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Haïti Priorise: Renewables, Kashi

The Problem

Haiti’s economic condition both influences, and is influenced by, its failing electricity market. Only 35% of Haitians have access to electricity through grids. In rural areas that figure is 11%. Per capita consumption of electricity in Haiti is significantly lower than other Caribbean countries, and is only two percent of the neighboring Dominican Republic.

The inability to access electricity has serious implications for all Haitians, but is especially harmful for commercial and industrial enterprises. The lack of reliable electricity supply is cited by business owners as the most binding constraint to private sector development. Businesses in Haiti also face some of the highest costs for electricity in the region, making it hard for them to operate competitively. Households also suffer from lack of available power, and are forced to adopt coping strategies such as using small diesel generators to power household appliances, or burning kerosene oil for light. Those Haitians that do have access to electricity through grids face shortages, and it is estimated that those with connections only have electricity for 5-9 hours a day. 

Haiti’s electricity sector is also a serious financial burden on Haiti’s economy. The electricity supplier EDH requires a transfer that averages USD$200 million each year to cover operating costs.

Most of Haiti’s electricity (85%) is generated by fossil fuels such as diesel. This is economically inefficient and contributes to climate change. Haiti’s reliance on fossil fuel also makes it vulnerable to shocks in the global price of oil. 

The Solutions

  • Wind Power
  • Solar Photovoltaic (PV)
  • Concentrated Solar Power (CSP)
  • Hydro Power

Carbon dioxide and other greenhouse gasses released by humans are leading to increasing average air temperatures, acidification of the oceans, and increasingly disruptive weather patterns. 

When addressing ways of supplying Haiti’s electricity demands, it is important to consider the environmental implications of possible interventions. While Haiti is not currently a large contributor to global emissions due to its underdeveloped economy, it is vulnerable to extreme climate conditions. Haiti’s relatively underdeveloped electricity grid means that it can incorporate clean renewables into its energy supply

Benefits, Costs and BCR

Costs

There are two major sources of costs: the annualized cost of capital and the annual cost of operations and maintenance. The annualized cost of capital is calculated by taking the average installation cost per MW of capacity for a given generation technology, and spreading the costs over the lifespan of the asset. The costs of financing the project are included to reach equal annual costs:

Figures use 5% discount rate.

The cost of operations and maintenance is the cost to ensure that installed generation capacity can continue to operate over its lifespan. It includes labor costs, repair costs, and the costs of replacing parts. Total operations and management costs per year:

Wind: $75,686.40

Solar PV: $32,000.00

CSP: $77,884.00

Hydro: $56,000.00

Benefits

The first benefit attributed to this intervention is the value of the electricity being generated. The annual value of electricity generated is:

Wind: $261,748.80

Solar PV: $159,957.60

CSP: $218,124.00

Hydro    $378,081.60

The second benefit is the benefit of reduced carbon emissions. This benefit is calculated using estimates of emissions of diesel generators, which it is assumed would be replaced with clean energy. The values for the social costs of carbon are taken from Tol (2011), the same estimates used by all members of the Haïti Priorise project to ensure comparability. The annual cost of carbon dioxide reduction, using a 5% discount rate, is:

Summary Table of the BCR