Energy Policy 133 (2019) 110895

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Energy Policy
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T
Cost minimization for fully renewable electricity systems: A Mauritius case
study
D. Timmonsa,∗, A.Z. Dhunnyb, K. Elaheec, B. Havumakia, M. Howellsd, A. Khoodaruthc,
A.K. Lema-Driscolla, M.R. Lollchundb, Y.K. Ramgolame, S.D.D.V. Rughooputhb, D. Surroopf
a
Department of Economics, University of Massachusetts Boston, USA
b
Department of Physics, Faculty of Science, The University of Mauritius, Reduit, Mauritius
c
Mechanical and Production Engineering Department, The University of Mauritius, Reduit, Mauritius
d
Department of Energy Technology, Royal Institute of Technology (KTH), Stockholm, Sweden
e
Electrical and Electronic Engineering Department, The University of Mauritius, Reduit, Mauritius
f
Chemical and Environmental Engineering, The University of Mauritius, Reduit, Mauritius

A R TICL E INFO A BSTR A CT

Keywords: Climate change is the world's most prominent environmental problem, and fossil-fuel combustion is its primary
Climate change cause. To set carbon reduction goals, policy makers require information on feasibility and cost of renewable
Decarbonization energy systems. In this study, we describe an economic approach to modeling a national electricity system based
Renewable energy economics entirely on renewable sources, using the island-nation of Mauritius as a case study.
Energy storage
Many renewable electricity studies consider levelized costs of electricity (LCOE), which represents average
OSeMOSYS
cost of electricity, but cost minimization requires equalizing marginal costs. With variable sources, marginal
costs change over time. Minimizing cost thus requires a model incorporating variability at high time resolution
(daily or hourly), with the objective of minimizing the levelized cost of electricity for an entire electricity system
(LCOES).
In Mauritius, the minimum-cost renewable electricity portfolio includes roughly equal proportions of solar,
wind, and biomass electricity, along with electricity storage. Policy issues include setting renewable energy
targets, selecting policy instruments to incentivize optimum renewable energy portfolios, incorporating energy
efficiency, determining appropriate discount rates, ensuring land availability, and accounting for non-cost
considerations. Many of the economic and policy issues identified apply universally, and methods demonstrated
in this study could be used anywhere in the world.

1. Introduction
1.1. Motivation and objectives
One of the greatest environmental threats faced by the world today
is the changing climate caused by the accumulation of heat-trapping
gases in the atmosphere. Fossil-fuel combustion is the largest producer
of greenhouse gases and must therefore be curtailed. To limit global
warming to 1.5 °C, the Intergovernmental Panel on Climate Change
(IPCC) estimates that world emissions must be reduced by about 45%
from 2010 levels by 2030, and the world must achieve net-zero emis-
sions around midcentury (IPCC, 2018). To achieve such targets, more
economic studies of energy systems dominated by variable renewable
sources are needed. While policy makers must set targets for renewable
energy adoption, they often have little information on the feasibility,
composition, and cost of renewable energy systems, or on important
implications for issues such as land and water use.
In this study, we contribute to the literature on the economics of
fully renewable electricity systems dominated by variable sources such
as wind and solar electricity. Like fossil sources, costs of renewable
sources have often been expressed as levelized cost of electricity
(LCOE), representing average cost over the life of a resource. Unlike
fossil sources, the variability of many renewable sources implies that
the marginal cost of obtaining electricity varies with ambient condi-
tions. For example, generating more power from solar electricity on a
cloudy day requires more solar panels, hence increasing the marginal
cost of electricity at that time. LCOE for individual electricity sources
obscures such critical information. As we demonstrate in section 2.1,

*
Corresponding author.
E-mail address: david.timmons@umb.edu (D. Timmons).

https://doi.org/10.1016/j.enpol.2019.110895

0301-4215/ © 2019 Elsevier Ltd. All rights reserved.

