There has been a perception that Trinidad and Tobago is the only energy-rich country in the Caribbean.
However, our other borrowing member countries (BMCs) are definitely not energy poor.
Evolving renewable energy technology and recent price reductions can potentially bring about a transformation in the energy landscape to the extent that all BMCs can now harness their available resources.
With our considerable potential to enhance regional energy security, save foreign exchange, improve the competitiveness of Caribbean economies; and with falling prices of renewables, including solar energy technologies, what prevents us from taking advantage of the opportunity to create a Shakespearian-type “sea change” in the Caribbean’s energy landscape?
The legislative and regulatory environment is a major hindrance to the pursuit of a new energy paradigm for our region. There are two priority areas for urgent government action. We need to change the legislative framework, at the national level, in order to facilitate access for renewables by altering the monopoly on generation where this exists in BMCs. Revisions in the framework should ensure equitable pricing for supply from independent power providers or small, distributed renewable generators of electricity.
As a matter of urgency then, all BMCs should follow the lead set by Barbados and Jamaica, which have already enacted the supporting legislation.
An appropriate regulatory framework needs to be established for each BMC to ensure that equitable tariffs and rules for optimal performance are in place and to make certain that the interests of consumers, investors and governments are balanced. Given the constraints of market size, and the availability and cost of specialised skills necessary for the effective administration of the regulatory function, it makes sense for a collective approach to be adopted.
The building of a new energy paradigm must give priority to energy efficiency, which is relatively low-cost and yields a high return on investment with a short payback period.
A successful energy efficiency programme, incorporating appropriate tax incentives, would reduce household expenditure on electricity and other forms of energy, thereby increasing disposable incomes. Businesses, especially the critically important micro, small and medium sized-enterprises (MSMEs), would also see improvements in their efficiency and their competitiveness.
Our fight against high energy prices could, potentially, also open the door for the emergence and growth of new non-traditional businesses that promote the use of energy-efficient technologies and services to reduce energy consumption.
The growth of industries producing and/or installing solar water heating systems are the most familiar of the new industries that have emerged in our region as a response to high energy prices.
In the new energy paradigm, we should expect an expansion in new industries around a range of energy services, and the manufacture and installation of PV and other renewable energy systems and energy saving devices.
The new paradigm is integral to the “Green Economy” approach currently under consideration by some BMCs, and is consistent with the CDB’s Climate Resilience Strategy.
Promoting poverty reduction through inclusive and environmentally sustainable growth, and building resilience to external shocks and natural hazard events underpin all of CDB’s development financing and technical assistance to its BMCs.
Within that broad framework, the bank has been intensifying its focus on renewable energy and energy efficiency.
(Dr Warren Smith made these remarks at his organisation’s recent annual meeting of governors in Georgetown, Guyana.)
