No Plan is an Island: Coordinating Paths to Caribbean Energy Future

June 13, 2023
For the last 15 years, the leaders of Caribbean island nations have convened annually with renewable energy experts to explore solutions at the Caribbean Renewable Energy Forum (CREF)
Storm disasters in the Caribbean islands are appearing with increasing frequency and intensity each year, and the news stories depict their staggering effects.

Heart wrenching photos of horrendous losses and incredible flooding, homeless communities and destroyed crops, and the predictions on returning to normalcy paint almost impossible scenarios.

For anyone not living on an island these challenges to recovery, inherent to island life are difficult to imagine.

Under the lens of climate change, scientists explain these disaster events now appear with more frequency as sea levels rise and oceans warm. And yet there is good news. Transitioning to renewable energy is key to island energy dependability, sustainability and disaster recovery.

Deep, Abiding Faith in the Caribbean Energy Transition

For the last 15 years, the leaders of Caribbean island nations have convened annually with renewable energy experts to explore solutions at the Caribbean Renewable Energy Forum (CREF). They discuss and explore collaborations, update each other on the progress of projects and discuss financing.

The most recent CREF held this spring was the largest ever, according to reports, with more than 500 participants from 25 nations.

One key participant is not based in the Caribbean, but has a deep, abiding connection to the region.

"The Atlantic Maritimes—which are Nova Scotia, Newfoundland/Labrador, New Brunswick and Prince Edward Island—have played a three- centuries long role in Caribbean trade history," Terry Thibodeau, coordinator for renewable energy and climate change for the District of Digby, Nova Scotia, told EnergyTech.

"A trade route was established from Africa to the Caribbean, and then north to the Canadian and American coast, then again east to England and Europe. It was called the Triangle Trade, but this was only made possible through the uncompensated labor of Africans who were enslaved to work the sugar plantations in the colonized Caribbean islands."

This painful, raw history is never to be forgotten, but fast forward to 2023 when Atlantic lessons learned on renewable and on-site power can be “perfect for Caribbean application,” Thibodeau pointed out.

"With renewables increasingly under the lens of climate change, the last five years have really escalated island interest and there is tremendous opportunity at CREF to showcase what we are doing in the Maritimes, and how that can work for these nations," Thibodeau says.

He added that the island nation representatives attending CREF are all key decision makers and influencers such as "top level ministers of energy, banking leaders, and the CEOs of utility companies, all keen to advance renewables in their respective country."

Unique in their climate, geography and topography, the Caribbean and the Maritimes face specific challenges as Thibodeau reports.

"Like the islands, we are also uniquely surrounded by water. We understand how coastal erosion, land management and mitigation works, how the effects of climate change plays a role on communities and energy demands, and how devastating storms can quickly knock grids out, especially in underserved areas with vulnerable populations.

Thus, remote areas such as those parts of the Atlantic Maritimes have been forced to develop alternatives to main grids, including on-site power such as solar and gen-sets. But that region also is gaining insights into the benefits of offshore wind and even tidal wave energy, he said.

 "All of these renewables have been underway here for at least a decade or more and today are real working solutions, not test models. We're also looking at using recycled EV batteries for off-grid power as that exciting technology is advancing every day.”

To do these projects however, requires political will, funding, and implementation capacity. But even those are not enough.

Put your money where your regulations are

CREF panelist Gillian Charles-Gollop, Executive Director of Corporate Banking and Sustainable Finance at CIBS First Caribbean International Bank, emphasized that it takes more than enthusiasm to move forward in these collaborations.

She said that the Caribbean countries who seek funds for investment "must have a very solid Purchase Power Agreement (PPA) that demonstrates the contractual agreement between the energy buyers and sellers.

"This document becomes the (fiduciary) proof that serves as a guarantee of utilities buying energy—provided by renewables—for a long period of time, usually 10-20 years."

And there's more at stake impacting a bank's underwriting investment.

 Outdated regulations hamper a country's ability moving forward with renewables as there are rarely any policies governing the buying and selling of renewables.

