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Energy breakthrough in Caribbean’s hands

Below are excerpts of a message delivered by Kenneth McClintock, secretary of state of Puerto Rico, at the recent Northern Caribbean Conference on Economic Cooperation.

Geographically and culturally, the perspective of Puerto Rico is rather singular because our islands are at the crossroads of the Americas – where Latin America and the United States come together and where the United States becomes a Caribbean nation.

However, from a political standpoint, Puerto Rico’s perspective is no different than that of other subnational entities of the United States – such as California, Texas or Florida – which seek to influence, and play a role in, US foreign policy to the extent that the US Constitution allows it.

Among the challenges that the Caribbean faces today, I would like to focus on energy, because energy is fundamental in achieving sustainable economic growth.

A majority of Caribbean countries face a high and increasing dependence on imported oil and oil products to power their economies. And most rely primarily, or entirely, on imported diesel and heavy fuel oil. This situation results in a significant drain on foreign reserves that affect economic and social development as well as the ability of Caribbean countries to attract investment.

Costly fuels also mean that businesses in the Caribbean have a harder time competing in the international marketplace. Furthermore, electricity demand is expected to double over the next 20 years, which will pose even greater challenges for Caribbean economies.

While running for office, President Obama responded to the challenges faced by the hemisphere calling for “a new alliance” with the region and promised to bring together the countries of the region in a new “energy partnership for the Americas”.

He proposed to go beyond bilateral agreements through a regional approach by which the United States and the countries of the Caribbean Basin and South America – with the help of multilateral institutions such as the World Bank and the Inter-American Development Bank – would forge a path towards achieving sustainable economic growth in the hemisphere.

And thus at the Fifth Summit of the Americas in Trinidad and Tobago, President Obama called for a new Energy and Climate Partnership of the Americas in which the countries of the Western Hemisphere would cooperate as they seek to promote energy efficiency, facilitate the increased use of renewable energy sources, use cleaner fossil fuels, encourage investment in infrastructure, and reduce energy poverty.

Ironically, as I’ve driven around this island and spoken to its people, I realise that, as in Puerto Rico, Jamaica is blessed with a high dosage of sunlight and quite a bit of wind, yet we have almost nothing in place to harness all that solar and wind power that we’re letting go to waste.

In August 2008, President Bill Clinton, speaking before the Clean Energy Summit in Las Vegas, stated that Puerto Rico – surrounded by the ocean, and having plenty of wind and sunshine all year around, like all the islands in the Caribbean – could become the United States’ first energy self-sufficient jurisdiction and offered to help in attaining that goal.

Taking from the ideas of President Obama and President Clinton, it seemed reasonable to ask ourselves: why not transform the entire Caribbean into the world’s first energy self-sufficient region? And thus, at the 2009 Miami Conference, the administration of Governor Luis Fortuño ventured to propose the interconnection of the electric power grids in the Caribbean Basin.

Obstacles

The implementation of an energy partnership in the Caribbean presents its own obstacles related to energy isolation. Most Caribbean countries have small electric power systems and markets with insufficient reserve capacities and inefficient transmission infrastructure having no links to other electricity grids. In addition, most Caribbean countries and territories face some of the highest electricity rates worldwide because they depend primarily, or entirely, on imported diesel and heavy fuel oil – as Puerto Rico does.

Many countries have sought to diversify by including renewable sources in their energy matrix. However, the cost of generating electricity from renewable sources of energy can be very high without efficient economies of scale which cannot be achieved in the Caribbean without market integration. And, needless to say, the interconnection required for such integration is made difficult by geography.

The technology exists to interconnect the electric power grids of the Caribbean by means of submarine cables, but in order to justify the cost of laying a submarine cable, a supplier of electric power generally needs to be matched with a large electricity market.

Enter Puerto Rico – the largest consumer of electricity in the Caribbean. In order to meet peak consumption demand and provide redundancy, the government of Puerto Rico is already considering several interconnection alternatives.

Last October, President Fernández and Governor Fortuño met in Santo Domingo and agreed to create a joint working group within the Dominican Republic-Puerto Rico Strategic Alliance that will discuss, at the highest level, the interconnection of our electric power grids. The first step in the process will be assisting in the completion of a feasibility study to be conducted for the World Bank.

Also, Puerto Rico and the US Virgin Islands, with the support of the US Department of Energy and the US Department of Agriculture, are close to signing a letter of intent that would make possible the interconnection of the USVI and Puerto Rico electric power grids. SIEMENS has already been selected to perform the technical viability study, which we expect to be completed during the summer of 2011.

Geothermal power

Another exciting possibility includes bringing geothermal power from Nevis.

Fortunately, our proposal has met with strong federal support. Energy Secretary Steven Chu has stated: “Some of these island states have wind and solar resources … . In order to make them more economical, it would be nice if you could connect these island states to each other … that would make the investment in clean energy renewables much more accessible, more profitable.”

Secretary of State Hillary Clinton has expressed: “We have a lot we can do and we have to get started. Imagine a future in which, instead of waiting for those oil tankers to come and dock, Caribbean nations are supplying each other with energy, whether it’s geothermal power from Dominica or gas from Trinidad.”

Interconnecting the electricity grids in the Caribbean Basin can make the generation of electricity from renewable energy more economically viable by creating a large-scale transnational electricity market in which Caribbean countries could trade renewable energy rather than oil.

The repercussions of such an alliance can be far-reaching because energy is central to our lives. We rely on it for transporting the goods that we consume and sell, cooling hotels and homes, as well as running our farms, businesses and manufacturing plants.

And we must begin to produce and share it without doing more damage to the global climate. While a windmill here and a solar panel there are steps in the right direction, we must start thinking and acting as a region.

Cheaper electricity will facilitate investment, competitiveness and job creation that can reduce poverty and social inequalities.

Through multilateral cooperation a common Caribbean energy market can be achieved. And it can begin with a single link. The interconnection that Puerto Rico is pursuing with the Dominican Republic can lead to the interconnection of the northern rim of the Caribbean Basin, encompassing Florida, Cuba, Jamaica, Haiti, the Dominican Republic, Puerto Rico, the US Virgin Islands and Nevis. The World Bank has recently completed a study that considers precisely this possibility among other regional interconnection options.

Needless to say, a Caribbeanwide interconnection would require considerable financing, but this can be secured through multilateral development institutions.

Let us deal with the immediate problems at hand. Let us seek ways to increase trade, strengthen friendships, and repair the damage that the present global financial crisis has wrought against our peoples. But as we deal with the immediate, let us also focus on the energy problem that requires concerted, regional cooperation to accomplish long-term structural solutions.

From policy to reality, there is always a long way to go. Similarly, the path to energy independence and clean-energy economies seem to entail a long and arduous journey. But in the words of philosopher Lao-tzu, “[A] journey of a thousand miles begins with a single step.”



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