I.H.T. SPECIAL REPORT: BUSINESS OF GREEN
Tiny Spanish Island Has a Huge Stake in the Future
Gorona del Viento El Hierro
Windmills will supply electricity to El Hierro’s residents and desalination plants, and the surplus power will be used to pump water up into the crater of a sealed-off, long-extinct volcano. By ANDRÉS CALA Published: January 19, 2011
MADRID — The tiny Spanish island of El Hierro, off the coast of Africa, is so remote that until America was discovered in the late 15th century, Europeans considered the island the last outpost of land in the known world. It is so isolated that until recently bouts of hunger sent inhabitants fleeing to Venezuela, not Europe. But next year, this volcanic formation of 270 square kilometers, or 104 square miles, will become the first island in the world to be electrically self-sufficient, producing all its power from a combination of wind power and a single battery with a maximum capacity of 500,000 cubic meters, or 17.6 million cubic feet. The historic neglect endured by this outpost, the smallest and farthest west and south of the Canary Islands, has been the driving force for the island’s threedecade-long dream that only got traction three years ago with European Union support, said Tomás Padrón, the island’s top official and one of the early proponents of the project. “We have always been an abandoned island,” said Mr. Padrón. “When we started telling officials in Madrid back in the 1980s about our project, they thought it was a utopia and they turned their backs on us. Now it’s a world-class model for all.”
Five windmills, with a combined installed capacity of 11.5 megawatts, will supply electricity to the island’s nearly 11,000 residents, plus visiting tourists, and its threedesalination plants, and then accumulate the surplus power by pumping water more than 700 meters, or 2,300 feet, up into the crater of a sealed-off, long-extinct volcano. The basin will release its energy in the form of hydroelectric electricity when wind stops blowing or demand is too high. Water will gush through turbines with a combined capacity of 11.3 megawatts into a smaller basin below, with a capacity of 150,000 cubic meters, in a closed loop system that is not only more economically feasible than burning fossil fuels, but a cash cow that will finance other renewable projects. A test run is expected by the end of the year. El Hierro is not only a model for other islands, but a test for the power sector. The island hopes to soon be the first entirely energy-self-sustainable territory in the world as it replaces petroleum-run vehicles with an electric fleet and installs solar panels for heating, among a long list of projects that its hydro-wind combo will help finance. “We are not only generating electricity with a free raw material; this energy will generate revenue, and we are going to reinvest that into infrastructure projects,” said Mr. Padrón, who is also chairman of Gorona del Viento El Hierro, the consortium building the nearly €65 million, or $87 million, hydro-wind project with a €35 million government grant. It is 60 percent owned by the island government, 30 percent by the Spanish utility Endesa, and 10 percent by the Canary Institute of Technology. The technology, known as pump storage, is not new. It was first applied on a large scale in the United States 50 years ago to accumulate the unused power of nuclear plants during off-peak night hours. But it is being revisited globally by policy makers and utilities alike with a surge in installed renewable energy capacity. The European Commission, the U.S. Department of Energy and China, among others, are promoting more investment to allow for growing penetration of renewable energy sources. Despite its environmental and security of supply benefits, wind power and solar energyhave the drawbacks of being intermittent and more expensive than fossil fuels, in part because some of the generated power is wasted when electricity demand is too low. In combination with pump storage, analysts say, those issues
could be addressed, making renewable sources more investor friendly, despite their upfront costs. “El Hierro is an emblematic project,” said Peter Sweatman, chief executive of Climate Strategy, an investment consulting firm specializing in climate change that is based in Madrid. “It’s really a role model for other islands, and for non-islands it’s a test case to fully develop the potential for pump storage.” “El Hierro is saying that renewable energy will be cheaper in the long run than fossil fuels, and the answer depends on future expected price of oil,” he added. “But if it’s $100 a barrel, renewable energy with pump storage would be cheaper over 30 years.” Europe has installed 38 gigawatts of pump storage, most of it connected to fossil fuel generators, but it has 140 gigawatts more of installed hydroelectric capacity and Mr. Sweatman said “there is potential to significantly increase pump storage as old European hydro installations are renewed.” “The economics of pump storage combined with intermittent renewable energy are very good, under the right circumstances,” he added. Those not only include technical issues like water availability, but also high energy commodity prices, a wide electricity market price differential between peak and offpeak demand, and a lower cost of generating renewable power as technology improves. China is looking at 50 gigawatts of hydro pump storage by 2020, especially to aid its renewable-energy expansion, and the United States, which has 21 gigawatts of pump storage, is also looking to add more capacity. A Greek island, Ikaria, is already building a hydro-wind project modeled on El Hierro, said George Caralis, a researcher in the Wind Energy Laboratory of the Fluids Section of the National Technical University of Athens. “But we need pump storage in the mainland as well to meet our wind power growth,” he added. The El Hierro effort is also being closely followed by big utilities that want to apply the technology in large-scale renewable projects, said Eduard Sala de Vedruna, head of Europewind energy research at IHS Emerging Energy Research in Barcelona. “It’s very positive to the power industry to have a renewable energy storage system running,” he said. “El Hierro is going to be replicable in other islands first and as
the system improves its application will expand to other systems. Many clichés about renewable energy will be broken once this is proven as costs fall and largescale application increases.” But nowhere will this have a bigger impact than on El Hierro, which will not only do without about 40,000 barrels of oil a year, a savings equivalent to about $4 million at current prices. It will also generate €4 million annually from selling electricity to consumers, said Javier Morales, the island government’s vice president and head of planning. That revenue in turn will help finance the replacement within five years of the island’s fossil fuel vehicle fleet. A version of this article appeared in print on January 20, 2011, in The International Herald Tribune.