The Caribbean is perhaps best known for the beauty of its islands, and as a tourist destination. The region is comprised of several hundred islands, islets and cays, stretching from the Bahamas in the north, to Barbados in the east, the mainland countries of Guyana, Suriname and French Guiana in the south, and Belize in the West. As such, a range of languages are spoken, including French, Spanish, Dutch and English, along with local dialects. It has a population of approximately 40 – 45 million, but only around 6 million in the English speaking nations of which Jamaica and Trinidad are the largest. Despite being islands blessed with a rich abundance of sea and sun, a key challenge, for most (apart from the oil rich Trinidad), is energy security.
The region spends about US$22 billion annually to import oil, primarily from Venezuela and Trinidad and Tobago. Mark Lambrides, a World Bank senior energy specialist, noted that oil provides more than 90% of the Caribbean’s “primary energy needs”. Therefore exploring options that would not only save energy, but also money for these small open economies is vital. Indeed, renewable energy programmes could save the region billions of dollars in precious foreign exchange and help to boost their competitiveness.
However, accessing the necessary finance to fund renewable energy projects can often be costly, and in some instances prohibitive. For example, Mark Lambridges went on to argue that “policy and regulatory frameworks which aren’t necessarily attractive to investing in these technologies, [and] limited access to financing and the resources necessary to take on these technologies”.
However, David Nelson, senior director of Climate Policy Initiative’s Energy Finance Programme, and Gireesh Shrimali, Professor of Energy Economics at the Monterey Institute of International Studies, noted that “there are creative policy solutions that could potentially reduce the cost of renewable energy support by as much as 30%”, in developing economies. Nelson and Shrimali recommended: (1) reducing the cost of using debt sourced from the developed world, by for example, index linking energy tariffs to foreign currency, thereby reducing the currency hedging costs; (2) improving the cost effectiveness of domestic renewable energy support programmes; and (3) lowering the overall costs of debt by providing debt concession programmes.
In addition to the financial issues, Prime Minister of Barbados, Freundel Stuart noted that the absence of inter-island co-operation within and between SIDS regions (commonly known as SIDS Collectivity – SIDS speaking with one voice), is one of the most critical obstacles to be urgently addressed with respect of the implementation of the SIDS agenda, and the post-2015 Development agenda.
Recently the Renewable Energy Centre was launched in Barbados. It is aimed that the Centre will serve to revolutionise the renewable energy sector and help to develop the region’s economies. Indeed, renewable energy and energy efficiency are widely seen as key to the Caribbean reducing its long-standing dependence on imported fossil fuels. It is perhaps fitting that the Centre should be located in Barbados, given the pioneering work on solar water heaters and solar energy in the island, by people such as the late Professor Oliver Headley and the entrepreneur James Husbands.
Delegate of the European Union (EU) to the Caribbean, Mr Mikael Barford, noted that the Centre should serve to overcome challenges related to technical coordination and implementation within the region. The Centre, he argued, had to adopt a strategic approach, building partnerships. The EU and its Member States have contributed some US$12 billion in 2013 alone, almost half of all pledges to the Green Climate Fund.
The work of the CARICOM Energy Programme and the CARICOM Sustainable Energy Roadmap and Strategy, also offer significant potential. CARICOM is the political grouping of the region and its common market. According to Dr Devon Gardner, programme manager for energy in the CARICOM Secretariat, the Programme’s work activities are aligned along four main thematic parts: (1) developing information and knowledge management; (2) capacity building and institutional strengthening; (3) climate resilience and economic resilience; and (4) finance, working in conjunction with the Caribbean Development Bank (CDB) and other financial institutions. The Secretariat has partnered with international financial agencies to develop the The Caribbean Renewable Energy Development Programme (CREDP).
For example, Tessa Williams-Robertson, head of Renewable Energy/Energy Efficiency Unit, in the CDB, notes that energy security is one of the key strategic objectives within the Bank’s 2015 to 2019 strategic plan. It is developing a new energy sector policy and strategy and is seeking accreditation to the EU’s Adaptation Fund and to the recently-established Green Climate Fund. It has also recently utilised the European Investment Bank’s Climate Action Line Of Credit for partial loan financing for a utility scale solar photo voltaic plant. The Bank is also partnering with the Inter-American Development Bank, Clean Technology Fund, the Japan International Co-operation Agency, and other potential partners to support further investment in climate adaptation and mitigation, and energy security.