Many islands share the same policy drivers, for example:

  • Most islands depend on external (usually liquid) fossil fuel sources for heat, transport and power. Energy is expensive and is hampering economic development. Islands can spend 20% of gross domestic product (GDP) on energy and are keen to invest to reduce this.
  • Many international island countries are too small to have fully open competitive markets along European lines. Power is traditionally a vertically integrated monopoly (generation, distribution and supply in one company). The electricity company is usually locally owned, but is regulated by a government department or an arms-length regulator. Many provide price support for electricity customers, typically domestic customers, for economic and social reasons. increasingly this support is being removed.
  • Many islands are in the process of opening up their electricity systems in a limited way by allowing small generators to connect or by signing power purchase agreements with developers who design, build, finance and own new renewable energy systems. Some provide price support such as limited feed-in tariffs.
  • Heat is often an unregulated market. There are no natural gas networks so domestic, industrial and commercial heat typically comes from oil or biomass.
  • Inter-island transport is often state owned because of the importance of communications in archipelagos like Indonesia. However, a significant number of additional private companies operate on particular routes or provide additional cargo services. On-island public transport again has significant government involvement.
  • Islands often share experience and collaborate through political groupings such as Small Island Developing States and the Commonwealth.

Scottish companies have worked within all these policy drivers to develop energy systems that meet the needs of islanders. These companies are often based on islands, embedded in island communities and know the unique challenges of working on an island.

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