By guest author Don Buchanan, Virgin Islands Energy Office Media Information Specialist
Christiansted, St. Croix
Island populations may bear the brunt of negative effects of climate change more than other populations. So, it should be no surprise that some islands have not hesitated in efforts to convert to non-fossil fuel energy sources. The U.S. Virgin Islands, in the brief span of five years, has cut its oil consumption by 20 percent. One island – St. Croix – by the end of this year will be producing 25 percent of its power from wind and solar. The quick progress there indicates that conversion to a low-carbon economy across the developed world may be easier than many suppose. The key to the success was that energy prices in the U.S. Virgin Islands were high, but they are no higher than what energy prices should be if the external costs of burning fossil – pollution and climate change just to mention two – are factored in.
First, it must be noted that the Virgin Islands economy had in one aspect already been devastated. Ironically, the main factor in that devastation was not high energy costs but the volatility in the fossil fuel market. In 2012 the islands’ largest employer – the Hovensa oil refinery – closed up shop, taking away over 2,000 jobs. It left behind little more than a huge scar on the South Shore of St. Croix. Acres of unused refinery towers now stand in an area that once had been a pristine, mangrove shoreline.
In December 2013, the V. I. Energy Office Director Karl Knight stated, during a conference signally the end of the Energy Development in Island Nations (EDIN) project, that the islands’ utility was burning 11 percent less fossil fuel than it was just three years ago. This resulted from energy efficiency measures and the beginning of the renewable energy onslaught. (The utility did not supply power to the refinery). In 2014, renewable energy projects for residential and commercial customers tied in the electric grid reached 5 megawatts on St. Croix and 10 megawatts in the St. Thomas/St.John District. The utility has almost completed a 4 megawatt solar installation on St. Croix. It is expected to be on line by November. The peak megawatt usage on St. Croix, population 50,000 is now about 39 megawatts.
These projects did not happen without the commitment of island residents and its government. Nor did it happen overnight.
The Energy Office in 2007 pushed through the V.I. Public Services Commission, an agreement forcing the utility to accept a net metering program. Net metering allows a utility customer to sell excess energy he or she produces back to the utility. This cuts the costs of an alternative energy system because the customer does not have to install batteries; the utility is used as a storage system. The program, in its details, is generous compared to many states, but some believed it should have been more generous. It did not take off immediately. Only a couple of customers a year took advantage up till 2010. Then the high-cost of oil kicked in permanently, the EDIN project commenced, and $32 million in American Recovery and Reinvestment Act of 2009 funds (commonly referred to as stimulus funds) came to the islands.
EDIN, which was founded on an agreement between the V.I. government, the U.S. Department of Energy, and the U.S. Department of the Interior, set the goal of reducing fossil fuel consumption 60 percent by the year 2025. The project put the National Renewable Energy Laboratory (NREL) in position to give technical assistance to the islands and help with planning efforts. The Virgin Islands’ government was in charge of implementing changes, and the stimulus funds allowed it to do so.
EDIN projects covered several areas, including community education. An Energy Roadmap toward fossil fuel reduction was produced. A major failure of the program was the area of transportation. The island’s mass transportation system (bus system) remains poor, and no plans for programs like car pooling were initiated. A small amount of money was allocated for rebates to residents buying gas-efficient vehicles, but that only covered the purchase of about 25 vehicles. Implementation of other projects in the other areas were extremely successful.
Some of the projects were in-your-face; just switch to alternative energy projects. Relatively quickly, a 448-kilowatt array of solar panels was installed at the St. Thomas airport with $3 million from the stimulus money. A grant program was set up for non-profit institutes giving up to $50,000 for renewable energy or energy efficiency projects. This allowed for one church to install solar panels and another to install a wind turbine and a day-care center to get energy-efficient air conditioning and a solar water heater. Fifty non-profits took part in the program. The Energy Office and the Department of Labor initiated a program training solar system installers. Residents who installed solar water heaters were given a rebate covering 50 percent of the costs. These projects kick started the commercial market for renewable energy. They showed residents renewable energy worked.
The utility, the Virgin Islands Water and Power Authority (WAPA), was able to install LED streetlights, and the Public Works Department installed LED traffic lights and also did a project with solar lights on the boardwalk in Christiansted on St. Croix.
All those projects quickly contributed to less fossil fuel being burned in the islands.
The NREL technical guidance enable the utility-scale solar projects like the 4 megawatt project on St. Croix to get on track. Ground has already been broken for a solar installation of similar size on St. Thomas.
In total, the power company has signed agreements to purchase 18 megawatts of solar power. The wind study project, directed by NREL and implemented by the Energy Office, has been completed. The study has found sites where utility-scale wind projects can feasibly be placed and WAPA is preparing to go out for bids on that project.
These public projects were slow compared to the private sector projects. When the net metering program was approved in 2007, a limit of 5 megawatts was put on St. Croix and 10 megawatts on the district of St. John/St. Thomas for grid tie-ins. The limits were put in place because grid stability was and still is a concern. The limits have been reached.
This has government officials scrambling. The territorial legislature this summer enacted a feed-in-tariff program to replace the net metering program, but it doesn’t take care of grid stability concerns. Proposals of micro grids and innovative, energy-storage facilities are floating around. But with the guidance of NREL gone and stimulus funds no longer available, it is hard to see where this will go. The Virgin Islands government is running deeply in debt, much of it because of its own energy costs, and it will have few resources to devote to projects. But this won’t stop residents and businesses who see the economic advantage of going to alternative energy.
WAPA predicts that, along with its alternative energy projects and its conversion from burning oil to burning propane, it will cut costs by 30 percent. However, even if it managed to cut cost by 50 percent (a kilowatt hour now costs 55 cents) the economic advantage of turning to alternative energy will still be noted by residents because of the community education efforts by the government.
The utility has taken cost-cutting measures including waste heat recovery boilers and reverse osmosis systems for desalinating water. Last year it signed an agreement to enable it to convert from burning oil to burning propane. Although, this switch little pleases residents concerned about CO2 emissions and climate change, it may bring down energy costs. Other efforts on the utility’s part include studying the possibility of a grid interconnection with Puerto Rico and signing an agreement with a biogas company that proposes to produce seven megawatts of power through anaerobic digestion of King Grass.
Major setbacks and delays have occurred. (A generator that runs on gas from a landfill took years to hook up to the grid and now is not getting adequate methane to run it. This was a $3 million project.) Much still remains to be done and the islands bureaucracy can be cumbersome. Anyone who has spent time on Caribbean islands knows that the infrastructure is not on par with the infrastructure in most of the developed world. The lifestyle is of a slower pace; that is why many people choose to live here. But much has been accomplished in this small territory; many barriers have been overcome. Those accomplishments might have a lesson for politicians in other parts of the world.
Imagine the United States and Canada not waiting for energy costs to rise as high as they have in the Virgin Islands. Imagine a carbon tax being imposed to motivate more businesses, residents, and government agencies to do what Virgin Islanders are doing now. Imagine these countries building up their treasury instead of denigrating their landscapes and sending great chunks of their treasury to oil producing countries. Imagine North America moving into a future of cleaner energy.
The change in the last five year on how this territory is getting its energy is profound. The Virgin Islands’ example shows that a lot can be done in a short time when the problem gets the focus it deserves. The goal the islands set — cutting fossil fuel 60 percent by the year 2025 — once appeared huge. Now it looks like, “We can do that. We can even do more.”
