4 Reasons Natural Gas Is a Bridge to Nowhere in the Caribbean
Caribbean island residents pay some of the highest retail electricity prices in the world. Most islands generate 90 – 100 percent of their electricity by burning expensive imported diesel or heavy fuel oil in large generators. Thus Caribbean electricity users pay between $0.20 and $0.50/kWh (kilowatt hour). By comparison, the average for mainland U.S. residential customers is $0.13/kWh; in Hawaii, where they burn oil for much of their electricity, the average is $0.39/kWh.
Naturally, Caribbean islands are in the market for more affordable alternatives. Some islands are seriously pursuing renewables—witness Jamaica’s 20-MW-and-growing wind farm and the Dominican Republic installing one of the largest solar arrays in the Caribbean. Some other islands such as the U.S. Virgin Islands are experimenting with different fossil fuels that don’t require major capital investments, like propane.
But another option looms on the horizon: natural gas. A recent U.S. Energy Information Administration article and a soon-to-be-released International Development Bank study noteliquefied natural gas (LNG) is increasingly being touted as a cost-effective solution for the Caribbean.
This is more than unfortunate. Switching from one imported fossil fuel (diesel/oil) to another (LNG)—the latter of which is currently slightly less expensive but much more price-volatile—overlooks the Caribbean’s abundant, domestic supply of cost-effective energy efficiency and renewable energy.
One Colombian island in the western Caribbean, San Andres, is grappling now with the future of its electricity generation, including the relative merits of LNG compared to efficiency and renewables. It becomes quickly clear that there are at least four important reasons LNG is the wrong choice for the Caribbean’s electricity.
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