The U.S. Virgin Islands: Promise, Problems, and Progress

posted in: Blog, Newsletter | 0
by Heru Ofori-Atta, Senior Vice President of Caribbean Operations, and Becky Wink, Marketing Manager


St John U.S. Virgin Islands
St. John, U.S. Virgin Islands


Forty miles east of Puerto Rico[1] in the heart of the Caribbean lays an island group known as the United States Virgin Islands (USVI). Made up of three main islands (St. Thomas, St. Croix, and St. John) and dozens of smaller islands, the USVI is known for its white sandy beaches and the year-round temperate climate enjoyed by many a tropical location. Outside of tourism, locals earn a living through agriculture in St. Croix (the mountainous St. Thomas being unsuitable for farming) and rum distillation. U.S. Virgin Islands map

For locals – 50,000 individuals each on St. Croix and St. Thomas, and 10,000 on St. John – life in the USVI has held many challenges in the past few years. Like most islands, the USVI relies heavily on expensive imports for food, water, and fuel. St. Croix’s agriculture sector has been hit hard by multiple droughts this decade and was declared a disaster area in August 2015.[2] This meant a dramatic increase of food prices as residents turn to exports, but that’s not the only impact to the wallet. In mountainous St. Thomas, most residents do not have access to municipal water, and purchase cisterns that can hold tens of thousands of gallons. In a normal season, the cisterns fill with rainwater. In times of drought, residents must purchase water from water trucks at the price of $0.20 per thousand gallons.

Electricity is an ongoing struggle in the USVI. Hovensa, a large petroleum refinery in St. Croix, shut down in 2012.[3] A group in China has since purchased the refinery, but it will be used for storage rather than power generation. The generators were refashioned to run on propane, which has had a major impact on health on the island. People living close to the refinery now have residue on their roofs and a high incidence of respiratory illnesses. On top of this, power is unreliable, with island-wide outages happening as often as twice a week. The cost of energy is also wildly unstable and has fluctuated between $0.52 per kwh and $0.292 per kwh in the past 2.5 years.

Solar energy is widely used on the island, but it is less than ideal. Solar, like many renewables, is intermittent. If the sun comes out suddenly on a cloudy day, power rushes onto the grid and can destabilize it. This is akin to a sugar rush in the body and is one cause of the frequent power outages. Solar also requires a tremendous amount of land – 4-5 acres per MW generated. This takes away land from the already-strapped agriculture sector.

The closure of the Hovensa caused issues beyond a gap in electricity generation. The refinery had accounted for 20% of the island’s GDP. The shutdown meant the loss of 5,000 jobs on an island of 50,000 people. Some of those 5,000 stayed behind and found new jobs. Most of them left and never returned.

Drought, agriculture, reliable power, high prices, pollution, food insecurity, economic development – the beautiful USVI is a region in need.

Fortunately, one company in the mainland United States has partnered with the USVI to take action. Ocean Thermal Energy Corporation (OTE) in Lancaster, Pennsylvania, specializes in a groundbreaking technology called Ocean Thermal Energy Conversion (OTEC). OTEC taps into the sun’s solar energy stored in the surface of the world’s oceans. OTEC uses the temperature differential between warm surface water and chilly deep water to produce steam.  The steam turns a turbine, thus generating electricity. OTEC is not dependent on any weather conditions and may be produced 24/7, reliably, stably priced, 365 days a year, without the use of fossil fuels.

Jeremy Feakins at the Legislature of the U.S. Virgin Islands
Jeremy Feakins at the Legislature of the Virgin Islands

In April of this year, OTE completed a 2-year feasibility study in St. Thomas and St. Croix. The Legislature of the USVI invited the OTE team to present to their findings. Jeremy Feakins, CEO; Dr. Ted Johnson, Senior Vice President and Head of OTEC programs; and Heru Ofori-Atta, Senior Vice President of Caribbean Operations met with the Legislature on April 6. The results of the study show that OTEC is extremely feasible in the USVI. The year-round consistent climate in the USVI keeps the warm surface water at a constant temperature, which is critical for OTEC.  A nearby ocean shelf means the chilly deep ocean water is close enough to shore to be accessible by a land-based plant on St. Croix.

The chilly deep ocean water is melted glacier water with a complete mineral profile, untouched by humans for thousands of years. This water is ideal for desalination. When a desalination plant is put next to an OTEC plant, the OTEC plant can divert some energy at night when energy demand is down (yet another benefit of producing energy around the clock). With this, OTEC can solve the USVI’s drought problems. OTEC can sell this water to water trucks at half of its current price, and the savings will be passed on to the end user. This water can further be used to make the USVI self-sufficient in food production. The total water needs for all the farmland on the islands is 50 million gallons per week. OTEC can produce all of this.

OTEC can resolve the USVI’s power and water issues, but that’s not all: OTEC can stimulate economic development. OTE would not run the desalination plant; this would produce jobs locally. Bottled water can be sold to cruise ships, resorts, and other tourists. The agriculture sector will be revived. The water from OTEC can be used for sustainable fish-farming, biofuels, algae, rum distillation, and more. The OTEC plant at the Natural Energy Laboratory in Hawaii hosts a tech park where a variety of businesses do this very thing.

All this, and less than an acre of land is required to produce 10 MW of power. Combined with water production, OTEC can cut the cost of electricity to a stable $0.19 per kwh, as well as stimulating economic development and providing food security.

Following the meeting with the Legislature, OTE applied to become a Qualify Facility in the USVI. That application was approved in July, and the company is now moving forward with contract negotiations for power and water. The U.S. Virgin Islands is full of natural beauty and 110,000 hard-working people. OTEC can and will bring relief, economic development, and improved quality of life.