Rebuilding the Caribbean for a Resilient and Renewable Future

Last week, Hurricane Irma ripped through the Caribbean with devastating fury. Its 185-mph winds smashed buildings, downed trees and power lines, overturned trucks, and tossed boats ashore like toys. Its storm surges turned streets into raging rivers and flooded whole communities. Irma, the strongest Category 5 hurricane on record in the North Atlantic, killed more than three dozen people and caused staggering amounts of damage. On Barbuda, Irma destroyed 95 percent of homes and infrastructure, including the entire electrical grid. In the British Virgin Islands, witnesses say it was a “nuclear hurricane,” with devastation and debris beyond description. In addition, the storm left behind a trail of destruction and misery on St. Bart’s, Anguilla, Puerto Rico, Cuba, the Dominican Republic, Turks and Caicos, The Bahamas, and the U.S. Virgin Islands. Thousands of people are homeless and without water, food, or power.

In total, Hurricane Irma caused an estimated US$10 billion in damages, and the overall economic losses could be tenfold higher. And yet, Irma was only one of four named storms in the North Atlantic or the Gulf of Mexico in the last three weeks. Hurricane Harvey downed power lines and flooded the streets of Barbados on its way to dump record rainfall and inflict unprecedented damage on Texas less than a week before Irma.

Major storms take terrible personal and societal tolls on the small economies of the Caribbean—setting these countries back decades overnight. For example, Hurricane Ivan cost Grenada $900 million in 2004, more than twice its GDP.

Equally important, these disaster events highlight how vulnerable Caribbean countries are to disruption. Nowhere is this more evident than in their electricity grids, which are exposed, centralized, and powered by fossil fuels. If a storm shuts down an island’s power plant, the entire island goes dark. Damage to vulnerable seaports also cuts off the delivery of desperately needed fuel. And the many miles of power lines are both highly vulnerable and expensive to rebuild.

The Opportunity to Rebuild for Resiliency

The crucial first response to this latest disaster, of course, is tackling the humanitarian crisis. That means bringing in water, food, and other essential supplies; ensuring the safety of residents; reestablishing basic services; and helping businesses get back on their feet. But even as we rally to help the region now, there is an opportunity to rebuild better, cleaner, and stronger. Instead of reconstructing the existing twentieth-century electricity grid, we can leapfrog ahead with twenty-first-century technologies that make the Caribbean region far less vulnerable to future storms.

The key step is replacing or retrofitting the centralized electricity grid with decentralized resilient renewable power, combined with energy efficiency measures. This will bring many benefits. Thanks to plunging costs for solar, wind, and battery storage, small distributed renewable energy systems and increased efficiency would actually lower the electricity costs on the islands, which now are some of the highest in the world at US$0.20–$0.50/kWh. They would also reduce the countries’ vulnerability to major storms, since some individual microgrids are likely to continue functioning even if the grid or other microgrids are knocked out. Remarkably, the solar installation that powers the majority of Sir Richard Branson’s Necker Island survived the brunt of Irma and reports from Fortis TCI, the utility on Turks and Caicos, confirm the uninterrupted operation of its solar assets on the island of Providenciales after Irma whipped 155 mph+ winds through the popular British Overseas Territory.

And the islands are not the only places that decentralized, resilient, and renewable grids are being targeted. In the U.S., the National Electrical Manufacturers Association (NEMA) envisions, “that a resilient and robust utility infrastructure of the future can be built out of interconnected microgrids at universities, hospitals, industrial parks, and neighborhoods. Individual microgrids would be nominally connected to form a single utility grid but could also isolate from the grid and operate independently in case of disruptions.”

In addition to resiliency, renewables would insulate the islands from spikes in fossil fuel prices, which along with hurricanes, have shocked the region’s economies and put significant burdens on one of the most economically challenged parts of the world. More importantly, they would reduce dependence on fossil fuel imports, keeping millions of dollars at home instead of shipping them off island to buy foreign fuel—while also making it possible to slash those imports far more by switching to an electrified transportation system.

