Caribbean Tour 1 - Renewable Energy Outlook

Connectsun.blogspot.com (CSB - <date>)

The Caribbean is a massive archipelago consisting primarily of Small Island Development States (SIDS). The majority of these SIDS have nominal domestic supply of oil and natural gas exposing them to the volatility of importing essentially all of their energy needs. As a result, SIDS typically have extremely high prices of electricity ranging between 25-50¢/kWh (USD). Utilities are often required by the government to include a “Fuel Cost Clause” that discloses the energy costs associated with the imported fuel. With electricity prices that high, grid parity is achieved.

Connectsun was established to evaluate the regions opportunities and create a network of local integrators for North America Project Developers to partner with. Providing the ideal combination of local labor and financing that neither party could obtain effectively if left to their own devices. (CSB – Sept 22)

The tour started in Aruba at the 5^th annual Caribbean Renewable Energy Forum (CREF 2013). Over 500 delegates represented companies ranging from solar manufacturers to wind farm developers to regional utilities. Other organizations present included Inter-Americas Development Bank (IDB), World Bank, and Caribbean and Latin America (CALA) government officials. (CSB – Oct 12) Aruba aggressively boasted 100% clean energy by 2020. (CSB – Nov 6)

After Aruba, Connectsun fulfilled a short term consulting contract with Smart Energy, an energy solutions firm in Trinidad and Tobago (TT). TT was an interesting market to work in considering they are one of the only nations in the region that is a net-exporter of oil and natural gas. Not to mention the price of electricity there is heavily subsidized and only 6¢/kWh (USD). On top of this, interconnection and procurement is completely absent thus grid tied renewable energy projects do not stand a chance. The government did however promise a 100MW wind farm is under development. (CSB – Nov 5^th)

The last leg of 2013’s trip was to Barbados. With 40% of residents having solar hot water systems installed on their roof and new legislation promoting Independent Power Producers (IPPs), Barbados at face value seemed to be the next market to take off. The issue in Barbados is a 100% Canadian owned monopolistic utility that has the same issues with renewables that every other utility has with even less of an incentive to deviate. (CSB – Nov 20)

The tour of these three distinctly different nations, meeting with various stakeholders, offered strategic insight into the major issues associated with successful renewable energy projects in the CALA region. The major limiting factors are as follows:

1. Infrastructure- electrical configurations, grid compatibility, and site location

2. Enabling Environment- access to finance, gov’t procurement and interconnection

3. Capacity Constraints-peak demand, handling intermittency, and available space.

The Caribbean’s   forward progress for renewable deployments will be possible due to recognized economies of scale and mimicking successes learned abroad.  The challenges facing these states are solvable and will not stop major renewable energy penetration for the SIDS’ electrical grids.