Monthly Archives: February 2014

Caribbean Going Green – Will the Cayman Islands be next?



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Richard Branson Launches A Green Energy Plan For The Caribbean

In 1979, when Richard Branson bought the 74-acre Necker Island in the British Virgin Islands, he paid less than $300,000. It was untouched, undeveloped, inhabited only by birds and jungle critters. Back then, no one worried a wit about carbon emissions, ocean acidification, rising sea levels. To bring electricity to his island retreat Branson, like virtually everyone else on the small islands of the Caribbean, installed diesel generators.

Necker Island

As far as fuels go, diesel is hard to beat. It’s easy to transport and contains a lot of energy in a small volume. It’s already ubiquitous in the islands as fuel for boats. And it’s never been cleaner, with U.S. government standards limiting sulfur content to no more than 15 parts per million. For decades, diesel was simply the way to go.

But Branson wants to change that. Because running on diesel means that the cost of electricity on Caribbean islands averages about 50 cents per kwh, about five times what it is on the mainland United States.

In early February, Branson leveraged his star power to convene a three-day meeting of dignitaries from 13 Caribbean nations including the Virgin Island, St. Kitts & Nevis, Turks & Caicos and the Cayman Islands. While enjoying both Necker Island and Branson’s neighboring Moskito Island, they discussed the costs of powering their island homes and the economics of switching over to clean, green renewable energy.

Working with The Carbon War Room (an anti-carbon group he co-founded) as well as the energy experts at the Rocky Mountain Institute, Branson is promoting something called the 10 Island Renewable Challenge. The idea is to get the island nations of the Caribbean to switch away from diesel. The argument is simple: going carbon-free won’t just help keep the air clean and reduce greenhouse gases in the atmosphere — it will save lots of money too.

To help the cause, Carbon War Room and RMI have worked with the World Bank and the U.S. Overseas Private Investment Corporation to earmark $300 million for new renewable energy projects in the islands.

Necker Island will be the first to make that shift. Within three years Branson aims to be using solar and wind, with battery backup, to provide for 80% of Necker’s energy needs, with a long-term goal of 100%. Branson has contracted with NRG EnergyNRG Energy to build Necker’s renewable micro-grid.

“What we hope to do is use Necker as a test island to show how it can be done,” said Branson in a statement. “The only way we’re going to win this war is by creative entrepreneurship.”

Among the world’s CEOs and billionaires, Branson has real environmentalist cred. Sure the founder of Virgin Records, Virgin Airways, and now Virgin Galactic is responsible for millions of tons of carbon emissions over the years. But he’s been trying to make up for it. As early as 2008 his airline flew a Boeing Boeing 747 from London to Amsterdam on a low-carbon fuel made of babassu oil and coconut oil. He’s also a backer of the new solar-powered airplane SolarImpulse.

Jon Creyts, a managing director at the Rocky Mountain Institute, was in attendance at the conference, and shared with the group RMI’s research on just how much sense it makes for the islands to shift from diesel. According to Creyts, when you factor in the costs of fuel, transmission and capital investment, the average cost of electricity in the Caribbean ranges from 32 cents to 65 cents per kwh. That’s as much as five times what the average American pays for electricity. Most of that cost is in the diesel; a 1,000 kw diesel generator running at 100% capacity gulps about 70 gallons in an hour. That equates to .07 gallons per kwh. At current diesel prices in the Virgin Islands of $3.50 per gallon that comes out to 25 cents per kwh in diesel.

Compare that with the U.S. Energy Information Administration’s figures for the all-in costs of other generation methods. Gas turbines can do about 7 cents per kwh, offshore wind 22 cents, and solar photovoltaic 14 cents.

The increased costs of building in isolated locations might add a couple cents per kwh, but overall it’s hard to argue that the islands should stick with diesel. Even before Richard Branson’s new efforts, Aruba had worked with RMI and Carbon War Room to institute a green energy revolution. In recent years Aruba invested $300 million to build a 20-turbine wind farm rated at 30 mw that meets 20% of the island’s power needs. It replaced its old electric turbines with more efficient models, and is building a solar panel park. Since beginning its efforts in 2006 Aruba has reduced its imports of heavy fuel oil from 3,000 barrels per day to 1,700 barrels, saving some $50 million a year.

The U.S. Virgin Islands had taken tentative steps toward solar, signing long-term deals with solar developers to buy power from three systems with peak capacity of 18 mw. That will meet about 18% of the territory’s peak demand. A 20-year deal with Toshiba Toshiba will cost an average of 17 cents per kwh. The islands also require that all new construction use solar power for hot water heating.

