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Caribbean renewables have made a sluggish start, but could still gather steam

Caribbean islands are likely to suffer greatly at the hands of climate change. But their progress towards adopting renewable energy has been sluggish, even if the mission to be free from dependency on expensive fossil fuels is politically desirable and economically essential.

“Caribbean governments are easily bamboozled because they have not had the necessary experience with renewables”

Monopolistic state-owned utilities are often considered the root cause of stagnation in what should be buoyant renewables markets, given the abundance of sun, sea and wind. But speculative developers with questionable intentions, or “raiders of the Caribbean”, as one Nevis politician puts it, are also to blame for holding back progress.

The most recent incident is the case of the much-anticipated Nevis geothermal project.

Nevis is a modest island of 93sq km — a sister to the neighbouring St Kitts, with which it forms a nation state.

Nevis has an installed generation capacity of just 13MW but an estimated geothermal potential of 100MW, which could be tapped to export power to St Kitts and other islands.

The geothermal project promises to highlight what other Caribbean islands could do: building indigenous renewables capacity and sharing it with neighbours — and ending the stranglehold of the fossil-fuel industry.

Nevisians pay about $0.37 per kWh for electricity — twice the rate in the US — and geothermal is seen as a way to lower bills.

Kerry McDonald, a lawyer from the US state of Colorado, founded West Indies Power with a promise to build a 10MW geothermal plant. He obtained a 25-year power-purchase agreement (PPA) in 2007 with the Nevis Island administration, which is controlled by the Nevis Reformation Party (NRP).

The opposition party, the Concerned Citizens Movement (CCM), has criticised the secrecy surrounding details of the PPA, but the deal was good enough to attract the attention of major sources of finance, including Scotia Bank and the Export-Import ­(Ex-Im) Bank of the US.

McDonald announced several start dates for construction over the years, as the cost of the project soared from $30m to $70m.

He hired an engineering group, Power Engineers, which confirms to Recharge that it is still involved with the development but declines to discuss its progress. The group had previously told Recharge that work would begin in 2011.

McDonald, meanwhile, seems to have disappeared, and attempts to contact him and his team have failed. The CCM claims that McDonald has left Nevis, having achieved nothing in five years.

The party blames the NRP for signing up with a novice — alleging that McDonald has not built any geothermal plants before. “This is a cautionary tale,” says one renewables industry source.

Nevis Premier Joseph Parry recently met Ex-Im officials in an attempt to keep them on board, but Scotia Bank’s mandate has expired.

Caribbean governments are easily bamboozled because they have not had the necessary experience with renewables. Indeed, resistance to green power was prevalent throughout the region until recently.

High upfront costs have meant that private developers, equipment manufacturers and progressive politicians have had to press the case for clean energy.

But progress has been made, particularly in wind, with Jamaica’s 38.7MW Wigton facility, 2.2MW of turbines on Nevis and a 5.4MW project in development on St Kitts.

And the Nevis geothermal scheme may yet be realised. Industry veteran Hezy Ram, who has decades of experience building geothermal plants in challenging environments, has joined the project. He is convinced he can make it happen, and does not see financing as a problem.

His optimism is understandable. The PPA is there, as is the political desire, and multinational banks are interested in getting into the Caribbean to finance green projects.

But telling the honest developers from the raiders or the dreamers remains a challenge. Hopefully, the West Indies Power debacle will be a lesson learned.

Source: http://www.rechargenews.com/energy/geothermal/article315391.ece



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