You're listening to Redefining Energy. Your co hosts from Berlin Gerard Raid and from London Lawrence Segalan. Today on Redefining Energy, Chard, we're going to talk about electrifying islands. It's not so easy. Actually electrifying them as easy. Doing it a green way, that's not easy. But first of all, from our partner, PVKS is the ultimate design software for solar pv developers, from the earlier stages of planning all the way to the procurement phase. PVKS
is the ideal choice for solar. We also do this epidote in partnership with a friend and that's Bruce Douglass used to be one of the top guys as you electric and he has created a new organization called the Global Renewables Alliance and it's really supported by pretty much every organization and you might have seen it, but he just launched a campaign for the tripling of global renewables by two or
thirty. Well done, Bruce, Good luck with everything. Back to our islands, but probably something I want to share with you and our listeners our shows. So the main one, this one and the minutes we passed one million downloads yard oh, my god, I kind of believe this. It's crazy, really long, but I think that we started as a bit of a joke to be honest. Really a million downloads crazy. So guys,
we thank you all. We are just the produce of our listeners, and every time we receive some nice feedback or comments, this incentivize us to continue and just be better all the time. Absolutely, feedback helps you become better. Simple as that. So islands. So why we choose islands. I think we choose islands because the smaller degree, the higher the price. That's what you've seen everywhere if you look at the US sprice de fim is in
Hawaii. These are child and very difficult system to run with. For one success, there are a lot of failures in Puerto Rico in the US is unmitigated disasters, not their fault. They've been hit by a lot of hurricanes. Electrifying islands. It's not that simple, no, and it tends to be very expensive because I have two choices. One is you import electricity.
There was you put in a very expensive power cable. But if you're in the middle of the Atlantic Ocean or the middle of the Pacific Ocean or whatever, you can't do that, so then you're left with importing it. And what do you import? You import fuels. That's what you've been doing in islands are using diesel GM sets. I don't care if it's the Greek Islands or Jamaica. That's what they're doing. They're important oil. Why did we
choose Jamaica. People only hear about Jamaica when sportmale or it's US and bolts, or it's tourism. And by the way, it's absolute beautiful place. It's a tiny island, were million inhabitants for those who don't know. So Jamaica is west of it, south of Cuba, and they don't make yod lines because it's a relatively well managed country and it does a privately integrated unity company called jipps Jamaica a big service. And now it's managed by someone you
know very well. Job. Yeah, well, listen, I didn't know we'd be talking about Jamaica six months ago. I know Steve Burbish very well. He used to be the former head of California ISSO and otherwords, the grid operator in California. Even went into early retirement, got fed up playing golf, and then one day it just says, by the way, I moved into Jamaica. You go, why would you move to Jamaica? Because I'm going to become the CEO of the utility there, and the question is
why do you do it? It's a challenge and it is an incredible challenge, and I think it's so great because if you can decarbonize that island, then that's a role model for the rest of the world. And it's completely different if you're on an Iceland or in Australia. They're also islands, but they have their own resources. To Jamaica is if this world's don't I think it's prettiant what he's doing right, really probably the best thing used to bring
Steve on the show. Steve, welcome to the show. Thank you. Sure, it's a pleasure to be here with you. I really look forward to this conversation. Let me just kick off straight away with You've had a very successful career with a head of California isso for many years, you took a little bit of time off after that, and then suddenly you've ended up in Jamaica. You need to explain that one to me. That's a multilayered
question. It requires a bit of a multilayered response, but part of it I think it connects well with what your audience is interested in, So you're right. I was the CEO of the grid Operator market Operator in California, and I left there after being the CEO about ten years because one is I just feel that it's important for people to keep mentally sharp and for organizations,
I think also to have new, fresh ideas and faces. So after about ten years, I think it's about time, and so I tried retirement, but I still wanted to be involved in this transition discussion. And so someone called me about Jamaica and I did some research on it, and I found that Number one, their electric system is run almost entirely on either natural gas,
which is important or distalates that it is also important. They have a high cost of power, they have a grid that's relatively unreliable, and they want to transition to renewables. They want to get renewables by twenty thirty and that sounds like a pretty cool thing to try to do. So that's really what motivated me to do this. From a personal perspective, it sounds like an interesting adventure. From professional perspective, what better microcosm of what needs to
happen than work on a Caribbean island to try to get this done. And I suppose if you can do it in Jamaica, you can do it anywhere. Exact point, So, Steve, you arrive on an island of three million naman so gdppa capita, which is twelve time lower than the US. What's your first assessment of the situation. The first assessment I found here, or that I did here in the island was, let's look at the big