Seizing this opportunity to rebuild smarter would be eminently worth doing even in a world without climate change. But with the certainty of rising seas and stronger and more frequent storms, the task becomes even more vital. It offers the Caribbean islands their very best hope for surviving the next challenges while also cutting costs, boosting their economies, and improving the entire region’s competitiveness.

The tragedy of Hurricane Irma can be a catalyst for government and utility leaders and people of affected countries—together with international partners and the private sector—to transform destruction into opportunity—an opportunity to build back better and cleaner through sustainable, resilient power and transportation systems.

Our Approach

The approach to transforming the Caribbean builds on our experience from running our Islands Energy Program with the Clinton Climate Initiative (CCI) over the past few years. Specifically, our approach consists of three mutually reinforcing components:

1. Rapid Integrated Resource Planning: A whole-systems approach will create an integrated plan for the energy and transportation sector that reduces costs, catalyzes private sector investment, improves reliability, increases resiliency (to extreme weather events and other disasters), and reduces emissions (ideally to net zero). The plan identifies the optimal projects for transforming the energy sector with high levels of renewable energy and energy efficiency, and converting the transportation sector to electric vehicles. The steps in the process include:

• Aligning stakeholders on a shared vision of what they want their society to look like
• Forecasting the change in electricity demand, and determining the need for new resources to meet that demand
• Identifying the available resources such as solar, wind, hydro, biomass, geothermal, waste-to-energy (WTE), diesel, and natural gas
• Analyzing combinations of energy efficiency and centralized and distributed energy generation options and their impacts on the existing grid, along with their costs
• Identifying existing vulnerabilities in the grid (from disasters, overloads, or other issues), and the opportunities to strengthen the grid

2. Project Identification and Resilient Development: Once the planning process identifies the possible investment projects, the next phase of the effort focuses on increasing the investment opportunity in targeted Caribbean islands by creating more detailed plans and reducing the overall risks. The process includes:

• Identifying the mix of resources that will meet a specific island country’s needs at least cost and determining the best place to install those resources
• Performing a detailed financial and economic analysis
• ŸPreparing the sites for development and commercialization

3. Project Financing and Construction: Once resilient, renewable projects are developed and considered investment ready, affected countries need support in mobilizing concessionary and grant financing and private sector capital to turn those proposed projects into steel in the ground. They also need support in supervising construction to ensure safety and building standards are met. This support includes:

• Determining the right financial structures such as power purchase agreements (PPAs); build, own, operate, transfer (BOOT); public-private partnerships (PPPs); or typical capital improvement loans
• Supporting the contract negotiation process
• Supervising construction to ensure that best practices and safety standards are implemented
• Commissioning the system with the local island utility, the contractor, and a third-party engineer

The efforts in all three components above are mutually reinforcing. The rapid integrated resource planning work identifies optimal climate resilient projects to pursue. Project de-risking ensures high quality and attractive investment-ready projects. Meanwhile, project financing and construction oversight support ensures the rapid quality deployment of these projects—enabling beneficiaries to see the myriad benefits, including lower costs and increased reliability and resiliency. That, in turn, reinforces the value of the integrated plan and the iterative process continues. Moving forward with this process yields faster, higher-quality, and lower-cost projects, making it possible to accelerate the transition to a stronger, cleaner, more sustainable future.

Coordination and Cooperation

Hurricane Irma was a deadly and devastating storm, bringing an enormous toll in human suffering and economic damage. But now we have an opportunity, perhaps even a moral responsibility, to rebuild in ways that make people safer and more resilient in the face of future threats. CCI and RMI have a proven track record of success using the approach outlined above.

Realizing this opportunity, however, will require broader coordination and harmonization of efforts. There are a multitude of donor organizations, foreign aid, and private entities that will participate in the rebuilding effort after Irma. It is critical that there is a harmonized approach across the islands to ensure flexible, distributed, resilient, and renewable power systems are built in the Caribbean.

Image courtesy of iStock.