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Banks DIH – A Move in the Right Direction

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Banks DIH 

 

Ulric Trotz is the Deputy Director & Science Adviser, Caribbean Community Climate Change Centre, Belmopan, Belize

 

Recently one of our daily newspapers carried the headline, “Banks DIH interested in auto sales, energy sector”. My knee jerk reaction to this announcement was to be concerned that this decision might have been inspired by what I designate the 4Fs syndrome – “Fossil Fuel Feeding Frenzy”-  which seems to be informing a multitude of investments now being made in Guyana that hope to feed off the oil economy by providing a range of supporting services all dependent on fossil fuel production. However, I was heartened to read comments by the Banks DIH Chairman Mr. Clifford Reis to the effect that “The motto of this subsidiary will be on the future of transportation and alternative energy.” According to him, the company must get with the changing times: “The economy, which is poised to undergo dramatic changes, will bring new challenges, demands and realities”.

 

I could not agree more with the Chairman’s vision of investing in a future that includes the transformation of the architecture of our energy sector from a fossil fuel based configuration to one that is based on renewable energy.  This is in keeping with the goals and aspirations of the future energy sector architecture as expressed in Guyana’s Green State Development Strategy. The latter calls for transitioning Guyana’s economy rapidly towards renewable, clean and cheaper sources of energy and stipulates that Guyana will rapidly accelerate the transition towards renewable sources of energy as part of its ‘green’ development thrust and will invest in solar, wind, hydro and biomass sources of energy over the next five years. The Strategy further states that Guyana has the potential for:

–  generating hydro-electricity with more than one hundred sites which are suitable for the development of hydro-electric power stations;

– solar energy since irradiation levels are high, making it ideal for the establishment of industrial scale solar farms;

–  producing energy from bagasse and other sources of biomass with potential for energy generation.

The local policy environment is thus conducive to the sort of change that Mr Reis is referring to, and the decision of his company to capitalize on this is commendable. For us in the climate change community, we have always been grappling with the challenge of attracting private sector interest and investment in helping the region build a climate resilient and low carbon economy. It is welcome news that some in the private sector seem to be taking up the gauntlet when it comes to the low carbon aspect of the equation, which requires moving towards renewables and energy efficiency. One can always make a business case for investing in activities in these areas which collectively fall under the mitigation umbrella of the United Nations Framework Convention on Climate Change (UNFCCC). Mitigation is one side of the response coin for dealing with climate change and is concerned with the reduction of Green House Gas emissions. The other side of the coin, and the one which we as developing countries are more concerned with, calls for building climate resilience in our physical socioeconomic and environmental systems and is referred to as adaptation. Actions such as rehabilitation of mangroves for shoreline protection; redesign and upgrading drainage systems and reservoirs to cope with changing weather patterns; adjusting and reinforcing sea defence to provide protection from rising sea-levels, are a few examples of adaptation. They invariably lead to the production of a “public good” for the benefit of everyone but for which there is no modality or appetite from private sector for investment. The result is that these actions fall completely with the purview of the public sector which has to scramble to find the resources for their implementation.

 

For the changing energy sector, it was disclosed that Banks DIH has already begun the installation of solar energy at its restaurants. Reis said the positive results will now see the conversion of all areas within the company to the use of solar energy – utilising solar panels to be mounted on the manufacturing plant and office buildings. The company is exploring sourcing and importing PV panels and related equipment, to provide service. Banks should also develop a cadre of skilled workers with the ability to install and service these systems and should explore other investment possibilities e.g solar water heating which is being fully exploited across the region especially in Barbados.

 

One related possibility Guyana should explore concerns the use of our ultrapure silica (sand) deposits for the production of raw material for the manufacture of photovoltaic cells. Earlier work on our sand deposits has proven that they are ideal for the manufacture of highest quality crystal glass articles. A few years ago we approached colleagues at the University of Trinidad and Tobago to conduct a feasibility study on the use of Guyana’s sand deposits to produce the raw material for the manufacture of photovoltaic cells. At the time it seemed logical to marry our resource base with the availability of cheap energy in Trinidad and Tobago as the conversion is highly energy intensive. Now that Guyana is moving in the direction of affordable energy, we should consider carrying out this work locally at UG and the IAST. Were this to be successful we have an excellent resource base for new industries dependent on the use of our sand and kaolin deposits in the Linden area, supplied with affordable energy from a revived Tumatumari facility. But let us again turn our attention to the Banks initiative.

