Reducing the cost of energy is a major priority of the New Democratic Party (NDP). It impacts everything: the cost of living for all the members of our population, particularly the poor, and it is equally critical to the cost of doing business and therefore creating jobs.
Whether it is commercial or industrial businesses or our homes, energy must be used, and in St. Vincent and the Grenadines energy is costly. One of the ways to reduce the cost energy is through renewable energy.
St. Vincent and the Grenadines has long benefited from renewable energy in its national energy balance, in the form of hydropower.
Hydroelectric power plants commissioned in the 1950s, 60s and 80s contributed to the economic growth of the country while keeping electricity bills low. Over the past eighteen (18) years however, the development of a vision for a sustainable energy future for our country has been neglected.
Consequently, the trends are all heading in the wrong direction: our country’s dependence on expensive, imported petroleum products is increasing, electricity prices practically doubled during the past fifteen years and our energy security is threatened.
However, the government has decided to proceed with exploratory drilling for geothermal energy. We believe that the geothermal energy project that the government has embarked upon has not been designed in the best interest of the Vincentian public. If this project continues in its present form, the bulk of the benefits will be reaped by the foreign investors.
It must be reiterated that the NDP supports geothermal energy for St. Vincent and the Grenadines, but is opposed in the manner in which the Unity Labour Party (ULP) regime has implemented the project. For example, the financing of the project and the shares that were allocated to the companies then.
Early in the life of the project, the Honourable Arnhim Eustace made the following observation, “No one seriously believes that Emera will come to St. Vincent to put in the facilities to generate only 10 megawatts of power. They have their eye on a larger prize”.
Now, consider that Emera is the owner of the electricity company in Barbados, they acquired majority shares 2 ½ years ago. So the question now is: what is Emera going to get for spending all the money and taking all the risk upfront? What is this “larger prize” that Gonsalves is talking about? Do not underestimate that question. What is the larger prize that Emera has their eyes on? And why should Ralph Gonsalves, the Prime Minister of a sovereign state, be interested in the larger prize to be acquired by a private company?”
Dominica has also done exploratory work for geothermal energy. But has a different financial arrangement. In 2007, Dominica applied for grant funds from the European Union (EU) to finance the exploration phase of their geothermal project and the exploration phase commenced in 2008.
Dominica has completed the entire exploration phase of their project, and they have fully proven the location, extent and quality of their geothermal resource. They have begun to build a geothermal power station. In doing so, they spent over 32 million EC dollars, and this is the important point; all of that money was public money.
They got grant funds from the European Union (EU) and they added local counterpart funds, they have proven the geothermal resource and now, the rights to the geothermal resource belong to the state and people of Dominica. What is happening in St Vincent is the opposite.
There were problems associated with the project. Vincentians were kept in the dark as to changes that were made to the companies who were initial shareholders of the geothermal project. It was not until Dr. Friday, Leader of the Opposition, asked a question of Dr. Gonsalves that he was forced to explain that Emera had pulled out.
In response to the question, Dr. Gonsalves said, “On 25th October, 2018 Emera Caribbean incorporated (ECI) indicated to the government that it was not in Emera’s best interest at this time or for all concerned in the project for them to remain in the project and gave notice of their intention to exit from the St. Vincent Geothermal Project. As you know that there were three partners to this project Emera, Reykjavik Geothermal and the government.”
He went on, “In keeping with the objectives of the project and to safeguard against any reputational harm to themselves, Emera entered into a sale purchase and option agreement and sold its shares to Reykjavik Geothermal in St. Vincent Geothermal and the government now holds 51 per cent.”
At a recent function by the ULP at Rabacca, it was announced that electricity consumers will have their electricity bills reduced by one third from 2022. Taking into consideration the present agreement and the funding arrangement where VINLEC will invest $200 million in the project. That means a further $200 million in debt for VINLEC. One may ask, is the reduction of electricity bill possible by the time mentioned?
At our 41st Convention of the NDP, president of the party, Dr. Friday, remarked, “VINLEC is killing us. Everybody knows the story: VINLEC is quick to increase the fuel surcharge with the slightest provocation, increase in oil prices, but slow to lower it when oil prices go down. To the consumer, it is just as painful to pay his light bill if the increase comes for rising fuel surcharge as from using more energy in his daily activities.
The light bill is too high. And we will do something about it, starting with ensuring that the fuel surcharge never exceeds the cost of units used. In other words, you should not have to pay more in fuel surcharge that you pay for the energy you actually use.” As mentioned earlier the NDP supports geothermal energy and is committed to cheaper electricity for Vincentians.