Sint Maarten’s Energy Transition: Challenges and Opportunities

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Based on the TNO report “De energietransitie in Aruba, Curacao en Sint Maarten “

Sint Maarten, the Dutch Caribbean island nation, faces significant challenges in transitioning to renewable energy sources. Unlike its neighbors Aruba and Curaçao, Sint Maarten has made limited progress in adopting clean energy technologies. However, recent studies and plans point to potential pathways for the island to reduce its reliance on fossil fuels and build a more sustainable energy system.

Current Energy Landscape

NV GEBE, the government-owned utility company, is responsible for electricity production and distribution in Sint Maarten. The company operates a power plant at Cay Bay with an installed capacity of 97.3 MW, primarily using heavy fuel oil (HFO) generators. However, the actual production capacity has declined to 75.4 MW due to aging infrastructure.

Of the 12 generators at the plant, five are over 25 years old, with the oldest approaching 34 years. This aging equipment struggles to meet the island’s growing electricity demand, which currently peaks around 55 MW. GEBE faces challenges in maintaining the n-2 redundancy standard for network reliability.

Renewable energy adoption in Sint Maarten remains very low. The only significant installation is a 2 MWp solar array at a hotel in Sonesta Maho. While regulations allow for decentralized renewable systems up to 500 kVA for self-consumption, there is no feed-in tariff or net metering policy to incentivize small-scale solar installations.

Urgent Need for New Capacity

GEBE urgently needs to invest in new generation capacity to meet growing demand. The utility has plans to add two 11 MW generators in the short and long term. These will likely run on HFO initially but have the capability to switch to LNG in the future.

Electricity rates in Sint Maarten consist of a base tariff (currently 0.25 ANG or €0.13 per kWh) plus a variable fuel surcharge. This tariff structure, which essentially covers only GEBE’s fuel costs, does not provide sufficient revenue for the utility to invest in system upgrades or renewable energy projects.

Limited Progress on Renewables

Despite having an ambitious energy policy in 2014 that aimed for 80% renewable electricity by 2020, Sint Maarten has made little progress toward these goals. The 2014 policy envisioned significant solar, offshore wind, and waste-to-energy projects, but none have materialized.

Solar energy appears to be the most viable renewable option for Sint Maarten in the near term. The island’s electricity demand peak aligns well with solar generation, occurring between 10:00 and 14:00. Potential locations for large-scale solar include floating panels on The Great Salt Pond and solar canopies over parking areas.

Wind energy faces more significant challenges on Sint Maarten compared to neighboring islands. Lower average wind speeds, limited available land, and vulnerability to hurricanes make wind projects less attractive. While there has been some discussion of offshore wind, no concrete plans exist.

Barriers to Renewable Energy Adoption

Several factors have hindered renewable energy development in Sint Maarten:

  1. Financial constraints: GEBE and the government have limited capacity to finance large-scale renewable projects.
  2. Tariff structure: The current electricity rate design does not incentivize GEBE to invest in renewables, as it would only receive the base tariff for solar generation while losing fuel surcharge revenue.
  3. Land availability: Sint Maarten’s small size and hilly terrain limit options for utility-scale renewable projects.
  4. Policy implementation: While the 2014 energy policy set ambitious goals, there has been a lack of follow-through on specific initiatives and incentives.
  5. Grid infrastructure: Significant investments in grid upgrades and energy storage will be necessary to integrate large amounts of variable renewable energy.

Potential Pathways Forward

Despite these challenges, there are several opportunities for Sint Maarten to advance its energy transition:

  1. Rooftop solar: Given land constraints, a focus on distributed rooftop solar could be an effective strategy. This would require implementing supportive policies like net metering or feed-in tariffs.
  2. Utility-scale solar: Developing floating solar on The Great Salt Pond and solar canopies over parking areas could provide significant renewable capacity without using scarce land resources.
  3. Energy storage: Battery systems could help stabilize the grid and enable greater renewable energy integration.
  4. Waste-to-energy: A waste-to-energy plant could address both electricity generation and solid waste management challenges.
  5. Regional cooperation: Exploring geothermal energy imports from neighboring islands like Saba or St. Eustatius via undersea cable could provide baseload renewable power.
  6. Sustainable transportation: Policies to promote electric vehicles, particularly in the taxi and rental car fleets, could reduce overall fossil fuel consumption.
  7. Demand-side management: Implementing energy efficiency programs and smart grid technologies could help manage electricity demand growth.

Ongoing Studies and International Support

The National Recovery Program Bureau (NRPB), established after Hurricanes Irma and Maria, is conducting studies to assess Sint Maarten’s current electricity system, forecast demand growth, and identify potential renewable energy projects. These studies, expected to be completed in 2024, should provide valuable data to inform energy planning.

