Caribbean Nations Join Forces to Develop Geothermal Energy
Five Caribbean nations are collaborating to accelerate geothermal energy development, aiming to overcome financial hurdles and cut electricity costs in a region long burdened by some of the world’s highest power tariffs. Grenada, Saint Kitts and Nevis, Saint Lucia, and Saint Vincent and the Grenadines announced their plans after the U.N. COP30 climate conference in Brazil, reaffirming their commitment to supply affordable and sustainable power.
Together, the countries possess an estimated 6,290 megawatts (MW) of geothermal potential—enough to power the Eastern Caribbean many times over. The Organisation of Eastern Caribbean States (OECS) estimates that by replacing diesel imports, each nation could save between $5 million and $30 million annually and reduce fossil fuel dependence by more than 90%.
Electricity tariffs in the region currently range between $0.29 and $0.40 per kilowatt-hour, more than twice the U.S. average of about $0.15. Many islands still rely on isolated grids and ageing diesel generators that depend heavily on imported fuel.
Building Momentum After Past Setbacks
Saint Lucia has intensified geothermal testing and revised drilling contracts to avoid the cost overruns that plagued Dominica’s project. Dominica’s 10 MW geothermal plant—expected to meet more than three-quarters of its electricity demand—will finally come online next year after a decade of financing challenges and a $68 million investment package.
Grenada, meanwhile, is relying entirely on grant financing to fund exploration, which has slowed progress but reduced fiscal risk. The country’s 15 MW geothermal project is scheduled to start operations in 2033, providing enough energy to meet every household’s current consumption levels. “The sizing is based on current demand and resource confirmation, and future expansion depends on confirmed resource and financing,” a spokesperson for Grenada’s Ministry of Climate Resilience said.
Overcoming Climate and Financial Challenges
According to James Fletcher, climate envoy for the Caribbean Community, successful geothermal development could significantly strengthen the region’s economic resilience. Many island governments struggle with limited borrowing capacity after repeated losses from hurricanes and other extreme weather events. “Caribbean governments just don’t have that kind of fiscal space that would allow them to borrow, as it has been eroded by having to constantly respond to extreme weather events,” Fletcher said during COP30.
To reduce upfront costs, OECS is coordinating shared management of drill rigs—a move that could help smaller nations overcome one of the biggest barriers to financing. Saint Kitts and Nevis, which plans to begin drilling in 2026, has tripled its project capacity to 30 MW, secured funding in advance, and partnered with a private developer to build a debt-financed power plant. The facility is expected to begin operations by 2029.
Globally, geothermal energy is gaining momentum as innovations in drilling and heat extraction make projects more viable. For the Caribbean, success could mean not only lower energy prices but also greater independence and resilience in the face of climate threats.
with inputs from Reuters