In fact, some restrictive regulations go as far back as the oil embargo days. But the energy regulations written in those dire times have little bearing on today's world.

 "We have seen how Jamaica started off by first putting regulations in place, and then this allowed them to develop a strong PPA (power purchase agreement),” Charles-Gollop said.

“We did investments there and we can assess them. The utilities recognized if we were going to finance them they had to have a strong PPA and it has to ensure there is a reliability of a cash flow for a defined amount of time through their PPA."

Other participants agreed that throughout the Caribbean there are larger scale projects that need to be financed, but without a strong PPA it will be difficult to finance a good pipeline of projects waiting in limbo to go forward.

Thibodeau, the Nova Scotia renewable energy and climate change expert, said that when banks are involved this is a sign of credibility for other investors.

"That agreement with financial institutions can bring other investors on board knowing that oversight is in place."

Harbor no illusions: the PPA is what makes that happen, CREG panelist Bruce Levy, president and CEO of BMR Energy, pointed out.

The negotiated PPA ensures the customers gains ample benefits from the power.

“It is the roadmap of the relationship between the generator and the utility,” Levy said. “Plus, the path in converting from oil to renewables is also based on a lot of existing situations that need to be addressed: Transmission wires are in the wrong place, and there's not enough of them, and there are not enough of, or, the right regulatory rules."

Other panelists affirm a need to go into the energy efficiency mode first. For example, make all the upgrades now in building efficiency, heating systems and more that will accommodate the integration of new technologies when they do arrive.

Giving attention to how your utility data is protected is equally crucial but not always at the forefront of the new energy conversation, these island energy experts caution.

Clean Energy and Regional Integration are Key

According to experts at Bloomberg New Energy Finance’s outlook, the Caribbean has varied, complex and yet common challenges in achieving their energy goals. This includes heavy reliance on imported liquid fossil fuels, exposure to crippling natural disasters, and dis-economies of scale. But they cite the many opportunities as well.

"The Caribbean has abundant renewable energy resources, especially wind and solar as well as geothermal and biomass on some of the islands,” Caribbean Sandals Resorts Group Chief CEO and CREF panelist Gebhard Rainer said as quoted in an interview with the Jamaica Observer. “Developing the existing potential of renewable energy coupled with energy efficiency actions would reduce the reliance on imported fossil fuels, thus enhancing energy security while decarbonizing the economies."

But they add that without completed or updated Integrated Resources and Resilience Plans (IRRPs) in place, there are no adequate governance frameworks nor effective regulations to promote clean energy solutions, thus hampering private sector involvement, according to experts as quoted on the New Energy Group website..

Three changes are noted as key to that end: First, collective procurement models for fuel vs individual island transactions would increase competitiveness.

Second, renewable energy projects scales can be increased through a regional umbrella approach.

Third, regional integration would help harmonize technical standards; optimize intraregional logistics, supply and maintenance schemes, and leverage energy trading and storing options which would reduce price volatility exposure and improve energy security, the New Energy Group report reads.

Caribbean Sandals Resorts Group Chief CEO and CREF panelist Gebhard Rainer also expressed his belief in the benefits of regional partnerships.

"Even now, as we seek to integrate more renewable energy programs across our resorts, if there is not a robust legislative infrastructure in place, particularly for subsidies, the energy problem will invariably evolve into an energy crisis,” Rainer said. “We must coordinate our efforts into a regional policy that focuses on both advocacy and legislation as we prepare for further effects of this global phenomenon."

Rainer says that they have invested millions in infrastructure to ensure that their carbon footprint is a low as possible.

"We are not into green washing because they look good,” he noted. “We want to be effective in the communities where we live and work."

About the author: Barbara Hesselgrave is a free-lance writer who has contributed stories in Endeavor Business Media publications. 

About the Author

Barbara Hesselgrave

Barbara Hesselgrave is a regular Endeavor contributor specializing in environmental sciences, climate, and energy.