Received 28 March 2019; Received in revised form 18 July 2019; Accepted 20 July 2019
D. Timmons, et al.
accommodating varying marginal costs requires simultaneously mod-
eling all candidate generation technologies and electricity storage as an
integrated energy system, with the objective of minimizing LCOE for
the energy system as a whole (LCOES). This implies that a region
transitioning to renewable electricity must have explicit knowledge of
all candidate sources, of their variability, and of their costs, as we de-
monstrate in a case study of Mauritius. We use current estimates of
capital costs as an upper-bound estimate of future costs (since costs will
likely decline in the future).
Results from the case study also suggest policy questions that will
likely occur wherever renewable energy is developed. For example, if
wind turbine development is limited for aesthetic or other reasons, the
resulting renewable energy portfolio may include a greater proportion
of solar photovoltaic (PV) electricity, increasing land demand and re-
quired electricity storage (given the day-night variation of solar power).
Furthermore, technologies such as pumped-hydroelectric storage may
require different institutions for water management. Such considera-
tions represent critical information for policy makers responsible for
implementing measures to mitigate climate change. Other major policy
issues include what proportion of renewable energy to obtain by when
(e.g. 100% of electricity by 2040 as modeled in this study); what dis-
count rate to use for capital investments; where to get land, which can
be a substantial requirement in a renewable energy system; and which
policy instruments most effectively promote optimal energy portfolios.
We adopt a cost-effectiveness approach, which seeks only to identify
the least expensive way to obtain electricity from renewable sources.
We do not attempt to measure the benefit of controlling climate
change—economically, socially, environmentally, or otherwise—or
conduct benefit-cost analysis by comparing the cost of renewable
sources to fossil fuels. There are now many potential sources of re-
newable energy; our question is how to combine sources in a system
that minimizes the total cost of electricity for society, with little or no
reliance on fossil fuels. Mauritius provides a useful case study to de-
monstrate cost minimization for renewable electricity, and represents
an example of an electricity transition that must ultimately occur in
more complex electric grids around the world.
1.2. Mauritius case study
Mauritius is a small island developing state (SIDS) in the southwest
Indian Ocean with a population of approximately 1.3 million people
(Statistics Statistics Mauritius, 2017). Island area is about 2040 km2,
including the main island of Mauritius and Rodrigues. The country
currently has a goal to obtain 35% of electricity from renewable sources
by 2025 (Ministry of Renewable Energy and Public Utilities, 2009). In
this study we describe a hypothetical 100% renewable portfolio for the
year 2040 to illustrate its composition and cost for policy makers.
Electricity distribution, transmission, and supply are solely con-
trolled by the Central Electricity Board (CEB). In 2016, electricity
generation was dominated by fossil fuels, with 36.6% of generation
from oil products and 41.6% from coal. Renewables accounted for
21.8% of total electricity production, with 16.3% from sugarcane ba-
gasse (available only during the 6-month crop season), 3.3% hydro-
electricity, 1% solar electricity, 0.6% wind electricity, and 0.6% landfill
gas (Statistics Statistics Mauritius, 2017).
Mauritius is a useful location to study fully renewable electricity.
Being an island, the electricity grid is isolated from other countries,
simplifying modeling. Mauritius already has most of the major renew-
able electricity sources (except geothermal) on a limited scale, in-
cluding wind, solar, hydroelectricity, biomass from sugarcane bagasse,
landfill gas to electricity, and bioethanol from sugarcane (Statistics
Mauritius, 2017). Island land area is finite and land-use questions are
important. And since Mauritius produces no fossil fuels, economic and
security issues related to energy imports are prominent (Timilsina and
Shah, 2016; Wolf et al., 2016). Given feasible but finite and costly re-
newable resources, which ones should be developed? The world as a
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Energy Policy 133 (2019) 110895
whole faces the same question.
1.3. Relevant literature
A number of previous studies use temporally explicit models to si-
mulate fully renewable electricity systems and estimate their costs
(Elliston et al., 2013; Pleßmann et al., 2014 Jacobson et al., 2015;
Lenzen et al., 2016; Child et al., 2018). Diesendorf and Elliston (2018)
identify 44 studies at national and international levels, and using
broader criteria, Hansen et al. (2019) find 181 articles since 2004 re-
lated to 95% or greater renewable energy penetration. Europe is the
most studied region, with the United States and Australia also having a
number of studies. Most studies are national in scope (Hansen et al.,
2019). Some of these studies use simulation models (proving a parti-
cular renewable portfolio is feasible), while others include optimization
(finding the least-cost renewable portfolio). Most optimization studies
find that a mixture of renewable resources minimizes cost because of
resource complementarity over time (Solomon et al., 2016). To our
knowledge, the economic principles that support the use of simulation-
optimization approaches have not been articulated prior to the current
study.
Small islands are interesting cases for transitions to greater renew-
able energy use. The components of energy systems in islands tend to be
less complex than larger continental systems and islands may be used as
blueprints for transitions to sustainable energy systems (Child et al.,
2017). Franzen et al. (2013) suggest that small islands provide an op-
portunity for quicker transitions to renewable energy, given their lower
energy requirements. Many islands also have high costs for diesel
generation, and thus have greater financial incentives to adopt re-
newable electricity than mainland systems.
A critical decision for renewable electricity modeling is the degree
of temporal resolution. Hourly models are often preferred for accuracy,
typically for periods of one year (Hansen et al., 2019). For an optimi-
zation model, the objective is to identify the set of feasible renewable
resources that always meets demand and has the minimum total cost.
Optimizing an annual model with 8760 hourly time periods is a com-
putational challenge; several approaches have been used to address this
problem, and to optimize periods longer than one year (Pfenninger,
2017). In this study we balance the accuracy and tractability criteria by
using day and night time slices (730 per year) rather than hours. We
discuss possible limitations for results in section 3.1.
Another important modeling question is what prices to use for fu-
ture renewable energy technologies. Prices are typically assumed to fall
in the future, but how much and when are uncertain. For capital cost of
the core utility-scale photovoltaic (PV) technology, Elliston et al.
(2013) use a 2030 cost range of $1.42-$1.87/W, Pleßmann et al. (2014)
use a 2020 cost of $1.13/W, Jacobson et al. (2015) use $1.70/W, and
Child et al. (2018) assume cost reductions from $1.15/W in 2015 to
$0.35/W in 2050. There is clearly no single correct price for solar PV, or
any reliable price forecast for the future. Assessing renewable energy
based on current prices demonstrates to policy makers that renewable
energy is feasible without depending on uncertain future price reduc-
tions. We thus use current technology prices, e.g. $1.24/W for PV
(Lazard, 2017).
Most existing world electricity systems that use primarily renewable
sources rely on hydroelectricity (Diesendorf and Elliston, 2018); few
working examples exist of systems based on variable wind and solar.
Godina et al. (2015) describe the electricity system in El Hierro, one of
the Canary Islands of Spain, which utilizes mostly wind power and
pumped-hydroelectric storage. Today, this is one of the world's few
working examples of an electricity grid powered almost entirely from
variable sources.
In Mauritius, Khoodaruth et al. (2017) evaluate various routes to a
carbon-free energy future. Surroop and Raghoo (2017; 2018), and
Elahee (2010) survey the current energy landscape, supporting a larger
role for renewables. Recent papers on Mauritius provide useful
D. Timmons, et al.
background on peak demand (Elahee, 2011; Adam et al., 2017), daily
insolation (Ramgolam and Soyjaudah, 2015), annual precipitation
(Staub et al., 2014), and hydropower potential (Sahai, 2004; Beeharry
et al., 2009; Elahee, 2013). A recent LCOE analysis provides a useful
first approximation of costs to achieve 35% of electricity production
from renewable sources, but the study does not explicitly model elec-
tricity production variability or include the cost of electricity storage
(Shea and Ramgolam, 2019). An earlier study of the Mauritian island of
Rodrigues also considered only renewable-electricity LCOE and possible
electricity price paths (Weisser, 2004).
2. Methods and data
2.1. Economics of cost minimization for renewable energy
If climate change mitigation requires obtaining virtually all energy
from renewable sources, then the primary economic question is how to
minimize total energy-system cost. To determine this, we must first
express one-time capital and on-going operating expenses in compar-
able terms. Levelized Cost of Electricity (LCOE) is often used to express
total cost per unit of electricity. Assuming for simplicity that annual
