It seems that quite often small islands can provide a condensed view of world-wide problems: As long as it is cheap today it’s ok.
Residents of the small Honduran Isle of Roatan, situated in the Caribbean sea just south of Mexico’s Yucatan peninsula have recently taken to the streets in protest of the price increases imposed on them by the island’s power company RECO. The protesters have on several occasions set up road blocks and picket lines all over the island, effectively bringing the island to a standstill for three days on one occasion and two on another. In fact, several cruise ships responsible for a major source of income to the island’s developing economy have been turned around and sent on their way costing the island an estimated $450,000 a day.
The current owner of RECO, a Texan billionaire, took control of the company earlier this year with a pledge to increase the use of renewable energy. At present 100% of the island’s power comes from a group of old diesel generators. With the increase in tourism and demand for condo style holiday apartments with 24hr 360 day a year air conditioning, the demands on RECO’s present supply and generation systems are exceeding current capacity. The new owner wanted to invest significant amounts of his own personal wealth in bringing Roatan’s electrical supply up to today’s standards, with a focus on renewable options: Roatan is bathed in bright Caribbean sunshine and experiences good consistent trade winds throughout the year. The opportunities for developing a renewable power supply with less pollution seem pretty good. However, as the basic price of power has not increased since 1996 the need to pass some cost to the consumer is obvious.
Unfortunately there have been rumors that the owner is having second thoughts. After such severe protests, poor support from national and local government and general discontent among a large portion of the population, why should he stay and pour his own money into improving the island for everyone else?
Sadly many people on the island (at one time this writer included) fail to see the connection between turning on the switch and paying for it at the end of the month. If developers and island residents thought about efficiency then many of the problems would disappear overnight. For example, building holiday homes which are likely to be occupied for a month or two a year but have centrally controlled air conditioning on 12 months a year refrigerating empty space is surely not a prudent use of the island’s limited power supply?
Image credit: MicheKerr at Flickr under a Creative Commons license
Not enough credit is being given to the high gas prices this past year and it’s serious damage on our economy and society. That one factor alone has caused serious stress in both individuals and businesses. A record number of homes and jobs have been lost as a direct result. And, while we are doing the happy dance around the lower prices at the pumps OPEC is announcing cuts to manipulate the prices upward again. We must get on with becoming energy independent.We can’t take another year like this past. There is a wonderful new book out about the energy crisis and what it would take for America to become energy independent. It covers every aspect of oil, what it’s uses are besides gasoline, our reserves, our depletion of it. Every type of alternative energy is covered and it’s potential to replace oil. He even has proposed legislative agenda’s that would be necessary to implement these changes along with time frames. This book is profoundly informative and our country needs to become more informed and move forward with becoming energy independent. Green technology would not only provide clean cheap energy it would create millions of badly needed new jobs. The Book is called The Manhattan Project of 2009 Energy Independence NOW. Our politicians all need to read this book. http://www.themanhattanprojectof2009.com
Your statement doesn’t make any sense:
“centrally controlled air conditioning on 12 months a year refrigerating empty space is surely not a prudent use of the island’s limited power supply?”
No one on Roatan leaves air con running when they are gone. Most of us don’t have air con, but the expensive luxury condos that do have it, which are a minority of the homes here, certainly wouldn’t bother paying for air con when no one is home!
it is often hard to understand a place after only spending a couple of weeks here.
Thank you for your comments Roberto. I agree that it is often difficult to understand a place or situation after only a limited time. I disagree however that my statement does not make sense.
I have lived on Roatan for the past 2 years, and I have been in Honduras since 2005. I know from first hand experience of luxury condos like those I mentioned. I know that these places are a minority of actual homes. However, I would imagine the energy requirement of a single condo would be significantly higher than that of a small shack with a couple of lights and a fridge. My point in this respect is that a large part of the investment required will be used in upgrading the existing infrastructure which is not keeping up with present demand. If demand could be reduced by increasing efficiency then this need may be negated. Also, I believe that if your electricity bill is too high, then you need to use less. Roatan has for many years kept the price of its power artificially low. In fact, even with the suggested rise which is being protested it still has cheaper power than both its Bay Islands neighbors, Utila and Guanaja.