picture of things. Number one. I think for a developing country, they should have every expectation to have the same level of reliability that a developed country has. And my first observation is, not only is a grid not as reliable generally, there's an expectation of unreliability, and I think that inhibits quality alive. I think it also inhibits economic development. So having a good quality,
reliable system I think is important. I also saw firsthand in my time in California that I think renewables can contribute to that resiliency across many fronts, and but having good reliable power I think is the most important. First thing I did, this island needs and I observe that they don't have. The second thing too, is they have very ambitious goals to get to fifty percent renewables by twenty thirty, as I mentioned, and they don't have a lot
of money to do that. However, they spend a lot of money barding the fuel needed to produce electricity. So there's a good put in take for renewables that can offset the cost of generation. Because the marginal cost of generation here reaches almost three hundred dollars a megawatt hour, which is way higher than you see in other parts of the world. In California, as an example, would probably be around forty dollars. So the marginal costs to generate here
is very high, and the marginal cost for renewables is very low. So I think there's a way to thread this needle to get this done. And I think those are probably my first observations. How do you thread the needle? And how do we make this system reliable? And so can I ask then, just converting that into a plan of action, what comes next?
You've gone done your assessment, what do you do now? I believe the strategy has to rest on culture, and this is a hundred year old company that was formally government owned, and I think there's a lot of embedded culture here that is a bit slower to change then I think is necessary, particularly when you're starting to think about an energy transition, and when they take a step back, they look at rooftop solar as an example, as a threat.
They see these other things or the renewables on the grid as a challenge. And what I need to do first and formist is change that cultural platform form so that you can later on a strategy. And the cultural platform that I'm talking about is making sure they understand this transition is something that's healthy, that can be good for the organization. And they also have to understand as
a monopoly that they do have competition. They have competition and forms of consumer choice, and as consumers decide to make those decisions, we have to adapt to them. So I want to build a cultural platform that embraces and adapts to this transition that it's going to happen, and fighting technology is all losing cost. So that's the first thing I have to do, and that will take some time in some doing, however, I don't have time to do
things in Cereal. I'll have to do things a parallel. The second thing we have to do is up our game on reliability because I can't have a good conversation about a transition. Tell we have a good reliable system. Now that means we need more crews, we need more equipment, we need to get out there. But I think that also is a paradigm shift because we
need to shift from reactive to proactive. We need to do proactive maintenance and tree trimming and the necessary things that keep trucks from rolling in the first place. We spend a lot of time just responding to vegetation that got into lines because it's a heavily vegetated area and those kind of challenges. The other big issue that I have to get after that you have to have a multifaceted strategy
around, is how to reduce theft on the system. In Jamaica, approximately twenty five percent of the power is stolen, and that's a problem for lots of reasons. Number one, it increases the rates for those who are paying. Number two, it's dangerous. Number three three, it's not conducive to energy efficiency and other kinds of things you want to try to do, because if you're stealing power, there's certainly no incentive to try to be efficient about
that. So we have to reduce theft too, and we need to bring everybody into the entire tapestry of the energy system. I firmly believe that everyone should have access to power, and we have to start this anti theft program with the premise that everyone should have power. Now we know some people are stealing because I can't afford it, and so how are we going to help
them and make sure they're not disenfranchised. We saw with COVID firsthand that people have to have power to educate their kids and to stay connected in all those things. So it's become more improyant now that everyone needs to have access. So I think it's one of the major things that I have to get after for all kinds of reasons. It also causes reliability, is just because people blow transformers and when they go and connect illegal connections under the system. Those
are the big rocks. But as I said, it needs to fundamentally rest on a solid change at change, abled agile culture, healthy organization. We've seen in the past two years in South Africa failing public own utility as common and you know the reaction of the public has just been wild solar deployment, even on balcones on roof totally anarchic, but they manage to put four gigat
on rooftops, you know, without any plan. And of course now it's going to create problems of integration, but that's that's people a reaction because the technology is there. So and I know it's a very academic question, but do you foresee a centralized development or a decentralized development or a mix of both.
