A new era for energy utilities

The Caribbean’s utility landscape is shifting rapidly, especially for the region’s energy suppliers who are feeling the pressure from environmental concerns, juggling new innovations and incorporating emerging tech. With a new era and new challenges, industry body CARILEC is launching a strategic plan focused on cooperation and partnership that aims to transform the sector in a measured, responsive and realistic way.

Repositioning for renewables

CARILEC is the Caribbean’s association of electric energy solution providers. Its membership numbers over 100 and comprises state-owned utilities as well as independent power providers. At the helm is Saint Lucian Dr Cletus Bertin who joined the group in 2017 and was more than willing to take on the challenge of guiding CARILEC as it launched its 2018-2022 Strategic Plan. “It is not by chance that I came in at this point,” says CARILEC’s Executive Director. “What I bring to the table is a passion for innovation and change management. There is more we can do in the energy space and I’m excited to see what we can achieve.”

CARILEC recently celebrated its 30th anniversary and has seen a lot of activity in those three decades. “There have been numerous changes in the sector — changes in technology, legislation, consumer expectations, business, marketing and the environment,” says Dr Bertin. “That is what led to this repositioning of CARILEC to better cope with and anticipate these changes.”

Nature has been one of the biggest change-makers with climate concerns now at the forefront of all policy discussions in the region. As Caribbean nations look to reduce their reliance on fossil fuels, the conversation has turned to renewable energy sources such as solar, geothermal and tidal, some of which have already been implemented across the islands. Dr Bertin is bullish on the prospects of renewable energy to help meet demand but says it will take time, and every island has its own unique set of considerations and concerns. “It is a mixed bag. There are different rates of penetration in terms of renewables as a result of many factors. Each jurisdiction has different opportunities. There is a common perception that because the sun is shining and the wind is blowing we can switch to renewables tomorrow. It is not that simple. 

“Transitioning is like turning a huge tanker in the middle of the ocean. It takes time. There has been some reluctance in the past to embrace some of those changes [but] over the last decade the issues of climate change and CO2 emissions have put the utilities in a place where they have no choice but to get on board in terms of repositioning and pivoting.”

Dr Bertin is also wary of targets set by international bodies which may not align with realities on the ground. “We sometimes have a difficulty when policy makers set targets almost arbitrarily, sitting in rooms far away from the region, and then we have no clue how to meet those targets. We believe that decisions should be more evidence based and data driven as opposed to simply philosophical positions.”

According to the CARILEC head, the answer lies in Integrated Resilient Resource Planning such as that seen in devising Saint Lucia’s National Energy Transition Strategy (NETS), which was drawn up by the government and LUCELEC with the support of the Rocky Mountain Institute. NETS looks at how much renewable energies can contribute to the national grid and how this hybrid approach can be managed and maintained. Dr Bertin sees it as a template for the region and an example of how partnerships between stakeholders can result in solutions that work for all.

In a region where most electric utilities are still government-owned, the idea of a hybrid business model can be a hard sell. International investors are actively searching for opportunities in the renewables space, but governments are often unwilling to relinquish control of such critical assets. 

There is room in the market for both the public and private sectors, according to Dr Bertin who points out that most investors come in with innovative ideas and plans but are often unwilling to take on the more mundane challenges of transmission and distribution — an area where they could partner with state utilities. But if utilities are to adopt a more flexible business model, they need flexibility in regulation. “We need a policy framework to enable transition. We must have incentives and a legislative framework for investors to come in. This is where the government has been a bit slow,” says Dr Bertin. 

Working smarter

While the sector is lagging in some areas, there are bright spots of progress. Quite a few islands are upgrading their grids to make them smarter, using the latest technology such as smart meters to track usage, highlight issues and crack down on illegal activity.

In Saint Lucia, LUCELEC is using innovative travelling wave fault locators which allow providers to remotely pinpoint breaches in the system and send crews out to fix the fault, cutting disruption from a matter of days to hours.

“We have technology that enables the provision of electricity to be more efficient and more cost effective,” says Dr Bertin. “We are embracing and promoting that and we see a different sort of landscape developing. It is within our reach and it is actually happening.”

While CARILEC’s Strategic Plan runs until 2022, Dr Bertin does not see that as an end point but merely another step in the journey. He is wary of making unrealistic promises and wants to push towards a realistic future, saying: “In 2022 the landscape will still be in transition. We do not expect to have arrived at any end point. What we expect to see is an energy market that has more certainty and some level of predictability for investors. We will also be using technology to determine the optimal energy mix going forward across each territory, as each has different potential and different trajectories.

“All of these things will be best enabled through collaboration in the region and beyond. No man is an island and the utilities sector cannot do it alone. Government, regulators, utilities and consumers all have a role to play.”

In the meantime, he urges the public not to be discouraged at the pace of change, saying: “As much as we become frustrated by the slow progress, and we should be frustrated, we also need to be mindful of how far we have come in a relatively short space of time. As small independent developing states, the rate of progress is phenomenal. We need to recognise our achievements but recognise that we have some way to go. We should push ourselves and never settle for mediocrity. This is not just an academic exercise for CARILEC. We all live and work in this region, it is in our interest to see progress happen.”