As a recent purchaser of one of these “Luxury Condominiums” I have to agree that the electrical needs of my new home would exceed the needs of a modest typical Roatanian home and it would be unfair for both to be charged the same amount per kilowatt used.
One also has to be realistic and realize that since the last price hike in 1996 the price of fuel for the generators went up just a little and price for electricity would have to follow suit.
I would propose to put in place an escalating scale where a lower rate would be charged low level users and on an escalating scale a higher rate for heavier electrical users.
Let’s look for a peaceful sensible solution, it is there for all to grasp.
Civil unrest and turning away Cruise ships is turning off the main source of revenue to the island and ultimately that will help no one.
My wife and I are full time residents of Roatan. We have a simple home without A/C, we allow the trade winds and ceiling fans to do our cooling. It has been efficient. I fully agree with Abraham in the adjustment of the rates for the low level users. We have adjusted our electrical use since the escalation of rates, and have reduced by 30%. The NEW RECO has significantly reduced blackouts and low/high voltage spikes. This alone is going to save us a fair amount of money, as the old system was destroying our electrical appliances. The saddest part of the ordeal has been outsiders from the mainland, that are being paid, to disrupt our way of life on the island with the blockades etc. The islanders per se are struggling but are not the perpetrators. They are a kind and loving people.
The power situation on Roatan is a perfect example of the world’s energy dilemma. New and hopefully renewable energy sources must be developed and implemented to deliver the world’s energy requirements. However, current energy sources, fossil fuel and nuclear, must continue to be developed and improved until new technologies can be brought online.
The Roatan Electric Co. (RECO) is exploring the use of renewable energy sources and will use them when they are available and economically feasible. RECO’s management told me that the delivery lead time on an adequate wind system here is five years and that solar is even further out. And this is for a small 10-12 megawatt system. In the meantime they must continue to improve the efficiency of the current fossil fuel system to contain costs.
The wild fluctuations in the oil market recently forced RECO to increase their billing rates to recover operating costs. This resulted in the social unrest that was responsible for the demonstrations that disrupted business here.
Los Angeles is another example of what the practicalities of converting to renewable energy sources are. The Mayor is sponsoring a solar system that will deliver 10% (1.2 gigawatts) of the power requirements of the city. If that figure is accurate it means that Los Angeles consumes 1000 times the energy required for all of Roatan. The estimated delivery date of this system is 2020, and that’s for just 10% of the city. Additonally, although the city is signing up for 33% of the cost of installing the system the source of the additional 66% is unknown.
The conversion of energy systems to new technologies will be a long, costly but vitally necessary effort. The world economy cannot continue to be held hostage by OPEC and other oil producing nations for their economic and political purposes. While this conversion is in progress we should continue to develop and improve fossil fuel and nuclear sources and systems. Failure to do so will result in repetitions of the chaotic events of this year in the future.
While my perception and arguement of this percieved problem may seem somewhat incoherent, there are a number of questions and objections that need to be addressed with regards to the above article.
Firstly, “The current owner of RECO, a Texan billionaire, took control of the company earlier this year with a pledge to increase the use of renewable energy” yet it is clear from your own article that he has not done nothing of the sort – hence the protests.
Secondly “The new owner wanted to invest significant amounts of his own personal wealth in bringing Roatan’s electrical supply up to today’s standards, with a focus on renewable options”, Yes – that’s why he bought it but if this is the case, then why hasn’t he brought Roatan’s electrical supply up to today’s standards? On a side note – and who’s standards are you making measurements by – Honduras is one of, if not the poorest nations in South America – Poland’s electricity supply is not on a par with the U.S. for example.
Thirdly “Unfortunately there have been rumo(u)rs that the owner is having second thoughts,why should he stay and pour his own money into improving the island for everyone else?” He should stay and pour his own money into improving the island for the sole purpose of securing his investment and commiting to it as he may have intended to do when he decided to invest in the first place. A benefit to everyone else is a benefit to his own investment.