It sounds good, but even on the islands, reality is a challenge. According to a study last year by the National Renewable Energy Laboratory, solar developers need an average of 10 acres of land to put up 1 mw of solar panels. That implies that if the U.S. Virgin Islands were to go totally solar and replace its two big oil-burning generators that put out about 100 mw around the clock, they would likely need at least 1,500 acres of land (or roofs) covered in panels, a bunch of wind turbines to provide power at night, plus some sort of ingenious energy storage system smooth out the peaks. That could be doable on St. Croix, which consists of about 53,000 acres and the 1,500-acre Hovensa oil storage terminal on its south side. A 1,100-acre chunk of land adjacent to the terminal is now in process of being cleaned up and redeveloped.

An even better idea for the very long term is for these islands to tap their enormous and endless domestic energy opportunity: geothermal. Most of the islands in the eastern Caribbean were formed by volcanic action. The volcano on Montserrat erupted violently in 1997, killing 19. Because they are located close to the boundaries of two tectonic plates, the islands have plenty of natural volcanic heat that they could tap at relatively shallow depths. Already Iceland Drilling Company, based in the world’s capital of geothermal energy, is reportedly working on exploratory geothermal projects in Dominica and Montserrat. Projects are also being drawn up for Nevis and St. Vincent.

In time each of these islands could be powered by steam turbines running on virtually endless supplies of cheap energy harnessed from the Earth’s own internal furnace.

But solar, wind and geothermal are all expensive. Another part of the challenge, says Creyts, who was a McKinsey consultant before joining RMI, is that most of the Caribbean islands have pretty lackluster credit ratings and not much borrowing capacity. Indeed, Jamaica, St Kitts-Nevis, Grenada, Barbados and Antigua and Barbuda all have public debt loads approaching or surpassing 100% of GDP. That’s why it was so vital to get the World Bank and OPIC on board to help arrange low-cost financing.

There’s no shortage of potential projects for the islands to pursue, with energy-hungry hotels, hospitals and schools offering the lowest-hanging fruit. Naturally, there’s plenty of corporate partners ready to help the islands make the shift. Executives from Philips, Johnson Controls, Sungevity, Vestas and NRG were present at the Necker Island retreat.

There’s some incentive for these island nations to think about moving a little quicker in their renewables plans. Many Caribbean nation’s have joined the PetroCaribe pact created by Venezuela’s late President Hugo Chavez, whereby Venezuela has for years sent them discounted oil. Though Chavez’ successor Nicolas Maduro has continued the oil discounts, there is concern that amid Venezuela’s slow-motion economic collapse the largesse will soon end, forcing the islands to pay more on the world market.

Renewable, carbon-free energy doesn’t yet make economic sense in the most densely inhabited parts of the world that are already well served by reliable energy sources. But islands like these represent a motivated laboratory of energy evolution. In time, the lessons learned in the islands will be ripe for application across the other energy-starved corners of the world. More


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International Year of SIDS Launched


The International Year of SIDS was launched this morning by PM of Samoa, President of General Assembly, UN Secretary General, President of Nauru and USG of UNSIDS Conference. The event was emceed by Ambassador Jumeau of Seychelles. A great start to build momentum towards UNSIDS Conference in August 2014 focused on genuine and durable partnerships.


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Richard Branson Wants Caribbean Islands to Swap Diesel for Renewables

Dirty diesel is the most common form of electricity generation throughout Caribbean island nations, but that will change if billionaire Richard Branson has anything to do with it.

Branson is using his private island in the British Virgin Islands, Necker Island, as a test bed for a microgrid that will run on renewable generation. The project on Necker, which is supported by NRG Energy, is not just an exercise in bringing renewables to the region at any cost. It aims to make renewables affordable to island economies.

“What we’ve learned in the renewable world is everyone wants to save the world,” David Crane, NRG’s chief executive, told The New York Times. “But very few people want to pay more for energy.” The average price of electricity in the Caribbean is about four times higher than it is in the mainland United States.

The push for clean energy is the core mission of the Ten Island Renewable Challenge led by the Carbon War Room, a nonprofit founded by Branson. The problem for most islands is that the upfront cost of renewable technology and storage is relatively expensive given that most island nations have small populations. Because the projects are relatively small, compared to projects in the US or Europe, it can be difficult to get financing.

At the same time, however, islands across the globe depend on diesel, which makes electricity incredibly expensive compared to regions that rely on other fossil fuels such as coal or natural gas. Hawaii, for example, has the highest electricity rates in the United States, about double the price of the next closest state.

Branson's challenge in the Caribbean already has the support of Aruba, British Virgin Islands, St. Lucia, and Turks and Caicos. Aruba, for example, already has a wind farm and is planning more.

