Caribbean nations team up to cut power costs

12/12/2025 9:30

Five Caribbean nations are pushing to develop geothermal energy by pooling expertise and separating drilling from power plant development to work around scarce funding, aiming to cut costs in a region with some of the world's highest power tariffs. After multiple failed attempts since the 1970s in the region, Grenada, Saint Kitts and Nevis, Saint Lucia, and Saint Vincent and the Grenadines said after the U.N. COP30 climate conference in Brazil that they were looking to supply clean and cheap power in places where high electricity bills strangle household budgets and curtail tourism competitiveness. The five nations hold an estimated 6,290 megawatts (MW) of geothermal potential, enough to power the region many times over and to save each country $5 million to $30 million annually by cutting diesel imports by more than 90%, according to the Organisation of Eastern Caribbean States (OECS). Electricity tariffs in the region average between $0.29 and $0.40 per kilowatt-hour - more than double th

e U.S. average of about $0.15, OECS data showed. The nations currently operate small and isolated grids and aging diesel generators that depend on expensive imports. Saint Lucia intensified geothermal testing before commencing civil works and adjusted drilling contracts this year to avoid cost overruns such as those from a site redesign in Dominica, said Arthur Antoine, technical director at its Renewable Energy Sector Development Project. Dominica's 10 MW geothermal plant, which could meet over 75% of its total electricity needs and is due for completion early next year, has needed a decade to gather a $68 million financing package from multiple lenders. Globally, geothermal projects are gaining traction after breakthroughs in drilling and heat extraction techniques. Relying entirely on grant financing for exploration has caused delays and design changes in Grenada but shielded taxpayers from risk, said a spokesperson for the geothermal project management unit at the country's ministr

y of climate resilience, the environment and renewable energy. Grenada hopes its planned 15 MW project will start generating power in 2033 and supply every household at 2024 consumption levels. "The sizing is based on current demand and resource confirmation, and future expansion depends on confirmed resource and financing," the spokesperson said in an emailed statement. CLIMATE RISKS Successful execution would boost the finances of island nations vulnerable to extreme weather, said James Fletcher, climate envoy for the Caribbean Community, a group of 21 countries where hurricanes regularly destroy infrastructure and disrupt diesel shipments. "Caribbean governments just don't have that kind of fiscal space that would allow them to borrow as it has been eroded by having to constantly respond to extreme weather events," he said on the sidelines of the COP30 conference last month. OECS is facilitating joint management of drill rigs to slash upfront c

osts, which had stalled Dominica's attempts to secure financing, said Chamberlain Emmanuel, who heads the environmental sustainability division at the OECS. Saint Kitts and Nevis, which expects to start drilling in early 2026, tripled its project capacity to 30 MW, secured financing upfront and backed a debt-funded private power plant to offset risks, said Albert Gordon, general manager at the Nevis Electricity Co. Gordon said he expects the plant to be commissioned by 2029.