How do you see the shot term deployment R And I think it has to be all the above because I firmly believe that we're moving abroad perspective in the energy sector to away from central to decentral But part and parcel of that and other pinnings, whether it's decentralize or centralized, you still have to have wires and I think you have to have a good solid system of transmission and distribution in any scenario, so that has to be part of it. But
from a decentralized perspective, I saw it firsthand in California. I saw where people wanted to get their own power and self supply and the utilities fought it, and it was a losing battle, and now the utilities have very good, efficient approaches to how you know where it's going to be and how they're permitted and how they're connected to the system. And I want to do that here in Jamaica as well, so that if people want to make that choice
that they can. We have to decarbonize the central grid too, and we'll do that through solar and wind and storage and all the things we all know of out So I think it has to be an and approach, and I think the utility has to be prepared for both. That's what I'm trying to do here in Jamaica. Can I ask you there, because it's one of the things you have to do is you also have to keep the price of
power low. And if you're going to go and invest in all this renewables, what you've got as upfront calls which are pretty expensive, which means you need to come in with some form of financing solution and around that. So how does that work and how do you see that work? And going forward? Let me just harken back to some of the previous conversation about South Africa. The good news about Jamaica Public service is it is a financially solid and
stable company. It is a properly regulated company by the Office of Utility Regulations here in Jamaica. So we start from a position of strength. So JPS is able to finance and be the counterparty for this transition when you need central renewables and you need a counterparty purchase power agreement. So I think we start from a position of strength. We shouldn't have a problem financing it. The key thing will be making sure that we think through this in a way that
reduces costs as much as possible. The good news or bad news in Jamaica is that the price of power here is very expensive. Now that's bad, but it's also good in that when you look at the economics of renewables and the upfront costs, you actually come out with an offseted cost that is at least equal or or we may be able to save money by transition to renewables themselves. So in this case, renewables actually will help reduce costs. And
then let me turn to the longer term. This island is highly dependent on imported oil and gas, and we have all seen through the invasion of Ukraine and the other upheavals in the global economic system that the price of import if fuel can turn very very fast. So not only is it going to save money, but it's going to be a hedge for the future. So they're not exposed to these major swings and commodities. Because the people here the average
income in this island is five thousand US dollars. They cannot afford big swings and power prices here. Can I also ask you about the residential solar because I would have thought you could see that as a threat or you could see that as an opportunity. And the opportunity is that actually you go and help the customer to build solar and you build that let's say resilience into the system because maybe you're putting batteries in and stuff like that. Is that the way
you look at it or how do you see it? Well? I look at it in two ways. First, I think our strategic assets are our wires, as I mentioned earlier, and we need to properly finance those wires. And I think there are contribute to the reliability issues too, So there you have to have a proper tariff so that it's benign to the utility.
Whether somebody wants to self produce or not, as long as they're paying their fair share of the wires, and we don't create a socially unjust system here where the poor people pay for the wires and the ridge people get to ride for free, then we'll be fine. We just need to create an agnostic
tariff that properly funds the wires associated with it. Then I think what we have to do is we have to be out front about whether we want to be in this business, whether we want to help people and facilitate it and finance it and provide leases and those kind of things. And we're currently exploring
that as a strategic opportunity for us. Can I ask if you look in the future right, what I can imagine is you're an incredibly sunny part of the world, So that's going to be it's the lowest cost of way of generating electricity there. But it's not hows its challenge is going forward? So how do you deal And I know you dealt with these challenges already in California, but I can imagine those challenges are even greater in an island situation.