operating costs and electricity production are constant for the life of a
project, one formula for LCOE is:
C+K
LCOE =
annual energy production (1)
where C is annual fixed and variable operating cost, K is capital cost,
and α represents a capital recovery factor, which amortizes the capital
expense over the life of a project:
r (1 + r )T
= (ETSAP, 2018); providing a code base that can be reformulated with
(1 + r )T 1 (2)
where r is a discount rate and T is the life of the project. Note that the α
factor—and discount rate r in particular—reflect the crucial compro-
mise between capital and operating cost. This affects, for example, the
relative desirability of a wind turbine (with high investment and low
operating cost), as compared to a gas turbine (with lower investment
and on-going fuel costs).
The economic objective is to minimize cost for the desired quantity
of energy, subject to constraints on availability of energy sources. At the
minimum cost, the equimarginal principle applies: the marginal cost of
obtaining another unit of energy must be equal for each energy source
used (or only one energy source is used). This is a substitution principle;
if a less expensive energy substitute is available, total cost can be fur-
ther reduced. At the minimum total cost, no cost-reducing substitutions
are available, so all marginal costs must be equal.
Unlike dispatchable generation sources, with variable sources the
marginal cost of obtaining energy changes through time with ambient
conditions. For example, capturing a given quantity of wind energy
requires fewer turbines on a windier day. LCOE—based on average
generation over a year (equation (1))—does not capture the marginal
cost of delivering electricity at a specific time. For this we modify
equation (1) slightly:
C+K
LCOET =
(time period energy production )(time periods per year ) (3)
LCOET captures the marginal cost of electricity for the ambient
conditions at a particular time. Timmons (2018) demonstrates that the
equimarginal principle holds for variable renewable energy sources, but
only for LCOET, and only at critical times when the supply of energy is
limited. LCOET when a demand constraint is binding—when supply just
equals demand—determines the optimum composition and cost of a
renewable energy portfolio.
For variable renewable energy, marginal cost thus changes in two
ways: (1) in the familiar way, as the quantity supplied increases (e.g.
since the next unit of hydroelectricity may be more expensive than the
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Energy Policy 133 (2019) 110895
last), and (2) with ambient energy availability, which depends on ever-
changing weather. This changing marginal cost is the most prominent
challenge in renewable energy economics. There are nearly infinite
combinations of possible energy sources and ambient conditions. A
computer model that captures daily or hourly variation in ambient
energy availability is thus used to capture changing marginal costs, and
to identify an optimum renewable energy system.
Within an electricity system, average costs can vary greatly. For
example, a bioethanol power plant used at times of low ambient energy
may run only a few hours per year, and because of low capacity factor
have high LCOE. Yet, this dispatchable electricity source may be a key
enabling technology for multiple variable resources in an electricity
system. Minimizing the levelized cost of an integrated electricity system
(LCOES) is therefore the only relevant objective. And minimizing LCOES
ensures the equality of LCOET at critical times (Timmons, 2018), so a
model need not calculate LCOET explicitly.
Economic theory thus proves that a specific modeling strategy is
needed to identify a minimum-cost renewable energy portfolio: we
must model temporal variation in energy sources and energy demand,
we must consider all candidate energy sources and energy storage si-
multaneously, and our objective must be to minimize LCOES, the
average cost of energy for an entire energy system.
2.2. OSeMOSYS model
2.2.1. OSeMOSYS background and purpose
The Open Source energy Modeling System (OSeMOSYS.org) was
developed with several goals in mind: removing financial barriers for
initial uptake and deployment of an optimizing model, allowing a
network of researchers to collaborate without requiring license fees
new representations of an evolving energy system (Howells et al.,
2011); injecting ‘peer-reviewed’ transparency allowing for a full audit
by policy makers and experimental repeatability by scientists
(Morrison, 2018); and finally, supporting and enlarging the community
of energy-systems analysts (Gardumi et al., 2018) by providing infra-
structure that is easily accessible and replicated. The resulting char-
acteristics of OSeMOSYS are critical for the current study, for example,
the flexibility to adapt formulations to assess variability, and the
transparency needed to inform Mauritian policy dialogue about re-
newable energy. Code, documentation, discussion fora, and teaching
material are freely available online (KTH - DESA, 2018). OSeMOSYS
has been applied to a wide array of questions, and it provides the op-
timization routines of the world's most used energy model, LEAP (Long-
range Energy Alternatives Planning system; Heaps, 2016).
2.2.2. Mauritius renewable electricity model in OSeMOSYS
We use OSeMOSYS to model a fully renewable electricity grid for
Mauritius in the year 2040, when existing infrastructure will be fully
depreciated (or nearly so). The model thus represents a tabula rasa
electricity system. Though the model does not describe how that system
should be developed over time, the existence of an optimal solution
suggests that there is also an optimal path.
The OSeMOSYS linear programming solver identifies the cost-
minimizing quantities of generating and storage resources for which
electricity supply equals or exceeds demand in each time period, subject
to constraints on land, fuels, etc. as described below. For this one-year
model, we annualize all capital costs as in equation (1); costs thus re-
flect a representative year in the life of an electricity system. For each
generation source we include both fixed operating costs per kW that are
incurred regardless of production level, and variable costs per kWh that
depend on use, such as fuel.
The discount rate (r in equation (1)) reflects assumptions about risk,
about financing with debt vs. equity, and about private vs. public fi-
nancing. For new generating sources in the United States, the Energy
Information Administration uses an after-tax weighted cost of capital of
D. Timmons, et al.
7.0% (EIA, 2019), while Lazard (2017) uses a before-tax rate of 9.8%.
Much higher rates can be found in an African context (Ekholm et al.,
2013). Discount rates have a large effect on renewable energy costs,
since most technologies are capital intensive, but we find that the dis-
count rate has little effect on the optimum mix of sources, with most
sources being similarly capital intensive. We assume an 8% rate in the
model; achieving this rate in Mauritius may require public-sector in-
volvement in renewable energy investments.
The model includes time slices for each day and night of the year,1
or 730 time slices (365 x 2), plus two additional time slices (discussed
below). We include separate time slices for days and nights, antici-
pating that solar electricity will be a significant source on this tropical
island, and that electricity storage and/or non-solar generation will be
needed at night. Time slices for days represent the hours 8:00–16:00,
when insolation is potentially sufficient to meet demand. Using 8 and
16-h time slices is a simplification of reality used for modeling tract-
ability, but it ignores variability within time slices. We discuss effects
on results in section 3.1.
Available generating technologies include solar PV, wind turbines,
hydroelectric turbines, a plant burning municipal solid waste, bioe-
thanol power plants (a renewable equivalent of existing diesel gen-
eration), and solid-fuel plants burning sugarcane bagasse plus a variety
of possible biomass fuels. Assumed performance and constraints for
each potential generating resource are described in the following sec-
tions.
Given data limitations, performance data for the variable renewable
resources are drawn from various sources and years and combined into
one composite year. Generating performance enters the model as ca-
pacity factors (CF) for each time slice in the model:
MWht
CF =
ht (4)
where MWht is electricity production estimated for 1 MW of capacity in
a particular time slice, and ht is hours in the time slice. The capacity
factor thus reflects how much electricity would be obtained from a
particular generating source in a particular time slice, if OSeMOSYS
includes that generating source in the solution. Solar and wind capacity
factors are calculated from observed ambient conditions in each model
time period. Some authors have observed differences between calcu-
lated and actual capacity factors (Jefferson, 2012); should any such
discrepancies arise from operational issues, they are not reflected in the
model.
OSeMOSYS also models electricity storage investments and perfor-
mance. For each time slice where electricity generation exceeds de-
mand, electricity can be stored, subject to available charging capacity
and the available quantity of electricity storage. Similarly, electricity
can be removed from storage if needed to meet demand in a subsequent
time slice. Like generating capacity, OSeMOSYS chooses storage to
ensure that electricity supply equals or exceeds demand in each time
slice and to minimize cost. In this model we include pumped-hydro-
electric storage, the least-cost option for long-term applications, as well
