By Megan Rowling

BARCELONA (Thomson Reuters Foundation) - After oil prices hit a record high in July 2008, the tiny Pacific nation of the Marshall Islands was forced to declare an economic emergency since around 90 percent of its energy needs were met by imported petroleum products.

The fuel price shock was a major incentive for the low-lying island country to reduce its reliance on diesel and other fossil fuels, and expand renewable energy instead.

Now 99 percent of lighting on its outer islands is powered by solar, street lamps and water pumps also run on the sun, and solar energy is being fed into the otherwise diesel-powered grids on the main urban islands.

In its national contribution to a new global climate change deal now under negotiation, the Marshall Islands outlined in July more ambitious renewable energy measures for the future.

They include small-scale wind-power, expanding coconut oil production for use in electricity and transport fuel, introducing electric vehicles and solar-charged lagoon transport, and improving energy efficiency with pre-paid meters and heat recovery.

The planned steps are expected to replace more than one-third of fossil fuels for electricity and transport by 2030, helping meet emissions reduction goals of 32 percent by 2025 and 45 percent by 2030.

Tony de Brum, foreign minister of the Marshall Islands - the first small island developing nation to submit its U.N. climate offer ahead of December's Paris summit - said his low-lying country had taken a leadership position because "it's a matter of survival".

The population of around 72,000 supports the government's strategy to cut its already miniscule emissions - less than 0.00001 percent of the global total - and shift to renewable energy because they want to stay in their homes rather than leave in response to rising seas and extreme weather, he noted.

"The idea that I can pollute as much as I want as long as it's for development and then later on I will fix things... I think that is an absurd way of looking at this climate emergency," he told the Thomson Reuters Foundation after the Marshall Islands' plan was submitted.

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Kiran Sura of the Climate and Development Knowledge Network, who leads a program to help developing nations prepare their U.N. climate plans, said the Marshall Islands' strategy had multiple benefits.

"It's about energy security, as well as reducing the impacts of climate change, and ensuring they are leading by example," she told journalists.

FINANCIAL FREEDOM

Dymphna van der Lans, CEO of the Clinton Climate Initiative (CCI), which is working with around a dozen Caribbean and East African island nations to develop and roll out renewable energy strategies, said there was both a moral and economic imperative for such states to transition away from costly diesel imports.

According to the CCI, the price of energy for some island nations has reached almost 500 percent of the U.S. average - the Seychelles spends around 8 percent of its gross domestic product (GDP) on energy, for example, while the figure for the Bahamas tops 13 percent.

"For us to work with them to remove their dependency on expensive diesel imports is incredibly important," Van der Lans said, because the money saved can then be used to strengthen communities and key industries such as fishing and tourism.

The CCI has worked with partners, including the Rocky Mountain Institute-Carbon War Room and the International Renewable Energy Agency, to help governments devise and find funding for renewable energy projects, including a 24 megawatt (MW) wind farm in Jamaica and a 1.3 MW rooftop solar photovoltaic (PV) project in the Seychelles.

The Clinton Foundation has also signed initial agreements with many Pacific island nations, with the aim of providing free financial, technical and policy support for adopting greener energy sources, drawing on what it has learned elsewhere.

Leslie Hayes-Labruto, CCI's director of resilient communities, said some island nations with small populations lack the data and expertise needed to develop projects that will meet investors' requirements.

It is also hard to attract high-quality developers to islands that can only offer low dollar-value projects, so there is a need to increase demand, bundle projects together, and show they are ready for the market to finance, she added.

Van der Lans said international development banks in particular have earmarked large sums to fund renewable energy in developing countries, yet the money is not being drawn down fast enough due to a lack of suitable projects. The CCI hopes to change that.

"If finance is secure, ground-breaking will happen," Van der Lans added.

SECURE SUPPLY

Colin McCormick, a research fellow in energy technology innovation at the World Resources Institute, said small island nations needed technical expertise as well as capital.

His team is looking at examples of developed island communities that are blazing a trail with 100 percent renewable energy supplies, such as El Hierro, one of the Spanish Canary Islands, and Kodiak Island in Alaska - both of which combine wind and hydro power.

He is also keeping a close eye on Hawaii, which announced in June it plans to transition its grid to 100 percent renewables by 2045.

McCormick said Hawaii's experience of integrating different renewable energy sources, from solar to geothermal, would yield valuable technical lessons in how to make grids based on that kind of model run smoothly.

For smaller, more remote island communities like the Polynesian territory of Tokelau, grid power supply is not a cost-effective solution, and energy needs can be better met using solar PV combined with battery storage.

Yet while the right renewable energy solution may vary according to geography, population size and other factors, it is a win-win for island nations to become less dependent on expensive petroleum imports that can easily be disrupted by events beyond their control, McCormick said.

"Investment in renewables is as much an energy security investment as it is an economic investment," he said.

(Reporting by Megan Rowling; editing by Laurie Goering. Please credit the Thomson Reuters Foundation, the charitable arm of Thomson Reuters, that covers humanitarian news, women's rights, trafficking, corruption and climate change. Visit www.trust.org)