So how do you look at that? From a technical point of view? I suppose the good news is this is a microcosm of what I saw in California. The only difference is, obviously, is we don't have connectivity to the rest of the world. We have to provide everything here on the island. We can't assume we can get power from Cuba or some other or South America or Central America. It all comes from here. So we will see
those issues of renewable integration. For instance, we know there's a major ramp a solar in in the morning and a ramp out at night, so you have to have something to contend with that ramp, and we know that's there. Secondly, we need to be very good at prediction. The weather changes here actually pretty quickly. For instance, in the afternoons you often have rain showers that will come in and clouds will come in in the afternoons. It'll
be sunny all day until four o'clock, which is your peak. So we will have to model that much like my experienced in California. And what we'll do is we'll then assess what kind of backup fleet we need. Now, how much can batteries help with that? Because you're right, most of the time it's pretty sunny. We don't usually have unless there's a hurricane or something coming through. We don't have extended periods where it's not sunny for days on
end. So batteries actually will work here, I think better than a lot of areas, because we know that we'll have ample solar to charge them during the day and be able to use them in the evening. And then we'll also have to assess what residual thermal fleet we need to have during this transition and can it ramp and do all the things that we need that I saw
firsthand in California. There's a centive island which have decabonized, But of course it's inside the US, it's Hawaii, and of course I'm looking about the dramatic recent fires. But what can you learn from they experience. The thing I've learned most about the why experience is the price of power is very high
end. Why this island cannot afford a high price of power, So we have to do it, I think differently, and that means we have to be very thoughtful about what residual feet you need, what the renewable mix is, and how storage will play a role on the system. You're right, I think It's a good lesson there about how you operate the system. What I'm most interested is learning about how you plan the system because we can't really
afford planning mistakes here. We can't afford to have extra generation just laying around that doesn't have a high capacity factor. We have to be thoughtful about wind versus solar, storage versus solar and exactly how that goes in. So what I'm really focused on now is making sure we do proper planning. I'm engaged with the government policymakers here about these issues and to make sure they understand the behavior of solar, of the behavior of wind, and what you all need
to net the system together. Can I ask you a bit about wind, because earlier on you did talk about hurricane risk. Just talk about how you see it. We do have wind on the island, and it's not very much. I believe it's somewhere on the order of forty megawatts or so, just to give you some perspective, out of an eight hundred megawatt peaking system.
So it's not very much. It's in the mountains as relatively safe from hurricanes, and hurricanes have come through while this wind was here, So properly constructing the wind and operating it and feathering the blades as an example, in high winds and facing it into the wind, we found it will be plenty of resilient, so I'm not too concerned about that. We also have to
make sure the same thing happens when we play deploy solar. Oftentimes the major destructive force on hurricane is water and making sure that we don't have storm surges to go into the solar fields or they get damaged by flooding or other kinds of things. So as an example, we can't afford to have flooding in the inverters or other things. So we'll have to think through that. But resiliency in the face of a category for hurricane that will inevitably happen here at
some point has got to be part of our planning. Steve, that question seems a bit awkward, But as far as I can see, you're running a laboratory here, and if you succeed here, whatever success your a chief can be replicated not only on other islands, but you know in parts of Africa or Soustasia or let America. So how do you see the success of the future success of Jamaica in relation to the bigger world, Lauren, I think that is an excellent question, a good way to kind of summarize what
I'm trying to do here. And this is exactly why I came here, because if you can do it here, if you can do it in a developing country with relatively low per capita income, I think you can do it anywhere. And the ambition I have for both for Jamaica and Jamaica Public Service is to actually be a beacon and an example for the world for how it can be done. Because if it can be done on an island nation like
this, I think it can be done anywhere. There are parts of the world such as India in Africa, and obviously there are other islands, and I think we can be a very good example. I would love to have people come and visit here and find out how we did it, and I think if we do it right, we can be that example. And that's frankly, that's why I'm here, so that I can set the standard for what not me, but my entire organization can set the standard for what is
possible. And Steve and I would expect that there's a whole pot of very interesting technology partners across the world who need to learn because they see this a huge opportunity that you can partner up with. Absolutely right. I think the economic opportunities here are tremendous, and I think the economic opportunity for this investment that's going to be made for this transition will be very stimulative to the economy here. And because I think lots of outside capital will have to flow in.
We don't manufacture panels or wind turbines or batteries or any of these things on the island, so we will have to have them come in from elsewhere. So there will be ample opportunity for people to come here, both with advanced technologies. Because the other thing we have to try to accomplish, or what I want to try to accomplish, is get as many of the vital grid services as we can offer renewables so we don't have to run expensive power
plants, so that we can lower the overall costs of the system. So I think, but the technology tapestry, the renewables and how it all knits together, I think will be an excellent opportunity for anyone who's interested in investing here, in providing services here and providing hardware here. We will need all those things. It's an incredible exciting opportunity. I just want to say us I'm really excited by the conversation and I wish you all the best really going
forward. Thanks to you both. Wish me well. There's it's a target rich environment of things to do here. For sure. I'm glad I'm here. This is doing everything I personally and professionally wanted to do. And let's check in again in a year or two and see how we're progressing. Very good, very good, very good. Again, Thanks a lot well, Steve, thank you very much, and definitely investors should come to Jamaica not just for the culture and the tourism, but also to the energy transition.
