Caribbean Energy Generation Policies Need to Change, part 1

Published: Fri 26 Apr 2013
A blog entry by Paul Hay

Contributed by:

Paul Hay
Partner
PAUL HAY Capital Projects

Bahamas’ only privately-owned power provider – Grand Bahama Power Company – recently commissioned an additional 52 MW power plant.  Speaking on the occasion, Minister of Grand Bahama – Dr. Michael Darville – urged the owners to support the government’s thrust to reduce the cost of electricity.  He stated that: “...the use of alternative forms of energy will bring real change to the cost of electricity and open new doors for the industrial sector to grow, thus attracting many foreign and domestic investors to Grand Bahama...”.  He further stated that high dependency on fossil fuels had negatively affected that nation’s development.

Bahamas was the largest of ten Caribbean nations studied by the Organization of American States’ Department of Sustainable Development, the National Renewable Energy Laboratory, and the Renewable and Appropriate Energy Laboratory of the University of California, Berkeley.  A report was produced titled: Energy Policy and Sector Analysis in the Caribbean (2010-2011).  One of the stated objectives of this study was to identify renewable energy and energy efficiency opportunities within the nations studied.

At that time, Bahamas’ energy capacity was 585 MW, none of which was from renewable sources.  It was determined that 73 MW of technical potential existed for renewable energy development, which represented 12.5% of that capacity.  However, Bahamas’ National Energy Policy targets 15% use of renewable energy by 2020.  In other words, the nation needs to fully utilize its renewable energy potential within eight years.  As if this is not difficult enough, Bahamas like most of the other nations studied does not allow the operation of independent power providers or self-generation of electricity, except on private islands. So, the task of achieving its 2020 objective is solely dependent on their two power providers, and mainly on the larger government-owned Bahamas Electricity Company which produces 80% of its power.

The report concludes that: “Caribbean islands have the potential to lead the world to a new energy future, this will not happen without consistent, thoughtful policies and plans”.  It is my considered opinion that the Caribbean needs to reconsider its restriction of independent power providers and self-generation if we are to realise our potential in renewable energy development.  This is particularly relevant to Bahamas if it is to have a chance of achieving its 2020 goal.  Very few governments, even within developed nations, can unilaterally undertake the transition to renewables.  But partnering with private enterprise will make this achievable.  New policies and standards must be developed and implemented to allow for distributed energy generation from renewable energy sources, to augment existing central power plants.  The use of Renewable Distributed Energy Generation is emerging as a growing sector of the global electrical power industry.  This is particularly so in developing countries, where electricity costs are high and a significant proportion of the society has no access to electricity.  But, business and technology practices will have to change.