President and CEO of Makai

5 July 2017

energy Q&A

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Jose Andres about the Caribbean Energy Transition
5 July 2017
JOSE ANDRES | President and CEO of Makai

energy Q&A by REVOLVE

One of the main challenges facing the Caribbean is the energy market. The islands currently rely predominantly on oil imports for energy, but companies like Makai are working to make sustainable, renewable, and local energy sources part of the future for island nations. In this interview with Jose Andres, he talks about the technologies that are helping to make the energy transition happen.

  • With over 30 years of experience working on ocean engineering and renewable energies such as SWAC and OTEC, what do you think are the main challenges for these technologies to become more widely accepted and integrated into the Caribbean market?

    Sea Water Air Conditioning (SWAC) systems are a fundamentally different technology than Ocean Thermal Energy Conversion (OTEC). SWAC is a proven and commercially robust technology, while OTEC still requires development and large-scale validation before being proven as commercially viable. Since SWAC is more mature than OTEC and its application to the Caribbean is more likely in the short-term, I will focus on SWAC for this interview.
    SWAC involves a district cooling system with a network of underground pipes supplying chilled water to buildings in a coastal area. The technology is simple yet relatively unknown, so educating stakeholders on the benefits of SWAC is key. Successful project execution requires buy-in from all stakeholders, including governments, regulating authorities, customers, the community at-large, and investors. This means that the single most important factor in project success is having a strong local champion capable of financing and developing large energy projects ($25 million to $250 million). Each Caribbean island community has a unique constellation of government and private sector actors, and understanding how to build a project in that specific environment is paramount. Thus, the primary challenges with SWAC are associated with project development rather than technology risks.

  • Do you think SWAC and OTEC are key technologies in the energy transition for Caribbean islands?

    Yes – especially SWAC. OTEC has promise over the next decade, but SWAC can make a real difference here and now. Areas with high population density and air conditioning loads that are near the shoreline – especially tourist areas with multiple hotels – are good candidates. SWAC can reduce energy consumed for cooling by up to 90%, which can result in huge cost savings of millions of dollars annually while decreasing the strain to the local electrical grid. SWAC also reduces environmental footprints by eliminating the evaporative water and sewer usage required for conventional AC.

  • Can OTEC/SWAC become a viable competitor in terms of the levelized cost of energy (LCOE) with other sources of renewable energy such as solar or wind energy in the next decade?

    Absolutely – SWAC is already there. We have studied projects with capital costs of more than $100 million USD that have payback periods shorter than 8 years. SWAC has the unique advantage that, unlike solar or wind, it is constant: 24 hours a day and 365 days a year. As a result, the return on investment and LCOE equivalents are quite predictable.

  • What has to be done to enable a future powered by ocean thermal energy?

    The industry needs a successful project in the Caribbean to serve as a model for the rest of the region. However, the early-stage money to study feasibility and cost for a project are at-risk dollars. The studies funded by CAF – Development Bank of Latin America and others go a long way towards reducing that early-stage risk. Once a single successful project is built in the region, I am certain you will see many more projects following suit.