A World Bank report concludes that liquified natural gas is the least-cost option for powering Haiti by 2028, but notes that renewable energy sources may also be cost effective.

Less than 30 percent of Haiti's population has access to electricity © Worldwatch

What options are available for Haiti’s energy future? The office of the country’s new State Secretary for Energy is weighing the available options for energy supply and beginning consultations to plan the next steps for Haiti’s power sector. In doing so, decision makers should consider not only the short-term technical and economic costs, but also the long-term environmental and social costs and benefits for Haiti’s population.

A March 2011 report, commissioned to Nexant by the World Bank and the Public-Private Infrastructure Advisory Facility, a multi-donor technical assistance facility, explores future electricity supply options for the Caribbean region. For Haiti, the Nexant analysis presents three scenarios and concludes that liquified natural gas (LNG) is the cheapest fuel option at nearly all capacity factors. (See table.) The report also notes that renewable energy technologies such as wind power and hydropower are economically viable in the country through 2028.

Scenarios for Haiti’s Power Supply, 2009–2028

 

 

Added Capacity by 2028

Technology

Import Infrastructure

Savings over Base Case Scenario

Base Case Scenario

540 MW

20 MW low-speed diesel (LSD) units (27 in total)

Imported

Fuel Scenario

540 MW

Liquified natural gas (LNG)

Imported through an LNG terminal in 2014

US$433 million

Interconnection Renewable Scenario

540 MW, including

81 MW wind

20 MW LSD units; 81 MW wind

US$76 million

“Comprehensive integrated”

540 MW, plus 81 MW wind

LNG;

81 MW wind

Imported through an LNG terminal in 2014

US$476 million

Importing power from the Dominican Republic (DR) via landline

Heavy fuel oil or LNG

Building a 563 km transmission line between Port au Prince and Santo Domingo, US$242 million

Net savings US$235 million (increases costs for DR by US$322 million, decreases costs for Haiti by US$556 million).

 

Source: Nexant, 2011


All three scenarios recommend a centralized power-generation model, fueled by large imports of fossil fuels in response to a forecasted surge in domestic demand. Nexant projects that Haiti’s power demand will increase 5 percent annually from 2009 to 2028, due largely to population growth and to an increase in average consumption per capita. This translates into a more than doubling of net peak demand between 2009 and 2028, from 226 megawatts to 570 megawatts.

The report lays out three main options for Haiti to switch its dominant fuel source from diesel to a combination of liquified natural gas, wind, and diesel. In two of the scenarios, developing LNG in Haiti would require building an LNG import terminal to fuel new natural gas power plants. Electricity would then be generated at a few relatively large power plants and distributed throughout the country.

Although large and centralized power plants have often been viewed as the “gold standard” for electrification, due mainly to their cheaper generation costs per kilowatt-hour, there are barriers to their development in Haiti. A significant reliance on LNG and a few large generating plants would require building a centralized grid, an infrastructure project that would be both economically and logistically difficult to accomplish in Haiti.

Although the Nexant report provides useful first insights into the mix of power-generation options available for Haiti, the model falls short of giving a fully robust analysis. Policymakers should be aware of these limitations when interpreting the results of the study and making future energy plans.

For one, the analysis is based mainly on economic and technical comparisons of fuels, renewable energy technologies, and interconnections. It recognizes but does not quantify the political, institutional, regulatory, or financial risks associated with each option, even though these factors will affect a project’s feasibility in the long run. Issues like energy security (dependence on foreign fuels as well as the security of the fuel supply), environmental impacts, and potential technological and political risks may present real obstacles to implementation of any of the analyzed scenarios.

The relatively small size of Haiti’s power market, for example, would necessitate a smaller LNG import facility. The report acknowledges that there is little global experience with building small LNG terminals or a barge, which means that the technology used to ship LNG to Haiti would still be at its demonstration stage. Even though this would be a major limiting factor, the report fails to provide a quantitative assessment of its impact.

In another methodological limitation, the report examines only large-scale and grid-connected systems and ignores the economics or viability of “distributed generation” systems in Haiti. This is a major shortcoming, as the country lacks a national grid to connect rural regions—home to a majority of the un-electrified population—to the proposed large-scale power plants. A centralized generation model would require massive investments in the grid. Yet Haiti’s government and private sector currently lack upfront capital for grid extension, and the state-owned utility Electricite d’Haiti (EDH) is already suffering from a US$219 million annual net deficit caused mainly by transmission and distribution losses.

With household budgets too small to pay for the full cost of recovering interconnection fees and tariffs, alternative solutions are needed. A recent study by the Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) shows that for typical rural households that use (on average) 2–5 lights, a television, a radio, and a cell phone, power generated by small, distributed alternatives to grid-power is often sufficient. According to the study, off-grid electrification is frequently the most cost-effective solution for un-electrified users in least-developed countries who live more than 5 kilometers from a small town or an existing low-voltage grid.

In the case of Haiti, distributed generation options offer the significant advantage of locating power consumption close to supply, thus reducing transmission and distribution losses, which are as high as 51 percent. Rural electric cooperatives are another cost-effective and socially beneficial option, as demonstrated by past experiences in developed countries (such as the National Rural Electric Cooperative Association, or NRECA, in the United States) and in developing countries. By increasing community ownership of the project, such approaches can also help fight electricity theft.

Haiti’s people and government currently face multiple challenges in the energy sector. The January 2010 earthquake damaged the country’s already-fragile power generation and transmission infrastructure, adding to the gravity of an already precarious situation. Yet the country now has a significant opportunity to plan its energy future for the next few decades; at this critical time, it is important that all options—including distributed and renewable energy sources—be considered.

In this series of blogs, Worldwatch aims to provide a discussion of the current options available to Haiti and to guide policymaking through informed, independent analysis. Please stay tuned!

Supported by the International Climate Initiative of the German Government, Worldwatch currently works on Sustainable Energy Roadmaps for the Dominican Republic, Haiti, and Jamaica.

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