A PRELIMINARY ANALYSIS FOR THE TRANSITION OF THE U.S. VIRGIN ISLANDS FROM PETROLEUM-BASED POWER GENERATION

Abstract

Small island economies are almost entirely dependent on petroleum-based products as the fuel stock for power generation. This dependency places a significant burden on economic growth with up to 30% of GDP attributable to importing oil along with accompanying environmental concerns. This paper focuses on the U.S. Virgin Islands (USVI) and considers different generation technologies that can help the USVI meet its goal of 60% reduction in petroleum usage for power generation by 2025. The paper assesses the cost effectiveness of different utility-scale generation technologies evaluated against the current baseline system in the context of cost and carbon emissions. The approach for the analysis assesses secondary research and publications on transitioning island economies from petroleum-based power generation. Research specific to the U.S. Virgin islands is utilized along with technology data to develop a cost effectiveness optimization model for serving the load demand in the U.S. Virgin islands under different scenarios. Two key scenarios are considered, one where energy efficiency measures are successful and electricity load is reduced 36% per NREL research conducted and the second where energy efficiency measures are not successful and load continues to grow at 1.2% annually through 2025. With these scenarios, different generation technologies are evaluated utilizing their respective levelized cost of electricity (LCOE) to determine the most cost effective and carbon considerate technologies to serve the residual load of the USVI. Findings illustrate that natural gas-fed advanced combustion turbines provide the most cost effective means to meet the USVI demand load, regardless of the success of energy efficiency programs in reducing load. Energy efficiency deployment provides cost savings and value in reducing exposure to fuel price volatility by reducing the load served by oil/natural gas generators. Per these findings, further research is warranted for determining a secure and viable natural gas supply chain, advanced combustion turbine integration studies, cost/benefit analysis and roadmap evaluation of energy efficiency programs for the USVI.