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Part One—Critical Facilities: Where Government and Utility Services Redefine Resilience – Part One

Do people really care about electricity? Or do they just care about all the services electricity provides? The 2017 hurricane season in the Caribbean and the United States was so destructive that entire communities spent weeks—and in some instances months—living without the services that rely on electricity to keep their communities functioning. Texas, Florida, Puerto Rico, the US Virgin Islands, the British Virgin Islands, Turks and Caicos, Ragged Island (Bahamas), Cuba, the Dominican Republic, Sint Maarten, Saint Barthélemy, Anguilla, Barbuda, and Dominica, all struggled with extended grid outages that affected critical services in their communities, including water supply, hospitals, schools, banks, grocery stores, cell phone towers, airports, and seaports. Utilities in the affected region (which often self-insure their grids) worked tirelessly to put overhead distribution systems back in place, repair power stations, reestablish fuel supplies, and reconnect homes and businesses to the grid. But even with an around-the-clock effort, a surge in utility support from Caribbean Electric Utility Services Corporation (CARILEC) mutual aid agreements, and federal support through the Federal Emergency Management Agency in the US Virgin Islands and Puerto Rico, thousands of homes, businesses, and critical services across the islands remained dark for extended periods of time.

Recognizing the importance of reliable electricity, people in disaster-prone areas have historically kept diesel or gasoline generators as backup systems to provide electricity when the grid is out. These systems have a relatively low up-front cost and are readily available to all sorts of consumers. However, the hurricane season of 2017 exposed the shortfalls of generators in disaster-prone areas. These relatively small investments work well during short outages, but can quickly become expensive to maintain and fuel during longer outages. Admittedly, after a natural disaster, cost is not always the driving factor in decision-making. However, the lack of available fuel needed to run generators can lead to lack of reliability in these backup generation systems. Shortages of fuel after a storm are especially problematic for island economies that depend on imported fossil fuels. After Hurricane Maria in Puerto Rico, it took weeks to reestablish fuel supplies. Furthermore, the lack of on-site expertise in maintaining generators along with the overuse of these generating assets can lead to unplanned shutdowns and maintenance issues. To top it off, generators are only useful during grid outages. When the grid is up and running, these generators do not provide any value to the grid or for their owners. In fact, these backup generators are a sunk cost for their owners and require routine maintenance to keep ready for emergency use.

Planning the grid holistically

Although it is important to provide electricity that is resilient to extreme events, planners cannot prepare the grid only for these events. It is best to plan electricity assets in the context of the whole system. For many island economies, resilience to storms is an important factor but not the only priority. Least cost, for example, is a high priority for many islands because high electricity rates weigh heavily on their economies. Energy autonomy is another important factor for islands. The desire to use sustainable, natural resources like wind, solar, biomass, hydro, and geothermal power instead of imported fuel is often another driving factor in decision-making. Optimizing electricity systems to solve any one issue (e.g., resilience, cost, or utilization of local resources) is not a comprehensive solution. It is best to optimize investments to be as valuable as possible for all customers across an entire electricity system, based on the priorities of each island.

At Rocky Mountain Institute (RMI), the Islands Energy Program has been working throughout the Caribbean with island governments and utilities to plan their electricity systems and optimize future investments to accomplish the things that are important for them. In Saint Lucia, the government and the utility explored the prioritized energy objectives of the country through a National Energy Transition Strategy (NETS), which included a detailed 20-year plan as well as a suite of optimal near-term projects. The NETS showed that a portfolio of utility-scale solar and distributed solar, wind, and diesel generation together with energy storage helps best meet the electricity needs of Saint Lucia. Through the support of the island’s utility, LUCELEC, and the Government of Saint Lucia, the NETS charts a pathway toward a future Saint Lucian energy system—one of lower cost, continued reliability, and increased energy independence.

After the collaborative success in Saint Lucia, and on the heels of Hurricane Irma last year, RMI, the Government of the British Virgin Islands (BVI) and their utility, BVIEC, outlined all of their shared electricity sector priorities; resiliency, reliability, low cost, environmental stewardship, and job creation in a draft Resilient National Energy Transition Strategy (R-NETS). Once finalized, the R-NETS will provide a long-term plan for the territory (one which includes significant investment in distributed energy resources) and will support the territory’s commitment to finding reliable and resilient energy solutions in support of building the BVI better, stronger, and greener.

A win-win scenario: siting grid resources with critical facilities

From our work with islands, it is clear that a positive energy future for island economies involves a significant shift away from fossil fuels and movement towards energy efficiency and renewable resources such as wind, biomass, hydro, solar, geothermal, and battery storage. Planning for this transition will require careful consideration of how to best deploy resources to yield the most value for the grid. For any energy system, there is a baseload requirement of centralized generation and the need for some valuable distributed energy resources (DERs) as well. But adding backup generation that provides no benefit to the grid when there is no outage is not an efficient or holistic way to plan for an energy transition. Instead of diesel generators sitting idle in parking lots waiting for the next outage, islands could take advantage of the fact that renewable generation and storage are already part of the island’s plans for the future grid. Such assets can be distributed throughout the grid, a portion of these can be colocated with facilities that provide critical services. RMI, with its government and utility stakeholders, has found that a percentage of generation assets will likely be distributed or decentralized sources to achieve the objectives of each particular island in their energy transition. Distributing electricity generation resources in different locations allows for a more diverse set of resources to be utilized and minimizes single points of failure, while efficiently using available land.

It may be counterintuitive for a utility to distribute what would normally be centralized generating assets, kept behind the utility’s fence line, into smaller projects near critical facilities. This approach would add a cost premium and surely add complexity around ownership, operation, and regulation. However, if these DERs were used as part of the utility’s daily operations and provided seamless redundancy and resiliency to serve the island’s most critical services, then, as analysis illustrated in part two of this blog series shows, the additional costs are outweighed by the collective value these resources provide to the grid and the colocated facility.

This is the first blog in a two part series. In the second part of this series, we examine in detail the economics of transitioning to distributed energy resources and explore some of the issues surrounding the process and lessons learned from various examples.