NRG Expert Senior Analyst Edgar van der Meer was recently asked by CNBC for his opinion and views on the Caribbean energy investment climate. Overall, the Caribbean is a very dependent market for energy with very little production from own resources and a heavy reliance on imports for even the most basic of energy needs. Those nations in the Caribbean that do produce and export, are seeing diminishing market shares due to the flood of cheaper resources being made available on the global market. So what is in store for the energy market?
Solar and wind energy are interesting prospects for Caribbean nations to reduce their reliance on imported energy. With the costs of energy having been very high in recent years and the overall downturn in the world’s economy, there has not been much room for capital investment in these areas. The main source of income for many island nations is tourism, and with less tourist money coming in, the countries of the Caribbean have had to reign in their large spending. With a resurgence in tourism, helped greatly by lower transport costs, as well as lower costs for goods to be imported to the Caribbean, the possibility for more investment to take place has increased in recent months. While wind and solar will not be able to supply 100% of any country’s energy needs, diversifying the energy mix has many benefits to the economy when hydrocarbon prices are at their most volatile and prone to significant fluctuation.
Foreign investment will have to play a large part for any small nation to see the most significant gains from renewable energy. Though partnerships and joint ventures, the smaller nations can tap into a wealth of research and development on a scale that is inconceivable in the domestic markets. In order for the Caribbean economies to see economic growth, diversity is key. If, by lowering costs which are heavily related to energy at any given time, they are able to attract new business and see tourism re-flourish; there is potential for excellent return on investment.
Read: Why energy investors are looking at the Caribbean on CNBC.com
NOTICE: NRGExpert is not acting as a financial advisor and the opinions or views contained herein are not intended to be, and do not constitute, financial, investment, or legal advice.
