Turks and Caicos Islands

is wrong” (FP Turks and Caicos, 2011a). The Company believe that since the sun and wind do not provide
reliable power sources and require large up-front investments diesel generation (especially with newer and
more efficient plants PPC has invested in) remains a reliable and cost-effective solution (FP Turks and
Caicos, 2011a; Castalia, 2011). PPC management is however, considering a wind study for 2011, and has
stated that it would not exclude purchasing power from an independent power producer that uses wind
technology, provided that it were supplied at avoided cost and with satisfactory financial and operational
safeguards (Castalia, 2011). The CEO also acknowledges that solar water heaters at the islands hotels may
have economic potential (FP Turks and Caicos, 2011a).
TCU have had a more proactive approach since the early when it secured all necessary permits and project
finance to install wind turbines, but land grants were denied. TCU have obtained approval for installing
meteorological towers on Crown Land for 3 years to conduct a detailed assessment, but no long-term
approval for installing and operating a wind farm. In 2009, TCU submitted a proposal for a hybrid windsolar
PV-diesel system including eight to nine wind turbines (650-850kW each) and about 1MW of solar PV.
TCU‘s preliminary estimate for renewable energy capacity are 32% for wind; and 18-20% for solar PV
(Castalia, 2011:21).
The barriers to implementing energy efficiency and renewable energy initiatives are discussed in Section
5.2.1.
4.2.2. Vulnerability of the Energy Sector to Climate Change
Two key impacts related to energy and emissions are of relevance for the tourism sector and the wider
economy. First of all, energy prices have fluctuated in the past, and there is evidence that the cost of oil on
world markets will continue to increase. Secondly, if the international communities’ climate objective of
stabilizing temperatures at 2°C by 2100 is taken seriously, both regulation and market-based instruments
will have to be implemented to cut emissions of greenhouse gases. Such measures would affect the cost of
mobility, in particular, air transport and cruise tourism, both being highly energy- and emission-intense
sectors. The following sections will discuss past and future energy costs, the challenges of global climate
policy and how these interact to create vulnerabilities in the Turks and Caicos tourism sector. Additional
discussion is included on how climate change impacts can affect the physical infrastructure of the energy
sector.
Energy costs
High and rising energy costs should self-evidently lead to interest in more efficient operations, but this does
not appear to be the case in tourism generally. Since the turn of the 19 th century, world oil prices only once
exceeded those of the energy crisis in 1979 after the Iranian revolution. Even though oil prices declined
because of the global financial crisis in 2008 (Figure 4.2.5) – for the first time since 1981 (IEA, 2009) - world
oil prices have already begun to climb again in 2009, and are projected to rise further. The International
Energy Agency (IEA) (IEA, 2010) projects for instance, that oil prices will almost double between 2009-2035
(in 2009 prices). Notably, Figure 4.2.5 shows the decline in oil prices in 2009; in March 2011, Bloomberg
reported Brent spot prices exceeding USS120/barrel.
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