It seems that while government is moving closer to buying two new generators for utilities provider GEBE (see related story), rising prices and increased global demand are now affecting the process and could force a reassessment of the plan. Prime Minister Luc Mercelina hinted that a US $42 million loan provided by the Netherlands, along with an additional US $1 million to support technical assistance and expert guidance for the project, may no longer be enough.
Readers may wonder if a favourable price could not have been locked in when the decision was first made, but that’s usually not how financing for huge capital investments that involve producing machines work, particularly when it regards public financial means. Cancelling or greatly changing an order of such magnitude, for example, would probably not be without significant penalty.
Mercelina suggested recent geopolitical developments will likely impact delivery timelines too, as more countries compete for the same equipment. Government is therefore reviewing whether to continue on its current path or consider alternative solutions, including sourcing from different manufacturers.
This is worrying, especially taking into account the debilitating months-long electricity crisis just two years ago. The solution back then was to repair some of the older production units to the point where rented emergency generating capacity was returned.
It’s thus hard to tell how vulnerable the current situation is, although there haven’t been many power outages during the peak tourism season. Nevertheless, the summer period when air-conditioners are often blasting because of the heat is still ahead.
The prime minister said St. Maarten must also move toward renewable sources, adding that legislation will be critical to support this transition, particularly to regulate energy use and allow residents to supply electricity back to the grid. However, with all due respect, the time to actively search for funding alternatives to support green energy development is now, not later.
Looking at the present oil picture worldwide, perhaps ordering just one fossil-fuel generator and investing the rest in solar panels with accompanying battery storage to ensure continuity of service is an option. Doing so responsibly obviously depends on the condition, expected lifespan and maintenance schedule of GEBE’s current units, but might well be worth considering at this point.
