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The winds of change in the Caribbean
renewable energy market
22 Oct 2015 Cory Arce Gessert 2

energy, energy markets, renewable energy, Renewables,

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In the energy industry, the Caribbean has long been known as the land of sky-
high electricity prices. Caribbean islands, typically made up of isolated grids, Enter email address...
see average retail tariffs in the $0.30-$0.40 per kWh range. As most islands are
still fully dependent on energy production from conventional diesel
generators with relatively small total installed capacities ranging between 5-
100 MW, utilities command a low purchasing power and are at the mercy of SUBSCRIBE
fluctuating oil prices. While some utilities are considering liquid natural gas,
renewable energy holds a certain financial and public relations appeal.
However, renewable energy developers have been reluctant to move into the
space for a variety of reasons. Project financing has traditionally been
challenging to obtain in the Caribbean, given typically low credit ratings of
Caribbean offtakers and general country economic instability risks.
Furthermore, the smaller scale of commercial projects in the Caribbean (mainly
due to competing land use), as well as construction and logistics constraints,
tend to make project development unattractive to most developers.

Recently, however, there have been increasingly compelling reasons to

develop renewable energy projects in the Caribbean. Several island
governments are in the process of revising legislation to remove utility
monopolies to allow independent power producers (IPPs) into their markets.
Recent technological developments in energy storage and batteries are
opening possibilities for larger penetrations of intermittent renewable
resources. A number of island utilities and governments are increasingly
interested in divorcing themselves from oil price fluctuations, producing
energy with local resource, and see the public relations value of renewable
energy projects. And, of course, solar and wind resource are readily available
at the Caribbean’s intersection of the trade winds and copious sunshine.

Perhaps the most significant opportunity for development of renewable

energies has emerged in the last year. Three very different organizations have
recently come together with a shared vision for the Caribbean: renewable
energy transition plans, developed and implemented specific to each island’s
resources and unique energy needs, island-by-island across the region to
create a lasting market change. The Clinton Climate Initiative, Carbon War
Room, and Rocky Mountain Institute (CCI/CWR-RMI) have merged into a think-
and-do-tank powerhouse, with over $300 million raised for their “Ten Island
Challenge”. To-date, seven islands have signed up for Challenge and
renewable energy and energy efficiency projects are underway on over a
dozen islands. CCI/CWR-RMI recognizes that a range of organizations have
funded renewable energy feasibility studies, but those studies have not yet led
to development. The Ten Island Challenge’s mission is to work with
governments and utilities to progress bankable, feasible and viable projects
through the development pipeline at reduced cost to the utilities.

With DNV GL as a the technical partner and lead, CCI/CWR-RMI is performing

energy audits, feasibility studies, grid integration studies and Integrated
Resource Plans (IRPs) on multiple islands in the region, and are developing
Requests for Proposals (RFPs) for procuring IPPs and contractors to construct
solar, wind, geothermal, waste-to-energy, and energy efficiency projects. This
in-depth investment effectively de-risks the development process for
interested technology providers and IPPs.

Recent renewables developments in the Caribbean include the following:

Saint Lucia, where a 3 MWdc ground-mount solar PV project, a waste to

energy project and a commercial scale wind project are all in the
development pipeline;
British Virgin Islands, mostly complete with an energy legislation revision,
and distributed rooftop solar PV projects, LED and solar streetlight
replacement campaign, and development of a hybrid wind/solar/battery
storage system for a remote island underway;
Aruba, with a 30 MW wind project operational since 2009, additional
solar PV and waste to energy planned, and an energy transition plan in
place to be completely independent of fossil fuels in the next five years;
Bahamas, publishing RFPs for 12.4 MWdc of solar PV and energy
efficiency retrofits on government buildings and hospitals, including
chiller replacements, HVAC improvements, LED lighting, and heat
recovery systems
San Andres and Providencia, developing a 7.5 MW wind project and
various energy efficiency retrofits on two Colombian islands
Belize, developing a utility scale solar project on Caye Caulker and
energy efficiency retrofits
Integrated Resource Plans, grid studies, and/or feasibility studies
completed across all of these islands to understand renewables
penetration limits and grid capacity for commercial-scale projects

The Caribbean energy market is seeing a significant increase in direct foreign

investment, changes in energy policies to allow IPPs to enter the market, and
concrete, useful feasibility and grid studies that de-risk the development
landscape. DNV GL sees increasing opportunities for renewable energy
technology suppliers and vendors, geotechnical and electrical design services,
construction contractors and development companies, transportation and
logistics companies and ongoing project operation and maintenance service
providers as the market matures and projects come online. As with any new
market, there continues to be unknowns and risks; however, through feasibility
studies, proper planning and comprehensive procurement started by DNV GL
and CCI/CWR-RMI, these unknowns and risks are decreasing which has
catalyzed the renewable energy market in the Caribbean.

Add your comment

2 Comments

Kelan Costelloe June 22, 2017 at 10:17 am Reply

Good day,
 I am a distributor for Solar Panels and I would like to be added to your list of
suppliers to be invited to tender. Can you provide information on same.

Best Regards

Luisa Freeman October 28, 2015 at 5:26 pm Reply

You may be interested to know that Joe Lopes and I plus other senior staff in
DNV GL’s Sustainable Energy Use group have been involved in assisting the
islands of Barbados, Jamaica and Bermuda with energy efficiency planning.
We most recently completed an energy efficiency and demand response
potential study for the Barbados Light and Power Company that included staff
training, stakeholder engagement, inputs to the IRP and an action plan for
developing programs. If you have need to understand the energy efficiency
components of islands in the region, please consider calling on us!

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