and affordability as those of larger nations and should not remain oversimplified in energy modeling or underrepresented in published datasets. Rhetorical pushes for unrealistic, renewable-only solutions overlook islands’ need for diverse and flexible energy generation systems that provide true energy security.

Future strategies for island states must acknowledge these challenges and fulfill the missing capacity to address them. Islands need technical partnerships, capable of providing more high-quality electricity sector modeling—without bias towards one particular technology or solution—to better optimize clean energy policymaking. Island governments should specifically pursue more technical and financing support for clean, firm generation technologies with assistance from overseas partners. One example is the Jamaican government’s recent Memorandum of Understanding (MoU) with Canada to explore nuclear energy technologies. Some observers speculate that vulnerable nations could finally start to receive loss and damage funds next year, provided countries are able to finalize the details of the disbursal next month at COP29 in Baku, Azerbaijan. Islands could maximize the impact of these funds by directing part of them toward research initiatives that provide dedicated insights to guide their decarbonization and resilience-building efforts.

It is time these island governments and clean energy advocates move past imagery of idyllic, renewable societies that overlook the true difficulties of island energy transitions. Island energy transitions require careful, thoughtful analyses rooted in the realities of cost, grid variability, and resource limitations. While solar and wind energy remain essential building blocks, they cannot alone provide the stability needed for a sustainable energy future. A balanced approach that incorporates a range of clean generation options—adapted to each island's unique challenges—offers the best viable path forward.