as lithium batteries. Cost of storage charge-discharge capacity in MW is
specified separately from cost of stored energy potential in MWh.
A limitation of the modeling strategy is that the time-slice incre-
ments (day and night) are too long to capture peak demand, which
occurs over much shorter intervals of minutes or hours. In addition, the
model data reflect only one composite year of weather conditions, and
other years will have different conditions, potentially including pro-
blematic days when little electricity is available from any of the vari-
able sources. For sufficient dispatchable capacity to meet both peak
1
Some other simulation studies model variability at higher resolution, for
example in 1-h or 5-min time slices. However for a cost optimization model as
used in this study, a suitable compromise must be made between time resolu-
tion, the number of technologies considered, and computing power and time.
4
Energy Policy 133 (2019) 110895
demands and extreme weather conditions, we include an additional
hypothetical model day (day 366). We define this day as having the
estimated 2040 peak demand occurring over the entire day and night
time slices. In addition, this day is assumed to have no solar, wind, or
net hydroelectricity. The model solution must provide sufficient dis-
patchable capacity and energy storage to accommodate these hy-
pothetical extreme conditions for at least one day (or similar but less
extreme conditions for multiple days). For scenario 5, we remove day
366, to estimate the potential benefit of meeting peak demand and
extreme weather conditions with only demand-side management.
2.3. Electricity and cost data
In the following sections we describe potential Mauritian renewable
electricity sources and their costs. Costs include only generation capa-
city and operations, not other new infrastructure which may be needed,
such as roads, grid extensions, etc. We do not include potential future
technologies for which there are not yet reliable production and cost
data, including wave energy, tidal energy, and offshore wind turbines
suitable for the deep waters around Mauritius. A recent report on
geothermal energy in Mauritius finds it unlikely (ELC Electroconsult,
2015), so this is also excluded. However, should any of these sources
prove to have costs or characteristics that warrant their use, this would
reduce the cost of renewable electricity that we estimate. Unlike fossil
fuel prices, renewable energy prices should decrease over time, and
today's costs are thus an upper bound on future costs (while today's
fossil fuel costs are a lower bound on future costs).
To our knowledge, there is no single source for ground observations
of ambient energy conditions in Mauritius. Satellite data can be gen-
erated for specific time intervals and contain a wide range of environ-
mental data; however, satellite-based data have their own sources of
error. Ernst et al. (2016) and Ramgolam and Soyjaudah (2015) have
reported that satellite data overestimate conditions actually measured
at ground level, with overestimations varying between 9% and 40%. In
order to rely exclusively on ground observations, we combine data from
different sources and years, as described below. For example, solar data
are from 2017 to 2018, wind data are from 2010 to 2011, river-flow
data are from 2009 to 2010, and demand data are from 2015. We
construct a composite year with consistent days, i.e. solar, wind, hydro,
and demand conditions are all observed on the same calendar days,
albeit in different years.
The resulting data capture seasonal relationships between important
variables such as sun and wind, but daily covariances between the
sources are missing. A number of studies have investigated correlations
between environmental parameters such as wind and solar irradiance.
Bett and Thornton (2016) investigated the daily covariability of wind
and solar irradiance in Britain. The authors report that irradiance is
weakly anticorrelated with wind speed throughout the year and there is
a weak tendency for windy days to be cloudier (at least in Britain). Any
such weak daily correlations are lost in our model, which would have
the effect of increasing our estimated energy storage requirements and
costs.
2.3.1. Solar electricity
Mauritius already uses solar PV electricity on a limited scale. An
initial program in 2010 and 2011 facilitated the connection of 4.94 MW
of capacity. The first 15 MW PV park of Mauritius was commissioned in
2014. Net metering schemes introduced in 2015, 2016 and 2017 en-
abled the connection of 17 MW of small and medium-scale PV dis-
tributed generators. A home solar project launched by the CEB in 2017
allows 2000 PV connections of 1 kW each for five years. Aided by these
policies, PV installed capacity is almost 40 MW, or about 4.5% of in-
stalled capacity in Mauritius.
According to ground-based measurement data obtained using c-Si
reference cells, Ramgolam and Soyjaudah (2014) report spatial varia-
tion of average daily global horizontal radiation between 3.91 and
D. Timmons, et al.
5.09 kW h/m2 and sky clearness index variation between 0.31 and 0.61
across the island. Under clear sky conditions GHI values of above
7.5 kW h/m2 are also reported.
With the financial support of the Global Environment Facility and
United Nations Development Programme, research-grade equipment
was installed across the island in 2016 to measure global horizontal
irradiance (GHI) and plane of array (POA) irradiance and hence de-
velop solar maps for Mauritius. Temporal variations of radiation can be
obtained from a GIS solar map website for Mauritius (Solarmap, 2017),
and are used in this study. The northern part of Mauritius receives the
highest level of insolation, followed by the west, south, and center of
the island, while the eastern part receives the least insolation. Ac-
cording to extended research performed by Ramgolam (2018) mean
annual insolation levels vary from 1237 kW h/m2 to 1901 kW h/m2
over the island. These values correspond to PV capacity factors of be-
tween 0.141 and 0.217.
Solar data for the OSeMOSYS model is based on observations from
August 2017 to July 2018 (Solarmap, 2017), for stations at Goodlands
(north), La Mivoie (west), and Souillac (south). Daily capacity factors
range from 0.03 to 0.29, with mean capacity factors of 0.173, 0.169,
0.147, for the north, south, and west respectively. Table 1 provides
capital and operating cost assumptions for PV panels in ground-mount,
utility-scale plants; for PV floating on inland water reservoirs; and for
commercial and industrial rooftop collectors. All costs are in US dollars
and based on current US prices, which may be an underestimate of
prices in Mauritius.
2.3.2. Wind electricity
There is currently one commercial-scale wind farm of 9.35 MW at
Plaine des Roches on the main island of Mauritius, and several addi-
tional turbines on the island of Rodrigues. Dhunny et al. (2014, 2015)
develop and test different probability densities for selected locations in
Mauritius. The island's relatively complex orography requires modeling
with computational fluid dynamics (CFD), along with in-situ measure-
ments of wind speed (Dhunny et al., 2017). WindSim CFD software was
employed to generate yearly wind and power maps for Mauritius at a
resolution of 500 m, identifying the best locations for wind harvesting.
Data for the OSeMOSYS model are from measured wind speed in
2009–2010 at the Plaine Sophie site (Suzlon-Padgreen, 2012), a site
Table 1
Cost parameters for renewable electricity model.
Capital cost, USD
Photovoltaic panels, ground-mount utility scale, per kW $1238
Photovoltaic panels, floating, per kW $1547a
Photovoltaic panels, roof mount, per kW $2875
Wind turbines, per kW $2066
Hydroelectric and pumped storage plants, per kW $2743b
Pumped storage reservoir, per potential kWh $12c
Lithium battery AC charge/discharge power, per kW $107d
Lithium battery energy storage, per potential kWh $376d
Solid fuel plants, per kW $2850
Bioethanol power plants, per kW $650e
Municipal solid waste plant, per kW $9250f
Costs from Lazard (2017) except as noted.
a
Assumed 25% greater than ground mount, based on Sahu et al. (2016).
b
Kantor Management Consultants (2008), adjusted for inflation.
c
Havumaki (2018).
d
Lazard (2018b).
e
Assumed same cost as diesel internal-combustion generator.
f
Carnegie Clean Energy (2017)
g
Assumed same as ground mount, based on Sahu et al. (2016).
h
Assumed same as solid fuel plant.
i
Based on best site monitored at Goodlands (Solarmap, 2017).
j
Mean of 3 sites monitored (Solarmap, 2017).
k
Assumed 90% of 3-site mean (Solarmap, 2017), due to potential shading.
l
Capacity factors for dispatchable sources determined within model.
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Energy Policy 133 (2019) 110895
slated for development of a new wind farm. The model turbine is a
Suzlon 2.1 MW turbine, which is proposed for the Plaine Sophie project,
and is thought to have favorable characteristics including cyclone re-
sistance (SRM, 2012). Data observed at 60 m are adjusted for the Suzlon
90 m hub height. Time-slice capacity factors range from 0.0 to 1.0, with
a mean value of 0.29. Capital cost and operating costs for wind turbines
are shown in Table 1. Capital cost is based on an announced cost for the
Plaine Sophie project (François, 2014), adjusted to 2017 dollars and
further adjusted to reflect turbine price decreases since 2014 based on
Lazard (2017).
2.3.3. Hydroelectricity and electricity storage
Hydropower was the original electricity source in Mauritius, and
still contributes 3.3% of supply (Statistics Mauritius, 2017). But po-
tential for additional development is clearly limited, as expressed by
Elahee, who writes that “… more than 90% of the technical potential of
