Like other Small Island Developing States, Dominica faces distinct challenges and vulnerabilities when it comes to its energy sector. Despite substantial renewable energy reserves, the country remains dependent on imported petroleum products for electricity generation. According to government estimates, Dominica spent $20 million on diesel imports in 2012, equivalent to 24 percent of its GDP. (By contrast, health expenditures were only 6 percent of GDP in 2012). Nearly 65 percent of the country’s electricity production is fossil fuel-based.
That could soon change, as the island nation lies in a volcanic region, boasting the second largest boiling lake in the world. Estimates suggest that geothermal power could generate 500 megawatts (MW) of power in Dominica, 20 times the island’s current installed capacity of 25 MW.
Results from exploratory well drilling and testing in September 2013, funded by international donors Agence Française de Développement, the European Union, and public funds from Dominica, confirmed a high likelihood of up to 65MW of geothermal resources in the Wotten Waven / Laudat field. Given the high potential, Dominica has the possibility to not only achieve energy security, but also become an energy hub for the eastern Caribbean.
To assist Dominica’s development of geothermal resources, the World Bank is supporting Dominica’s Ministry of Public Works, Energy, and Ports by conducting an analysis of current and projected geothermal power generation capacity in the system. This analysis takes stock of the considerable progress made towards readying the country’s geothermal resources towards commercialization and helps map the road ahead.
"The World Bank's situational analysis helped us move closer to commercializing geothermal power generation. Its assessment of our geothermal resources and how to actually integrate geothermal energy into the power system, backed up by a comprehensive review of financial feasibility and social impact, is a huge step forward," said Michael Fadelle, Renewable Energy Programme Coordinator with the Ministry of Public Works, Energy, and Ports.
To arrive at this analysis, World Bank experts used the Model for Electricity Technology Assessment (META) to demonstrate that of the power generation options available to Dominica, geothermal energy would require the lowest operating and management costs over the long term. META also showed that once completed, a geothermal plant’s operating cash flows would be much less variable than other options, such as Dominica’s current diesel-powered plants.
“Using META, we were able to inform the Government of Dominica that the high initial exploratory costs associated with geothermal would be more than compensated over the life of the project,” noted Nadeem Karmali, Financial Economist, Finance & Private Sector Department of the World Bank. “For a small island state like Dominica, this has very important implications for foreign exchange and the trade balance.”
META was developed by the Energy Sector Management Assistance Program (ESMAP) in 2012 to help governments make informed decisions on energy policy by providing a comparative assessment of the economic costs of different electricity generation, transmission, and distribution technologies.
The results provided by the META analysis reinforced the rationale to invest in geothermal energy. Activity is already underway in Dominica to tap into its abundant geothermal energy resource base. Supported by the World Bank, ESMAP and other partners, donors, and private sector stakeholders, a small-scale geothermal plant of 5-15MW is being developed in the Roseau valley to supply the domestic market and a possible scale-up plant of 100 MW plant is being assessed to export to surrounding islands.
“Public-Private Partnership discussions are currently underway to develop the first geothermal power plant in Dominica. While the important first steps have been taken towards this end, further international support and financing will be needed to fully take advantage of Dominica’s considerable untapped supply of clean, domestic energy,” said Nadeem Karmali.
Going forward, geothermal energy has the potential to deliver clean, reliable and domestically-produced power, and in the long-run could even provide power for export to neighboring islands, which would spur economic growth for Dominica, reduce fossil fuel imports, and enhance the prosperity of its people.