Convert Oil Opex to renewable CAPEX
Sustainable mobility in the Caribbean
Energy Challenges in the Caribbean, Amazonia and Central Africa
The energy context is similar for populations in the Caribbean, Amazonia and Central Africa. Their geographical situation – regarding sources of fossil fuels which are essential for modern economies and societies – and the conditions in which their energy is generated and consumed, entail extra transport and generation costs:
- Because of their isolation (islands or forests) and their distance from European or American electricity grids where mass production (partially nuclear) makes it possible to achieve very competitive energy costs, they are in fact Non-Interconnected Zones (NIZ). For example, the additional cost of producing electricity in the French territories means that about 40% of generation costs are covered by public funding: the Public Service Electricity Contribution (CSPE). EDF SEI’s projections in the four NIZs for the CSPE are 1,400 million euros for 2015 while the necessary investments for the transition of the electricity grid to all-renewable production in Martinique would cost about 1,070 million euros.
- Objective factors linked to their status as outermost regions (in relation to Europe but also to the south of Brazil or to the United States) – specifically their insularity, size of their energy markets and electricity grids, and the almost exclusive use of fossil fuels for transport and electricity generation – mean that operators, producers and consumers in these outermost regions have to face additional constraints that greatly hamper their activities.
- Energy needs for transport have increased in Europe’s outermost regions due to:
- Economic development, the mushrooming of the service sector, population pressure, and the evolution of transportation modes,
- Local land and urban planning, only recently introduced compared to Europe, that makes the organization of public transport more costly.
- The non-European Caribbean and Amazonian territories are moving in the same direction.
Today, almost all of these needs are being met by fossil fuels.
Specificities of local mobility
Caribbean-Amazonian mobility is different in several respects from that of developed markets:
- Socio-economic situation: The opportunities for carpooling are legion:
- The purchasing power of consumers is almost everywhere lower than in the developed countries,
- With the notable exception of some Brazilian towns like Belém or Manaus, even the largest urban centers are small:
- Martinique and Guadeloupe are the most populous islands in the Eastern Caribbean with a half a million inhabitants each,
- The large towns of Amazonia have about 100,000 inhabitants
- Tourism is often the main industry,
- Climate: Local temperatures and humidity levels mean that proposed solutions have to be adaptable, in particular to allow for the air-conditioning of vehicles,
- Topology: The distances covered for private use are smaller because of the size of the territories and/or urban areas,
- Finances: The cost of transporting fuel, added to upward pressures on fossil fuel markets, offer an opportunity to run electric vehicles using decentralized renewable electricity.
Local issues related to electricity
Grids in the NIZs have to limit the direct feed-in of intermittent energies. In the French NIZs, this limit has been fixed at 30%.
With a grid having a peak generation of 250 MW in Martinique, 30% represents 75 MW. This limit having already been reached, the feed-in of total energy generated is no longer guaranteed by grid operators. The financial advantage of renewable energy projects is therefore seriously undermined and the survival of the sector is only possible through grants. And yet, the feed-in tariff for photovoltaic energy is €160/MWh, while fossil fuels are trying hard to reach an average of €240/MWh (for a very different grid service, we should point out).
Puerto Rico is the only non-French territory in the region to have reached this limit. However, all the other NIZs, whether Caribbean or Amazonian, will reach it in the coming years.
The Strategy developed by Martinique
Martinique is implementing an energy governance policy for the island, and sustainable development is among its priorities.
It has an economic and a social remit and its energy policy is environmentally-aware; its energy approach is thus based on the three pillars of sustainable development. This policy seeks to:
- Improve energy self-sufficiency
- Give momentum to local development that adopts environmentally responsible modes of consumption, industrial production and land-planning
- Mitigate the effects of climate change
- Reduce atmospheric pollution
- Develop land-based and ocean energy potential, both renewable and waste to energy
The energy question is usually treated from the point of view of supply – therefore of sources – but to adopt a more effective strategic approach, it is important to understand the destination; that is, the use of energy.
We distinguish three uses: energy for ‘living’ (households and the service sector): 21%, energy for ‘producing’ (agriculture and industry): 12%, and energy for ‘travelling’: 67%.
The first of the three uses electricity from the grid, with the exception of large sites that produce their required cooling locally thanks to generators that run on diesel fuel. A change in this type of use should therefore be considered through:
- a change in centralized electricity generation (from fossil fuels to renewable energies),
- a change in the grid necessary for the transmission of electricity to meet ever-increasing demand and to lessen vulnerability to major risks, and,
- above all, the decentralizing of electricity generation through positive energy buildings and housing.
Today, agricultural and industrial production uses electricity from the grid and fossil fuels for plant. Electricity, even with the compensation mechanism of the CSPE, is a solution that is too expensive for real industrial development, in addition to which, available capacity is limited.
Local industrial development, particularly of agro-industries, would be greatly facilitated by cheaper sources of thermal and mechanical energy such as biomass or geothermal, but also gas.
Finally, transport in Martinique is almost exclusively based on fossil fuels. It is important to note that this use is decentralized. The transition to electric vehicles raises the question of the origin of the electricity necessary to run them. The electricity grid could not meet demand for energy that would be three times higher than at present. As of now, the plan should be for electric vehicles to use decentralized electricity linked to photovoltaic buildings, for example.
Reducing dependence is the financial solution to the problem. The creation of local added value is the socio-economic response. This will result in a drop-in polluting emissions, which is the environmental response.
A long-term island vision
To continue to develop renewable energies and offer an opening to the local renewable energies sector, it is both essential and urgent to define new conditions for consumption, with intelligent storage and with or without feed-in.
This possibility exists thanks to both Martinique’s authority to legislate on energy and French Republic/European Union to implement energy transition as quick as possible. The enabling act states that local regulations about the feed-in of energy can be adopted (regarding electricity, the economy and construction). It is only used if Martinique needs to adapt Frenc/European regulation to its tropical island situation.
High local demand for electricity means that the running of electric vehicles needs to be regulated very rapidly, by prohibiting their direct connection to the grid. Since our electricity system is already finding it difficult to satisfy demand from households and industry (21% of total demand), it would not be possible to satisfy demand that would be three times higher; transport representing two thirds of final energy consumption in Martinique.
Although provisional solutions can be found from a technical point of view by storing night-time production in charging stations, decentralizing electricity generation for transport should also be considered from a financial standpoint, for ‘fossil’ transport provides fiscal income whilst ‘renewable’ transport is likely to consume CSPE.
So, whether it is for private transport, public transport or, later, haulage, we hope to be able to develop the Positive Energy Building – Electric Vehicle link and new related economic activities.
Indigo’s intention is to position our islands, priorly vis a vis French and European industries but not exclusively, as a center of innovation for:
- Storage technologies,
- Using panels as roofing or placing them on existing roofs in hurricane and earthquake areas,
- Intelligent networks,
With the aim of the Caribbean and African markets as soon as possible.