hydroelectricity has been fully tapped,” and that “large scale hydro has
no potential in Mauritius” (Elahee, 2013, p. 922). Yet Elahee (2013) is
optimistic about additional small-scale hydroelectricity; we assume that
a 12% increase in net hydroelectricity is feasible (Elahee, 2013), with
new capacity in pico- or micro-hydro plants.
Pumped-hydroelectric storage is different, since it entails little or no
water consumption. While no sites have yet been developed in
Mauritius, Elahee (2013) notes positive prospects for future im-
plementation, given existing water resources and topography.
Havumaki (2018) estimates costs and technical feasibility for two
prospective pumped-hydroelectric storage sites. Each scenario com-
bines existing reservoir storage with a hypothetical new reservoir. As-
suming use of just solar PV and hydroelectricity, Havumaki finds that a
single pumped-hydroelectric storage installation in the area of Ta-
marind Falls could provide all required electricity storage, including all
nighttime electricity and approximately 1,300 GW h out of the total
2,982 GW h consumed in the scenario year. It is clear from Havumaki
that significant storage potential resides in the existing reservoir net-
work, given the favorable elevation profile of these reservoirs in the
Mauritian Central Plateau.
In OSeMOSYS we model hydroelectric water as an aggregate flow
into a single reservoir. River flows are based on 2009–2010 observed
data from a representative gauging station on the Central Plateau
Fixed operating cost, USD/kW Mean annual capacity factor
$10.50 0.173i
$10.50g 0.163j
$17.50 0.147k
$35.00 0.289
$57.14b nal
na na
$2.30 nal
$5.17 na
$50.00 nal
$10.00 nal
$50.00h 0.950
D. Timmons, et al.
(station J04; Ministry of Energy and Public Utilities, 2011). Total hy-
droelectricity from 2015 is assigned to time slices based on the pro-
portion of annual flow in each time slice.
Excess electricity may be used to pump water from a lower reservoir
to an upper one. Reservoirs are thus charged by both river flow and
storage pumps. Electricity may be dispatched immediately or in a
subsequent time slice, as determined in the model, and depending on
charge/discharge capacity and reservoir volume, also determined in the
model. Since large reservoirs already exist at high elevation in
Mauritius, we assume construction of only lower reservoirs. We also
assume that a single turbine-pump-generator set is used to both charge
and discharge reservoirs, using a cost of USD 2,743/kW, based on an
earlier consultant's report for hydroelectricity in Mauritius (Kantor
Management Consultants, 2008), and adjusted to 2017 dollars. The
International Renewable Energy Agency (IRENA, 2018) notes that a
typical range for hydroelectricity capital costs is USD 500–4500/kW,
with a global weighted mean cost of USD 1,558/kW in 2017. We thus
use a relatively high cost assumption for constructing new hydroelec-
tricity and pumped-hydroelectric storage facilities in Mauritius; more
accurate estimates require engineering evaluation. Reservoir cost is
based on recent construction costs for the Bagatelle reservoir in
Mauritius (Havumaki, 2018). All capital and operating cost estimates
are shown in Table 1.
We include lithium batteries as another electricity storage option.
Compared to pumped hydroelectric storage, batteries have much lower
power charge-discharge costs and much higher costs for energy storage
potential (Table 1), making them more economical when only short-
term storage is required.
2.3.4. Waste to electricity
There is currently a 3.3 MW landfill gas generating plant in
Mauritius, but at this writing a new plant burning municipal solid waste
appears likely. We include a waste-to-electricity plant of 30 MW and
force this plant into the model solution. Costs are high compared to
other generating sources, as shown in Table 1, but the primary purpose
of the plant is waste disposal. We omit landfill gas, since a shift to solid
waste combustion will eventually curtail landfill gas production.
2.3.5. Biomass
Mauritius currently has several biomass electricity plants, all col-
located with sugar processing facilities. During the six-month sugar
harvest season (approximately July–December), these plants burn pri-
marily sugarcane bagasse (crushed cane residue), and to a lesser extent,
sugarcane tops and leaves, and coal. During the six-month non-harvest
season, most of these plants burn coal exclusively. Unlike variable wind
and solar, biomass energy is a dispatchable source, and can serve as an
important complement to variable sources.
There are several options to avoid burning coal in biomass/coal
plants (Lema-Driscoll, 2018). These include shutting down in the non-
harvest season, storing bagasse during the harvest season for use in the
off season, producing additional biomass crops or timber residues to
burn in the off season, importing biomass from other countries, or a
combination of these options. Our OSeMOSYS model includes para-
meter values and temporal availability for all of these options (Table 2).
Purchase et al. (2014) explored options for storing bagasse to make
it available in the non-harvest season. Economic issues include costs for
placing bagasse in storage and later removing it, as well as losses due to
degradation in storage. We follow Purchase et al. (2014) and their re-
commended methods for storing bagasse in open-air piles. We assume
that 25% of the net bagasse energy is lost in storage.
We include miscanthus as a possible off-season biomass crop.
Potential cropland includes marginal agricultural lands that once
served the sugar industry and other marginal agricultural land. In ad-
dition, we consider a portion of net forest growth as a possible biomass
source, and consider the option of importing biomass to burn at the
biomass/bagasse plants. Values used are shown in Table 2.
6
Energy Policy 133 (2019) 110895
Finally, sugarcane is a useful energy crop both because its waste can
be burned as biomass, and because its molasses and sugar products can
be used to make bioethanol fuel. Costs of bioethanol are included in the
OSeMOSYS model, and are shown in Table 2. Bioethanol power plants
are a dispatchable electricity source, and unlike solid-fuel plants, they
can be started and stopped quickly to match changes in electricity de-
mand and/or changes in variable supply. Either turbines or internal
combustion engines could be used in bioethanol power plants; more
research on optimal plant configurations is needed.
2.3.6. Electricity total demand and peak demand
Daily electricity demand data for the 2015 data year are provided
by the Central Electricity Board (CEB). We estimate day and night time-
slice demand from typical hourly data also from the CEB. To reflect
possible demand in the 2040 model year, we use demand growth as-
sumptions from the Mauritius Renewable Energy Agency (MARENA) of
approximately 4.1% annual growth until 2020, 1.8% from 2021 to
2025, 1.6% from 2026 to 2030, and subsequently 1.5% annual growth.
This pattern reflects an assumption of increasing energy efficiency over
time, though in this study we do not model efficiency as a specific
technology option. Peak demand from 2015 is scaled to 2040 to
maintain the same ratio of peak to total demand. Peak and total elec-
tricity demand assumptions are shown in Table 3.
2.4. Scenarios
To test the sensitivity of results to different assumptions, we model
five different scenarios: (1) a base scenario; (2) a scenario where only
80% of electricity generation is renewable, with the balance from fossil
fuels; (3) a low-wind scenario, reflecting possible aesthetic or other
concerns with further wind power development; (4) a scenario where
no land on this small island is used for solar arrays, relying instead on
more-expensive rooftop panels and floating panels on reservoirs; and
(5) a demand-side management (DSM) approach to meeting peak de-
mand and atypical weather conditions (with little solar, wind, or hydro
availability). All scenarios include the total costs of electricity genera-
tion, but not other utility costs such as transmission and distribution.
3. Results and discussion
The cost-minimizing solution for each scenario is shown in Table 4.
In general, we find that optimal renewable portfolios combine all the
available resources to different extents, including solar, wind, hydro-
electricity, biomass, and electricity storage. The variable nature of solar
and wind electricity is mitigated partly by a diversity of sources, partly
by coupling with dispatchable biomass and hydroelectricity, and fur-
ther mitigated with electricity storage. Though none of the solutions
relies on bioethanol power plants for a large portion of electricity,
bioethanol is used to meet demand when other sources are unavailable.
3.1. Scenario 1: base
In the base scenario, wind and solar PV supply the same amounts of
electricity, at 27% of total electricity each. As in the current Mauritian
electricity grid, solid-fuel plants play a prominent role with 35% of total
electricity produced, but in addition to sugarcane bagasse they now
burn a variety of biomass feedstocks to replace coal. In particular, 15%
of total electricity is provided by imported wood chips. Bagasse storage
is not utilized due to costs being greater than for imported wood chips.
Power plants using bioethanol provide 334 MW of installed capacity
(17% of total capacity) but provide only 1.5% of total electricity: these
plants seldom operate, but are occasionally needed when variable
supply plus pumped-hydroelectric storage is insufficient to meet de-
mand.
In the base results, hydropower provides 3% of net electricity, si-
milar to its current production. Capacity grows from 56 MW currently
D. Timmons, et al. Energy Policy 133 (2019) 110895

