What's Happening?
A recent report by global energy think tank Ember reveals that Caribbean nations remain heavily reliant on fossil fuel imports, with over 90% of electricity generated from gas and oil products across the thirteen countries analyzed. This dependence persists
despite the fact that renewable energy sources are often cheaper than fossil power. The report, published ahead of OLACDE Energy Week in the Dominican Republic, indicates that the Caribbean has installed nearly twice as many solar panels as officially recorded between 2021 and 2024, based on an analysis of imports from China. However, policy barriers are hindering faster deployment of renewables, leaving the region vulnerable to high electricity prices and global price shocks. Eleven of the analyzed countries have renewable targets, but only six are verifiable, and none of those six are on track to meet them. As a result, renewables accounted for less than a tenth of electricity in 2024 in these countries, significantly lower than the 32% worldwide average.
Why It's Important?
The Caribbean's continued reliance on fossil fuel imports has significant economic implications for the region. Every Caribbean country with available data spends more of its GDP on fossil imports than the global average of 3.2%, with some nations like Jamaica and Barbados spending more than double. This exposure leads to increased inflation following oil shocks, as seen in 2008 and 2022, and contributes to some of the world's most expensive electricity prices, averaging around 25 cents USD per kilowatt-hour—more than double the median price in emerging economies. The report highlights that despite the economic advantages of renewables, policy hurdles are preventing a faster transition. Overcoming these barriers could stabilize energy costs, reduce economic vulnerability to global fuel price volatility, and foster greater energy independence for these nations.
What's Next?
The Ember report recommends three key policy changes to accelerate renewable energy deployment in the Caribbean. These include establishing independently checked targets, ensuring licensing and grid connection decisions are made independently of utilities, and designing tenders around system needs with published results. If the six countries with verifiable targets were to achieve them, the renewable share of electricity could reach 23% by 2030, leading to a 9% reduction in fossil generation. Wilmar Suárez, Ember’s Latin America analyst, emphasizes that decisive action by leaders could position their countries at the forefront of reimagining their energy systems, making them more resilient to external shocks like hurricanes and storms and less exposed to volatile fossil fuel markets. The upcoming OLACDE Energy Week in the Dominican Republic may serve as a platform for discussions and potential commitments towards these policy reforms.
Beyond the Headlines
The situation in the Caribbean underscores a broader global challenge where the economic and environmental benefits of renewable energy are clear, yet systemic policy and regulatory frameworks impede their widespread adoption. The discrepancy between actual solar panel installations and official records suggests a disconnect in data collection and reporting, which can hinder effective policy-making and investment. Furthermore, the high cost of electricity in the Caribbean, driven by fossil fuel dependence, disproportionately affects households and public accounts, potentially exacerbating socio-economic inequalities. The transition to renewables is not just an energy issue but also a matter of economic stability, climate resilience, and social equity for these island nations, which are particularly vulnerable to the impacts of climate change and global market fluctuations.
