The tiny Pacific island nation of Palau announced last week that it will soon become the home of the world’s largest microgrid, a development that could help it ramp up to 70 percent renewable energy over the next three decades.

The Armonia project, announced Thursday night after a brief delay, includes 35 megawatts of dispatchable solar power coupled with 45 megawatt-hours of energy storage. It’s the product of a public-private partnership between the island nation and French multilateral electricity utility Engie SA.

Like many island nations, Palau overwhelmingly uses imported diesel to supply power. But under the Paris Agreement, it pledged to increase its share of renewable power use to 45 percent by 2025 compared with an existing 6 percent to highlight its commitment to addressing the climate change that threatens its security.

Consultants from the Energy Department and World Bank Group advised Palau that the maximum it could draw from renewable energy was 45 percent, Palau climate change ambassador Ngedikes Olai Uludong told E&E News. The challenge of supplying the 340-island country’s 25,000 residents was too great, experts told Palau, unless it overhauled the entire power supply system with a microgrid that would support more distributed generation.

And that’s what Palau plans to do.

“Basically, small islands are incubators for change, and Palau can lead the way,” Uludong said, touting Palau’s renewable energy renaissance as one of the fastest in the world.

Palau faces many of the same challenges shared by other small island states in both the Pacific Ocean and Caribbean. On one hand, last week’s landmark report by the U.N. Intergovernmental Panel on Climate Change highlights how much islands have to fear under the current warming trajectory—especially from rising sea levels.

On the other, islands have some of the dirtiest and most expensive energy on the planet. Like Palau, most rely on diesel shipped from the mainland in small quantities at great expense. If residents live on numerous islands, such as in Palau, the process of importing fuel must be repeated again and again.

But because these sunny and windy nations also have some of the best renewable potential in the world, islands can also become leaders in that area, said Justin Locke of the Rocky Mountain Institute.

“We refer to islands as ground zero for the global energy transition,” Locke said. “The islands are going to have to go through the energy transition process a decade before continental countries.”

Financing this shift is a challenge, especially as islands frequently carry high sovereign debt levels and don’t have policy frameworks in place that inspire investor confidence. RMI is working to overcome those challenges in the Caribbean.

Reprinted from Climatewire with permission from E&E News. E&E provides daily coverage of essential energy and environmental news at