Table 2
Potential fuels for electricity generation in Mauritius.a.
assumed moisture gross energy at moisture content, fuel cost per kWh generated maximum electrical energy production,
content MJ/kg GWhc

Sugarcane bagasse, as produced 50% 8.2 nab 452.6

Sugarcane bagasse, stored 50% 6.2 $0.067 339.5
Sugarcane tops and leaves 14% 13.6 $0.009 147.4
Miscanthus biomass crop, domestic 15% 15.3 $0.069 77.7
Wood chips, domestic 30% 11.8 $0.056 123.3
Wood chips, imported 30% 11.8 $0.140 na
Coal na 25.1 $0.065 na
Bioethanol na 26.9 $0.324 na
Diesel fuel na 46.9 $0.057 na

a
Numerous assumptions are included in these estimates; a full set of assumptions is available on request from the corresponding author.
b
Assumes bagasse is a costless byproduct of sugar refining.
c
Based on physical constraints in Mauritius.

Table 3
Mauritius electricity demand and growth assumptions.
2016 2040
Annual electricity demand, MWh 2,559 4,011
Peak power demand, MW 460 737
installed effective capacity to 114 MW of reversible pumped storage.
New lower reservoirs with a total volume of 7.3 Mm3 are included in
the solution. With an assumed 335 m of head, this provides 5.1 GW h of
storage, or 0.47 days of average electricity consumption. Estimated cost
of this is USD 0.139/kWh stored, not including the cost of electricity to
charge the storage.
None of the model results include lithium battery storage, given its
current costs. However, in testing results on an hourly basis, we find
that the day-night model structure underestimates storage charging
power required, particularly during sunny days: the model is based on
daily average solar radiation, while in fact, there is a large insolation
peak at midday. Lithium batteries would be the least expensive solution
to this problem. For example, using lithium batteries to increase storage
power by 50% with 4 h of energy potential would increase LCOES by
2.0%. This is an additional cost not reflected in model results, though
some cost reductions would also be likely in an optimized hourly sce-
growth rate nario.
Total curtailment in the base model is 7.2%, i.e., this amount of
1.8% electricity is produced by the variable PV and wind sources at times
1.9%
when it is not needed and cannot be stored. Some level of curtailment is
a common result for cost-optimized models (Solomon et al., 2019); as
described in section 2.1, the most difficult days of the model year drive
system design, and under favorable sun and wind conditions extra
electricity is available. Given the day-night structure of the model for
this study, actual curtailment is likely underestimated.
System levelized cost of generating electricity (LCOES) in scenario 1
is estimated to be USD 0.130/kWh. While total cost of current gen-
eration for the CEB is not publicly available, USD 0.130/kWh appears to
be a plausible cost of electricity given current CEB retail tariffs. For
example, residential rates are stepped, starting at a rate of USD 0.093/
kWh for the first 25 kW h per month, and rising to USD 0.258/kWh for
usage in excess of 300 kW h per month (CEB, 2018). Total CEB revenue
in 2015 amounted to USD 0.172/kWh sold (CEB, 2016), though the
utility obviously incurs expenses beyond obtaining electricity.
With 785 MW of installed capacity in the base scenario, solar PV
farms would require an area of 17.7 km2, or 1.0% of the main island

