Approximately 730 million people live on islands around the globe – about 11% of the world’s total population. Island energy systems are in a process of transition. From a base of low renewable energy content (around 1%), many islands are now setting targets of 50% or more. Electricity is the easiest target, but heating, cooling and transport are increasingly important.

Scottish companies have led projects that delivered a high penetration of renewable energy on islands. Island economies are increasingly moving to more sustainable energy systems that offer lower costs. This presents increasing numbers of opportunities for Scottish companies to sell their products, services and experience into these markets. In broad terms, these opportunities fall into two types:

  • Fully developed energy systems. In these, energy is widely available, but may come from unsustainable or expensive sources. The switch to more sustainable sources may be driven and funded by private companies, central governments and state-owned energy companies.
  • Partially developed energy systems. These provide intermittent access to energy at high costs. Here, the switch to sustainable local supply is often subsidised by central government, development aid funding or industry.

Many energy systems on smaller islands are often reliant on diesel generators provided by an incumbent monopoly provider. Diesel generators are simple to operate and maintain, easy to dispatch and can provide a reliable electricity supply at the point of use. This makes them the technology of choice when there is limited power system infrastructure and capacity (e.g. skills). However, the cost of importing diesel fuel makes island power expensive (between USD[1] 0.20-0.35 per kWh). This opens up opportunities for renewable energy, which can be cost competitive without subsidy.

Companies in Scotland have expertise in and can supply:

  • A range of renewable energy technologies (solar photovoltaic, wind, hydroelectric, tidal, and heating and cooling) to provide low-carbon solutions.
  • Low carbon transport and desalination equipment, which can address wider islands issues.

The combination of environmental and cost factors, and lack of local expertise opens opportunities for those with the expertise (and, particularly, clusters of expertise) to provide solutions.

The Sustainable Islands International programme aims to be the conduit between island opportunities and Scottish businesses.

 

Of relevance will be opportunities where:

  • The UK has a relationship at a national level (through British Overseas Territories or Commonwealth countries) which often result in legal or language and cultural synergies.
  • Larger islands or groups of islands are likely to be of a size that can justify the additional cost to business of accessing these markets. Population can be a proxy for the economic opportunity, though size is only one indicator of market value
  • There is an energy transition now or there is about to be a transition. The Sustainable Islands International programme maintains a watching brief on emerging policy frameworks, and investment plans from the World Bank, Asian Development Bank, Caribbean Investment Bank, to identify potential market developments that Scottish companies can help support.
  • Member companies of the Sustainable Islands International programme already have connections with trusted intermediaries, agents, established offices, and local governments and agencies.

[1] Where USD is the US dollar.

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