Other islands are looking at solar, wind, LED lighting for municipal applications, waste-to-energy, and geothermal. For years, Barbados has been toying with the idea of using a special breed of sugar cane for co-generation, but has yet to invest in a large-scale project. Late last year, Puerto Rico mandated energy storage to go with wind and solar projects on the island, which could be a model for other islands if it is successful.

On the 74-acre Necker Island, the microgrid will combine wind, solar, and batteries that can support about 80 percent of the island’s energy requirements. On small islands, like Necker, microgrids may seem like a natural solution, but cost remains an issue if they are powered by renewables.

Although the cost of renewables have come down, and might be competitive with expensive diesel power, intermittent renewable energy requires expensive storage and sophisticated controls to balance grid conditions on that small of a scale.

Branson has the will and the deep pockets to invest in such a project, but the results will have to be replicable at a price that non-billionaire utility customers can afford on other islands.

Some of the solutions may be in attractive financing, rather than in proving the technology. In some places, subsidies for diesel make it more affordable and if those are ended, renewables look more attractive. Short-term tax benefits for renewables can also help to get projects off the ground. The Carbon War Room said it would help islands with assistance in attracting project engineers and financiers.

“There’s tens of thousands of islands burning diesel fuel that’s really destroying their economies because it’s so expensive,” Crane told the The New York Times.

Branson is hoping for quick results, and not just on Necker Island. “We're hoping to get a number of islands to sign up to get as carbon-neutral as they can over the next few years,” Branson told “Immediately afterwards,” he wrote in a blog post, “we want to head to the Pacific Islands and implement everything we will have learned.” More


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The Asia Pacific Clean Energy Summit & Expo – Call for Papers’

The Asia Pacific Clean Energy Summit & Expo

Co-located with the Islands Innovation Summit & Showcase/ Pacific Defense Energy Summit & Showcase

September 15-17, 2014

Honolulu Convention Center, Honolulu, HI

The event is the preeminent meeting place for international leaders and energy experts at the forefront of the clean energy movement. Securing energy independence and developing a clean energy industry that promotes the vitality of our planet are two reasons why it is critical to reaffirm already established partnerships and build new ones throughout the Asia-Pacific region and the world. The summit will provide a forum for the high-level global networking necessary to advance this emerging clean energy culture.

'Call for Papers' Submission deadlines:

Panel Proposals – Due March 28th

Islands Innovation Challenge & Defense Energy Challenge – Due May 31st

For further information, partnerships, island/community showcase, or group programs, please contact Regina Ramazzini at

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Pacific island states ‘must think beyond grid to electrify’

JAKARTA, Indonesia —- Despite advances in research and development on renewable energy, Small Island Developing States (SIDS) in the Pacific remain the most energy-poor in the world, with an estimated 70 per cent of the population still without access to reliable energy.

A paper from the Crawford School of Public Policy at the Australian National University lays the blame on the pervasive focus on traditional approaches to rural electrification that prioritise grid extension. Grid extensions connect a home to a local utility grid.

But extending the grid lines in the Pacific region whose populations are spread across tens of thousands of islands may not be suitable and cost effective, the paper says.

“Both utility agencies and the private sector need incentives to extend electricity grids and to set up off-grid systems in rural areas. To provide those incentives, government subsidisation of upfront costs is necessary instead of merely subsidising operation and maintenance costs,” says Matthew Dornan, the primary author of the report.

Dornan says off-grid electrification projects, which involve mainly renewable energy, may be more sustainable in the long term. However, it requires significant upfront costs that are often impossible for local households or government to shoulder, he says.

“In terms of off-grid technologies, the key is simplicity,” explains Dornan. “Technologies should only be installed where they can be supported by institutional arrangements, be that a utility agency or a community technician.”

Renewables may play a stronger role in low-density, off-grid networks, but only with large-scale support, experts say.

According to Linus Mofor, a spokesperson for the International Renewable Energy Agency, “institutional strengthening, increased collaboration among islands and enhanced coordination of development partners, donors, regional institutions and national authorities and institutions are essential for efficient use of resources for renewables deployment in the region.”

Though his paper focused on SIDS, Dornan believes that his findings can help governments and development institutions alike in tackling the challenges of energy poverty.

“Sub-Saharan African and Pacific island countries can learn from one another given the capacity constraints that governments in both regions share,” he notes. More


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Utilities: Survival course for dinosaurs (advice from one of our own

Steve Klein recently served as a utility industry panelist at a conference where he introduced himself as a living, breathing dinosaur. It was not his intent to imply that he was really old, or not hip to the latest trends. Rather, he was making the point that this description was now being applied to electric power utility executives..