Table 4
Results: Mauritius renewable electricity generating costs.
Scenario 1: base 100% Scenario 2: 80% renewable Scenario 3: low wind Scenario 4: no ground- Scenario 5: DSM to meet peak
renewable mount PV demands

LCOES, $/kWh $ 0.130 $ 0.105 $ 0.136 $ 0.136 $ 0.124

MW GWh % GWh MW GWh % GWh MW GWh % GWh MW GWh % GWh MW GWh % GWh

Wind turbines 475 1112 27% 486 1137 28% 100 234 6% 578 1341 33% 481 1126 28%
Solar PV, utility scale 785 1120 27% 687 963 24% 1079 1557 38% 0 0 0% 762 1079 27%
Solar PV, floating 0 0 0% 0 0 0% 0 0 0% 620 842 21% 0 0 0%
Solar PV, roof mounted 0 0 0% 0 0 0% 0 0 0% 0 0 0% 0 0 0%
Hydro and pumped hydro 114 130 3% 60 128 3% 87 130 3% 78 130 3% 108 130 3%
Lithium batteries 0 na na 0 na na 0 na na 0 na na 0 na na
Municipal solid waste plant 30 250 6% 30 250 6% 30 250 6% 30 250 6% 30 250 6%
Solid fuel plant 280 201 336 298 280
fuel: sugarcane bagasse 453 11% 453 11% 453 11% 453 11% 453 11%
fuel: cane tops and leaves 147 4% 147 4% 147 4% 147 4% 147 4%
fuel: domestic wood chips 120 3% 120 3% 120 3% 120 3% 120 3%
fuel: biomass crop 75 2% 75 2% 75 2% 75 2% 75 2%
fuel: imported wood chips 626 15% 0 0% 1077 26% 678 17% 619 15%
fuel: coal (nonrenewable) 0 0% 418 10% 0 0% 0 0% 0 0%
Liquid fuel plant 334 467 290 353 102
fuel: bioethanol 61 1.5% 0 0% 41 1% 53 1% 53 1%
fuel: diesel 0 0% 388 10% 0 0% 0 0% 0 0%
(nonrenewable)
Total 2019 4095 100% 1932 4080 100% 1973 4084 100% 1956 4089 79% 1764 4051 100%