 

From the Chairman’s remarks, and I may be wrong, I do not get the impression that the same vision informing the company’s investment in renewable energy informs the auto business decision. In the Chairman’s words the company is seeking to secure a car dealership agreement with a recognised manufacturer. He further disclosed that talks have already commenced with another company for the importation and sale of a new brand of motorcycles to the Guyanese market. I would strongly encourage the Company (that is on the assumption that this is not on their radar screen) to seize the moment and consider becoming the hub for pioneering the transformation of the transportation sector in  Guyana to one that does not use fossil fuel – in other words the introduction of Electric Vehicles (EVs) and the promotion of e-mobility. This is an excellent opportunity in the automobile sales business plan to make a significant contribution to Guyana’s “greening” thrust. Assessments of the level of Green House Gas emissions in the region reveal that after the energy generating sector, the transportation sector accounts for the second highest level of Green House Gas emissions into the atmosphere. Recently there has been an acceleration of action to develop the policy environment and the infrastructure (charging stations which ideally should be powered by renewable energy) to support e mobility and the transition to electric vehicles. Already in the region there are several initiatives in this regard and countries are in the process of implementing pilot demonstration projects to promote the idea of e-mobility. Regionally too there have been several initiatives. A recent study sponsored by the OAS and the IDB examined the progress on the impediments to EV expansion in five countries (Barbados, Bermuda, the Cayman Islands, Jamaica,  and the Dominican Republic) . The study found that Barbados was among the top users of EV per capita, with some 430 EVs on the road. Advances in e-mobility were due to some common factors such as reduction or elimination of import duties; long term national renewable energy and transportation goals; high use government and commercial fleets; and utility and involvement of independent providers in the deployment and operation of the required charging infrastructure. Challenges to e-mobility uptake were identified as being mainly due to lack of public awareness of EV technology; concerns of government of less revenues from the taxation of fuel (a significant amount of fuel sold in country is for transportation); insufficient charging infrastructure to support large numbers of electrical vehicles; and the lack of trained sales and maintenance personnel. The paper concludes with actions that Caribbean governments and other stakeholders could take to stimulate EV adoption in the Caribbean. Among these were recommendations for governments to clearly communicate their goals to automakers, dealers and utilities and credibly establish their commitment to EVS. There is need for assessment and increase of levels of public awareness, exploration of opportunities to electrify public transportation (a challenge in Guyana given the architecture of our present public transportation landscape)  and government and commercial fleets. The study concluded that utilities should view the electrification of transport as an opportunity for growth and that governments should define the role of utilities in incentivizing electric mobility.

 

E-mobility is a niche market waiting to be explored. Banks is in an ideal position to take the lead on this given their decision to diversify into the auto supplies business. They can start with their fleet of vehicles – both commercial and domestic –  and invest in changing over to electrical vehicles and the supporting charging infrastructure. This will allow for a full assessment of the feasibility of e mobility (inclusive of the savings in GHG emissions and attendant benefits e.g. health benefits accruing from cleaner air) and a demonstration effect which could inform future national action to implement a national e-mobility programme. Other private sector entities can follow suit (like DDL) and of course Government ministries’ fleets, paving the way for a national changeover to e-mobility. Of course this has to be accompanied by private sector/ government collaboration to create an enabling environment for this transition. This may include considerations in the first instance of reduced tariffs on imported vehicles and supporting infrastructure for charging stations. Incentivising the policy environment will be a sine qua non for promoting investment not only in e-mobility but also for changeover to renewable energy systems at the domestic level. For the energy generating sector there will be a need to put in place the necessary regulations with respect to Feed in Tariffs, Power Purchase Agreements, Net Metering, all of which allows for private generation and use of electricity from privately owned private sector generating facilities inclusive of home owners. In many instances one of the greatest obstacles to this type of change has been the utilities. This should not be of major concern in Guyana as the Utility is a Government entity, whereas in instances where there is some reluctance to accommodate change the utility is privately owned. If they embrace change, utilities can become big players in this transformation and in fact pave the way for accelerated action to successfully achieve the ambitious targets set in the Green Development Strategy.  These pilot activities will serve as demonstration initiatives which eventually will promote national acceptance re its desirability and feasibility and lead to widespread investment in e- mobility.