Renewable Energy Efforts in the Caribbean

RENEWABLE ENERGY EFFORTS IN THE CARIBBEAN
by James Post

There are a variety of different types of renewable energy in the Caribbean and this article gives the status on each. After an overview, including a summary on the most promising ones, a status is given per renewable energy type as well as per island. Finally, a technology update is given per type of renewable energy including amazing developments in wind and solar energy for home use, even DIY.

Overview

Without exception, Caribbean islands are ideally suitable for wind and solar energy as the wind regime is favourable and the sun shines bright every day. While solar photo-voltaic systems require subsidies to be applied in western hemispheres, the high cost of energy in the Caribbean causes a break-even point for individual solar PV owners at around 80 to 90 US$ per barrel of oil. Windmills have a break-even point of between $48 to 80 US in the small/mid-range category.

In June 2008, the oil price exceeded $140 US per barrel, while in December 2008 the oil price was below $34 US per barrel. In June 2009 the price was over 70 US$ per barrel. Once the economy recovers, is there any doubt the oil price will again surpass this level?

Clearly, wind energy can provide a substantial monetary and energy savings to the Caribbean. So, why did the many initiatives presented last summer not come to fruition? The answer is bi-fold: the plummeting oil prices and the availability of financing. The oil price is no longer the big issue, but financing is now the bottleneck. Even in North America, with a substantially lower energy cost, the trend of home owners buying a new generation of small, super-quiet windmills is rising fast. This means higher production volumes, which in turn generates more competition.

FOR WIND ENERGY TO BECOME A WIDESPREAD SUCCESS IN THE REGION… LEGISLATION THAT ENFORCES NET METERING WILL BE REQUIRED.

In 2008 a typical home windmill sold for $3,500 US - now the latest “out of the box” windmill is scheduled to go on sale for less than $2,000 through the use of wide-spread US based hardware distribution chains. For wind energy to become a widespread success in the region, a Caribbean-wide legislation that enforces net metering will be required. The net metering will ensure that the electricity user is charged for the difference between used and supplied energy. Without net metering, these windmills would not be a viable option in the Caribbean. Fortunately, there are some positive exceptions in the region, such as in Grenada, where the local utility, Grenlec, has provided net metering (up to 10 kW renewable energy systems, which covers the home market) as well as rules and contracts that are easy to understand and work with.

At the low end of the market, engineers now offer DIY designs for small scale wind and solar systems. While the yield of these systems is not high, the cost of materials, thanks to the use of recycled materials, is range in the few hundred US dollar bracket (base: North American conditions). For typical North American households, these systems would only provide a fraction of their energy use. In the majority of Caribbean homes, the energy demand is typically limited to lighting, a refrigerator, washing machine, iron, TV and stereo set. Practical recycling is common practice in the Caribbean. For instance, many people use ovens made of used drums and barbecues constructed from worn gas bottles - noted examples of the creativity of the Caribbean people. Add to this the fact that these DIY recycled-based designs are so affordable, even for the average Caribbean family, that they may gain rapid popularity in the Caribbean (see link to more information at the bottom of this article).

Once financing is available every utility company should provide their customer base with affordable energy prices. One way those companies can take action is to install wind parks, currently the easiest and most sure way to substantially reduce the price of electricity. If these companies don’t adopt these measure, we may experience the same situation as in the Summer of 2008, when there were demonstrations, even riots, against the high cost of energy. It certainly is not in the best interest of the utility companies to be confronted with a growing number of consumers that cannot pay their bill anymore either as this causes financial losses or disconnections. Usually it is both, as many people who are in arrears cannot settle their account, and after being disconnected, they simply give up.

DISMANTLED WINDMILLS FROM UPGRADED WIND PARKS FIT WELL IN THE CARIBBEAN, AND AT A COST THAT WOULD NOT BE PROHIBITIVE.

