By: Staff Writer
November 3, 2023
A regional Think Tank says it is unrealistic to believe that the Caribbean can transition to clean, renewable energy in the short or medium term because many of the power-grids throughout the region just can’t take the change.
The Atlantic Council, in their report, “A roadmap for the Caribbean’s energy transition,” said that while the region is in “desperate need of an energy transition,” the energy infrastructure, particularly the power-grids are “undercapitalised,” leaving them susceptible to climate change and extreme weather events, making investment in them a waste of time.
The report also said: “The region’s small markets and its import-dependent economies are disadvantaged by volatile oil and gas prices, rising inflation, and supply-chain disruptions. And, because most Caribbean countries are categorized as middle- or lower-middle-income economies by the World Bank, access to concessional finance and attracting commercial investment in power generation and transmission are common challenges.
“Only the Southern Caribbean (e.g., Trinidad and Tobago, Guyana, and Suriname), routinely attracts significant levels of private investment due to rich fossil-fuel resources. All this paints a precarious scenario for the Caribbean. It needs to build competitive and resilient economies, which can only be done with access to affordable and reliable energy.”
Transitioning power generation and transportation from fossil fuels to higher shares of renewable energy and battery storage will address the region’s vulnerability to fossil-fuel price volatility and concerns about energy-system resilience. “But regional energy systems must also be transformed. If energy systems (including electrical grids and utility structures) are not upgraded and modernized, most power grids will be unable to integrate significant renewable-energy projects and the region will remain unable to attract large-scale renewable projects. It will be important for the international community to recognize that the region’s dependence on fossil fuels will persist over the next decade as the transition takes place,” the report said.
The report also said: “To date, the region’s energy transition has been slow and incremental. The small nature of Caribbean economies and energy grids results in smaller renewable-energy projects. Projects also come with high costs due to several political, regulatory, technical, and financial risks, as is detailed in later sections. Long-standing undercapitalization of utility systems limits Caribbean governments’ ability to meet renewable-energy targets and presents a challenge for leaders who cannot abandon existing structures for new, uncertain ones. The way forward for the energy transition needs to be creative and politically realistic, equitably serving government, private-sector, and citizen interests.
The report added: “Two main challenges are driving the need for a regional energy transition, especially for political leaders: the economic costs of climate change and dependence on imported petroleum products. As climate disasters increase in frequency, the prospect of lost power for days, or even weeks, will drive Caribbean political and business leaders to ensure that the region’s access to power generation is reliable. Today, that reliability comes from carbon-intensive fuels, posing a question for leaders about whether generation can alternatively come in the form of renewables, natural gas, or a combination of the two. However, the stronger factors driving the energy transition are the high cost of importing petroleum products and the effects this has on a country’s economic growth.
“The climate crisis: Climate change is the existential driver of the energy transition in the Caribbean. Rising temperatures and sea levels are causing stronger tropical storms, drought, changing precipitation patterns, and ocean acidification. These climate-induced effects also pose a risk to the operations of governments and businesses, with blackouts or brownouts leaving people and institutions without electricity and power for days, or possibly weeks. This was most evident in Dominica, where Hurricane Maria destroyed 90 percent of government structures and left people without access to electricity, except for a few portable generators, for weeks.”
The dependence on energy imports is also stark. It was noted that CARICOM countries, on average, import an estimated 87 percent of their oil, compared to a global average of 21 percent. “Meeting consistent domestic demand leaves the region vulnerable to global energy-price volatility, which results in high electricity costs for the region (except Trinidad and Tobago). As a result, consumers in some Eastern Caribbean countries, as of 2021, pay almost three times as much for energy as their counterparts in the United States, with citizens in Barbados paying $0.332 per kilowatt hour (kW/h) and those in Antigua and Barbuda paying $0.367 per kW/h, compared to $0.109 per kW/h in the United States.”