Eustace questions financing of geothermal project

Leader of the Opposition Arnhim Eustace has questioned the financing of the geothermal project presently being undertaken by the Government, in conjunction with Reykjavik Geothermal of Iceland, Emera Light and Power of Barbados and the Clinton Climate Initiative on Clean Energy.{{more}}

As he addressed the 37th annual convention of his New Democratic Party (NDP) on Sunday, Eustace asked what will the private investors get after they have invested so heavily in the geothermal project here in St Vincent.

“This brings us to the point. Is this being financed by Emera? It is certainly not being financed by Government or VINLEC. And as you ask that question, remember what Gonsalves himself said. He said:

‘Now, no one seriously believes that Emera will come to St Vincent to put in the facilities to generate only 10 megawatts of power. They have their eye on a larger prize….’

“Now consider that Emera is the owner of the electricity company in Barbados (they acquired majority shares two and a half years ago). So the question now is: what is Emera going to get for spending all the money and taking all the risk up front?

“What is this “larger prize” that Gonsalves is talking about?” Eustace further asked.

Eustace said that the nature of geothermal energy development requires high-risk investment of capital up front and the people, who are investing that capital and taking the high risk must get their return.

“It is our contention that this up-front risky investment should not be made by private investors, because they will have their eyes on a bigger prize. But this is what the Prime Minister has already told us is happening!

“What is the bigger prize? Is it VINLEC? After Emera has made all of these investments, will we be called upon to ‘repay’ them by selling VINLEC to them? Remember they recently bought out Barbados Light and Power. Or will they charge us exorbitant amounts for the geothermal energy under our soil, but which they invested in, instead of us?

“It is our contention that far from being a leader in this area, Ralph Gonsalves is simply a follower, five years late, and he is following the wrong example.

“He is selling out our patrimony in energy and taking away our opportunity to develop a truly self-sufficient, indigenous energy sector, based on our own abundant renewable energy resources,” Eustace said.

Eustace also expressed concern that to date, there has been no definitive assessment of the country’s geothermal resources, because no definitive assessment can be made of our geothermal potential until geothermal wells are drilled.

Eustace said that on December 1, 2008, during Parliament, Prime Minister Gonsalves announced that the Government had signed a Memorandum of Understanding with the firm Croghan Energy Limited, for the investigation of the country’s geothermal potential.

He said Gonsalves further revealed that representatives of the Government and Croghan Energy had been involved in several meetings and that a formal agreement was in the offing, and if concluded soon, it was expected that drilling could begin sometime in the third quarter of 2009.

“The problem is, whoever this Croghan fellow was, it appears as though he tricked our great PM, because nothing was heard about him or that project again. Did Croghan trick Gonsalves? If Gonsalves and Jerrol Thompson had spent fifteen minutes on Google back then, they would have found out that the guy was a fly-by-night.

“In any case, years passed and we heard nothing further about geothermal until recently – and up to now, in October 2013, five years after Gonsalves spoke about Croghan, no drilling has started! So, five years passed and he can’t even organize some geothermal drilling, but now he wants us to believe that in four years we can explore, do the drilling, design and build a power station and be producing geothermal energy,” the Opposition Leader stated.

“That is not the statement of a credible person. That is the statement of a man who is tossing another election gimmick in front of you, hoping you will fall for it,” Eustace continued.

According to Eustace, the preliminary investigations presently being carried out will not definitively answer the question of what is the true extent and quality of our geothermal resource.

That question, according to Eustace, can only be answered by drilling, which is expensive, risky and time-consuming.

During the launch of the geothermal project at Cabinet Room on November 1, Gunnar Gunnarsson, the chief operating officer of Reykjavik, an Iceland based power company, said “So, we are here because we think there is an opportunity in St Vincent and my company Reykjavik Geothermal is a developing company looking at opportunities not only in the Caribbean, but also in other places on the globe where there are active volcanoes, and where we think there is an opportunity in developing our plants.”