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Caribbean utility’s managers swap renewables plans for diesel

Caribbean utility’s managers swap renewables plans for diesel Basseterre, the Capital of St Kitts and Nevis Photograph: iStockphoto

The directors of St Kitts’ national energy utility have launched a scathing attack on their own management company for proposing expensive diesel generation over planned renewables projects.

The board of the government-owned St Kitts Electricity Company (Skelec) — which since August 2011 has been run by a private firm called COMS — said there was no justification for COMS’s proposal to replace old diesel generators with new ones and disregard renewables.

The 5.4MW Belle Vue wind farm would be among the projects not moving forward, despite developer North Star having secured a long-term power-purchase agreement (PPA) with the government, and a $16.5m loan from the US Overseas Project Investment Corporation.

Skelec’s chief technology officer, John Krupski, resigned in August, saying that he could not in good conscience carry out the company’s five-year capital plan, which he says would financially burden the country’s consumers and benefit nobody but suppliers of diesel generators.

Krupski and others on the Caribbean island say that Terry Burn of CaribNRG, which has supplied diesel generators to St Kitts in the past, is also an owner of COMS and would benefit from the plan.

However, Burn tells Recharge: “I am not a shareholder in COMS and have never been a director or held any position in that company.” He claims he has no idea who owns COMS, which shares an office and telephone number with CaribNRG on the neighbouring island of Sint Maarten.

COMS chief executive Torsten Astrom says he owns and controls COMS and that those stating otherwise “must have something to gain from this”.

No position on renewables

Burn and Astrom worked together in Guyana in 2003.

Astrom, who has solar panels on his own roof, says the St Kitts and Nevis government announced an aggressive strategy last year to embrace renewable energy.

“Why would Skelec not be interested in renewable energy? Any technically feasible local source of energy that can be used to lower the cost of electricity is of interest to Skelec,” he adds.

Yet the Skelec board states: “No sufficient empirical evidence or an adequate business case is presented to justify replacing diesel engines with more diesel engines, as opposed to investments in renewable energy. The board requires that Skelec’s view on renewables be clearly articulated in the capital plan.

“It is imperative that Skelec presents a comprehensive position on renewable energy. However, this is not clearly addressed, if at all, in the five-year plan.”

Astrom tells Recharge: “Skelec has an obligation to consumers and ratepayers to supply reliable energy at reasonable cost. While doing so, Skelec must maintain enough firm capacity to meet the electricity demand of the island at all times.”

But a local source claims COMS is exaggerating future energy demand. The island has about 44MW of installed capacity, but a peak demand of only 26MW. COMS assumes St Kitts will need an additional 15-18MW by the end of 2016.

Critics claim that consumers are having to pay high electricity prices due to the cost of diesel-driven systems and say it is hard to understand any decision to buy new diesel generators.

Geothermal a no-brainer

Krupski says the North Star project “is on hold in spite of possessing all the approvals, financing and technology”. He adds: “Solar and waste-to-energy schemes are proposed almost monthly and never get anywhere; Nevis geothermal is stalled in spite of being a no-brainer; and biomass hasn’t even been addressed.”

Mark Tippett, founder and president of North Star, tells Recharge he has had no feedback from the government or Skelec on moving forward.

“We have not received any formal correspondence from them in over six months,” says Tippett. “We have been given no explanation — the ball is not in our court.”

Astrom says: “Skelec has been a strong supporter of the North Star project [but] Skelec does not have a signed PPA with North Star, the government does. The government will probably assign this PPA to Skelec once all other agreements are in place with North Star.

“Skelec will, in the future, hopefully enter into the renewable-energy arena through PPAs with third parties or through its own renewable-energy projects.”

Christiana Sciaudone, São Paulo

Published: Friday, August 31 2012

Category/ies:Regional News, St Kitts and Nevis News.
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