Cleantech Investor

First published in Cleantech magazine 2011 Issue 5. Copyright Cleantech Investor Ltd

Renewable energy technologies are especially compelling in island communities which have scarce resources of traditional fuels, but are often rich in renewable resources. There is growing interest in island projects, illustrated by several recent deals in the Caribbean.

The Overseas Private Investment Corporation (OPIC), the development finance arm of the US Government, has approved a loan of $16  million for a wind farm on St Kitts. The Caribbean island nation of St Kitts and Nevis has no indigenous source of fossil fuels and imports petroleum fuel at a cost of an estimated 15% of GDP (it currently uses diesel generators for electricity production). OPIC has recently focused on deals which can help catalyze investment in renewable energy - but this is the first investment by OPIC in wind power.

The St Kitts wind plant, which will have a capacity of 5.4MW (representing close to one third of the nation's energy demand), will be the first independent power producer on the island. OPIC President and CEO, Elizabeth Littlefield, commented that:

“This single power plant will significantly reduce emissions and the need for imported fuel in St Kitts and Nevis, as well as lower the cost of energy for her citizens.”

St Kitts and Nevis is recognised by the United Nations as a ’Small Island Developing State’, one of 39 low-lying coastal countries which face significant sustainable development challenges. The introduction of wind power on the islands will have the double benefits of reducing the use of diesel fuel and related emissions, as well as providing a more affordable and reliable supply of electricity to the island population - almost one quarter of whom lives below the national poverty line. The project is sponsored by North Star St Kitts Ltd, a company which is majority-owned by Fairways Equities LLC of Texas, alongside MAS St Kitts Wind LLC, a St Kitts and Nevis business, and North Star Bellevue LLC, a St Lucia company.

Over in The Bahamas, attention is focusing on ocean thermal energy conversion (OTEC). Sometimes described as the ‘third marine renewable’, OTEC capitalises on heat differentials between deep water and surface water in the ocean – think of a large heat pump in the ocean, running in reverse. OTEC is an appropriate technology in locations such as The Bahamas, with its combination of deep sea water and tropical latitudes.

OTEC was the subject of significant research in the 1970s when a US Government investment programme financed the technical demonstration of a floating OTEC system by Lockheed in Hawaii. The technology was demonstrated, but interest waned after the oil crisis and OTEC has re-emerged only in recent years.

Ocean Thermal Energy Corporation (OTE) is focusing on smaller scale land-based plants which are appropriate in locations such as islands. The company recently signed a Memorandum of Understanding with the Bahamas Electricity Corporation (BEC) toward the development of OTEC projects, which can offer base-load electricity and have the benefit of also providing potable water.

OTE Corporation plans to build and operate two OTEC plants on the islands. Jeremy P. Feakins, OTE Chairman and Chief Executive Officer, said:

“We are thrilled to be partnered with BEC in this way. The agreement with BEC has a global impact as the first of its kind OTEC facility to utilise ocean water for clean energy, fresh drinking water and sustainable aquaculture in a commercial capacity .”

Kevin Basden, General Manager of BEC, which operates electric generation, transmission and distribution systems across The Commonwealth of The Bahamas, added:

“This is a historical time for BEC and residents of The Bahamas. We are looking forward to working with OTE Corp to bring this technology and energy independence to our communities.”