RENEWABLE ENERGY 'AMAZING CHANCE' FOR DIVERSIFICATION
By NEIL HARTNELL
Tribune Business Editor
Nassau, The Bahamas
THE Bahamas has an "incredible opportunity" to diversify its economy by becoming a renewable energy exporter, a leading Caribbean expert yesterday saying it could emulate Israel's 92 per cent penetration rate if it acted now to prevent the competition "blotting it out".
Jerry Butler, chairman and principal consultant of the Caribbean Renewable Energy Forum (CREF), said matching the likes of Israel on sustainable energy take-up was "not a pipe dream" for the Bahamas if the political will and leadership were there, and the correct plan implemented.
Noting the Bahamas' renewable energy export potential, given its proximity to the US, the world's largest energy consumer with 25 per cent of the global market, Mr Butler added that a substantial domestic industry could be created through cutting this nation's annual $1.2 billion fuel import bill by 25-33 per cent.
Noting the regional lead established by the likes of Trinidad & Tobago and Barbados, the latter of which has a 95 per cent residential solar water heater penetration rate, the CREF chairman said his organisation had helped the latter nation to create a $10 million smart fund for renewable energy investments.
After the CREF conference was staged in Barbados last year, that fund attracted another $80 million, funds now available for Barbadians to partner with international financiers and developers on renewable energy projects.
Explaining how the Bahamas could effectively create a new industry by focusing on renewable energy, Mr Butler said: "It's a policy and never-ending journey that starts from the top....."
Noting the "age old focus on diversification" of the economy, Mr Butler, the former Inter-American Development Bank (IDB) country head for the Bahamas, added: "I truly believe that given what I've been able to accomplish with my team elsewhere in the Caribbean, a diverse sector of opportunity the Bahamas should focus on is renewable energy, both for domestic and security needs, and opportunities for international export."
This nation's proximity to the US, the nation that consumes 25 per cent of the world's energy supplies, meant "an incredible opportunity exists for us to provide a client base and financing to help the Bahamas' prosper".
Mr Butler, giving a preview of his contribution to this Thursday's Bahamas Business Outlook conference, said: "The incredible opportunity we have in the Bahamas will be lost to other jurisdictions if we do not take the chance to move on it on an erstwhile, consistent and well thought-out method. "
When asked by Tribune Business how long the Bahamas' window of opportunity to become a renewable energy leader would last, Mr Butler said: "Our window of opportunity will last as long as oil prices continue to rise, and as long as the competition remains in a working condition that has not blotted us out."
Multiple jurisdictions had plans to not only embrace renewable energy domestically, but export it. As examples, Mr Butler referred to Trinidad's 2020 policy, which aims to build on its own substantial gas and energy reserves to pave the way to renewables, and Barbados's 2025 policy, which speaks to growing this as a sector.
A Barbadian renewable energy company, he added, already had two representatives in the Bahamas, and was looking to export some 100,000 solar water heaters to other Caribbean nations.
"A Bahamian could very much have been involved in doing that," Mr Butler said. "The window of opportunity is there as long as the competition does not blot us out."
Apart from export opportunities, the CREF chairman said the Bahamas' annual $1.2 billion fuel import bill gave it the chance to develop a sustainable renewable energy sector for supplying the domestic market.
Just seizing a 30-40 per cent market share from fossil fuels would free up $300-$400 million annually for a renewable energy industry, Mr Butler said. "That's a lot of people they can employ," he added.
The CREF chairman added that he had driven from south to north Brazil without having to fill up his car once with fossil fuels. The Latin American nation, which has one-quarter of the Bahamas' per capita GDP, had reduced its fossil fuel reliance through ethanol and ethanol derivatives, and there was no reason why this nation could not follow suit.
Pointing out that the Bahamas Electricity Corporation's (BEC) financial and generational inefficiencies were not new, Mr Butler said its reliance on fossil fuels to run generators that were primarily slow speed diesel was "unsustainable".
"BEC cannot continue to be subject to world oil prices and pass them on to you as a surcharge," Mr Butler added. But, if it was able to derive a percentage of its generation needs from renewable sources, the impact of oil price volatility would be reduced, and the outflow of US dollars and foreign currency reduced.
Describing this as "a win-win" for utilities such as BEC, Mr Butler suggested the Bahamas could even split off power generation from its distribution and transmission. Depending on how it was implemented, this could permit businesses and homeowners to receive credits for selling excess power back to the BEC grid, and allow independent power producers (IPPs) to reach commercial agreements with BEC to supply it with electricity.
This would ultimately reduce electricity prices for Bahamian consumers, who have to put up with fuel surcharges that have averaged $0.28 per kilowatt hour (KwH) over the past two years. This compared to $0.42 per KwH in Jamaica, but just $0.18 per KwH in Miami.
Mr Butler said Bahamian homeowners could likely install solar power to run their homes at a $0.19 per KwH cost, "empowering" themselves and steering the country in "a totally different direction" on energy.
Noting that it was not impossible to see the day when the likes of the airport, hotels and government buildings had solar panels installed on the roof, Mr Butler said Germany - which saw sun for just two-thirds of the year maximum - already had a 26 per cent renewable energy penetration rate.
"It's a totally different visionary concept for what could be in the Bahamas," Mr Butler said. "It's not a pipe dream. This is workable for the Bahamas. We just need a vision that can be implemented with the right people, and need Bahamians behind it to sustain it."
Mr Butler added that by just focusing on energy conservation and efficiency, though initiatives such as replacing incandescent light bulbs with CFLs, and placing timers on hot water heaters, the average electricity bill could be cut by 40 per cent.
January 10, 2012