This story was produced as part of the 2022 Climate Change Media Partnership, a journalism fellowship organized by Internews’ Earth Journalism Network and the Stanley Center for Peace and Security.

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While world leaders and delegates negotiated over formal climate financing at COP27, the international climate summit at Sharm el-Shiekh, Egypt, millions of US dollars are about to flow into the Caribbean region from one non-profit organisation focusing on the clean energy transition.

When tropical storms and hurricanes move through the region annually, between May and November, significant power disruptions can occur on islands already using diesel-powered generators. More than 44 million people across the Caribbean are at the mercy of these older power supply systems. This is why Rocky Mountain Institute (RMI), based in Colorado, in the United States, launched the Caribbean Climate Smart Fund at COP27 on Tuesday. The fund includes US$150 million for investment and US$15 million for project preparation to accelerate the Caribbean’s energy transition, led by RMI Islands and Lion’s Head Global Partners.

Climate resilient projects, like renewable energy systems, have longed for funding in the Caribbean region. However, the stringent criteria of the larger US billion-dollar climate financing mechanisms like the Green Climate Fund, the Green Environment Fund and the Adaptation Fund have prevented the level of success seen in the Pacific islands.

RMI Project Director for the Global South Benjamin Bartle, who spoke with Guardian Media in an interview, said RMI aims to use their project preparation facility to connect the projects on the ground with the available financing.

He said, “We actually have identified a significant pipeline of around US$600 million of projects that need that technical assistance that’s going to be provided through the project preparation facility.”

Bartle said funding will be spread across more than 20 countries, including Anguilla, Antigua and Barbuda, Aruba, Bahamas, Barbados, Belize, Bermuda, British Virgin Islands, Cayman Islands, Dominica, Grenada, Guyana, Jamaica, Montserrat, Saint Lucia, Saint Kitts and Nevis, Saint Vincent and the Grenadines, Suriname, Trinidad and Tobago, Turks and Caicos Islands, and the US Virgin Islands.

Many of the projects are aimed at making Caribbean countries energy resilient. In their press release, RMI said, “the investment fund will comprise a diversified portfolio of utility-scale renewable energy projects, distributed microgrids (often supporting critical facilities), and energy efficiency projects.”

Bartle also said, “It also means that these islands no longer rely on importing these fuels and have their own local sources of renewable electricity.”

According to RMI projections, renewable energy can save Caribbean countries US$24 billion annually and prevent price volatility in countries with floating electricity rates.

In the last two decades, and more so during the previous five years, the Caribbean has been ravaged by powerful Category 4 and 5 hurricanes. One of these powerful storms, 2017’s Hurricane Irma, at Category 5 strength, made landfall at peak intensity across Barbuda and the southern Bahamas, with power grids taken offline for days and weeks in some areas.

Experts have indicated with a warmer climate, there will be an 80 per cent increase in these high-end tropical cyclones.

Solar panels in the Bahamas as a result of an RMI-Bahamas Power and Light project to create solar microgrids across various islands of the country (RMI).

However, RMI worked with the Bahamas Power and Light to design, develop, and install a solar microgrid following Irma’s impact.

A microgrid is a small network that generates electricity for local consumption and can disconnect from the primary grid so the lights can stay on when the central grid is down.

The 390 kW Ragged Island microgrid provides renewable and resilient power to every home on the island. The grid was tested in 2019 when Category 5 hurricane Dorian moved across the Bahamas, including Ragged Island.

According to Bartle, the grids withstood the powerful winds. According to RMI, these stormproof energy systems provide consistent power for hospitals, telecommunications, and other critical facilities during and after extreme storms.

This green energy transition may make sense in countries with high electricity prices, but in T&T, the situation is slightly different.

The cost of electricity

Many Caribbean islands, T&T included, use fossil fuels to generate electricity.

As recently as last week, the Trinidad and Tobago Electricity Commission’s (T&TEC) General Manager Kelvin Ramsook admitted that due to high fuel prices, T&TEC has reduced the standby capacity of its generators when power disruptions occur. In an interview with Guardian Media, he said, “We don’t run with a significant amount of spinning reserve, which we can do, which could assist in avoiding these short interruptions, and the reason is quite simple. If I run with spinning reserve, I’m going to be using gas which is very costly.”

