November 11, 2013
Head of The Bahamas Renewable Energy Association has called on the government to "stop delaying" advances in renewable energy generation in this nation, in response to a new report indicating that The Bahamas ranks 26th out of 27 countries in the region for its "progress and prospects" in relation to renewable energy investment.
The 2013 CREF-Castalia Renewable Energy Island index was revealed in October to hundreds of energy sector stakeholders from throughout the Caribbean and beyond at the Caribbean Renewable Energy Forum, which was hosted this year in Aruba.
The results show that The Bahamas has not only failed to gain ground with respect to its competitiveness as a jurisdiction for actual or planned RE generation, but it has in fact lost competitiveness simply by being overtaken by other Caribbean nations by dint of its inaction.
In the 2012 CREF-Castalia Renewable Energy Island index, The Bahamas was ranked second to last out of 22 countries assessed. In the 2013 index, 27 countries are ranked, and The Bahamas again places second from the bottom.
Guilden Gilbert, head of The Bahamas Renewable Energy Association, said that he is not surprised by the ranking, as "effectively the government has really done nothing with respect to renewable energy" and there continues to be "no forward movement" in this regard.
Referring to the government's indications that it plans to shelve action on renewable energy implementation until after the Bahamas Electricity Corporation (BEC) reform process is intended to be completed in mid-2014, Gilbert, also vice president of Alternative Power Sources Bahamas, a renewable energy solutions provider, said he sees no need to wait any longer.
"It doesn't make any sense," he said. "If you are going to implement, then implement; it doesn't make sense delaying.
"I understand that they are trying to sell BEC, to sell the generation arm of BEC, but if you look at the way BEC operates, Nassau subsidizes the Family Islands (electricity costs), so any private investment that comes in would probably be extremely reluctant to take the Family Islands - they are loss leaders."
Castalia Strategic Advisors describes the CREF-Castalia Renewable Energy Island index as one which aims to "track real progress and real prospects in renewable energy investment in the Caribbean."
"It is intended to help project developers and financiers see where the action is. Governments that want to attract renewable energy investment can use the index to see how their country is doing relative to others, and adjust their policies and plans if needed to get a higher ranking and attract more investment in renewable energy."
As such, it is likely that the ranking at the bottom of the index will be of some embarrassment to The Bahamas as it has expressed hope of moving towards what government officials have suggested will be significant reform in the area of energy in 2013 and heading into 2014.
Announcing plans to advance private sector involvement in BEC's generation, transmission and distribution arms in August, the government also indicated intentions to move ahead with plans to advance renewable energy generation after mid-2014, following the targeted completion date for the BEC reform process.
The index ranks countries taking into consideration three components: the enabling environment for renewable energy investments, the renewable energy projects already implemented, and the popeline of potential renewable energy projects.
In the overall index, The Bahamas ranks second from last (British Virgin Islands being the lowest rated of all), having the least "enabling" environment for RE, among the smallest planned RE generation and no recognized existing RE generation.
The enabling environment component consists of the extent to which an investor can experience "ease and security" in successfully implementing a viable RE project in the jurisdiction in question.
"For large-scale investments, this refers to the ability of a utility to recover costs and make a return on investment, or the ability of an Independent Power Producer (IPP) to get a bankable off-take agreement for RE investments. For small-scale investments, this refers to a customer's ability to recover costs of a viable grid-tied distributed RE system," states Castalia in its 2012 document.
Gilbert said that having The Bahamas at the bottom of the ranking would "definitely make investors gun shy" to enter this nation to provide renewable energy solutions, but added that the company he had partnered with to offer a Family Islands solution was still prepared to step up and move ahead with the project.
Highlighting the inaction on renewable energy, Gilbert noted that his company along with an international partner had proposed a photovoltaic plant energy solution for the Family Islands to the government, initially responding to a tender put out in 2012 that was later revoked.
"They put out a tender document for provision of 15 MW PV plants on FI that was rescinded by government two days before the due date for submission. We'd already done all of our work so we submitted it anyway. We would have financed it at 100 percent, so there was no capital cost to the country. There's a 20-year warranty across the board, and after 20 years we would've handed it back to the country at no charge. The delivered cost of energy for us was around 23 cents so even if BEC added a margin for distribution of 10 cents per kilowatt hour it still would've brought the cost of electricity down 25 percent. But nothing came of that.
"I think The Bahamas just needs to make a decision, all of the countries are showing it can be done and moving ahead with renewable energy."
Ranked in the top 10 in the CREF-Castalia Index are Dominica, Montserrat, Guyana, Guadeloupe, Belize, Grenada, Martinique, St. Vincent and the Grenadines, Jamaica and Curacao. In the bottom five, are Turks and Caicos, St. Kitts, Antigua and Barbuda, The Bahamas and the British Virgin Islands.
Castalia, the Washington, D.C.-based consultancy which compiled the index for the second year running, is well known to the government, having been hired by the Inter-American Development Bank on behalf of the Bahamas government on previous occasions to conduct studies into BEC and the water sector.
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