Solar energy best option for St. Maarten, TNO concludes, but no clear plans in sight

Solar energy best option for St. Maarten,  TNO concludes, but no clear plans in sight

PHILIPSBURG--Solar energy appears to be the best option for increasing renewable electricity in St. Maarten, according to TNO, which studied the energy transition in Aruba, Curaçao, and St. Maarten.

TNO, founded in 1932, is established by law as the Netherlands Organisation for Applied Scientific Research, an independent non-profit research institute.

“Given that the demand peak in St. Maarten is between 10:00am and 2:00pm, solar panels are an attractive option, as their production peak aligns with this period. However, there is currently a minimal number of solar panels installed and there are few concrete plans,” TNO said in it research report, published on May 2, 2024, and recently sent to the Second Chamber of Parliament in The Hague for review.

Wind energy seems less suitable for St. Maarten, with no clear plans in place, TNO noted. “Wind energy has been minimally explored, but the island regularly faces hurricanes, posing a challenge for wind turbines. Low wind speeds and limited space are additional obstacles.”

Offshore wind energy is being discussed, notably by Gridmarket, a US consultancy, which proposed executing the energy transition but faced disagreements and poor collaboration. Gridmarket’s 2021 memorandum of understanding with the government of St. Maarten suggested a third-party sustainable electricity production model, with GEBE purchasing and distributing the electricity.

The proposal included solar panel installations, offshore wind, batteries, and biofuel production. However, the feasibility of these plans was doubted, and cooperation with key local stakeholders was insufficient, TNO concluded. “Without judging the cause, the current Gridmarket proposals seem unfeasible and financially unrealistic, with inadequate site research and environmental considerations. Future comprehensive energy transition plans from Gridmarket are not ruled out, but careful decision-making on privatising electricity production is necessary.”

St. Maarten faces significant challenges in transitioning to 100% renewable electricity due to its limited space, lower wind speeds, and frequent hurricanes. The island’s small and hilly terrain makes large-scale solar and wind energy installations difficult, as many potential locations are already used for tourism and housing. Additionally, compared to Aruba and Curaçao, St. Maarten has less strong and consistent wind, making wind energy less viable and necessitating more robust and costly wind turbine installations to withstand hurricanes.

“Despite these challenges, there are opportunities for expanding solar energy, particularly through rooftop solar panel installations, which can address space constraints but require robust policies and incentives to encourage investment,” TNO noted. “A large-scale rollout of solar energy necessitates significant investments in the electricity grid and battery installations to ensure grid stability.”

Using synchronous condensers can maintain voltage quality, and adjustments in regulations and tariffs are needed to make solar panel investments attractive while protecting GEBE from revenue losses, TNO concluded. “Other renewable energy sources, such as battery storage, can help reduce network instability, and innovative locations like Great Salt Pond could be explored for floating solar panels and installations over parking lots.”

At present, GEBE operates a central plant with an installed capacity of 97.3 MW, mostly relying on fossil heavy fuel oil (HFO). Many of GEBE’s fossil fuel installations are outdated and can no longer meet the country’s electricity demand. Of the 12 generators, 5 are more than 25 years old, with an estimated maximum lifespan of 34 years. The electricity demand is growing, necessitating new generation facilities. GEBE also struggles to meet the n-2 redundancy standard for the network.

The peak electricity demand in St. Maarten is currently around 55 MW (GEBE, 2023), but it is increasing. In 2013, the electricity consumption was approximately 373 GWh. Data on demand trends are largely missing, and GEBE has difficulty predicting how and where electricity demand will develop, leading to supply reliability issues.

Conversations with TNO have indicated that electricity demand will significantly increase due to population growth and more hotels. GEBE often relies on building permits to estimate where additional electricity demand will arise, but a hotel or resort can be built within 18 months of permit issuance, a very short time frame for network or production capacity investments. Information on expected additional electricity demand prior to granting building permits is largely lacking.

There is relatively little renewable generation in St Maarten, with only decentralised solar energy production known to exist. A larger installation of 2 MWp is present at a hotel in Sonesta Maho.

Companies like Sol and Dynaf are active in the (decentralised) solar energy market, but discussions reveal that a limited number of panels are being installed. There is also no buyback scheme for electricity produced by decentralised solar energy production. The Electricity Concessions Ordinance allows decentralised sustainable systems for personal use up to 500 kVA (~450 kW). Anything above 500 kVA must be approved by GEBE.

According to TNO, investments in new production capacity are very urgent, as current capacity is insufficient and electricity demand is rapidly growing. “GEBE plans to expand production with fossil generators, starting with an 11 MW generator in the short term, followed by another 11 MW generator in the long term. Both generators will likely run on heavy fuel oil but can also operate on LNG.”

Electricity tariffs for end-users consist of a base rate supplemented by a variable rate depending on fuel cost. Currently, the base rate is NAf. 0.25 (0.13 EUR) per kWh.

The variable rate, set monthly by the government based on current fuel cost, roughly covers GEBE’s fuel cost, while the base rate must cover all other expenses, which is insufficient according to GEBE. “Discussions indicate that GEBE is in poor financial condition. To better manage the growth in decentralised solar energy production, smart digital meters are being installed for most connections,” TNO said.

Electric vehicles (EVs) are scarcely present in St. Maarten and there is no policy to promote their use. There are opportunities to make short-term progress, such as by mandating changes through taxi licences and encouraging car rental companies to include more EVs in their fleets, similar to Aruba.

Port St. Maarten has about 20 EVs and aims to increase this number. However, the availability of electricity is crucial for a rise in EVs. As GEBE struggles to meet current electricity demand, an increase in EVs would exacerbate the demand issue.

Shore power for cruise ships could become a significant new revenue source for the port and the island, but limited production capacity is a problem. Cruises are very important to the economy, and the island must remain attractive to these ships. Shore power is a factor in this appeal, as cruise operators prefer to use sustainable power while docked. However, St. Maarten's production capacity is insufficient, and shore power requires substantial electricity, making this plan unfeasible in the short term.

Currently, besides the 2014 energy policy, there are few concrete plans for the energy transition in St. Maarten. However, studies by the National Recovery Program Bureau (NRPB) could provide information on concrete steps, said TN, noting that “Discussions in St. Maarten revealed few concrete projects contributing to the energy transition, and there is a lack of information for good decision-making on energy transition investments.”


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