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Challenges, solutions for Caribbean energy security: WB

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The World Bank says while there are many challenges, there are also solutions to Caribbean energy security.

The Washington-based financial institution said oil provides more than 90 percent of primary energy needs in the Caribbean, making the region highly vulnerable to price fluctuations.

A summit last month of Caribbean leaders and energy experts, convened by the U.S. State Department in Washington D.C., renewed the region’s commitment to energy security, according to the World Bank.

With sustainable electricity now a key part of the development agenda, Senior Energy Specialist, Mark Lambrides, explained the challenges and the solutions for energy security in the Caribbean.

With the exception of Trinidad and Tobago, Lambrides said the Caribbean region is largely dependent on imported fossil fuels for the generation of electricity and for its transportation services.

Even with the relatively lower cost of petroleum these days, he said electricity produced from oil products - whether diesel or heavy fuel oil - remains expensive given their relative inefficiencies in terms of their electricity productivity.

Lambrides noted that many Caribbean countries have electricity tariffs between US $0.20 and US $0.50 per kWh, which is around 3-4 times what is paid in the U.S. or in some other developed countries.

“So, first I’d say is a high cost associated with this type of electricity generation of,” he said, adding that another challenge would be social costs.

In recent years, the top World Bank official said oil imports have drained hard currency resources and have cost the countries as much as 10 percent of their (Gross Domestic Product) GDP in expenditures and outlays for importing oil.

In addition, he noted the environmental impact of using oil products, stating that there is a high carbon footprint associated with petroleum products for power generation.

“And the Caribbean countries themselves are very vulnerable to the impacts of climate change,” he said. “The Caribbean countries are certainly not responsible for the effects of climate change that we are seeing given their very low carbon emissions, but they do have an opportunity to set an example for the rest of the world of using carbon-friendly resources for power generation.”

Lambrides, however, said Caribbean countries are blessed with an abundance of renewable domestic natural resources, which can be used to produce electricity, such as geothermal, solar, wind, biomass, and ocean or marine resources.

He said the costs associated with these alternative energy systems have fallen dramatically over the past decade, to the point at which they are, in many cases, the most cost effective options for power generation.

Lambrides said multiple renewable energy solutions are increasingly being deployed throughout the Caribbean.

“We are seeing numerous examples of wind farms, solar photovoltaics, solar hot water heating and other renewables,” he said.

For example, he noted that nearly half of the households in Barbados already make use of solar hot-water heating systems, which use the sun to heat water for household and commercial applications.

Additionally, Lambrides said these are cheaper to produce – “cheaper than electric water heaters today- so companies originating in Barbados are now doing business around the region, creating jobs and of replicating opportunities throughout the Caribbean.”

Solar photovoltaics (SPV) - which produce electricity directly from the sun, as opposed to solar hot water which uses the thermal energy to heat water – have dramatically dropped in price over the last decade, to the point where the electricity produced is very competitive with the existing grid-network supply, Lambrides said.

Likewise, he said prices have fallen dramatically for wind technology, “and we are seeing more wind-farms in the region.”

With over 50 MW of installed wind power in Aruba by the end of this year, combined with solar photovoltaics, waste to energy and aggressive energy efficiency measures, Aruba hopes to be generating half of its electricity from renewables by the end of this year, increasing to 100 percent by 2020, Lambrides said.

He said numerous countries in the region have significant geothermal potential, stating that the only active geothermal power plant online today in the region is in Guadeloupe, but islands of volcanic origin, such as St. Lucia, St. Kitts and Nevis, Dominica, St. Vincent and the Grenadines, and Grenada are aggressively pursuing geothermal as a clean, renewable, baseload power option.

Ultimately, Lambrides said the World Bank’s primary interest is in providing technical assistance and financing to countries in the region to enable the development and use of sustainable energy solutions.

Recognizing the many barriers that are still there, he said the bank is offering to work with the countries, with other multi-laterals, bi-laterals and with the non-governmental community to identify solutions to the obstacles, which currently inhibit the use of these solutions.

Lambrides said the bank is already active throughout the region providing support to countries, such as the regional project for energy regulation in the Eastern Caribbean (ECERA), work on energy efficiency and alternative energy in Jamaica, support for improved electricity distribution in the Dominican Republic, and assistance for geothermal power generation in St. Lucia and Dominica.

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