September 19, 2020

Moving toward a solar revolution in the Caribbean

0
0



Pin It

CaribbeanSolar2By Phil Elwood And Eva Glas From Levick Energy

It seems relatively obvious that Caribbean nations should reap the benefits of solar power generation, especially given that the equatorial island countries are consistently bathed in sunlight 365 days a year. Thus far, that has largely not been the case, however, as until recently, photovoltaic technology has been prohibitively expensive and inefficient and Caribbean countries have energy infrastructures constructed to thrive in a world where oil was both low-priced and abundant.

In fact, says Jim Wrathall, an attorney at Washington, DC-based Sullivan and Worcester, “more than a dozen island nations in the Caribbean rely on imported oil and coal for electricity generation.”

Some, including President of the Caribbean Development Bank Dr. Warren Smith, sees this energy dependence and the lack of varied power generation as a real threat, leaving the Caribbean more vulnerable to market instability. At the July 2014 UK-Caribbean Business Conference, Dr. Smith stressed these dangers declaring, “It has been a principal cause of unsustainable balances of payments and sovereign indebtedness problems.”

What he’s saying is relatively straightforward and commonsense: Caribbean nations are not in the financial position to be apportioning a considerable amount of money to an energy expenditure that could be costing them substantially less. The World Bank states that Caribbean nations have a per capita Gross National Income (GNI) of only $8,134, yet the average cost of electricity in the Caribbean typically ranges from 32 cents to 65 cents per kilowatt-hour (kWh).

Wrathall notes that these rates are “off the charts – as much as four to eight times rates in the U.S., and increasing.” For the sake of comparison, the U.S. GNI is roughly $53,960 per capita.

Entrepreneur Richard Branson witnessed the region’s total reliance on diesel back in 1979 when he purchased his infamous 74-acre Necker Island in the British Virgin Islands. At that time he, like every other resident, had few options other than installing a diesel generator to bring electricity to his home. And it made sense: the ease of transport, low cost, and compact nature of diesel were hard to beat. However, over the course of the following decades, it became clear to him that the Caribbean could reap tremendous economic benefits by making a carbon-free shift.

This past February, Branson led a three-day meeting of dignitaries from 13 Caribbean nations to discuss the financial implications of switching energy supplies. Together with the Carbon War Room and the Rocky Mountain Institute, Branson promoted the 10 Island Renewal Challenge, which aims to accelerate the most profitable, widely-implementable, and truly low-carbon solution for every sector.

José María Figueres, former Costa Rican president and current president of the Carbon War Room said that the small size of the market and a dearth of up-to-date infrastructure and equipment have meant that the Caribbean islands lacked access to any low-cost power. The Carbon War Room aims to solve this problem by transitioning islands to 100% renewable energy by accelerating commercial investment and implementing a scaled regional approach to the current legislative barriers.

St. Lucia’s minister for sustainable development and energy, James Fletcher, sees more than just environmental benefits, noting that, “With our economy, with the level of unemployment that we have, if you can create some more green jobs, if you can reduce some of the expenditures that we’re seeing right now, particularly on oil, it would increase the island’s economic competitiveness.”

Based on his experience, Sullivan & Worcester’s Wrathall sees potential for investors and developers who want to seize on this moment and the growing push for solar proposals in the region. But, he warns, implementation and execution is key. “At the end of the day, projects that look great based on planning models must be implemented in a timely and cost-effective way. Investors and developers who can effectively sort projects that meet the key regulatory and licensing variables in the early stages, and then execute to keep transaction costs down, will see large upside profits.”

As these groups look to develop solar and other clean generation utilities, they face an estimated capital cost of at least $30 billion over the next decade to modernize and upgrade their infrastructure. Like any capital expenditure, the governments of these nations thus will have to sell their plans to island residents and outside investors, making communications and public relations work a necessary component of any long-term development package.

In doing so, they will build momentum with those who will see a direct impact in lower electricity prices and show investors that they are organized enough to earn a positive return on their investment. This demonstration will situate the region for a substantial environmental and financial turnaround while giving its member countries a leadership role in energy evolution.

Phil Elwood and Eva Glas

Phil Elwood provides high-level strategic counsel to LEVICK’s corporate, government, and crisis clients. He has extensive experience with governments across the world, including throughout the Caribbean where he advised the Prime Minister and government officials of Antigua and Barbuda on a trade dispute with the United States.

Eva Glas has extensive international experience with corporate, nonprofit, international, and political clients.

For more on this story go to: http://www.levickenergy.com/moving-toward-solar-revolution-caribbean/

Related story:

NPD Solarbuzz: Latin America, Caribbean Region to install 9 of solar within five years

From Solar Server

Solar photovoltaic (PV) technology is poised to play a substantial role in fulfilling the need for increased power generation capacity across the Latin America and Caribbean () region. According to the latest NPD Solarbuzz (Santa Clara, Calif.) “Emerging PV Markets Report: Latin America & Caribbean”, the total solar photovoltaic (PV) project pipeline is growing throughout the region and now exceeds 22 GW across all phases of development.

Over the next five years, approximately 9 gigawatts (GW) of projects will be installed: PV projects totaling 1 GW are already under construction, and 5 GW of projects have received approval to proceed and could begin construction soon.

“Solar PV is now starting to emerge as a preferred energy technology for Latin American and Caribbean countries,” said Michael Barker, senior analyst at NPD Solarbuzz.

“The region has high electricity prices and it also benefits from strong solar irradiation, which makes it a good candidate for solar PV deployment. As a result, experienced global solar PV developers are seeing the strong solar PV growth potential in the region.”

Brazil, and Mexico are stimulating PV market growth, but opportunities exist across the entire region

Previously the LAC region was confined to small-scale and off-grid solar PV applications, including rural electrification; however, today solar PV is being targeted to address large-scale utility power project requirements, primarily in Brazil, Chile, and Mexico.

Many of these projects are being developed by experienced international companies, including leading U.S.-based companies First Solar, SunPower and SunEdison, and European developers Mainstream, Enel, and Solaria, which increases the likelihood that these projects will ultimately be executed.

“Many countries across the LAC region have the potential to develop into major solar PV markets in the future,” added Barker.

“While project pipelines vary by country, there is a strong contribution from early-stage developments that have yet to finalize supply deals or find end-users to purchase the generated electricity, which presents both risks and opportunities for industry players.”

IMAGE: Latin America & Caribbean five-year cumulative solar PV demand forecast by project status. Source: NPD Solarbuzz Emerging PV Markets Report: Latin America & Caribbean

For more on this story go to: http://www.solarserver.com/solar-magazine/solar-news/current/2014/kw40/npd-solarbuzz-latin-america-caribbean-region-to-install-9-gw-of-solar-pv-within-five-years.html

Print Friendly, PDF & Email
About ieyenews

Speak Your Mind

*