7
D. Timmons, et al.
land area.2 Preferred areas for PV farms would combine high insolation
with low-value land. The base result also includes 475 MW of wind
capacity, or 226 turbine towers at the 2.1 MW turbine size. Assuming
for illustration that turbines were arranged on a grid with spaces of 5.0
rotor-diameters (485 m for the turbine modeled), 53.2 km2 or 2.8% of
main-island land area would be needed for wind farms. Unlike solar PV,
other activities can take place beneath wind turbines, and the best wind
farm locations are often on high mountain ridges with fewer conflicting
land uses than for solar PV. Important policy questions are whether and
how such quantities of land could be made available, and at what cost.
Offshore wind may also be possible, but this is currently more ex-
pensive than onshore (Lazard, 2018a), and the deep waters around
Mauritius would increase costs.
3.2. Other scenarios
Scenario 2 reduces the renewable portion of electricity to 80%
(Table 4), to determine the cost of the final renewable increments, but
without fully addressing the costs of climate change and other fossil fuel
externalities. The 80% goal causes a number of changes in results. In
this scenario, wind generation increases slightly, and solar decreases by
12%. Coal takes the place of the imported wood chips used in the base
scenario. Diesel oil replaces bioethanol for fuel, and liquid-fuel gen-
eration capacity increases to 467 MW. With greater capacity from dis-
patchable fuels, pumped-hydroelectric storage capacity is reduced to
60 MW. LCOSS is USD 0.105/kWh, a reduction of 19.1% from the base
scenario.
In scenario 3 we test an arbitrary limit of 100 MW on wind gen-
eration capacity, to see whether any obstacles to wind power devel-
opment (lack of accessible sites, aesthetics, public opposition, etc.)
would greatly affect costs of achieving fully renewable electricity. The
result is much greater production of solar electricity, which accounts for
38% of total electricity in this scenario. Solid-fuel plant capacity in-
creases 336 MW to accommodate the greater day-night variability of
solar as compared to wind, and imported wood chips account for 26%
of total electricity production. LCOES rises modestly to USD 0.136, an
increase of 4.2% over the base case.
Since the model minimizes cost, the base scenario utilizes only
ground-mount PV, the least expensive solar option (Table 1). In sce-
nario 4 we exclude ground-mount solar, forcing the model to use
floating PV, the next most expensive option. Solar generation falls to
21% of the total, while wind generation rises to 33%. Pumped-hydro-
electric storage capacity falls to 78 MW. At USD 0.136, LCOES is 4.6%
greater than in the base scenario. Rooftop solar is still not utilized, since
based on our cost assumptions, floating solar is less expensive, and the
projected area available for floating solar is not exceeded.
Finally, scenario 5 tests the result of relaxing the requirement to
meet peak demand for a full day with no wind, solar, or hydroelectricity
available (the extreme scenario modeled as day 366). Bioethanol
power-plant capacity falls to 102 MW from 334 MW in the base sce-
nario, demonstrating that these bioethanol plants are used primarily to
accommodate extreme events. LCOES falls slightly to USD 0.124/kWh,
a 4.3% reduction. However, the efficiency and demand-side manage-
ment measures that would be required to implement this scenario
would result in additional cost savings not modeled here, as we discuss
in section 3.5.
3.3. Range of options and cost sensitivity
As demonstrated by results shown in Table 4, electricity costs for
Mauritius vary somewhat by scenario, but costs do not necessarily vary
greatly. This outcome can be traced to the equimarginal principle
2
Assumes solar farm density of 2.27 ha/MW, as found at the 15 MW Sarako
Solar farm at La Ferme, Mauritius.
8
Energy Policy 133 (2019) 110895
described in section 2.1. At the minimum total cost, the marginal costs
of all generating sources must be equal on critical design days. If it
should also be the case the marginal costs for different generating
sources are relatively constant, then there may be a variety of renew-
able electricity portfolios with similar performance and costs. This
implies some flexibility for policy makers in establishing renewable
energy systems, at least in some cases. But for systems with variable
sources, the degree of this flexibility cannot be known without mod-
eling of variability, as demonstrated in this study.
In scenario 2, which requires only 80% renewable electricity, LCOES
falls by 19% as compared to the base case. This suggests that obtaining
the final increments of electricity from renewable sources may be re-
latively expensive in the case of Mauritius. Here, coal is less expensive
than the renewable alternative of imported wood chips, and diesel fuel
is less expensive than renewable bioethanol, at least at current market
prices, and without considering the external costs of fossil fuels.
Continued reliance on imported diesel rather than switching to do-
mestic ethanol is another cost of this scenario. This suggests that strong
policy measures would be needed to attain 100% renewable electricity,
e.g. limits on fossil fuel use and/or subsidies for renewable fuels.
3.4. Roles of efficiency and demand-side management
In theory, the equimarginal principle of section 2.1 should also
apply to energy efficiency options, that is, the marginal cost of reducing
energy consumption with greater efficiency should equal the marginal
cost of producing energy (Timmons et al., 2016). If the marginal cost of
efficiency were less than generation, total cost could be reduced with
greater efficiency investments. However, it is difficult to assess effi-
ciency opportunities and their marginal costs at a national scale, and
efficiency considerations are thus omitted from this study. We assume,
however, that a large and as yet unidentified portion of demand for
electricity services can be met through better energy efficiency rather
than electricity production. For example in Mauritius, there is potential
for cooling buildings using water from the surrounding deep ocean,
potentially reducing the electrical load at less cost than generating
electricity for cooling (Francois, 2013).
Similarly, the opportunity to manage electricity demand at times of
high marginal cost could be valuable in an electricity system based on
variable sources. Babonneau et al. (2017) consider a system with flex-
ible loads responding to varying price signals, for example, charging
electric vehicles at different times of day or night. Economic efficiency
requires that the marginal cost of providing a service equals its mar-
ginal benefit. Where marginal cost of energy varies over time, accep-
table uses of energy should vary correspondingly, diminishing the need
to provide energy when it is expensive to do so.
3.5. Management of water for energy and consumption
Hydroelectricity and pumped-hydroelectric storage in Mauritius are
but two dimensions of a complex water management system whose
primary function is to ensure that domestic and agricultural water
needs are satisfied. A new network of lower reservoirs constructed for
pumped-hydroelectric storage might address both requirements—ena-
bling grid managers to dispatch electricity during times of high demand
but capturing water flows in lower reservoirs before they are lost to the
sea. And new lower reservoirs would increase total water storage vo-
lume on the island, potentially of value during water shortages.
Hydroelectric production in Mauritius is currently overseen by the
CEB, while other water functions are managed by the Central Water
Authority, the Irrigation Authority, and the Wastewater Management
Authority (Proag, 2006). Using water for energy storage as well as
domestic and agricultural water consumption would require a high
level of coordination in managing water to meet multiple objectives.
Policy makers will need to consider whether the existing institutional
structures are compatible with managing resources for a fully
D. Timmons, et al.
renewable electricity system. Welsch et al. (2014) study the inter-
relationships of climate, land use, energy, and water systems (CLEWS)
in Mauritius, an approach that will likely be needed to assess the full
impacts of large-scale pumped-hydroelectric storage.
4. Conclusions and additional policy implications
Historically, the sugarcane monocrop played a key role in the de-
velopment of colonial Mauritius, long being the country's economic
backbone and providing much of its electricity. More than three cen-
turies since sugarcane was introduced, this crop may be the basis of a
new bagasse-bioethanol-solar-wind renewable energy industry. This
study demonstrates that such a system can provide sufficient electricity
to meet demand in each day and night of the year, at a price similar to
current electricity generation.
Demand-side management with smart energy systems would also
allow the engagement of domestic, industrial and service-sector stake-
holders in this energy model. Social harmony can be enhanced by such
a transformation, along with economic and environmental bene-
fits—demand-side management has the potential to reduce both total
costs and total land requirements.
Policy implementation in a small-island economy like Mauritius
should benefit from less resistance since it urgently concerns a country
vulnerable to climate change. The policy challenge lies in integrating a
balanced, holistic approach combining energy issues transversely with
engineering, economic, environmental and ethical considerations. At
the same time, many aspects of the energy transition need to be better
understood, for example: linkages with land planning and development
in a densely-populated island; sustainable agriculture particularly re-
lated to the sugarcane industry; water management; transport and
mobility; climate change impacts on building and infrastructure; waste
management; potential for use of ocean energy resources; and con-
sumer behavior. But undeniably, the question of energy governance has
to be addressed through a transformation of the current institutional
and regulatory framework.
Similar policy considerations will apply in many places where re-
newable energy is developed, and some policy questions are universal.
For example, the cost of capital-intensive renewable energy resources
depends greatly on the discount rate used: a fundamental policy ques-
tion is whether renewable energy development will be undertaken with
public or private capital, and what rates of return will be provided to
investors. Also, non-cost considerations such as land use (solar PV,
wind, and biomass), aesthetics (wind), and water management (hy-
droelectricity) greatly affect a determination of which portfolio is op-
timal, and policy makers must appropriately weigh these issues.
As shown in this study, obtaining a cost-minimizing renewable-
electricity generating portfolio implies constructing specific technolo-
gies, albeit with some degree of flexibility around the proportions of
those technologies. Another important question is thus which policy
instruments can most effectively incentivize the desired generating
portfolio. Any approach must recognize the inherent variability of
many renewable energy sources, along with the resulting variability in
marginal costs and marginal values of electricity generated or stored.
Fixed subsidies or feed-in tariffs are therefore unlikely to provide an
optimal generating portfolio or to minimize total cost. For policy ma-
kers, mandating a specific portion of energy to be obtained from all
renewable sources collectively (a renewable portfolio standard) is
perhaps the simplest approach, with a combination of utility planning
and market mechanisms used to allocate funding to specific technolo-
gies.
Perhaps most importantly, policy makers must establish targets and
dates for an energy transition. Renewable energy is available, feasible,
and potentially affordable. As we demonstrate in this study, an opti-
mization model can be used to approximate the generation capacities of
technologies needed to meet electricity demand at all times in any
given area, and to estimate the cost of that generating portfolio. Over
9
Energy Policy 133 (2019) 110895
time, renewable energy prices will likely decrease; the scenarios de-
scribed in this study thus provide an upper-bound cost of generating
renewable electricity in Mauritius. At the same time, nonrenewable
fossil fuels must eventually become more expensive with scarcity, and
there is already a large environmental cost for burning fossil fuels. The
case for renewable energy is clear. Yet fossil-fuel resources remain
abundant, and a near-term transition to renewable energy sources is not
assured without policy intervention.
Funding
This project was supported by a Fulbright Program grant sponsored
by the Bureau of Educational and Cultural Affairs of the United States
Department of State and administered by the Institute of International
Education.
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