The Bahamas’ Energy Market: A Regional Comparison and Lessons Learned

The Bahamas’ energy market has been undergoing significant changes in recent years, as the island nation seeks to diversify its energy sources and reduce its reliance on imported fossil fuels. This shift has been driven by a combination of factors, including the need to address the environmental impacts of traditional energy sources, as well as the desire to improve energy security and reduce the cost of electricity for consumers. As The Bahamas looks to transition to a more sustainable energy future, it is worth examining how its energy market compares to those of its regional neighbors and what lessons can be learned from their experiences.

One of the key challenges facing The Bahamas in its quest to diversify its energy mix is the high cost of electricity, which is primarily driven by the country’s reliance on imported oil for power generation. In fact, The Bahamas has one of the highest electricity rates in the Caribbean, with an average cost of around $0.36 per kilowatt-hour (kWh) in 2019. This is significantly higher than the regional average of $0.25 per kWh and has placed a considerable burden on both households and businesses.

In comparison, other Caribbean nations have made greater strides in transitioning to cleaner and more cost-effective energy sources. For example, Barbados has successfully implemented a range of renewable energy projects, including solar and wind power, which now account for around 20% of the country’s total electricity generation. This has helped to reduce the average cost of electricity in Barbados to around $0.20 per kWh, making it one of the most affordable in the region.

Another regional success story is Jamaica, which has made significant investments in renewable energy infrastructure, including the construction of several large-scale wind and solar farms. As a result, Jamaica has been able to reduce its reliance on imported oil and lower the cost of electricity for consumers. In 2019, the average cost of electricity in Jamaica was around $0.22 per kWh, well below the regional average.

These examples demonstrate that it is possible for Caribbean nations to transition to a more sustainable energy future, while also reducing the cost of electricity for consumers. So, what lessons can The Bahamas learn from its regional neighbors as it seeks to achieve similar goals?

Firstly, it is clear that a strong commitment to renewable energy is essential. Both Barbados and Jamaica have set ambitious targets for renewable energy adoption, with Barbados aiming to achieve 100% renewable energy by 2030 and Jamaica targeting 50% by 2037. The Bahamas has also set a target of generating 30% of its electricity from renewable sources by 2030, but there is scope for this target to be increased, given the country’s abundant solar and wind resources.

Secondly, the experiences of Barbados and Jamaica highlight the importance of creating a supportive policy environment for renewable energy investment. This includes implementing favorable tax and regulatory policies, as well as providing financial incentives for both large-scale projects and smaller, distributed generation systems. The Bahamas has made some progress in this area, with the introduction of a net metering policy for solar PV systems in 2017, but further policy reforms will be needed to accelerate the deployment of renewable energy.

Finally, regional cooperation and knowledge sharing can play a crucial role in supporting the transition to a more sustainable energy future. The Caribbean Community (CARICOM) has established a number of initiatives aimed at promoting renewable energy and energy efficiency across the region, including the Caribbean Sustainable Energy Roadmap and Strategy (C-SERMS) and the Caribbean Centre for Renewable Energy and Energy Efficiency (CCREEE). By actively participating in these initiatives and learning from the experiences of its regional neighbors, The Bahamas can accelerate its own energy transition and reap the benefits of a cleaner, more affordable, and more secure energy future.


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