[dropcap]B[/dropcap]y any measure, recent times have been high octane for the renewable energy sector. This is saying something, too, given it is always a fast-paced and politically charged business environment. Yet recent years have seen the industry stress tested in a new way, and this has been borne out in a variety of fields.
Back in 2009 the failure of the Copenhagen Summit to get a global climate deal done was a low point; the September 2016 ratification of the subsequent Paris climate deal, a high point. Then the ‘Trump factor’ hit global politics, and saw new scepticism as the US withdrew from the Paris deal.
Throughout these events, markets have rollercoastered, and innovators have emerged in the renewable energy sector, bringing new promise to the sector and optimism for its growth. But this industry also has a ticking clock unlike almost any other, one that has serious implications for the Caribbean. Reducing emissions is not optional, but essential.
To do that, renewable energy needs to become a centrepiece of future energy policy. Real results and progress need to be made, and – put simply – the sector needs be truly sustainable.
So what is the state of the renewable energy sector in 2018? And is it set for more volatility in years ahead, or is it really different this time? Let’s look now.
POLITICAL RESISTANCE FADING
For the Caribbean and the wider world, in 2018 it’s understood going green is essential. The turn to renewable energy, at heart, is like two wings of a bird: providing the promise to reduce carbon emissions and combat the causes of rising sea levels and other environmental threats, while also offering an avenue for truly innovative tech to be developed. Tech that, when integrated properly, can deliver greater power, efficiency, and affordability to market.
Despite general agreement that climate change is occuring, there remain, even today, political parties and groups that dispute it’s caused by humans, and so dispute the need for action. At the very least, if the action comes in detriment to existing industry.
There are, of course, some shades of grey here. Just as those who would seek to take no action on climate change would enrage a conservationist, so, too, are there some activists who would make light of the impact that shutting down the fossil fuel industry overnight would have on jobs, and people’s very livelihood.
This tension notwithstanding, within the political arena recent years have seen a strong and decisive shift. Though the Trump Administration ultimately withdrew the US from the Paris agreement in mid-2017, the People’s Republic of China stayed in it.
Alongside many US states, like California, having sought to circumvent Trump’s withdrawal and get a deal done at the state level, a telling moment came when Trump championed the cause of Pittsburgh coal miners as a reason to withdraw from the Paris agreement. The world’s biggest economy may have withdrawn at the federal level but the state level showed the seachange.
The swift and widespread rebuke of Trump’s actions from Pennsylvania – with numerous state leaders saying a withdrawal would not help but hurt local jobs – illustrated that the old argument ‘climate change action means a loss of jobs’ no longer cut the mustard as a broad cloak for inaction.
Though this episode shows an old line of resistance fall on climate change inaction, there’s still a long road ahead. Ultimately, the next chapter of conservation and the shift towards more renewable energy will require a greater engagement by business and investors in the space.
MARKETS STILL SEARCHING
One of the challenges in the renewable energy sector right now is the absence of an iconic household name. When people think electric cars they think Tesla. When people think tech stocks they think the FAANG (Facebook, Apple, Amazon, Netflix, Google).
Many investors will agree that green energy is the way of the future – and could net some tidy profits too – but a business resonating enough now to have someone trade in a blue chip for a green stock is a tall hurdle. There is also the question of size. Green energy stocks are growing, but not yet at the scale of the giant energy companies.
As a number of these existing giants seek to shift away from carbon emitting fuels to renewable sources in their own right, it may ultimately delay public conscious of the green sector too, as anyone waiting for a giant to emerge may miss out on the fact a giant has reformed.
Cynics may ask why invest in a former fossil fuel company, but these firms have the size to deliver sweeping change. This is something newer start-ups and smaller competitors in this space may struggle to do.
LOCALS TAKING ACTION
With the politics of the green arena changing permanently, but the markets still seeking out a poster child of the new energy era, it’s business that serves as a focal point of new momentum in this space. As it stands, right here in Saint Lucia, recent events have shown rich promise.
The beginning of LUCELEC’s 3MW solar farm in September 2017 saw steady and commendable progress, leading to the official launch of the farm’s operations on the Saint Lucian power grid in April of this year. 3 megawatts powered by 15 thousand solar panels is an inspiring feat in and of itself, but it also represents a powerful proof of concept for our local energy industry.
Sites like this are not going away. They prove to governments near and far the political football of climate change is going to run out of game clock. It also shows the global markets that the era where renewable energy was a nice ‘thought bubble’ but impractical has long since come to an end. For nations across the Caribbean, projects like these are also a path for future growth.
MORE ENERGY, MORE INDUSTRY
The Caribbean has the potential to be a renewable energy epicentre. The Turks and the Caicos Islands alone get over 350 days of sunshine a year. While
nations like Scotland, England, and Iceland may be embattled with comparatively little sunshine on a global scale, Caribbean nations have it in abundance.
This goes beyond the production of energy alone, to other industries. The future of cars in the Caribbean shows how the region’s longstanding natural resources can be used in a new way as the shift to new energy use across a host of industries comes to the fore.
Yes, globally there remains a balancing act to green energy adoption, and this applies locally too.
But the more we see of projects like LUCELEC’s locally, the more it stands to benefit the renewable energy sector as a whole, in the Caribbean and beyond.
