GRENADA EAGER TO DEVELOP ALTERNATIVE ENERGY -- BUT

UNCLAS BRIDGETOWN 000623

SIPDIS
SENSITIVE

DEPT FOR S/CIEA, EEB, AND WHA/CAR

E.O. 12958: N/A
TAGS: OECS ENRG EINV ETRD ECON SENV XL
SUBJECT: GRENADA EAGER TO DEVELOP ALTERNATIVE ENERGY -- BUT
IS IT READY?

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SUMMARY
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1. (U) Poloff met with Ministry of Energy and Environment
Officials, senior officials from GRENLEC, the American-owned
private utility company in Grenada, and the President of
Grensol, a solar power provider, to assess the state of play
of alternative energy development in Grenada. The consensus
among our interlocutors was that Grenada has tremendous
potential geothermal, wind, and solar power resources and the
island nation could be powered entirely by green energy
within 15 years. End summary

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GRENLEC Cautiously Optimistic Regarding Geothermal
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2. (U) Poloff met with senior officials of GRENLEC, the local
energy producer and distributor, and with senior officials
from WRB, the Tampa, Florida company that owns both GRENLEC
and DOMLEC in Dominica. WRB execs claimed they are seriously
looking at developing geothermal sites in the country.
Grenada has ample geothermal resources, they noted, but the
temperatures at the geothermal sites are below optimal for
production using traditional geothermal extraction and
production technology. Consequently, GRENLEC is in
negotiations with several geothermal power producers in the
US that are developing "cool" geothermal technology --
technology that could make geothermal power production at
lower temperatures a reality within ten years.


3. (U) WRB, GRENLEC's parent company, is looking for joint
venture partners to share both the relatively high upfront
costs of drilling exploratory shafts, as well as eventual
development of a geothermal power plant. They believe that
Grenada could easily meet 100 percent of its energy needs
from the geothermal power if the potential and the technology
intersect properly. Installed electricity capacity is 30 MW
in Grenada, 1 MW in Carriacou, and 150 KW in Petite
Martinique. Domestic consumers use 140 kwh, with St.
George's University being the biggest single consumer, taking
up to 2.5 mw, 10 percent of peak load. Company executives
feel that they have adequate supplies of electricity. Power
is 98 percent generated through diesel fuel, procured mostly
under the Petrocaribe arrangement with Venezuela.


4. (U) Environment Minister Michael Church and Minister of
Public Works Joseph Gilbert likewise expressed enthusiasm for
geothermal potential and affirmed their desire to see GRENLEC
undertake development of the rich geothermal potential. The
Geothermal sites are located in the far north of the island,
so new transmission grids would have to be installed, but
GRENLEC officials said that was a minor problem in developing
the site. The real problem was finding a partner with the
resources and upfront capital to invest. According to Church
and Gilbert, Prime Minister Tillman Thomas is particularly
keen on developing geothermal sites as the sites sit in his
and Gilbert's constituencies.

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Wind Power Potential Still Being Explored
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5. (U) GRENLEC and the government also expressed interest in
taking advantage of Grenada's abundant wind energy potential.
They are currently looking at erecting wind farms, and had
almost broken ground on a wind farm in NE Grenada based on
data collected on wind capacity over the last two years.
However, reports some Grenadians culled from the internet
that wind farms cause cancer, miscarriages in animals, and
sterility in humans, as well as killing birds and bats,
generated widespread anxiety and confounded those plans.
(Note: Similar fears postponed a potential wind farm project
in Barbados. End note.) GRENLEC is now looking at
developing a site on government-owned land on the neighboring
island of Carriacou and has submitted a formal proposal.
GRENLEC would like to generate 10 percent of their power from
renewable energy from the wind farm by 2013 and 20 percent by

2017.

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Solar -- Two Percent of Power, More to Come?
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6. (U) Grensol, a local solar power company, has entered into

a power purchase agreement with GRENLEC that is capped at 1
percent of grid capacity. Grensol has installed 25 systems,
mostly in residential buildings, and is looking at installing
systems on hotels and government buildings. They are also
looking at installing solar power at St. George's University
and at the local hospital. A number of firms in Grenada,
including one of the major hotels, are looking at installing
solar power systems. Grensol sources their solar panels from
Evergreen Company, based in Massachusetts, and their
converters from a German supplier. Poloff briefed the
company CEO, Dale Burhardt, who is also a St. George's
Neurology Professor, on possible Ex-Im and OPIC financing
options for renewable energy projects. They would like to
greatly expand their operations in Grenada, with or without
GRENLEC's cooperation. Grensol would like to sell solar
systems that are off grid as well as connected to the grid.
Grensol's president was skeptical that geothermal power will
take off, noting the high cost of development and questioning
whether GRENLEC is really committed to developing alternative
power.

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Comment
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7. (SBU) All our interlocutors believe that alternative
energy resources will be developed in Grenada over the next
few years and that within ten years Grenada could be close to
100 percent green energy. At this stage, though, given high
start-up costs and small markets, much of the buzz for
renewable energy in Grenada appears to be at a rather
abstract level. This is particularly true for geothermal,
which would require substantially more money, research, and
technological advancement, but also applies to wind power,
where "eyesore" and environmental concerns continue to slow
development plans throughout the eastern Caribbean. Solar
has the most immediate potential, especially on small-scale
projects, but will likely continue to face opposition from
electrical utilities that have trouble staying in the black
in these small markets.
HARDT