Dear Source:
Electricity cost more in the Virgin Islands than just about anywhere else on the planet. For some, not all, it could soon get worse if we continue to rely on fossil fuels (diesel, propane, natural gas) for a substantial portion of our total energy requirements. The 30% reduction in electric rates that is anticipated following the Territory switch to propane as a fuel could disappear almost as soon as it arrives.
Legislation may soon be enacted that will greatly restrict the expansion of renewable energy systems (solar & wind) in the Territory; keeping renewable energy’s overall contribution to our total energy requirements quite small. An unintended, but no less important consequence of this plan, will be that many businesses and individuals, who can afford it, will choose to disconnect completely from the grid by either going 100% renewable or by building their own fossil fuel generation systems which a number of hotels already have in place. Going 100% renewable makes good financial sense for those who have access to the capital needed to make the transition. In today’s world a 100% renewable energy system can deliver power over its long life at $0.30 per kilowatt (KWH) hour; almost half our current electric rate and lower than the price anticipated when we switch to propane. As advances in electricity storage technology come to market over the next five years, the cost of power from renewable energy systems will fall below the $.030/KWH mark.
As rate payers leave the grid, the financial burden grows for those left behind. Fewer rate payers to pay the same bills means that each remaining rate payer’s bill will have to increase. Add these increases to any future upward swings in oil and gas prices, as we’ve seen historically, and we have the makings for a real social disaster. Who would have thought in 2007 that in just seven short years we would be paying twice as much for electricity? How many families and businesses will break under the burden and strain of increasing electric costs before we have relief?
The good news is that there is a way to avoid this disaster but it requires that we make smart choices about our investments in new energy infrastructure. There are two courses we can take: 1.) follow the current plan which calls for 40% of our energy coming from fossil fuels by 2025 , or 2.) update the plan for a target of 90% or more from renewable energy sources and 10% or less from fossil fuel by 2020. Earlier this year the island of Aruba announced its plan to transition to 100% renewable energy by 2020. It expects to be the first Caribbean islands that can truly market itself as a “Green Island”; making it a highly desirable destination for the “Green” traveler in the Caribbean.
The key element to making a near 100% Renewable Energy plan a reality in the Virgin Islands will be our ability to store electricity reliably and cost effectively. Today, Pumped Storage Hydro (PSH) is recognized as the lowest cost electric storage technology on the planet with the longest track record and service life. PSH is essentially a “water battery” that can store surplus renewable or fossil fuel generated energy. PSH is the technological first cousin of hydro-electric generation. Hydro-electric dams have been used to make electricity since the dawn of the electric age (think Hoover dam). PSH technology is simple; impound water behind a dam on a hill and then use the resulting high water pressure at the base of the dam to spin a generator to make electricity. This has been being done for over 100 years.
It is instructive to compare the potential associated costs of a “40% Fossil Fuel” plan with those of the “100% Renewable Energy” plan. If we choose the “40% Fossil Fuel” plan for both St. Croix and St. Thomas we are likely to see future expenditures in the multiple millions to upgrade aging generation equipment. With improved generation equipment, millions more may be spent building the facilities needed to receive liquefied natural gas (LNG). And those investments in new fossil fuel infrastructure will ensure that the Territory stays locked into spending millions each year to purchase fossil fuels; a practice that has wrecked our economy over the last eight years. LEAC will not go away – – it will simply pay for Liquid Propane Gas (LPG) or LNG rather than diesel fuel.
By comparison, a one-time $200 million investment per island would build a PSH system on St. Croix and St. Thomas large enough (about the size of 20 football fields) to take care of each island’s electrical needs. One of the biggest advantages of PSH is that once in place, electricity costs will be stabilized for multiple decades; locked in by a power & purchase agreement (PPA), with no uncertainty based upon international petroleum market pricing. In addition most of the $250+million we spend each year on petroleum fuels would remain in the Territory.
All of us should encourage WAPA to look outside of its fossil fuel box. It is past time to conduct a serious and properly funded cost/benefit analysis of the impact of electrical storage on electricity costs, jobs, and our economy. If you want the Virgin Islands to play a leadership role in the Caribbean and demonstrate how all islands in our region can transition to full utilization of our abundant renewable energy resources by 2020, then tell the governor, WAPA, the Energy Office, and your senators or favorite candidates! It is an election year! We can get this done!
Kelly Gloger, St. Croix
