Originally published on Worldwatch Institute.
By Philip Killeen
Never before has the opportunity to go green in the energy sector been as appealing and accessible as in the Caribbean. This four-part blog series documents the paradigm shift currently under way in the region, where the Dominican Republic, Haiti, and Jamaica present moving case studies on the momentum that is building to realize the Caribbean’s untapped sustainable energy potential.
Suffering from a crippling and ongoing trade deficit and from some of the highest poverty rates in the Americas, Haiti is a country desperate for a vision for sustained economic growth. Currently, Haiti sources 85 percent of its electricity needs, and spends 4 percent of its GDP annually, on dirty and expensive imported fossil fuels. This not only limits the availability of capital for domestic economic investment, but also exposes the country to the volatile global oil market.
These challenges are compounded by the sluggish recovery efforts seen in the aftermath of the 2010 earthquake. Although five years have passed since the magnitude 7.0 tremor struck Haiti, scars of its devastation remain. The earthquake resulted in the loss of some 200,000 lives and in an estimated $628 million in infrastructure damage, across all sectors of Haitian society. Recovery efforts have been insufficient, leaving the country reliant on aging, damaged, and often unreliable energy infrastructure.
As a result, roughly three quarters of Haitians lack access to modern and reliable electricity services. Those that do have access are charged rates significantly higher than global averages, further dampening the country’s potential for economic growth. As a consequence, Haiti’s power sector priorities differ greatly from those of other Caribbean nations. The country must dramatically grow its generation capacity simply to meet current demand.
Unfortunately, utility provider Electricité d’Haiti (EDH) has only limited financial and human capacity to expand electricity services and already struggles to provide reliable electricity to its existing customer base. It is unlikely that underserved and rural areas will be connected to Haiti’s existing and fossil fuel-powered grid anytime soon. More often than not, this dynamic forces consumers to rely on self-generation, using inefficient and dirty diesel generating units. This limitation could yet become an opportunity, however, as “distributed” renewable energy generation from independent power producers is emerging as a viable option for serving these communities.
Distributed Solar: A Decent Start
Haitian President Jean-Claude Martelly has made distributed renewable energy a major priority. In January 2012, Martelly declared the ambitious target of electrifying 200,000 rural households over two years through the Ban m limyè, Ban m lavi (“Give me light, give me life”) program, based primarily on distributed solar energy. Building from this declaration, a number of small companies and nonprofits have begun deploying renewables-based mini-grids throughout the country.
In the southern town of Les Anglais, the nonprofit EarthSpark has created a mini-grid—using smart meter technology and powered by a diesel-solar system hybrid—to supply more than 400 previously unserved customers. In the capital Port-au-Prince, the newly constructed L’Hôpital Universitaire de Mirebalais (HUM) is illustrating the degree to which self-generation from affordable, renewable electricity sources can have broad positive impacts. Powered by 1,800 rooftop solar panels and supported with technical expertise and financial resources from Boston-based Partners-in-Health, the hospital covers 100% of its electricity needs during peak hours and feeds surplus energy back into the grid. More importantly, HUM provides primary and secondary care services to an estimated 185,000 people, building vital human capacity lost in the fallout of the 2010 earthquake. The success and momentum behind such projects highlights the abundant potential for distributed electricity generation from renewables in Haiti.
A Vision for Sustainable Energy in Haiti
Unfortunately, solar alone cannot break the chokehold that fossil fuels have on Haiti’s energy system. Only by harnessing its full endowment of renewable energy resources can Haiti achieve the energy independence essential for a bright future. New research from the Worldwatch institute suggests that the country’s abundant hydropower, wind, biomass, and geothermal energy resources are primed for introduction into the grid. By developing these resources, in addition to solar, Haiti can realistically meet 52 percent of its projected energy demand through 2030.
What will really turn heads is that this path would lead to a more reliable and affordable energy system compared to continued reliance on fossil fuels. By pursuing opportunities to develop renewable energy generation capacity, Haiti can decrease energy prices for residential consumers to at least a third of current levels while incurring savings in excess of $5.8 billion through 2030 in fossil fuel import costs. Time is of the essence, however, as Haitian demand for electricity is expected to grow 11.8 percent annually through 2030.
Aren’t Fossil Fuels Cheaper?
It’s undeniable that the price for petroleum in international markets is plunging. Between higher standards for fuel efficiency in oil-importing states and a robust American natural gas market, demand for petroleum is well below typical levels. These dynamics apply downward pressure on oil prices globally. However, these markets are well known for being unstable over the long term.
Moreover, fuel prices alone do not capture the true costs of fossil fuel-based electricity generation. With an isolated electricity grid, Haiti incurs additional costs from the expensive shipping of fossil fuels. Operation and management costs for the country’s antiquated petroleum-charged power plants are 4.5 times more than projected costs for solar, wind, and hydro. Combined, these factors mean that, despite the slump in global oil market costs, total generation costs for petroleum-based power plants in Haiti are projected to increase nearly 6 percent annually through 2030. Already, these costs are hindering EDH’s ability to invest in expanded coverage for the roughly two thirds of Haitians who lack access to modern and reliable electricity services.
Jumping the investment barrier
In Haiti, as in much of the Caribbean, the first hurdle for sustainability is also the highest. Upfront investment costs are significantly higher for new renewable generation capacity than for conventional generation sources. In the long run, however, the transition to sustainable energy can result in savings in excess of $5.84 billion compared to business as usual by 2030. Yet more must be done to encourage stakeholders and investors in the energy sector to take the leap.
In general, investment in Haiti’s electricity sector has been very low. Rates of electricity losses from the grid—due to widespread electricity theft as well as to antiquated generation, transmission, and distribution equipment—are the highest in the Caribbean, at over 60 percent. This makes it difficult for EDH to recover costs and discourages further investment in new power plants.
Exploiting readily available opportunities to integrate renewables into Haiti’s energy mix is critical to encouraging this investment. Distributed generation in rural and underserved areas from wind, solar, and run-of-the-river hydropower can help reduce stress on the grid while promoting economic productivity by releasing those communities from the bottleneck of energy access.
Success stories like EarthSpark, HUM, and the Ban m limyè, Ban m lavi program demonstrate that clear signaling from the government on promoting renewables, as well as the participation of foreign technical and financial support bodies, can catalyze results on the ground. Communicating these stories is critical to conveying the tremendous potential of renewable energy resources in Haiti.
Philip Killeen is a Research Assistant for the Climate and Energy Team at Worldwatch Institute. There he contributes to the Institute’s portfolio of project work, including co-authoring the 2015 Caribbean Sustainable Energy Roadmap Strategy (C-SERMS) and independent research on sustainable urbanization and climate finance in developing states. Philip also manages the Low Emissions Development Strategies Global Partnership (LEDS GP) Energy Working Group, an international practitioner and knowledge sharing network of over 120 energy experts.