SCIENTISTS predict that this year (2023) the world will pass a critical turning point in renewable energy (RE) use. They say that although global demand for electricity is still growing, the release of dirty “Greenhouse” gases from the power sector—the largest source of these gases —is expected to fall because RE use is growing faster than the growth in demand for energy.
If they’re right, then that’s certainly good news! It means that globally, new demand for power is being met not from fossil fuels but from RE sources. Still, the simple arithmetic of global climate change (GCC) says that the change, while encouraging, must happen at a much faster rate and in other sectors as well, if global warming is to be reversed. That’s because already, there’s just too much of too many, dirty, harmful gases in the atmosphere.
While the Caribbean is unquestionably a victim of climate change and is by no means a major contributor to it, it is obligated under the Paris Agreement to do all it can to reduce its own emissions of greenhouse gases. But there’s another powerful reason why our region must swing from fossil fuels to RE. Doing so will help solve many of the social and economic challenges that emerge whenever there’s a surge in oil prices.
It cannot be said that the region’s approach to RE reflects its desire to reduce the damage caused by the recurring disaster of a sudden, steep, and sustained surge in oil prices. Even a cursory examination of the data would reveal that such damage far exceeds that caused by a major hurricane. Of course, the situation worsens when hurricanes hit areas where oil is produced.
Electricity prices in the Caribbean average around US$ 0.25 US cents per kilowatt hour (kWh), which is more than double the average price in the United States. In some Caribbean countries, electricity costs as much as US 40 cents per kWh. According to a 2022 World Bank study, 9 out of 11 Caribbean countries generated more than 80% of their electricity from imported fuels and 5 countries imported 90% of their energy. That’s the equivalent of energy madness, especially when we consider the abundant RE sources that are available to the region.
Admittedly, the socioeconomics of shifting to RE can be challenging. While generally, the up-front cost of RE technology is falling, it’s not doing so fast enough and it’s still too high to encourage more rapid uptake. RE sources like geothermal, wave and ocean thermal energy (OTEC) carry high financial risk that cannot easily be reduced in small energy markets like ours; although on balance there is less risk associated with wave energy than geothermal energy. Some power companies already have excess power supply and therefore could end up with stranded assets if they move too quickly to RE. Other companies are locked into long term agreements with Governments that guarantee them decent returns on the investments they’ve already made in fuel-powered generators. Additionally, energy grids must be upgraded, electricity markets must be restructured, and suitable land must be acquired for RE facilities.
From that perspective, the efforts of energy conscious individuals, businesses, and governments to increase the amount of RE in the region’s energy mix must be applauded. Dominica is moving full steam ahead with the construction of a geothermal energy plant. Grenada, St. Kitts and Nevis, and Saint Lucia have similar intentions. Grenada is undertaking geological and geochemical surveys with help from New Zealand; Saint Lucia is searching for commercially viable steam at 4 sites in Soufriere; while Nevis is looking to unleash steam that has already been discovered and capped. Jamaica has long used co-generation (fuels and natural gas) to meet its energy needs. St. Vincent and the Grenadines runs hydro and diesel electricity generation plants. Barbados and Grenada aim to generate 100% of their electricity needs from RE by 2030. Neither is likely to achieve this goal, but their ambition is beyond question. Barbados was an early pioneer in the use of solar power for water heating. Now it’s ramping up the use of electric vehicles in its public transport system. By the end of the year, it should have 70 electric buses on its roads.
Doing more, quicker
Despite the challenges, the region can do much more on the RE front IF the will is there. The logic of it all should engender the will. The logic resides in two factors: the first is that the cost of sticking with imported fossil fuels is far higher than the cost of shifting to RE; and the second is that the more RE that is used, the less foreign exchange that is used to import energy.
Improving the stability of power grids to handle the variability of solar power ought to be a priority as this will enable more independent power producers to enter the market. This can best be done in a phased manner to cushion the impact on the grid as well as on the balance sheet of power companies. But it MUST be done if Governments are to incentivize large electricity consumers like hotels to move even partially, to RE.
Hotels everywhere consume an enormous amount of electricity and therefore hotels in the Caribbean leak large amounts of foreign exchange. However, the 1000-room Grand Palladium Hotel in Jamaica gives us an idea of what’s possible. It boasts the largest solar photovoltaic system in a Caribbean resort. The plant, which costs US$3.4 million generates more than 2.6 MW of power, or 15% of the hotel’s energy use. The plant was built in 2014 and was expanded in 2019; but the hotel has already recovered its investment.
Planning for the Transition
The starting point for a successful transition to RE is having a clear plan and for this purpose multidisciplinary planning capability is critical. Planning authorities must address the spatial and skills requirements of RE development. Acquiring suitable land from private landowners has been a barrier to RE expansion in Saint Lucia. Land use plans must now provide for RE infrastructure like wind and solar farms. With an RE mindset, sites with high wave energy and OTEC potential should be considered when planning developments within the coastal zone. All lands deemed suitable for RE development should be acquired in the public interest. On the skills side, there is a dire need for trained energy planners, RE engineers and technicians.
Conclusion
Every kilowatt hour of electricity produced solely through fossil fuel wastes precious foreign exchange and makes the Caribbean more vulnerable to energy price disasters.
It’s time for the region to “step off the gas” and step up RE development.
In a follow-up commentary we will treat the issue of risk in RE development.