Citibank published a report titled “Energy Darwinism” that led industry analyst Jesse Berst to coin the prophetic phrase “Utilities are Dinosaurs Waiting to Die.” The original report argues that the utility industry’s dismissive attitude toward disruptive technological changes mirrors that of those who failed to recognize the game-changing impact of the Internet and cell phones. The report suggests that today’s electric power utilities could lose a substantial portion of their market to energy efficiency, solar, and other distributed generation technologies. Citibank further emphasized that history tells us such changes are never gradual.

Earlier this year, Marlene Motyka, an alternative energy advisor for Deloitte LLP, wrote an op-ed titled, “Why We Should Pity Utilities.” She highlighted the fact that utility “companies are caught in a vise: squeezed by simultaneously rising expenses combined with falling demand for electricity.”

Motyka was only addressing a portion of the vise. To complete the entire squeeze play, you also have to factor in legislative and regulatory pressure on utilities to fund large expansions of the nation’s transmission grid, as well as renewable portfolio standards, to ultimately promote large-scale commercial wind and solar development that likely will only add to the oversupply problem.

As I write this I am reminded of a clean tech venture capitalist who served with me on a panel that was charged with helping the previous governor of Washington establish a state energy strategy. Every time I made what I thought was an insightful comment from the utility perspective, he would whisper sarcastically to me, “Spoken like a true power company executive.” The electric utility industry is being accused today of resisting consumer demands by protecting its traditional business model in much the same way that Ma Bell sought to maintain control of its big black rotary telephone. Are we simply protectionists or dinosaurs that don’t want to adapt and accommodate technological advancement? Are we irrationally trying to preserve our version of the rotary phone?

I don’t want to be perceived like Ma Bell, but I do believe there are foundational elements of our industry that were put in place years ago and have served the nation and its citizens well. Unlike other parts of the world, everyone in America has access to safe, reliable, and affordable electricity at the flick of a switch. On the other hand, I would argue that we must adapt to the changing needs of our customers even if that means facilitating the application of new technologies that threaten our traditional business model.

I believe the best strategy going forward also happens to reflect my view of where we are heading as an industry. First of all, conservation and renewables are a legacy of the Pacific Northwest and should continue to be the first and foremost tools in our tool belt. As public utilities, we need to lead the way in making sure our communities are economically and ecologically sustainable through wise and efficient use of resources. Consumer-owned utilities do not exist merely to sell kilowatts and return generous cash dividends to detached shareholders; our dividends are evident through our unique values of local control, economic development, environmental and community stewardship, and overall quality of life. Public power utilities will have to become more creative to continue to be able to sustain strong conservation programs despite flat or declining energy load.

Utilities should also embrace the fact that a growing number of their customers want to avail themselves of distributed resources such as solar. We should develop community- based programs to educate and assist those who want to participate directly in supporting local renewable generating sources. Such programs can provide education and appropriate incentives as well as promote local economic development, similar to the many successful public power conservation efforts.

Rather than simply saying “no” to those in your community who look to the local utility for guidance, you should find ways to say “yes.” You can structure your program and rate design to address the potential revenue and nonparticipant impacts. I don’t expect distributed generation to grow as fast and have as large an impact in the Northwest as other parts of the country because of our comparatively low retail rates and underlying renewable resource base made up of non-carbon-emitting hydro. Resistance is not the best approach; it is better to work with customers, legislators, and regulators to meet this growing consumer interest. Our proactive stance will position us to better influence the solutions to adequately address reliability, safety, and economic impacts.

I see our role as power utilities changing over the ensuing years, but I also see certain fundamental aspects remaining unchanged in terms of utilities remaining mass market service providers. The grid system will become more and more complex, developing a multitude of interfaces with variable distributed generation as well as innovative service offerings and pricing schemes ranging from demand response to energy storage. This represents a challenging area upon which all electric utilities should be strategically focused. More buildings will become smart; they will have their own generating sources and energy management systems, and will be able to communicate on a real-time basis. The local distribution utility will still provide some level of central station generation, but it will be supplemented by local distributed generation as well as strategically sited utility- and customer-owned energy storage.

I think lots of people are interested in environmental sustainability and are willing to have a passively managed solar panel on their roof, but most consumers are not interested in becoming experts and committing the time necessary to effectively manage inverters, batteries, communications protocols, etc. That’s where the local utility comes in. We can provide a smart grid system that has the ability to balance and optimize all of the inputs and outputs to ensure that each customer has the energy they need when they need it.

We can no longer be satisfied with our form of Ma Bell’s black rotary dial phone, which is represented by an unsophisticated, one-way electric system highway. We cannot ignore the interests of our customers, who are demanding technological change and the provisioning of new services. With change comes opportunity, and I believe public power is well positioned to lead the way to the future utility service model, rather than going extinct like the brontosaurus and the black rotary telephone.

Steve Klein is the general manager of Snohomish County PUD in Everett, Wash. He can be contacted at More




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