Island Blues: A Caribbean Country’s Troubled Experiment with Geothermal Power

  • Share
  • Read Later
Danita Delimont

St. Kitts and Nevis, with a population of just over 50,000 and covering a mere 100 sq. mi. — one and a half times the size of Washington, D.C. — is the smallest sovereign nation, by size and population, in the Americas. The two-island federation in the east Caribbean is perhaps best known for welcoming wealthy tourists to its pristine beaches and luxury resorts.

But beneath the surface of Nevis there’s something that could put this palm-fringed paradise on the map in a big way: heat — and plenty of it. The volcanic island, the smaller of the pair, is home to active hot springs and if estimates are correct, a large geothermal reservoir. With steady onshore wind, St. Kitts and Nevis has enough potential energy to become the first nation in the world near self-sufficiency from renewable energy sources — and in the process, potentially reinvent the islands’ small tourist-reliant economies. Only Iceland, with its own abundance of hot springs, currently comes close to anything like that.

But accusations of cronyism and mismanagement — and the global economic crisis — mean that years-old plans to build a geothermal power plant to harness the energy have barely gotten off the ground. And their current prospects remain stalled and uncertain.

(MORE: All Steamed Up)

The incentives, economic and environmental, are clear. Nevis, which consumes a maximum of 10 megawatts (MW) of energy annually, spends $12 million a year on diesel for its power station. Meanwhile it emits 44,000 metric tons of carbon dioxide in the process, according to the website of Renova Capital, a Denver-based renewable-energy private investment firm and partner (since 2011) on the geothermal project. St. Kitts, which lies two miles northwest of Nevis, uses 46 MW at most each year, at more than quadruple that cost. Drilling at three sites on Nevis has indicated that the geothermal reservoir is capable of producing up to 500 MW of constant base-load power year-round. That’s led St. Kitts and Nevis to envisage one day exporting all that surplus energy to neighboring islands via high-voltage alternating-current submarine cables. This includes a tentative idea to supply power to Puerto Rico, the U.S. territory around 250 miles to the southeast. A White House task-force report on Puerto Rico’s future, released in March 2011, supported a feasibility study into the subsea cable.

Geothermal energy can only cater to minimum base-load power — the basic requirements of the grid — since output must be constant while demand varies. This means that fossil-fuel generation is still needed during peak generation. Despite this, even an 8-MW geothermal plant catering to most of Nevis’ needs — the current proposal for the first phase of the project — could transform the islands, according to Carlisle Powell, the minister in charge of public works. “It has the ability to completely revolutionize the way we live, do business, use electricity,” he told TIME recently. The minister hopes consumer electricity bills could fall by as much as 30% while Nevis could attract light-manufacturing industry through cheaper rates. All this would bring in additional revenues to the government for development projects, he says, which could include further geothermal plants on Nevis to serve the needs of St. Kitts and beyond.

The first chapter in this grand vision began smoothly enough with the opening of a 1.1-MW wind farm, the first of its kind in the east Caribbean, in July 2010. It already saves 275,000 gal. of diesel use, worth over $1 million a year, says Powell. Yet that’s as far as the success story goes. Trying to build just one geothermal plant has proved an increasingly expensive proposition; so far just three exploratory wells have been dug, while cost estimates have spiraled since the project was first conceived in the early 2000s. The reasons for all this depend on whom you speak to — and proved a contentious issue in elections on the islands last year. According to Powell, the problems were brought on by the global economic slowdown; when the credit crunch hit in 2008, external funding for the plant collapsed. The minister hopes the project will soon get back on track through funding from Ex-Im Bank — the official export credit agency of the U.S. A team from the bank visited Nevis last year and will decide in the first quarter of 2012.

MORE: Geothermal: A More Grounded Power Source for Japan?

Opposition politician Mark Brantley, deputy leader of the Concerned Citizens Movement — which helped initiate the idea for geothermal energy — has a different take. He claims the government has “mishandled and mismanaged” the project, in particular by awarding West Indies Power (WIP) — a St. Kitts-based start-up company working on a similar project on nearby Dominica — the contract to develop the plant in February 2007 without a publicly disclosed bidding process. “The details of the contracts with WIP have not been made public despite considerable clamor for them by the opposition and the press,” Brantley tells TIME. “Indeed, no information whatsoever about the financial arrangements with WIP made by the government have ever been disclosed. The entire process has been cloaked with secrecy.” WIP did not respond to requests for comment. Powell labeled the opposition criticism partisan and “foolishness.”

But Brantley also has other concerns. He notes the most recent proposals put before the Nevis Island Assembly now cost the project at $55 million, up from initial estimates of $30 million and then $41 million. Moreover, he says the new plans are for an 8-MW “reconditioned” facility, not the new 10-MW plant in earlier outlines. “No explanation whatsoever has been offered for this near 100% increase for a smaller used plant,” he adds. Meanwhile the IMF — a significant lender to the islands — forced the Nevis government to abandon guaranteeing any loan for the project because the island’s budget cannot sustain it, Brantley says. “The issues are myriad, but we as the official opposition in the country support the idea of geothermal development but demand a more sensible approach with a serious and capable developer.”

The current estimates are high based on research in an authoritative 2007 MIT study, “The Future of Geothermal Energy,” even when adjusted for inflation. It puts typical costing at that time for this type of plant in the range of $1,080 to $1,889 per kilowatt of capacity. The Nevis plant would work out at $6,470 per kilowatt of capacity, writes local journalist James Gaskell, who has reported extensively on the subject. He noted on Jan. 13, 2012: “It has been pointed out by others that this sum, in comparison to other projects, seems excessive.” Stephen Connors, of MIT’s Energy Initiative, says Nevis’ isolated location would add significant costs and that the estimates, probably initially too low, are not “inconceivable.” He notes that funding for geothermal plants has been “bad” in the past few years and believes the Nevis project has significant potential — but may never realize its full potential. “The feasibility study will say it’s very expensive,” Connors predicts of the plans for regional export, adding that the project’s principal value is in reducing local diesel consumption. “What they’re planning sounds like a good start.”

If it does get built, the first geothermal power plant alone would still probably make Nevis the greenest place on the planet, which is some accolade. But judging by the project’s tortured history, that’s a big if.

MORE: Energy: Research vs. Deployment