Additionally, the Dutch government and the World Bank are providing technical and financial support for Sint Maarten’s recovery efforts, which include improving energy infrastructure resilience.

Sint Maarten faces significant hurdles in transitioning to a cleaner, more resilient energy system. However, with careful planning, policy reforms, and strategic investments, the island has the potential to significantly increase its renewable energy capacity in the coming years. Success will require close coordination between GEBE, the government, and international partners to overcome financial constraints and implement effective policies to drive the energy transition forward.

A Critical Assessment of Sint Maarten’s Energy Transition Prospects, by GEBE GONE

While the statement presents an optimistic outlook for Sint Maarten’s energy transition, it fails to adequately address the deep-rooted issues that have historically hindered progress in the island’s energy sector. The assertion that “careful planning, policy reforms, and strategic investments” will pave the way for significant renewable energy adoption overlooks the entrenched challenges of corruption, mismanagement, and poor governance that have plagued both NV GEBE and the local government.

Firstly, the track record of NV GEBE and the Sint Maarten government in terms of “careful planning” has been abysmal. The utility has struggled to maintain its existing infrastructure, let alone strategically plan for a complex energy transition. Years of underinvestment and mismanagement have left GEBE in a precarious financial position, barely able to keep the lights on, much less finance ambitious renewable energy projects.

The call for “policy reforms” seems naive given the political instability and lack of long-term vision that has characterized Sint Maarten’s governance. The 2014 energy policy, which set ambitious renewable energy targets, has been largely ignored, demonstrating a lack of political will and follow-through. In a climate where short-term political gains often trump long-term planning, the likelihood of implementing and sustaining meaningful energy policy reforms is questionable at best.

The notion of “strategic investments” is particularly problematic given the history of financial mismanagement and corruption allegations surrounding both GEBE and government officials. Public funds earmarked for infrastructure improvements have often disappeared into a black hole of bureaucracy and alleged graft. The idea that these same institutions will suddenly become responsible stewards of the substantial investments required for an energy transition strains credulity.

Furthermore, the statement’s emphasis on “close coordination between GEBE, the government, and international partners” glosses over the dysfunctional relationships and lack of trust between these entities. GEBE’s management has frequently been at odds with government officials, and international partners have grown wary of the lack of transparency and accountability in Sint Maarten’s public sector.

The “financial constraints” mentioned are not merely a temporary hurdle but a symptom of systemic financial mismanagement. GEBE’s inability to collect payments from some government entities and the overall poor state of the island’s finances make it highly unlikely that the utility or the government can secure the necessary funding for large-scale renewable energy projects without significant external intervention.

Lastly, the idea that Sint Maarten can “implement effective policies” in the near term is optimistic to the point of being unrealistic. The island’s bureaucracy is notoriously slow and inefficient, with competing interests often paralyzing decision-making processes. The lack of technical expertise within government agencies further complicates the development and implementation of effective energy policies.

While the statement paints a picture of potential progress, it severely underestimates the deeply entrenched obstacles that have consistently undermined Sint Maarten’s development efforts. Without addressing the fundamental issues of corruption, mismanagement, and poor governance, any attempts at an energy transition are likely to fall far short of their goals, wasting valuable resources and further eroding public trust. A more realistic assessment would acknowledge that significant external oversight, comprehensive governance reforms, and a complete overhaul of GEBE’s management and operations are prerequisites for any meaningful progress in Sint Maarten’s energy sector.

Addition StMaartenNews – GEBE’s Tariff Structure Hampers Energy Transition in St. Maarten

The energy transition in St. Maarten faces significant obstacles due to the current tariff structure of Utilities Company GEBE. According to a report by TNO, GEBE’s base tariff and variable fuel cost component are not sufficient to cover operational and fuel costs, hindering investment in renewable energy. While solar energy is identified as a promising solution, the financial setup discourages GEBE from adopting it. The Dutch SDE++ program offers potential subsidies, but immediate action is required to adjust energy goals and infrastructure.

Full Article Summary

The article from St. Maarten News highlights that the energy transition in St. Maarten is hindered by GEBE’s current tariff structure, which includes a base tariff and a variable fuel cost. This setup fails to cover the company’s costs, making it financially unfeasible to invest in renewable energy sources like solar power. A report by TNO suggests that transitioning to renewable energy could reduce CO2 emissions and improve sustainability, but significant investments in new infrastructure and distribution networks are needed. The Dutch SDE++ program offers potential subsidies to support this transition, but prompt action and clear governmental stance are necessary. Currently, GEBE’s outdated generators and lack of investment in renewable energy pose a serious challenge, and the company’s financial model discourages shifts away from fossil fuels. The article also touches on the broader context of renewable energy adoption in Aruba and Curacao, contrasting it with the limited progress in St. Maarten.

Read the full article on StMaartenNews.