“Gas-driven Guyana,” other CARICOM nations urged to increase use of renewable energy – CDB Vice President

Feb 17, 2023 News

---

Kaieteur News – The Russia-Ukraine war has etched into the minds of all CARICOM leaders that they must hasten steps to reduce their reliance on outside fuel sources; the time is now to fully hone their God-given resources in the forms of solar, hydro, and wind. The urgency as well as the saliency of this message was restated by Vice President of the Caribbean Development Bank (CDB), Isaac Solomon during his presentation at Guyana’s International Energy Conference yesterday at the Marriott Hotel.

Solomon said it is imperative that Guyana, whose energy mix will soon be dominated by gas produced from the Stabroek Block, as well as all other Borrowing Member Countries (BMCs) of the bank, do all that is necessary to rapidly increase the contribution of renewable energy to their supply mix.

Pursuing a shift to renewable energy sources such as wind, solar, and hydro, he posited, would go a far way in improving energy efficiency and allow countries to meet their emission reduction pledges. Unfortunately, the CDB Vice President said this shift to renewables has been slow. He said, “The regional renewable energy electricity generation capacity currently represents approximately 12% of the total installed capacity. However, to be on track to achieve the targets outlined in the CARICOM Sustainable Energy Road Map and Strategy, this figure should be closer to 28%.”

He added, “It goes without saying, we are lagging way behind. This is why the main focus of CDB’s Energy Sector Policy and Strategy is to support the increased scale and pace of the transition across all BMCs.” To do this, he said the Bank has operationalised a framework called the Accelerated Sustainable Energy and Resilience Transition 2030 or the ASERT-2030 framework. Through ASERT-2030, the Vice President said CDB will help BMCs catalyse sustainable energy investments, through – among other things – enhanced sector diagnostics, identification and development of transformative sustainable energy initiatives which address key barriers, and de-risking of transformative thematic areas or sub-sectors to create investment opportunities.

In addition, the CDB official said strong strategic partnerships will be a central feature of the framework to facilitate scaled-up resource mobilisation and increased coordination among local, regional, and global actors supporting the sector.  He also noted another important factor for expediting the shift to renewable energy. He said this speaks to  the current and emerging threats to the region’s competitiveness. Expounding further, Solomon said global trade rules, particularly in relation to European trade, increasingly require ‘green’ products.

He cited for example, that the Carbon Border Adjustment Mechanism (CBAM), will be implemented by the European Union (EU), beginning in October 2023 with a transitional phase, with the system to come into full effect in January 2026. Under the CBAM, he said selected carbon intensive products imported into the EU will effectively be taxed based on their embedded greenhouse gas content. The CDB official said as a result, there is an opportunity to improve the competitiveness of regional exports, by reducing carbon intensity. He was keen to note that this will require action to accelerate the energy transition.

The CDB Vice President said, “Even as we align ourselves to accelerate the pace and increase the scale of the transition – as I have already indicated – it cannot and will not happen overnight and also, there is potential for significant disruption. One aspect which needs to be considered is that, even as we transition to increased renewable energy over the short to medium term, our vulnerability to global oil market disruption, as acknowledged earlier, remains a major concern.”

In light of this, he said it is critical that the energy transition be managed in a manner which allows for hydrocarbon supply security based on the region’s natural endowment in Guyana, Trinidad and Tobago, and Suriname. He said nations can therefore improve regional energy security by reducing the dependency on external resources.  The CDB Vice President said, “This is a critical lesson emerging from Europe’s experience with the Russian-Ukraine war. In recognition of this need, and in support of a managed approach to the energy transition, the CARICOM Heads of Government at their July 2022 meeting in Suriname, among other things, agreed on several matters.”

He said there was an agreement for increased focus and investment in energy security by utilising and harnessing hydrocarbon resources in the region towards reducing dependency on external resources and supplying the growing global needs arising out of the Russia-Ukraine conflict. Solomon said leaders also agreed, among other things, to ensure the pursuit of energy diversification and security through making use of significant assets in the region with immediate existing capacity in liquefied natural gas and fertilizer for agriculture.

There was also consensus for development of a renewable energy sector through building infrastructure to meet regional power generation needs. Solomon said a carefully managed process will help to ensure that solutions to difficult regional challenges such as food security and intra-regional transport, that is regional air and marine transport, could benefit from appropriate investments which enable predictable, affordable energy prices over a predefined period.  In parallel to the aforementioned, he said CDB and key partners, including the Inter-American Development Bank, IDB, and the Caribbean Centre for Renewable Energy and Energy Efficiency, (CCREEE), have initiated the preparation of a Regional Energy Security Strategy linked to the optimal development of renewable energy resources, including the wide range of options, such as green hydrogen, green ammonia, long-term storage and the interconnection of electricity grids.

The CDB official said the bank agrees that the region would be best served by an integrated approach, which will support managing the transition process in a manner which takes into account the region’s special development challenges, with a focus on long-term energy security and resilience building.  In conclusion, the Vice President said the CDB is embracing the challenge to play an increased leadership and coordination role in the sector, leveraging its unique position as the only multilateral development bank focused on the Caribbean.  He said, “We remain committed to working with the countries and all partners on a more optimal approach and more efficient deployment of resources…”

---

• Caribbean Development Bank (CDB), CARICOM, Isaac Solomon, Marriott hotel, Stabroek Block

---