VZCZCXRO2586
PP RUEHGR
DE RUEHWN #0104/01 0511427
ZNR UUUUU ZZH
P 201427Z FEB 08
FM AMEMBASSY BRIDGETOWN
TO RUEHC/SECSTATE WASHDC PRIORITY 6100
INFO RUCNCOM/EC CARICOM COLLECTIVE PRIORITY
RUEHFR/AMEMBASSY PARIS PRIORITY 0444
RUEHCV/AMEMBASSY CARACAS PRIORITY 1872
RUEHDG/AMEMBASSY SANTO DOMINGO PRIORITY 5897
RUMIAAA/HQ USSOUTHCOM J2 MIAMI FL PRIORITY
RUMIAAA/HQ USSOUTHCOM J5 MIAMI FL PRIORITY
RUEHCV/USDAO CARACAS VE PRIORITY
RUCPDOC/DEPT OF COMMERCE WASHDC PRIORITY
RHEBAAA/DEPT OF ENERGY WASHDC PRIORITY

UNCLAS SECTION 01 OF 02 BRIDGETOWN 000104 
 
SIPDIS 
 
SIPDIS 
 
SOUTHCOM ALSO FOR POLAD 
DEPT PLEASE PASS USTDA-ESTEBAN 
SANTO DOMINGO FOR FCS-PORTORREAL 
 
E.O. 12958: N/A 
TAGS: ENRG EINV PREL XL
SUBJECT: THE NATURE ISLE DEVELOPING GREEN ENERGY 
 
¶1. (SBU) SUMMARY AND ACTION REQUEST:  Dominica is poised to 
develop its geothermal and other renewable energy sectors. 
If successful, geothermal energy could supply all of 
Dominica's energy needs, as well as export considerable 
energy to the neighboring French islands of Martinique and 
Guadeloupe.  Seeing this potential, France is the first off 
the blocks in considering investing in this potential.  By 
analyzing the sector and its potential for U.S. investors, 
while ensuring that Dominica implements a transparent 
tendering process, geothermal energy could present an 
attractive target for U.S. investors.  Similarly, a 
USTDA-funded feasibility study on potential wind farms could 
help Dominica further develop the renewables sector and 
create openings for US energy firms or equipment suppliers; 
we would appreciate inputs from USTDA in this regard.  END 
SUMMARY AND ACTION REQUEST. 
 
¶2. (U) Dominica has prioritized developing ecotourism as a 
major component of its economy, marketing itself as the 
"Nature Isle."  However, one of its greatest roadblocks in 
developing the tourism sector is the high cost of 
electricity.  Currently, at ECD 1.38 (USD 0.53) per kilowatt 
hour, Dominica suffers from the highest electric cost in the 
Eastern Caribbean.  Dominica produces 75 percent of this 
expensive electricity through petroleum fueled plants and 25 
percent through hydroelectricity.  Prior to Hurricane Dean, 
Dominica operated two hydro-generators, supplying 40 percent 
of Dominica's demand of 13 megawatts.  However, Dean 
destroyed one of those generators. 
 
¶3. (U) Dominica is currently showing great potential in 
renewable resources, primarily geothermal energy, with wind 
energy and hydroelectricity bringing up the rear.  With 
successful implementation, the Nature Isle could boast 
supplying 100 percent of its energy needs from 
locally-available renewable energy, with enough extra to 
export to the neighboring French islands of Guadeloupe and 
Martinique.  Recent talk about the possibility of a 
Venezuelan-built oil refinery on the island, meanwhile, has 
so far not led anywhere, as opposition throughout civil 
society sectors has caused the PM to shelve the project for 
the time being.  At the same time, Venezuelan-built petroleum 
storage tanks have come on-line, and are supplying fuel to 
the country's generating plants. 
 
GEOTHERMAL 
---------- 
 
¶4. (U) The Organization of American States did the first 
major study of Dominica's geothermal potential, finding 
specific areas on the island most likely capable of producing 
sustainable electricity.  Estimates of the sustainable 
potential range from 70 to 100 megawatts, allowing up to 20 
megawatts for domestic consumption (currently at 13mw) and 
the rest for export to Martinique and Guadeloupe via undersea 
transmission cable. 
 
¶5. (U) Until recently, no investors had been willing to take 
the risk to explore these areas further.  After the 7.4 
earthquake off Martinique in November 2007 disrupted the 
island's power grid, the French have reportedly shown 
significant interest in investing in Dominica's geothermal 
potential.  As a start, the European Union, as part of its 
energy development project in the Caribbean, has agreed to 
finance a feasibility study into this new sector.  The French 
Development Agency (ADF) will run this program. 
 
¶6. (SBU) PolOffs emphasized to the GOCD the importance of 
ensuring that the results of this study lead to an open 
tendering process for bids on developing this sector.  GOCD 
representatives expressed their understanding that the EU 
requires that results from its studies be marketed through a 
transparent tendering process. 
 
WIND ENERGY 
----------- 
 
¶7. (U) Certain areas of the island also show potential for a 
successful wind farm.  The Waitukubuli Ecological Foundation, 
the leading environmental NGO in Dominica, believes that an 
 
BRIDGETOWN 00000104  002 OF 002 
 
 
appropriately placed wind farm could net approximately half 
of Dominica's energy needs.  To test this theory, WEF 
developed a USD 130,000 proposal to install a single turbine 
to adequately measure the potential.  If successful, WEF has 
estimated that a farm of eight turbines could generate up to 
7 megawatts.  WEF is currently soliciting for a donor to 
conduct a feasibility study for this project. An Energy 
Ministry representative stated that, although Dominica might 
have wind energy potential, it is likely marginal (2-3mw), 
and geothermal is the current priority.  Once geothermal is 
up and running, then the ministry might consider exploring 
wind energy options. 
 
HYDROELECTRICITY 
---------------- 
 
¶8. (U) Both the Energy Ministry and Dominica's sole 
electricity company, DOMLEC, see hydroelectricity as a backup 
system.  Although rivers are plentiful in Dominica, DOMLEC 
claims that the water levels are dropping, negatively 
impacting their producing capacity.  Regardless, both parties 
would like to keep hydroelectricity active as a backup 
system.  Two hydro plants previously supplied 40 percent of 
Dominica's energy needs.  However, Hurricane Dean caused, 
inter alia, massive mudslides that essentially destroyed one 
of the plants, leaving only 25 percent generating capacity. 
The government is (somewhat wistfully) looking for donor 
assistance to rebuild the plant and restore the generating 
capacity. 
 
COMMENT/ACTION REQUEST-GOOD INVESTMENT OPPORTUNITIES 
--------------------------------------------- ------- 
 
¶9. (SBU) It is fairly apparent from conversations with 
members of government and other parties concerned about the 
energy sector that France has a headstart on tapping into the 
likely successful geothermal market.  With such high export 
potential to the neighboring French islands, France's vested 
interest is clear.  It is still early enough in the process, 
though, that no one player is guaranteed a corner on the 
geothermal market.  Dominica looks ripe for American firms to 
competitively bid on Dominica's geothermal potential, and the 
government has said it would welcome any investment interest. 
 A small handful of investors, including French and Canadian 
businesses, have already begun lobbying with the GOCD.  Post 
stands ready to assist potential US investors to get the 
necessary access to pursue potential commercially viable 
projects. At the same time, we would welcome input from USTDA 
regarding the possibility of funding a feasibility study for 
a possible wind farm test project.  Initiative in this sector 
could successfully spillover into more potentially lucrative 
geothermal sector, and could create and bring attention to 
openings for US energy companies and/or equipment suppliers 
in this emerging market. 
OURISMAN