By Marlon Madden
President of the Caribbean Development Bank (CDB) Dr Gene Leon has thrown out a challenge to regional leaders to quicken their pace in transitioning to full reliance on renewable energy sources.
In fact, declaring that the region had only one option of “bold and urgent action”, he said achieving the 2030 goal of becoming carbon neutral was critical to building economic and climate resilience.
“The task at hand is no trivial feat. Achieving the regional target by 2030 will require an increase in our renewable energy penetration by approximately 43 per cent, which translates to an increase of our capacity by an estimated 2 600 megawatts within [seven] years.
“Embracing renewable energy, therefore, is not a choice but a necessity,” he told participants on day two of the Caribbean Energies and Investment Forum, Thursday, at the Lloyd Erskine Sandiford Centre.
He argued that while the renewable energy transition in the Caribbean was “no longer a pipe dream” and some countries, including Barbados, were making progress, there was still a long way to go.
“The Caribbean, like other regions, has a love-hate relationship with energy generated by fossil fuels. How much longer will we analyse, discuss, research, and visit other people’s renewable energy projects? Can we continue to afford paralysis by analysis on this matter of energy transition?” Leon questioned.
The CDB president said there were several “transformative opportunities” on which governments should capitalise.
“The first is the opportunity to promptly green government buildings and facilities. Given the clear commitments of governments for energy transition, the abundance of solar energy resources in all Caribbean countries, and the maturity of solar photovoltaic, battery energy storage technologies, and micro/mini wind turbines, I ask the question, ‘Why are all government buildings and facilities not powered from renewable sources?’
“The potential fiscal benefits are tremendous since government facilities represent the single largest electricity user in most Caribbean countries. The business case is clear and strong, and commercial banks even want to support these projects. It is one of the few areas where we have sufficient skilled persons and capacity available in the region,” contended Leon.
He also challenged Caribbean leaders to “commit with urgency to a 100 per cent greening of public transportation, lighting of all public buildings and facilities being powered from renewable energy, and knowledge creation in various centres of excellence in renewable energy”.
He said the Barbados-based CDB was willing to provide the relevant investment and technical support.
The bank president said there was also an opportunity for the region to create an interconnection of electricity and fibre optic digital grid through underground and submarine cables, which would be for domestic use, for trade in energy, and to facilitate improved climate and disaster resilience.
“Imagine the potential to innovate and spawn industries for economic diversification unrestricted by the need to own energy generation. Imagine the private sector confidence boost in longer-term investment knowing that policy uncertainty is being anchored on a foundational concept of adequate and connected energy supply. The Bank has commenced coordination of these dialogues on the concept and key partners have signalled support to advance some key studies,” he announced.
Leon argued that the region’s transition to renewable energy will not be possible without policy and regulatory certainty. He also recommended the pooling of resources and forming of key partnerships.
“Policy and regulatory certainty provide the framework and assurance investors need, signalling a government’s commitment to the energy transition, fostering trust and thereby catalysing the financial flows essential for transforming the energy sector,” he said.
“We also need a framework for joint responsibility. That framework consists of three elements – strategic partnerships among public and private sectors, multilateral institutions and international development agencies to leverage relevant technical and financial resources; financial institutions to devise innovative and flexible financing arrangements that can modify and reduce risk profiles; and governments to adopt appropriate regulatory governance and implementation frameworks to facilitate the crowding in of investments.”
The head of the CDB said the energy transition in the region should be driven by innovation and will require significant investment.
He reiterated that CDB’s estimates were that the transition in the region would require about US$1.2 billion (BDS$2.4 billion) in annual investment, or about 16 times the current level of annual investment, in the sector. Leon said that should come from the private sector, development banks and other development partners, and must be affordable.