An interesting option for many Caribbean islands is to use dismantled windmills that were installed around 12 years ago in those overseas countries that had committed to substantially increase their renewable energy base. The easiest way for those countries to achieve their energy base is to upgrade their existing wind parks, i.e. from 250 kW to 2 MW, thus creating an eight times higher capacity, without having to deal with the complicated and time consuming procedures of establishing an entirely new wind park.

In many highly populated countries there are just no more land sites available, and for them, offshore becomes the only, but more expensive, option for new wind parks. So the best option is to upgrade. Then, of course the face the fact that there is no market for the used windmills they have dismantled from the upgraded wind parks. This presents a win-win situation for those countries and the Caribbean. In the Caribbean the placement of large windmills can be problematic because of the infrastructural limitations, not to mention the financing dilemmas. So, these dismantled windmills from upgraded wind parks fit well in the Caribbean, and at a cost that would not be prohibitive.

The typical lifetime of a windmill is 25 years, so the windmills from upgraded wind parks should be ready for a second term. In this respect it should be mentioned that after around 12 years a major revision is normal, whereby all parts subject to wear and tear are completely and routinely overhauled. Clearly, it makes a lot of sense to perform this prior to re-installing the windmills. However, most second hand windmills are sold “as is” and as many buyers are unaware of the need for revision; this has led to installations in third world countries, requiring excessive maintenance and reduced availability.

A company in the Netherlands (http://www.mainwind.nl) has specialised in supplying and installing revised windmills and even offers full warranty and the option for all-inclusive maintenance contracts. This is clearly the safer way to go, especially since they have - and that is hardly a coincidence - experience installing windmills and wind parks in “difficult” markets. As the installed cost of a used, completely overhauled windmill is around 40% of a new windmill, one needs little imagination to understand that this is a very cost effective solution - and everybody in the renewable industry knows this.

There are two options on how the revised windmills can successfully be installed:

1) At electricity consumers who are connected to the grid and sell their excess energy to the grid. Even when the utility companies are not prepared to pay a reasonable price for the excess energy (mandatory in most of the Western world) this is still an attractive arrangement for the power hungry electricity user. In cases where the cost of energy is a substantial percentage of total operating cost it may even mean the difference between sustainable operation and losing the competitive battle of not being able to compete in the international market.

The utility companies don’t welcome this option as much, as they see it as a customer give away. When the utility companies accept the interconnection of third party utility-class windmills, and buy excess energy at substantially reduced prices, they at least make the first move to reduce the cost of electricity, which will become more and more significant when the oil price increases further.

When the companies cooperate with private initiatives to install windmills at power users, they will give a signal to the market that they are operating out of good will. Legislation seems to be the only remaining option to make this happen, like in the Western countries when this happened 20 years, or more, ago – as this was the only option when there is no cooperation. This legislation is already designed for all CARICOM countries, but Dominica seems to be the only island that implemented this properly and has a functional regulatory body.

2) In wind parks installed on the imitative of the utility companies or by investors with a Power Purchase Agreement. In Grenada for example, where the local utility is owned by a parent company with staff experienced in wind energy, a utility company-owned wind park is the current objective. This approach also has the advantage in that the utility company has direct control over the technical integrity of the grid. Considering the worst case scenarios of highest wind and lowest electricity usage, as well as the influence on the grid due to sudden peaks caused by wind gusts (the larger the wind participation is in the total energy situation) provide sensible arguments to have experienced utilities companies the proper control over larger wind parks.

With the same justification, the effect of small wind farms is less significant. It is therefore a wise choice to start with a limited approach, i.e. by installing a wind park of 3 MW using fully reconditioned windmills from upgraded wind parks, rather than going “all the way” - i.e. 8 MW in a grid with a base load (minimum usage at all times) of 16 MW. The first solution is an off the shelf routine project compared to an engineering project requiring significant measures that will likely include stabilisation measures that are far from routine.

With the investment being far lower, and to be written off well before the end of the wind park’s lifetime, the financing is much easier. The cost per kWh (kilowatt hour, also referred to as unit cost) is competitive even with much larger, and new windmills, even considering that in wind energy “bigger is better (cheaper).”