Chosen set of capital investments can greatly influence energy service tariff levels

Abstract

SUMMARYThe present centralised approach on very small islands does little to advance any kind of coordinated strategy for rationalising demand and factors of energy supply; the end-users are left to their own devices with little or no real sense of direction. This paper questions the current energy systems on such islands, and takes the Channel Island of Guernsey as a case situation, and suggests that by changing the system a net 'gain' of value may result.Great care needs to be exercised when making comparisons between the cost of centralised generation and the cost of alternative generation; centralised utility cost disclosures usually enjoy the benefit of substantial written down capital investment. A more appropriate comparison would be between the cost of new centralised power generation plant and the alternative methods of generation, which are also new. The question of occupacity, and whether the generator is a prime base-load supplier or not, also creates 'unfair' cost comparisons at times, and many false economics exist on this basis. This paper uses diurnal simulation of demand to bring clarity to these issues.