Minister of Public Utilities Marvin Gonzales, responding to questions from Guardian Media this week, said T&TEC saves over a million dollars a day by decreasing its reliance on standby reserves, which, in turn, has led to an increase in the number of brief outages around the country.

However, T&T has the luxury that many of our Caribbean neighbours do not—dirt-cheap electricity rates, even with the imported fuel to run our power generators. Countries like Barbados, Jamaica, and the Bahamas pay nearly five times more than Trinidad and Tobago’s rates.

The cost of electricity across various areas of North America, Latin America, and the Caribbean as of December 2021 (RMI).

Based on rates set since 2009, T&TEC residential customers pay between 26 and 37 cents (TTD, or 3.8 and 5.4 cents (USD) per kilowatt hour (kWh) for electricity, while commercial customers’ rates start from 41.5 and 61 cents (TTD) or 6.1 and 8.9 cents (USD). These rates set over a decade ago resulted in T&T being ranked as having the 35th cheapest residential electricity rates globally, bested only by Cuba and Suriname in the Caribbean/CARICOM region, and 20th cheapest commercial electricity rate—the least costly in the Caribbean.

T&TEC and the Ministry of Public Utilities have long explored the possibility of increasing the price of electricity.

In a statement from the Regulated Industries Commission (RIC), it said the Commission is “actively engaged in the Price Review Process for the Trinidad and Tobago Electricity Commission and is near completion of this exercise.”

The commission, “Upon completion, the RIC will publish its draft determination on electricity prices, and public consultations shall be scheduled to provide the opportunity for stakeholders to disclose any concerns on the draft determination for the consideration of the RIC.”

T&T’s Solar Incentive: A Feed-in-Tariff

The Ministry of Energy and Energy Industries (MEEI) has been working on a policy for solar feed-in tariffs, allowing T&TEC to pay homeowners for the energy they produce for the last decade.

According to the MEEI, a “Feed in Tariff (FIT)” is an energy supply policy that promotes the rapid deployment of renewable energy resources. The policy guarantees payments to renewable energy developers for the electricity they produce. The MEEI says these payments are generally awarded as long-term contracts over 15-20 years.

Prior to 2015, the MEEI collaborated with the United Nations Environment Programme (UNEP) to develop a framework for policy and legislation to govern feed-in tariffs. The framework was approached by Cabinet in June 2015, sent to the Legislative Review Committee in 2017 and was subsequently sent to the MEEI and Ministry of Public Utilities for a mandated review. Guardian Media reached out to the MEEI for comment on where they are in the review process but received no response.

Screenshot of the Feed-in-Tariff program presented by Hannibal Anyika from the MEEI at an Office of Disaster Preparedness and Management on Disaster and Climate Change Risks in Trinidad and Tobago in May 2022.

Hannibal Anyika, the Senior Sustainable Energy Development Analyst at the MEEI’s Renewable Energy Division, said at a webinar hosted by the Office of Disaster Preparedness and Management on Disaster and Climate Change Risks in Trinidad and Tobago in May, “The feed-in tariff which would basically address bringing renewables for small and medium-scale installations.”

But will homeowners be compensated for their solar panel investment? Anyika said, “At the small and medium scale, T&TEC and the RIC don’t envision the homeowner feeding into the grid or selling power to T&TEC. The sale of power is basically controlled by a power purchase agreement.”

However, she expanded, “In terms of dealing with this barrier for the homeowner or a business being able to produce renewable energy and sell to the grid, the homeowner will be able to produce this energy and feed onto the national grid, and T&TEC will have to pay you.”

How much a homeowner will be compensated for solar energy is still a detail that is being worked out. With initial investments ranging from $50,000 TT to 250,000 TT, the MEEI doesn’t want to dissuade people from seeking solar energy. Anyika said, “Given the fact that the investment required for the installation of a renewable energy system is a bit high, we have to create a mechanism where the homeowner recoups that cost in terms of developing that renewable energy system. Hence, we have this feed-in tariff arrangement where the utility would purchase the energy from the homeowner at a determined price.”

KALAIN HOSEIN
kalain.hosein@guardian.co.tt