MBA Renewables

Terji Nielsen

Master's thesis

Assessment of a 100% renewable electricity sector in the Faroe Islands in 2030, from the power company perspective

Professional background

Dipl. Ing. E.E. (hons)

Advice for future students

"It is hard at time, but for sure possible if you put enough effort into it".

Experience with the MBA Renewables

"With a technical background, this study completed me as both person and colleague".

Abstract of the thesis:
Renewable energy targets have taken many forms since their emergence in the 1970s, and have ranged from simple government announcements to legally-binding obligations with detailed plans and specific policy measures to achieve the targets.
Also the Faroe Islands, an archipelago in the North Atlantic Ocean, has set high goals for a renewable energy sector by 2030, and this report attempts to set up a deployment plan for renewable technologies in order to accomplish the ambitious goal of a 100% clean and carbon-free electricity production in the Faroe Islands by 2030.  
For many years, the Faroe Islands has imported expensive oil for electric power generation, and has suffered greatly from high oil prices in the last decades. While oil consumption in the electricity sector has nearly doubled from 1995 through 2013, due to a natural growth in electricity demand, oil expenses have increased by more than a factor of eight, from €2.4 million in 1995 up to more than €22.4 million in 2013. Additionally, substantial amounts of oil are used for heating and transport in the Faroe Islands.
Decreasing the dependency on oil is the most critical challenge in order to ensure the future economy of the Faroe Islands (Faroese Ministry of Interior, 2009).
In October 2014, the Faroese Electricity Company SEV announced its so-called Green Vision for a 100% clean and carbon-free electricity production by 2030, which also envisioned that electrical energy demand would increase as a result of a future electrification, and that the heating of homes and buildings and land transport would be based on renewable energy.
Due to its favorable site conditions, the Faroe Islands is surrounded by an abundance of renewable energy in many different forms like hydro, wind, tidal and, to a certain extent, solar energy. With these renewable energy resources, together with advanced ancillary services, Smart Grid technologies and energy storage systems, etc., it is realistic to have an electricity production in 2030 based on renewable energy alone.
For years in the Faroe Islands, the renewable energy resources of hydro and wind contributed approximately 40% of the total electricity generation, with the remaining 60% provided by fossil fuel. However, after a new wind park was installed in 2014, and additional expansion of the hydropower capacity, 2015 was the first year with 60% renewable electricity generation in the Faroe Islands since 1973.
The purpose of this thesis is to assess the different available renewable resources in the Faroe Islands and which technologies will be available supporting the goal of a 100% renewable electricity production in 2030, taking into account a 100% onshore electrification of heating and transport.
As the share of variable renewable energy increases, it becomes harder to balance production and demand. Therefore, a storage system is deemed necessary to help maintain grid stability and energy security, storing excess renewable energy at times when renewable production is higher than the load, and releasing energy at times when the renewable energy cannot meet load demand. Therefore, a preliminary assessment of a pumped storage system is conducted.  
An investment plan is prepared outlining the considered activities in a renewable energy deployment plan, and the total projected capital costs for the proposed 100% renewable energy scenario in 2030.
Finally, to demonstrate the economic attractiveness of the Green Vision, a comparison is made between two extreme scenarios in order to quantify the avoided cost of oil. Scenario 1 assumes no further integration of renewable energy into the national grid. Scenario 2 assumes electricity production is derived from 100% renewable energy in 2030.