A new report, commissioned by the CARICOM secretariat and published by Worldwatch Institute, presents a stark analysis of the current energy situation in the Caribbean, but a hopeful prognosis for the future.
The Caribbean Sustainable Energy Roadmap and Strategy (C-SERMS) Baseline Assessment and Report attempts to chart a course from the region’s current dependence on fossil fuel imports to a more sustainable energy mix that would allow CARICOM to meet it regional energy target of 48% renewables by 2027. This was the target agreed by the Council for Trade and Economic Development in 2013.
The report begins by noting most CARICOM member states’ heavy reliance on fuel imports, which contributes to the Caribbean having some of the highest electricity prices in the world. As in much of the world, transportation accounts for the highest consumption of energy in many CARICOM countries.
Although the region as a whole produces more energy than it consumes, once Trinidad and Tobago is removed from the picture, the rest of the region’s dependence on imports is thrown into stark relief. Given that T&T has transitioned its hydrocarbon sector from oil to natural gas, and that the scale of natural gas transport infrastructure makes its use unfeasible for most small-island states, the natural gas that T&T produces is shipped outside CARICOM. The Petrocaribe partnership has allowed several CARICOM members to benefit from subsidised petrol imports from Venezuela, but as the report’s authors (and recent events) suggest, Venezuela is unlikely to be able to maintain the terms of the agreement in the long-term.
Untapped renewable potential
The authors note that different countries within CARICOM could potentially exploit different sources of renewable energy: Islands on the volcanic arch of the Lesser Antilles have massive, but untapped geothermal resources. Countries with significant agricultural activity could convert biomass and solid waste into energy. Solar and wind are feasible throughout much of the Caribbean. In summary, the authors note:
“Every CARICOM member state exhibits significant and largely unexploited potential for developing renewable energy resources. If fully developed, these resources could transform many states into net energy exporters.”
With the exception of several countries that have significant hydropower installations, renewable energy as a percentage of overall capacity is very low in the region. In several countries, it is virtually zero:
The report’s authors calculate that renewable energy generation would actually be competitive with current tariffs in many CARICOM states, even when using a conventional analysis that doesn’t consider externalities or take into consideration the health and environmental costs associated with certain fuel sources. The problem, however, is that the installation of new renewable energy capacity requires upfront costs that would cause a spike in tariffs in the short-term, even though in the long-term, costs would eventually fall below current prices for electricity generated from fossil fuels.
A combination of several policy recommendations could break this stasis, including feed-in tariffs, more freedom for independent power producers, renewable portfolio standards (RPS), and production tax credits, among others. But the authors also suggest that an epistemological shift needs to happen: currently the economic assessments on which electricity pricing is based fail to account for the total costs of conventional power production, including the negative consequences for public health, and the social costs of climate change and pollution. Internalising these costs would allow for a better comparison between the costs of renewable versus conventional energy.
The report also addresses the interconnected problem of energy inefficiency in CARICOM member states, and the need to invest in more efficient ‘smart grid’ infrastructure. The authors suggest that this process will need to be led by CARICOM and national governments, as private investment in grid infrastructure is ‘slow to evolve.’
Ultimately, the regional CARICOM target of 48% renewable energy will need to be translated into individual country targets. The report argues that the same factors that make scaling renewable energy a challenge — small market size and installed capacity — also make it possible to rapidly achieve a 100% share for renewables in a very short timeframe. Specific renewable energy targets and projections are offered for each CARICOM member state (see image at right).
The report can be read in its entirety here.
Image Credit: Robert Gigliotti