Feasibility Study of Renewable Energy Powered Island-Hainan

This paper presents a feasibility analysis on a renewable energy dominated power structure in terms of both technological and economic considerations for Hainan Island, China. To determine the optimal system configuration for a hybrid renewable energy system, the software HOMER is used. The assessment criteria include net present cost (NPC), cost of energy (COE), and carbon emission intensity (CEI). The modeling results demonstrated that renewable energy dominated power structures can meet the power demand of the island not only in 2010, but also in 2020, despite the almost doubled demand for electricity in 2020 assumed in our model. The modeling results also showed that the COE of the power system decreases from $0.074/kWh in 2010 to $0.051/kWh in 2020 as a result of the declining cost of renewable power equipment. Additionally, CEI can be reduced by 69.2%-C74.9% against the current status. A sensitivity analysis showed that the correlation between interest rate and COE was linearly positive. However, the relationship between gas prices and COE was not linearly positive because COE increased significantly faster than gas price does when it was less than $0.24/m³. A counter-intuitive phenomenon was found from the sensitivity analysis, in which COE decreased with increasing carbon tax. The COE of the Hainan grid even became negative when carbon tax exceeded $125/t CO₂-e.