St. Vincent hopeful on $15 m loan for geothermal project

St. Vincent, Caribbean (source: flickr/ PlanetBarbados, creative commons)

Francisco Rojas 13 Jan 2015

For decades, the fertile slopes of La Soufriere volcano, which occupies the northern third of this 344-kilometre-square island, has produced illegally grown marijuana that fuels the local underground economy, and the trade in that illicit drug across the eastern Caribbean.

But now the 1,234-metre-high mountain, which last erupted in 1979, is now being explored for something very different — its geothermal energy potential.

The Ralph Gonsalves government believes that geothermal energy will be a “game changer” for the local economy.

In this country, where tourism is the mainstay, the cost of electricity ranges from 40 to 50 cents per kilowatt-hour — several times what consumers pay in the United States.

Householders and manufacturers are hoping that the geothermal energy exploration, which has been underway for more than a year, will in fact produce the 10 to 15 megawatts of electricity that the country desperately needs to relieve its dependence on high-cost fossil fuels and give new life to the manufacturing and agro-processing sectors.

The geothermal energy exploration is a partnership between the Unity Labour Party government, the Icelandic Firm Reykjavik Geothermal Ltd., and Emera Inc., an international energy company with roots in Nova Scotia, Canada that also owns power stations in the Caribbean.

One year after the geothermal project was launched, Prime Minister Gonsalves, who will run for a fourth consecutive five-year term in elections this year, told Parliament in December that the geothermal power plant is on track for a 2017-2018 completion.

By June 2015, a technical report will be completed and well and plant site selection will be done, Gonsalves, who also holds the energy portfolio, told lawmakers.

“We are still on target. I have been advised by the Energy Unit. … Barring some extraordinary challenge which may arise, we should be having a production of 10 megawatts by the end of 2017,” Gonsalves told lawmakers.

The “very low interest monies” that the prime minister says his government will receive shortly may have been a reference to his government’s application for a 15-million-dollar loan through the Abu Dhabi Fund for Development and the International Renewable Energy Agency (IRENA).

The successful applicants will be announced at the Fifth Session of the IRENA Assembly, slated for Jan. 17-18 in Abu Dhabi, which Gonsalves will attend.

Putting the loan application of St. Vincent and the Grenadines into context, Gonsalves told IPS, “There are about 80 applications from which they are choosing eight, and the total sum would be 60 million [dollars] overall … which they will lend in this particular year.”

Notwithstanding falling oil prices recently, Gonsalves is still convinced that renewable energy is the way to go for St. Vincent and the Grenadines.

“In days gone by, when diesel was 15 dollars or less per barrel, there was no real urgency to address the other forms of energy,” he tells IPS.

One-quarter of the 20 megawatts of electricity generated during peak demand in this multi-island nation comes from the country’s three hydropower plants. The remaining 15 megawatts is generated by diesel, 70 million dollars worth of which was imported in 2013 for electricity generation.

“We want to make the hydro plants more efficient … and we want to do solar, and we are doing solar, and we want to do geothermal,” Gonsalves tells IPS, adding that geothermal energy can carry a base load of 98 per cent of the country’s energy needs, whereas solar could possibly generate 20 per cent — or higher with improved technology.

“So, even if you have a lot of solar, you are still going to need the hydro and the geothermal and the diesel to carry the base,” he tells IPS, adding that the country has a good geothermal source.

To read the full press release, please follow the link below:

Source: InterPress Service