Caribbean urged to unite on renewable energy procurement

Caribbean governments are being urged to pool their purchasing power and standardise procurement systems to drive down electricity costs and attract greater investment in renewable energy, as the region confronts persistent dependence on imported fossil fuels.

Permanent secretary of the Ministry of Energy and Business, Kevin Hunte, made the appeal as he addressed Tuesday’s opening of the Caribbean Aggregation Procurement Programme (CAPP) regional workshop at the Courtyard by Marriott.

The workshop brought together regional energy ministries, regulators and development partners to explore competitive, aggregated renewable energy procurement across the Caribbean.

Hunte said the Caribbean remained heavily dependent on imported fossil fuels, leaving countries vulnerable to global market fluctuations and geopolitical instability.

“The overwhelming majority of the electricity that powers our hospitals, our schools, our small businesses and our homes… is generated using fossil fuels that we import from somewhere else,” he said.

“Every kilowatt hour we consume is in part a transaction within a larger global commodity market over which we have absolutely no control.”

Hunte noted that Caribbean people continue to pay some of the highest electricity costs in the world, not because of local failings, but because of the region’s small markets and fragmented systems.

“A family in Bridgetown, in Castries, in Kingston or in Roseau pays a premium not because of anything they have done, but because of the scale of our markets, the isolation of our grids, and the fragmented way in which we have historically gone to market.”

Despite possessing abundant renewable resources, including solar, wind and geothermal energy, Hunte said the Caribbean’s renewable energy deployment had remained below the global average over the past five years.

He pointed to a growing pipeline of renewable energy and battery storage projects identified by regional partners, but warned that continuing to procure projects individually would keep costs high.

“If we procure these projects in the way we’ve always procured them, country by country, tender by tender… we will continue to pay a premium and continue to pay more than the global average for the same assets and storage.”

Hunte argued that pooling regional demand and standardising procurement systems would make the Caribbean more attractive to international developers and investors.

“If we pool that demand, if we standardise our procurement processes and documents, if we present international developers and investors with a single credible, well-structured regional pipeline rather than fragmented 15 national ones, the benefits are extraordinary. 

“One major benefit is the ability to garner substantial combined savings. That is money that stays at home here in the Caribbean.”

Drawing comparisons with regional institutions such as CARICOM and the Organisation of Eastern Caribbean States, Hunte said Caribbean countries had already shown they could successfully cooperate when acting collectively.

“When 15 Caribbean ministries go together…for a few gigawatts, structured intelligently with standardised contracts and credit enhancement built in, that is a tender that the entire global renewable energy industry will compete for.”

(SB)