Fourthly, “costing the island an estimated $450,000 a day.” Is this not a reason for investing in the island in the first place? One wants a slice of the pie. This figure could be dramatically increased if investors made a concerted commitment and effort to building Roatan’s reputation into one of a place of security, quality facilities and stability.
Finally, for those who have criticisms towards OPEC. OPEC has every right to charge as much as it wants to supply those who require it’s resources. If a product is in demand, and thus, there is a market for it, why shouldn’t they over charge? These countries do not exist for you, and you do not exist for them. They need grain, you need oil, because one is more expensive than another does not justify unwarrented criticism of their economic policies.
“As a recent purchaser of one of these “Luxury Condominiums” I have to agree that the electrical needs of my new home would exceed the needs of a modest typical Roatanian home and it would be unfair for both to be charged the same amount per kilowatt used” – if you are being charged the same amount per kilowatt used then if you are using more kilowatts then you are paying more! How can this be unreasonable? Just because someone else on the island doesn’t use their fan as often as you – why should you pay more per kilowatt than them? The energy produced needs to be consumed otherwise it just becomes ‘wasted’. By purchasing a luxury home you are contributing to the local economy and consuming more energy thus boosting the local economy, I fail to see why you should be further punished for this.
@Matt:
People have a right to charge what they want for their goods and services, that is true. What’s not good is when cartels are formed (such as OPEC) which distort markets, meaning that goods are not traded at a price that represents their true value, demand and level of supply.
True, cartels may distort markets, and prices may not represent a products true value, however, a product is only worth what someone is willing to pay for it. If a country is prepared to pay $200 for a barrel of oil, then it’s value is $200 a barrel. Likewise, I wouldn’t pay $20 million for a swirl of paint – but someone else will, therefore it’s price is $20 million. Anyway – I’m not so sure that we are actually running out of oil as we seem to be led to believe.
Your question was “why shouldn’t they overcharge?”.
My answer is that market distortion is rarely a good thing.
Although in this case I would say that markets are anyway not working effectively, otherwise we wouldn’t have constructed an economy that is wholy dependant on a limited and polluting resource.
As for your doubts about the fact that we are running out of oil – how much evidence do you need?
I think it is sad for anyone living there. I would like to retire there some day. Me and my family, like many others first came to Roatan on a Cruise Ship. It was love at first site. I was planning on spending this Christmas there. Now we will be staying in the snow. I am not sure if the protest will help in the long run. I am sure it will keep people away. Is there a web site that has a daily update on what is going on there? Thanks for your comments.
Charlie
I agree with Mr. Ben Robinson. I am a Roatan Resident, i have lived here for 25 years. Both Mom and Dad are Islanders Born and Raised. Thanks Ben for caring and sharing your thoughts and concerns of our Beautiful Island. I would hope that with the enormous inflation problems over the past two years that people would be more considerate and efficient. The main problem is, however, people from the Hoduran mainland that are not Roatan residents or islanders that come here to look for work. They expect to live a life of luxury on a $3-500 a month salary, which is impossible. I would love to own a large house in the U.S. Beverly hill mountains, with infinity edge pools private catoring and beautiful views, but since i just can’t afford it, i think it’s wise for me to stick to my Little island in the caribbeab where i’m better established. Don’t get me wrong, we need some of these people and my example was a little dramatic, but i just wanted to prove a point. Those workers are welcome but need to adapt and live according to their salaries and/or budgets, or go back home. We have worked very hard to get Roatan where it is today, cruise ships, international airlines, millionare investors, franchises, etc… We can’t just let what our fathers and us have worked so hard for go to waste because of fuel and inflation prices that we the islanders nor Texan Billionares can control.
Thanks Again Ben,
Rgards
Not surprising. People just don’t realise that energy needs to come from somewhere – it is so available that it feels free at the point of use..
It would be great if they could make it work. Damn politics.