Caribbean Energy Grid message at OAS
Honorable Kenneth McClintock
Secretary of State of Puerto Rico
Energy and Climate Ministerial of the Americas
Caribbean Sustainable Energy:
Developing Indigenous Resources and the Role for Interconnections
Organization of American States
April 14, 2010
First, I would like to thank Secretaries Clinton and Chu for the opportunity to share with you Puerto Rico’s perspective on the role that interconnections can play in fulfilling the promise of the Energy and Climate Partnership of the Americas in the Caribbean.
Puerto Rico’s perspective is somewhat unique. While being a territory of the United States, Puerto Rico is geographically, historically, and culturally an integral part of the Caribbean as well as of Latin America. I like to say that Puerto Rico is where the United States becomes a Caribbean nation… and where Latin America and the United States come together.
In August 2008 President Clinton envisaged at the National Clean Energy Summit that Puerto Rico could become the first energy self-sufficient jurisdiction in the United States and offered to help us attain that goal. In April 2009, President Obama called in Port of Spain for an “Energy and Climate Partnership for the Americas” (ECPA) through which we can cooperate to improve the efficiency of energy production, integrate our energy markets, and increase access to energy while protecting our environment and building a more prosperous future. Today I venture to say that through the ECPA we can work together in transforming the Caribbean into the world’s first energy self-sufficient region.
Energy isolation presents a challenge to the implementation of the ECPA in the Caribbean Basin—particularly in the Eastern Caribbean. Most Caribbean countries have small electric power systems and markets with insufficient reserve capacities and inefficient transmission infrastructure that have no links to other electric power grids.
In addition, the power generation plants of most Caribbean countries and territories depend, at least primarily, on imported diesel and heavy fuel oil resulting in some of the highest electricity rates in the world.
To help shield them from higher energy costs, many countries in the region have looked to Petro Caribe. However, this arrangement has been unable to prevent the increase of energy prices and the associated public debt in most participating countries, or to protect them from the volatility of oil prices and their large impact on their macroeconomic and fiscal positions.
Nevertheless, the cost of generating electricity from renewable sources of energy can be very high without efficient economies of scale which cannot be achieved in the Caribbean without market integration. And, needless to say, the interconnection required for such integration is made difficult by geography. After all, the word “isolation” has its etymology in the word “island”.
The technology exists to interconnect the electric power grids of the Caribbean by means of submarine cables and, as the World Bank study has shown, interconnection is not only technically viable but it makes sense from an economic standpoint.
In order to meet peak consumption needs and provide redundancy, the government of Puerto Rico is already pursuing with the U.S. Virgin Islands the connection of their power grids and is exploring a similar interconnection with the Dominican Republic. We are also considering a proposal that would bring geothermal energy from Nevis through the U.S. Virgin Islands.
However, interconnection can and should be much more than an electric extension cord that takes electric power from an energy producer to an energy consumer. An electric power ring encompassing the whole Caribbean Basin could provide a pathway for creating a large scale transnational electricity market that can make the generation of electricity from renewable energy more economically viable and reduce our dependence on oil.
The repercussions of a common Caribbean energy market can be far reaching because energy is so central to our lives. We rely on it for transport and cooling our homes as well as running our manufacturing plants, farms and offices.
And we must begin to produce and share it without doing more damage to the global climate. While a windmill here and a solar panel there are steps in the right direction, we must start thinking and acting as a region.
A common Caribbean Basin energy market would mean cheaper electricity that will facilitate private investment, create jobs, fight poverty and reduce social inequalities. Even the infrastructure projects that would be required for the interconnection could, by themselves, provide a significant source of economic growth and employment.
Through multilateral cooperation a common Caribbean energy market can become a concrete reality. And it can begin with a single interconnection. It has been said that a pole does not make a fence but that a fence starts with a pole.
As a part of the United States in the Caribbean, Puerto Rico can be the conduit by which the United States can spearhead in the region the energy partnership of which President Obama spoke about at the Fifth Summit of the Americas.
Energy cooperation can advance mutual support and increased interdependence in the Caribbean Basin thereby strengthening the Inter-American system with potential implications on the political architecture of the region.
One should not forget that the history of European political and economic integration is in part the history of electric interconnection. Beginning with the League of Nations the governmental and non-governmental organizations that emerged with the end of the First World War led Europe towards the idea of single European network. Today Europe is integrated into a common market with a single currency that ensures the free movement of people, goods, services and capital.
If it all started with the development of a common energy policy that facilitated the interconnection of electric power grids, the value of such cooperation in seeking the establishment of Free Trade Area of the Americas cannot be ignored.
As we meet here this week, let us deal with the immediate problems at hand but let us also look at what can be possible. As a part of the United States, Puerto Rico stands ready to contribute its share in transforming the Caribbean into the world’s first energy self-sufficient region.
Paraphrasing what President John F. Kennedy said as he concluded his only Inaugural Address, the solution to our regional energy problems will not be finished in the next one hundred days, nor will it be finished in the first one thousand days, perhaps not even in our lifetime, but let us begin.