Thank you, Stephen. Yes, come here, experience the culture, experience the people. They are a wonderful, wonderful culture with a wonderful food, and they are happy, happy people, so everybody will appreciate that. Well job, there were a lot of things I learned along the way. Can you imagine that the theft or the losses are twenty eight percent of the power. That's insane. You're absolutely right. I didn't think about that at all,
right, but yeah. Of course that means that a lot of people simply contact for electricity and inside the mission of Steve you have great a reliability, but they need to get the price lower because the price of power is probably three times higher, so most a luxury to have power. It's really into an energy poverty. Of course, we have to do the energy transition here. The good news is we aligned the energy transition by the rediction of
the cost. We need to have lower cost Well, I think the thing I took out about around was that we're living in a different era and the era that we're living in is you do have low cost solar and batteries that you can integrate with the diesel jan sash and you couldn't do this ten years ago. Now. The only issue, and it's a big issue, is if you don't have low cost capital in terms of the dast and equity, then it's going to be very, very difficult. And that's the challenge.
How do you do that? But my god, there's a big opportunity there to do that. And then what you're doing is you're decarbonizing, you're lowering the cost of electricity to people, and as I said, you're becoming a role model for other islands. That's what I took out of it. Well, the very important feature of Jamaica Public Service is that it's owned by Marubini and the Koreans. It's almost investment grade and they can sign PPAs, which
is probably not the case in the majority of other islands. They have a good balance sheets so well to managed company, which means you can bring a lot of people as counter parties, and that's the most important thing. Then the second most important thing is the attitude of Steve, and his attitude is to say, okay, wind developers, Okay, it's not going to be a great market, but they are win resources. Provided you can manage the hurricanes. You know, we'll give you a great PPA microgrid. It's the
same solar hooftops. It is the same. But also if you go a bit beyond what we do on a regular basis, I'm talking about read enhancing technologies, you can use Jamaica as a laboratory to test all your innovations and all those startups in the Silicon Valley where despread, we have a pilot where they can run and test the technology while guys go to Jamaica. Number one
was very pleasant. And number two, you have people they're willing to experiment with you all your new technologies, and then you can build a track record in Jamaica and then you can literally export all over the world. I like that one. Thank you. Right now, I'm gotta add one other thing, which I hope we have another cup event taking nature in this here, and what I'm hoping that comes out of that is that the Western world agrees
to actually put money into the developing world. I said, it's very important because that's how you decarbonize this type of island is again low cost money that's coming in from the KfW in Germany or whoever it is. That's what's also needed in and around, as you said, the Marabonis of this world, who are already invested, and then that's the role model to go and scale
it with other technologies into other islands. That's pretty exciting, right. I know why Steve Dinner, it's the reality of it, right, he can really have an impact. I really encourage all the innovators of the world to go to Jamaica and see if their innovation works. Very good. I like that, and I do want to say started this off about why islands. I think islands are if you want to look at the future of your power markets, you have to look at islands because islands are naturally firstly stressed.
Jamaica has great solar resources, but you know, how do you actually go and integrate That's it's much more difficult for them to do that than France or Germany or even California. That's why I think islands are really interested, and not just them, I mean even sort of listen to the island you're living on Britain the same thing, or Ireland. You know you've got lots of
renewables, integrating it. That's a really tough job, much harder to do that than it is if you're as I said, on the continent way you can roll lie on your neighbors sometimes sometimes okay, job. We'd like to thank see for coming on the show. We support Bruce and it's the Global Houlnewable Alliance, and we put the links in the show notes. And of course we think our wonderful sponsor, PVKAS the best solot design software. Oh
absolutely, and you met them in as big as I did. Yeah, what's very impressive about pv gays for me is just how fast they've scaled up. Because usually you see a software solution that comes in it takes a long while. But founder came originally from the consultancy area and had a very good idea and being able to almost have a plug in into the card systems,
the architectural design systems, and it's just gone viral. It's amazingly. I like what I do, excellent and we're very happy to have them as partner. Job took to you into its time, look forward to my friend. Thank you for listening to Redefining Energy. Don't forget to rate the show and subscribe on Apple Podcast, Spotify, or the platform of your choice.