Caribbean countries facing increasing fuel costs,
inescapable transportation constraints and relatively high electricity prices
are looking to the sun for answers.
They hope a new Caribbean coalition, led by some of the
world’s clean energy heavyweights and bankrolled, in part, by international
lending institutions will channel $6 billion to transition the region to
renewable energy.
Former Ambassador of Trinidad and Tobago to the U.S., Neil
Parsan, founder of advisory firm Parsan Cross, is one of those driving the
new Caribbean
Climate-Smart Accelerator a collection of 27 countries and 40 global
companies launched in August 2018 to help fund renewable energy projects in the
Caribbean. Parsan is the director of public sector engagement for the
organization.
The Accelerator was born out of French President Emmanuel
Macron’s One
Planet Summit where the Inter-Development Bank committed $1
billion for clean energy projects across a region severely hurt by several
hurricane seasons on islands already in financial difficulties.
“Timing of all of this is not coincidental,” Parsan said.
After the storms of 2017, Prime Ministers Roosevelt Skerrit
of Dominica, Keith Mitchell of Grenada, Allen Chastanet of Saint Lucia and
Virgin Group Founder Sir Richard Branson reached out to many philanthropists
and Macron for help.
In 2004, Hurricane Ivan destroyed Grenada costing $900
million in damage, more than twice the country’s GDP. Another storm hit in
2005. Islands that were already indebted from the storms felt the effects of
the financial crisis of 2008. Then came another series of storms. In 2017,
Antigua and Barbuda were decimated.
Parsan said the Accelerator’s goal is to promote energy
security and resilience amid a growing number of destructive weather events.
Ironically, Parsan’s home country is one that is not
transitioning to renewables.
Trinidad and Tobago is one of the wealthiest islands in the
region, and its electricity is generated entirely by natural gas. The country
produces and exports natural gas and houses one of the largest natural gas
processing facilities in the Western hemisphere.
But not all countries in the region have that luxury.
Jamaica Aims for Change to Solar Power
Imported diesel costs Jamaica $2.7 billion a year. In
Jamaica, as on most islands in the region, diesel is the primary source of
electricity. This fall, Prime Minister Andrew Holness announced his intention
to change that.
In an event announcing the installation of solar
energy technology on his official state residence, Holness said Jamaica’s
energy security is at stake.
“Small island developing states are usually vulnerable to
oil price movements and energy shocks,” he said.
Holness wants renewables to generate 50% of the island’s
electricity by 2030. “It takes leadership. It takes the leaders of the
countries to bring this awareness to their people,” he said.
He hopes to make investors and technology companies aware,
too, that Jamaica and its electricity sector are open for business.
Prime Minister Holness helped host the Accelerator’s first
meeting in Jamaica.
As global diesel demand, and in turn prices, skyrocket,
Holness worries Jamaica’s poorest citizens will bear the cost of an already
pricey commodity. Jamaicans now pay about 42 cents/kWh of electricity.
By contrast, Trinidad pays about 7 cents per kWh for its
electricity, and Americans pay about 12 cents per kWh on average according to
the U.S. Energy Department’s Energy
Information Administration.
Several factors--fuel diversity, commodity prices, American
production, regulatory structures-- contribute to relatively low, stable U.S.
power prices.
“About 99% percent of houses in Jamaica have electricity,
but 12.5% of the system's electricity is stolen,” said James Ellsmoor, director
of Solar Head of
State. “People can’t afford to pay their bills. They go behind the meter.
It’s scary looking wiretaps coming out of electricity cables.”
Solar Head of State is trying to expand the use of solar
energy globally by driving heads of state to install solar panels or technology
on their official residences.
Holness said renewable energy expansion could create jobs,
which theoretically would help citizens afford electric power and reduce
electricity theft and energy poverty.
“If Jamaica does it, and they’re successful doing it, it
will encourage regionalization and aggregation of the idea,” Parsan said.
Jamaica isn’t starting from zero. Its Ministry of Science,
Energy and Technology says it has already attracted renewable energy projects,
including some funded by the The Clinton Climate Initiative.
Parsan said the new Accelerator looks to “mature projects so
they have an impact on the climate action.”
At the moment, the group is looking to facilitate 10
multi-country, scalable projects.
“Additionally, over the next five years, we’ll look at five
major transformative projects that would transform the economies while offering
permanent solutions to the climate crisis,” Parsan said.
Parsan says the regulatory work needs to happen in each
country to encourage the private sector to make investors feel more secure.
“A big part of [this regional effort] is the regulatory
framework that will create the right enabling environment to attract the right
type of investments,” he said.
“I’m of the view there’s no shortage of money out there but
there is shortage of mature, bankable projects,” Parsan said.
For many countries that cannot borrow or get traditional
financing, Parsan said his group could consider innovative financing models
such as blended finance that ensures access to affordable capital and new
sources of funding.
“We will be looking primarily at resilient infrastructure,
renewal energy and energy efficiency projects and electrical vehicles in the
early stages to move the climate-smart agenda forward for the Caribbean,”
Parsan said.
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