Deploying renewable energy in Haiti will expand energy access, improve economic conditions, and mitigate ongoing environmental challenges. We believe the government will succeed in creating the conditions for companies and organizations to build a robust renewable energy sector.
Lack of Infrastructure Allows for a Direct Route to Renewables
Only 25% of the Haitian population, roughly 11 million people, have access to reliable electricity. This includes illegal connections. In rural areas, the electrification rate decreases sharply to 5%.
As a result of such low grid connections, over 90% of Haiti’s population uses charcoal and firewood to fulfill their energy needs. The lack of a central grid in Haiti means that the country could potentially “leapfrog” over conventional fossil-fuel based sources of energy directly towards renewable energy options. This could be done by strengthening local grid capacity and promoting off-grid energy solutions.
If existing regional grids are repaired, the Haitian government can deploy distributed generation networks, meaning that energy generation, distribution, and transmission would take place closer to the end user. This would reduce electricity losses and could potentially withstand severe weather events such as earthquakes or hurricanes. Currently, two-thirds of all electricity that is generated in Haiti does not even reach end users in commercial and residential sectors.
Urgency Needed With the Collapse of PetroCaribe
Haiti depends on petroleum imports to generate 85% of its energy, putting the country at high risk of price fluctuations such as sharp increases in oil prices. This overreliance contributes to high electricity generation costs. The cost of electricity in the Caribbean is one of the highest in the world because of this dependence. Still, Haiti’s electricity utility rates are higher, about $0.35 per kilowatt hour (kWh) compared to $0.33 kWh in the Caribbean.
Haiti successfully hedged itself against this risk by participating in the PetroCaribe Accord, a 2005 agreement offered by Venezuela that provides subsidized oil to about a dozen countries in the Latin America and Caribbean region. As economic conditions in Venezuela have exacerbated, Haiti has no longer been able to depend on the subsidized oil which increases Haiti’s economic fragility.
Outlook Shines Bright for Investors and Project Developers
Limited to no electricity access throughout the country makes Haiti particularly vulnerable to environmental degradation. Currently, Haitian citizens derive 90% of their energy needs from wood biomass. The vast majority of this wood is turned into charcoal and is typically used for cooking. This practice of cutting down trees for energy contributes to severe deforestation and could be curbed if more reliable energy was available.
Latam Energy Advisors identifies and manages renewable energy investments for governments and financial sponsors. We seek to provide opportunities to not only expand energy access, but to also address vital economic and environmental issues that Haiti is experiencing. Contact us to learn more about the energy sector in Haiti.