Caribbean nations unite to cut electricity costs and revive the geothermal push

GRENADA--Five Caribbean nations are working to develop geothermal energy by pooling their expertise and separating drilling from power plant development to get around a lack of financing. Their goal is to lower costs in a region that has some of the highest electricity rates in the world.

After multiple unsuccessful attempts in the region since the 1970s, Grenada, St. Kitts and Nevis, Saint Lucia, and St. Vincent and the Grenadines said, following the U.N. COP30 climate conference in Brazil, that they want to deliver clean, affordable electricity in places where high power bills strain household budgets and hurt tourism competitiveness.

The five nations have an estimated geothermal potential of 6,290 megawatts (MW), enough to power the region multiple times over and save each country between US$5 million and US$30 million per year by cutting diesel imports by more than 90%, according to the Organisation of Eastern Caribbean States (OECS).

Electricity rates in the region average between US$0.29 and US$0.40 per kilowatt-hour, more than double the U.S. average of about US$0.15, according to OECS data. The nations currently operate small, isolated grids and aging diesel generators that rely on costly imports.

Saint Lucia has stepped up geothermal testing before starting civil works and adjusted its drilling contracts this year to avoid cost overruns, like those seen during a site overhaul in Dominica, said Arthur Antoine, technical director of its Renewable Energy Sector Development Project.

Dominica’s 10 MW geothermal plant, which could meet more than 75% of its total electricity needs and is expected to be completed early next year, took a decade to assemble US$68 million in financing from multiple lenders.

Globally, geothermal projects are gaining momentum following breakthroughs in drilling and heat-extraction techniques.

Relying entirely on grant funding for exploration caused delays and design changes in Grenada, but protected taxpayers from risk, said a spokesperson for the geothermal project management unit at the country’s Ministry of Climate Resilience, the Environment, and Renewable Energy.

Grenada hopes its planned 15 MW project will begin producing electricity in 2033 and supply all households at 2024 consumption levels.

“Sizing is based on current demand and resource confirmation, and future expansion depends on the confirmed resource and financing,” the spokesperson said in an emailed statement.

Climate risks

Successful execution would strengthen 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 deliveries.

“Caribbean governments simply do not have the kind of fiscal space that would allow them to borrow, because it has been eroded by the need to constantly respond to extreme weather events,” he said on the sidelines of the COP30 conference last month.

The OECS is facilitating joint management of drilling rigs to reduce upfront costs, which had previously blocked Dominica’s attempts to secure financing, said Chamberlain Emmanuel, who heads the environmental sustainability division at the OECS.

St. Kitts and Nevis, which plans to begin drilling in early 2026, has tripled its project capacity to 30 MW, secured initial financing, and backed a privately owned, debt-financed power plant to offset risks, said Albert Gordon, general manager of Nevis Electricity Co.

Gordon said he expects the plant to come online by 2029.

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