Renewable Energy in the BVI

After the hurricanes of 2017, many of us experienced first-hand what it is like to be without electricity for an extended period of time. The BVI Electricity Corporation (BVIEC) did a sterling job in difficult circumstances to reconnect its customers, but the experience led many to question whether there might be a better way to power our homes and businesses.

The BVI, like many other countries in the Caribbean, relies almost exclusively on fossil fuel imports to generate electricity. This makes the BVI susceptible to fluctuations in the underlying cost of fossil fuels.

Fossil fuels are a finite resource, release harmful emissions and are relatively expensive in the Caribbean, as a consequence of the long transportation process from the point of production to the point of use. Many Caribbean nations, including parts of the BVI, are low lying and susceptible to rising sea levels caused by climate change. Caribbean nations are also at risk from changing weather patterns and more extreme weather events, exacerbated by global warming.

Even before the hurricanes in 2017, there was a general consensus on the need to shift the focus of electricity generation in the BVI from fossil fuels to more localised, renewable sources of power.

Energy mix

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In determining the best energy mix to ensure a reliable supply of energy, it is important to note limitations imposed by local geographical features. While the BVI is blessed with plenty of sunny days, the availability of flat land on which to site photovoltaic cells is limited, meaning that rooftop solar schemes are likely to play a more significant role than larger-scale photovoltaic generating plants. Some potential sources of renewable energy, such as hydropower, are unlikely to have any role in the BVI’s energy mix, given the lack of permanent running water features.

Based on current technology, it seems that solar and wind are likely to be the most achievable sources of renewable electricity generation, but future advances in technology will no doubt introduce additional options. Fortunately, both wind and solar electricity generation represent proven technologies that are able to compete favourably with the cost of generating electricity from fossil fuels in many countries, without subsidies. This is likely to be the case in the BVI and many other Caribbean countries where the cost of generating electricity from traditional fossil fuel sources is generally high.

Variable supply

The supply of electricity will need to be carefully managed and have infrastructure upgraded to cope with the peaks and troughs in electricity generation that are associated with renewables. Sunny and windy days will inevitably lead to the generation of more electricity from photovoltaic cells and wind turbines than cloudy and calm ones.

Unlike many other countries, the BVI is unable to take advantage of a cross-border interconnected electricity grid, so that electricity may be imported from a different country when conditions in that country are more favourable for the generation of renewable energy. While it is no doubt feasible to link the BVI to the USVI by way of an interconnecting electricity cable, the proximity of the two territories suggests that if conditions are not conducive for renewable electricity generation in one, they are also unlikely to be conducive in the other.

Solutions

Some of the possible solutions to managing the issues associated with the variable supply of electricity generated by renewables include the following:

  •       Managing demand;
  •       Storage; and
  •       Flexible base load generation.

Managing demand

Energy efficiency leading to lower overall demand is one way in which the BVI will be better able to cope with fluctuations in electricity generating capacity. Examples include designing buildings so that they can be cooled by prevailing winds, rather than air conditioning, and painting roofs with a solar-reflective white coating so that less heat is absorbed from the sun.

Storage

Consideration should be given to capturing and storing electricity generated during the days when “excess” energy is produced and releasing it to homes and businesses when it is needed. Battery storage solutions are used for this purpose to good effect in many countries. Electric vehicles are also a good option for storing the energy produced and incentives could be put in place to ensure that such vehicles are charged when there would otherwise be a surplus of renewable energy.

Flexible base load generation

Given the constraints of current technology, it seems unlikely that electricity from renewable sources will be a complete solution and there will need to be an element of electricity produced by traditional fossil fuel sources, at least for the time being. Such electricity production will need to be flexible so that production can be increased or decreased according to the level of power produced by renewable sources of energy, which may require investment in existing generation and transmission infrastructure.

Recent legislation

The British Virgin Islands Electricity Corporation (Renewable Energy) Regulations came into force on the first of November, 2018, and provide an additional legislative framework to previous updates to the British Virgin Islands Electricity Act that were introduced in 2015.

These legislative changes were introduced to facilitate and encourage the generation of electricity from renewable sources in the BVI. So far, as the generation of electricity from renewable sources is concerned, the relevant legislation distinguishes between the following:

  •       A consumer-generator; and
  •       An independent power producer.

A consumer-generator is a person who has installed renewable energy generation facilities at that person’s premises (commercial or domestic) for their own usage with the intention that the excess power generated will be sold to BVIEC, with such electricity being fed back into the electricity grid.

An independent power producer is a person who wishes to build, own and operate a renewable energy generating facility in the BVI and who has been issued with a Green Energy Licence, authorising that person to do so and to sell all of the power generated to BVIEC.

In each case, the legislation provides for an agreement to be entered into between the consumer-generator or independent power producer and BVIEC as appropriate, governing the terms on which the electricity generated from the renewable source will be sold to BVIEC.

Much of the focus to date appears to be on creating a framework for private investment in renewable electricity generation and it will be interesting to observe the level of participation, what further steps will be taken by the BVI Government to promote and encourage the development of the renewable energy sector, and what further steps will be taken by BVIEC to develop its own renewable energy generation capacity.

Harneys Private Client team regularly advises clients on the acquisition of BVI real estate, including devising ownership structures to satisfy the tax, regulatory, succession planning, and other needs of each client. For more information on these solutions or any other matters relating to acquiring property or a yacht, registering a business, or planning for future generations, please contact Sheila George, Johann Henry, or Paul Mellor.

 

Paul Mellor

Paul Mellor

is a Senior Associate of the Private Client group at the Harneys BVI office. He advises corporate and private clients as well as financial institutions on a range of commercial and residential property matters.
Paul Mellor

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