The Energy Dilemma Of The Caribbean In General And Of Haiti In Particular
The citizens of Suriname organized recently a demonstration against the hike in the price of electricity in the country; such hike was a condition sine qua non for the International Monetary Fund (IMF) to continue budgeting support to the Bouterse government.
A Caribbean energy summit (Caribbean Central America Energy Task Force) took place recently in Washington to deal with the aftermath of the neo un-consequential benefits of the PetroCaribe arrangements due to the worldwide decline in oil price.
Definitively, if drastic measures are not taking place in the way Haiti and the rest of the Caribbean is dealing in procuring its energy and the region is doomed to enduring poverty and low growth in the long time to come.
Each country in the region has a different energy problem but they all come to the same conclusion, the cost of producing electricity being much higher than it can be delivered to the consumers. In Haiti it is due mainly to government in collusion with business ventures more interested in bilking the state than providing a service to the people.
Haiti has a fundamental problem of policy mission. It has not made yet the decision to be of interest to its entire population.
The vista is clear if you take time to look at the creativity of the ordinary Haitian citizen trying to survive in an environment highly attractive but highly hellish because the minimum amount of governmental services or civic duties have not been provided or entertained to deal with most issues that are routine in any emerging country.
The public hygiene, traffic, transportation, and other essential services that would make life a pleasant and normal way of life is not present in Haiti.
The Electricity of Haiti (EDH), established by law, had the monopoly of providing electricity to the country. Albeit that law has been repealed recently to open up the competition to other vendors, the past deals will continue to bankrupt the system, making unattractive the privatization of producing and delivering energy mainly to the capital.
Haiti, like the rest of the Caribbean, benefits from sunlight throughout almost the entire year, in addition it does not have a national electricity grid already in place. The majority of its citizens have no access to electricity. As such there is potential profit in producing and delivering electricity whether it from wind, solar or geothermal.
The Haitian government must first have the interest of its people at heart to lift itself to this paradigm of higher virtue of service and hospitality to its citizens. In a cat chasing its tail process, the citizens must understand energy has a cost; it is a means to wealth creation with creativity and diligence. Energy provision cannot be used as a way by the government to pacify the urban ghetto population relegated to slum conditions while those citizens give back an answer to a failing government by providing zero revenue for such service.
Haiti/EDH collects only $60 million from its customers per year against a $450 million subsidy from the government. It reaches only 28 percent of the population with electricity only six to nine hours per day even in the capital, at a cost of $0.38 per kWh in comparison to $0.20 per kWh in the Dominican Republic.
The dilemma of energy in Haiti is linked to the whole process of nation building. Sane institutions and adequate infrastructure are some of the elements of building a successful nation, providing electricity to the citizens of Haiti must take into account its excellent geographical setting. The fact of the majority of its population is not yet locked into an antiquated national grid and, with a government that cares, it can jump to the highest value of clean energy that might be cheaper than the fossil fuel one.
Haiti does not have an electricity problem. It has a problem of good governance.
Cuba, following the cut in subsided oil from Russia, transformed its whole society into a sustainable nation that uses renewable energy for its agriculture, with tools such as bio-pesticides, bio-fertilizers, animal traction, earthworms and compost to feed its population. It is now a world model of bio-food production.
Cuba CIES (Centro de Investigaciones de Energia Solar) is leading the way for the government to meet its goal of 700MW of solar capacity. With the US embargo being lifted against Cuba, it is seeking the $3.5 billion necessary for this energy policy.
I remember when Venezuela wanted to facilitate the energy policy for the region, through PetroCaribe, the United States warned that PetroCaribe was doomed to fail. Caveat emptor! By premonition or by design, PetroCaribe is a white elephant with the fall in oil price. Those countries who did not sing like the cicada have benefited from the loan arrangement scheme, but those like Haiti that used the PetroCaribe funds corruptly for political purpose will have to pay dearly in the future.
The energy policy for the region will have to enter into the joint grand design of regional nation-building process. The northern Caribbean that includes Bermuda, The Bahamas, Cuba, Haiti, the Dominican Republic, Puerto Rico and Jamaica must start a conversation on how this region could have an integrated energy and developmental policy that take into account the particularities of each entity.
The weak link, but also the most promising one because it is virgin and almost a blank page, is Haiti (at night it is not seen from an airplane). It could become an experimental exercise. The Dominican Republic next door has just inaugurated one of the largest solar panels in the region; it has taken the decision to reduce its 90 percent fossil sourcing of energy to 25 percent renewable one. It is a model to follow.
In the rest of the Caribbean, Puerto Rico has a much bigger problem than Haiti. It is engulfed in a $50 billion utility bond fraud that threatens not only the island economy but also the pension funds of senior citizens of all the 50 states of America.
Jamaica has an energy policy that aims to reach 30 percent renewable energy by 2030. On the negative side, it has an antiquated grid and a debt load of $2.4 billion to PetroCaribe, albeit renegotiated.
Further down the Caribbean there are some exciting models of renewable energy producing schemes. Aruba saved itself $85 million per year being guided by the Rocky Mountain Institute and the Carbon War Room in switching from fossil fuel to wind farms.
In conclusion, the energy policy of the region must take the imprint of the overhaul nation building project, with renewable electricity being one of the key elements. Educated by the Petro Caribe experience, the countries of the Caribbean must use the American energy lifeline with prudence and clarity, relying on the best practice model in the region with wind, geothermal or solar.
The Caribbean region could also benefit of the European Union experience that sets itself the goal of 2020 for full renewable energy. Already Portugal, Germany and Denmark have succeeded full days of energy fossil fuel free, inviting their clients to use more electricity with negative bills for energy use.
On this side of the Atlantic, Ed Bosarge Jr, a rich Texan American who owns Yonder Cay, a small island in the Bahamas, has been able to produce electricity at 12 cents per kWh through a combination of wind, solar and thermal. With the nonchalance of a man who knows what he is talking about, he says: “It can be repeated anywhere in the Caribbean.”
Except his investment brings back the dividends of settings rented at $75,000 per night per person! Just 28 persons at a time!
Next week: What if the politics of wealth creation for all was in the domain of human rights?
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