- Member states urged to transition to new energy paradigm
By Kiana Wilburg
After establishing that high energy prices remain the primary source of the Caribbean’s uncompetitiveness, President of the Caribbean Development Bank (CDB), Dr. William Warren Smith said at the recent opening ceremony of the Board of Governors 44th meeting at the Guyana International Conference Centre, that in order to unlock the opportunities for competitiveness, it is imperative that a new energy paradigm be created.
Dr. Smith said that there has been a perception that Trinidad and Tobago is the only
energy-rich country in the Caribbean. But this he proved to be an inaccurate view as he highlighted that Guyana alone has enough renewable energy potential, mainly in the form of hydro-power to meet all of its electricity requirements for the foreseeable future; supply all of the needs of immediate neighbours, Grenada and Trinidad and Tobago; and still have enough left over to sell to neighbouring Brazil. The situation, he said, is similar for Suriname.
Additionally, Dominica, Grenada, Montserrat, St. Kitts and Nevis, St. Lucia, and St. Vincent and the Grenadines have great potential to generate their entire base-load electricity requirements from geo-thermal sources.
The CDB President said that although their domestic markets are quite small, technological advancements in the development of undersea transmission cables would allow these countries to exploit their relatively large geo-thermal reserves for export to neighbouring countries.
“For example, Jamaica can meet up to 30 percent of its electricity needs from renewable sources such as wind, solar, mini-hydro and waste-to-energy. According to a study by the World Watch Institute in the USA, Jamaica’s annual average solar insolation (a measure of solar radiation), ranges from five to eight kilowatt hours per square metre per day. In comparison, Germany, the global leader in solar photovoltaic (PV) (materials which convert energy from sunlight into electricity), has only a few locations with a capacity in excess of 3 kilowatt hours per square metre per day. Jamaica’s situation is not unique. All borrowing member countries boast similarly strong solar potential.”
Dr. Smith said that all of these renewable options have the potential to lower electricity costs, and increase foreign exchange reserves from reduced energy imports.
The CDB President believes that the legislative and regulatory environment is a major hindrance to the pursuit of a new energy paradigm for the Region, and as such, the two priority areas require urgent government action.
“One, we need to change the legislative framework, at the national level, in order to facilitate access for renewables by altering the monopoly on generation where this exists in borrowing member countries. Revisions in the framework should ensure equitable pricing for supply from independent power providers or small, distributed renewable generators of electricity.
“It is noteworthy that CARICOM energy ministers have already adopted “net-billing” as a feasible mechanism for “ensuring equitable pricing”. As a matter of urgency then, all borrowing member countries should follow the lead set by Barbados and Jamaica, which have already enacted the supporting legislation.”
Additionally, Dr. Smith said that an appropriate regulatory framework needs to be established for each borrowing member country to ensure that equitable tariffs and rules for optimal performance are in place and to make certain that the interests of consumers, investors and governments are balanced.
“Given the constraints of market size, and the availability and cost of specialized skills necessary for the effective administration of the regulatory function, it makes sense for a collective approach to be adopted. It is for this reason that CDB welcomes the Eastern Caribbean Energy Regulatory Authority initiative, applauds those OECS countries that have already committed, and looks forward to the full participation by other member countries.
“I would go so far as to say that such a supra-national regulatory body is critical for full and sustainable development of the geothermal potential in the sub-region, to encourage private investment in the sector, and to make interconnectivity a reality. The building of a new energy paradigm must give priority to energy efficiency, which is relatively low-cost and yields a high return on investment with a short payback period.”
The CDB President also explained that a successful energy efficiency programme, incorporating appropriate tax incentives, would reduce household expenditure on electricity and other forms of energy, thereby increasing disposable incomes. He mentioned as well that businesses, especially the critically important micro, small and medium sized-enterprises (MSMEs), would also see improvements in their efficiency and their competitiveness.
Dr. Smith expressed that the fight against high energy prices could, potentially, also open the door for the emergence and growth of new non-traditional businesses that promote the use of energy efficiency technologies and services to reduce energy consumption.
In his closing remarks on this subject, the CDB President said, “The growth of industries producing and/or installing solar water heating systems is the most familiar of the new industries that have emerged in our region as a response to high energy prices. In the new energy paradigm, we should expect an expansion in new industries around a range of energy services, and the manufacture and installation of PV and other renewable energy systems and energy-saving devices. The new paradigm is integral to the “Green Economy” approach currently under consideration by some borrowing member countries and is consistent with the CDB’s Climate Resilience Strategy.”