Allocating the economic benefits of renewable energy between stakeholders on Small Island Developing States (SIDS): Arguments for a balanced approach

For many Small Island Developing States (SIDS) the cost of producing electricity from imported fossil fuels is so high and the cost of renewable energy technology has fallen so significantly that transitioning towards renewable energy is likely to produce cost savings. A recent workshop at NYU Schoo...

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Bibliographic Details
Published in:Energy policy 2016-11, Vol.98, p.744-748
Main Authors: Spiegel-Feld, Danielle, Rudyk, Bryce, Philippidis, George
Format: Article
Language:English
Subjects:
Alternative energy sources
Consumers
Cost control
Cost engineering
Cost reduction
Electric rates
Electric utilities
Electricity
Electricity consumption
Electricity generation cost
Electricity pricing
Energy
Energy conservation
Energy policy
Energy technology
Fossil fuels
Interest groups
Islands
Law
Prediction
Renewable energy
Renewable energy cost
Renewable energy policy
Renewable resources
Small island developing States (SIDS)
Solar energy
Studies
United States
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Summary:For many Small Island Developing States (SIDS) the cost of producing electricity from imported fossil fuels is so high and the cost of renewable energy technology has fallen so significantly that transitioning towards renewable energy is likely to produce cost savings. A recent workshop at NYU School of Law, which brought together SIDS utility representatives with a leading renewable energy developer and other stakeholders, provided strong support for this prediction. Utilities are likely to own the majority of renewable energy assets in SIDS and will therefore be the initial custodians of any cost savings renewable energy provides. This raises a key policy question: to what extent should SIDS utilities pass on these savings to consumers by lowering electricity rates? We analyze this overlooked element of energy policy and highlight undesirable consequences that complete disbursement of the savings to consumers could cause. •Renewables will create savings in SIDS by lowering electricity production costs.•Utilities are likely to own the bulk of renewable energy assets in SIDS.•Policymakers will need to decide how to divide savings among stakeholders.•There are compelling reasons to allow utilities to retain part of the savings.•Creditors can play a role in ensuring a prudent distribution of savings.
ISSN:0301-4215
1873-6777
DOI:10.1016/j.enpol.2016.03.008