By Kenneth Williams Despite several public statements promising geothermal electricity power, experts say Nevis is three (3) or more years away from flipping any geothermal energy switch. The geothermal association says it takes three to five years from the time of discovering the energy to the time when you could flip the switch at a cost of in excess of 100 million United States dollars for 50 megawatts of electricity. West Indies Power announced that the company found steam in three wells. The latest and best result was discovered in October this year at Hamilton. Based on estimates from the geothermal association, Nevis could see electricity generated by geothermal energy in the year 2012 or 2013.” Four years later than was first estimated by the Nevis Island Administration. The NIA has said that the smallest of the plants “would be set up late 2008.”” Kerry McDonald of WIP while on a radio talk show earlier this year estimated that Nevis could first see the energy by 2011. A source familiar with the Nevis Geothermal Project told The Observer that WIP may be further away from seeing the power due to the fact that the drill that the company has been using is not the drill usually used in the exploration of geothermal energy.” “That drill we are using is the drill used in the state to get a peep into the earth for various minerals.” We would take it down and bring up samples of what is down there for the geologist to test,” the source said. “He continued, “While we have been able to find stream with that drill, it cannot dig a large enough hole that is required for geothermal.” According to the source, the required drill is not easy to come by since those persons or companies who may have one is holding on to them and a used one could cost in excess of (2) two million US dollars. “The source said Mr. McDonald is still trying to find the correct drill rig. He said to advance the project the company needs to drill a 20-inch hole while the current drill could only drill 6- or 8-inch holes. The Nevis Island Administration and West Indies Power reached an agreement in late 2006 for the exploration of geothermal energy. “The Administration at first denied an agreement was signed but later admitted to an 18-month agreement but never released copies of the agreement. The NIA not only gave WIP a no-bid contract but capped royalties that the Nevis Island Administration could receive at 5%. The NIA also barred itself from receiving payments from WIP until all of the company’s loans are paid off. General Manager Rawlingson Issac did not return calls up to press time to confirm or deny what an Administration official told The Observer about the financing for the project.” An NIA official told The Observer that his information is that the funding thus far has come from Russian business interests. WIP earlier refused to discuss where the project funding is coming from, thus increasing speculation that the company is hiding something. History In February of 2007, exploration for geothermal in Nevis was set to begin.” The license was for 18 month’s exploration. Red flags were immediately raised; “This company has secured licenses in Caribbean territories including Dominica and St. Lucia and according to credible sources, have not fulfilled their mandate or commitment with regards to these islands” resources.” The deal was shrouded in secrecy” The Nevis Reformation Party (NRP – Nevis” ruling party) gave the contract to West Indies Power (WIP) without any bidding process, more than 95 percent of the gross annual revenues were set to go to WIP, and the ordinance puts a cap on the amount of money the Nevis Island Administration (NIA – Nevis” governing body) can receive.” It also restricts the NIA from receiving any money until WIP has paid back all of its “loans” in full.” Under the current provisions of the Bill, some of those same investors could very well receive more money over the years from geothermal than the NIA would receive from a resource that is owned by the people of Nevis.” There is no provision in the Bill that calls for any certification that the “loans” are actually loans and not investment money.” There is no provision in the Bill that requires that the gross annual sales be held in an account bearing both the NIA and WIP’s signatures and stamps.” Such a provision would give the NIA some leverage in its dealings with WIP. Every bit of the financial provisions of the Bill is in WIP’s favor.” Only when the royalty is paid will the NIA hold any of the money. WIP was involved in litigation with Dominica Electricity Company and has had the resources of the island tied up for the past 15 years.” Apparently the utility is trying to cancel McDonald’s contract.” Recently, a new contract was given to WIP in Dominica without a tender process; “We have a law that requires a tendering process and nothing like that was done,” said Wiltshire, a former attorney general.” “You cannot make secret agreements on behalf of people and the people on whose behalf you are making the agreement do not know what is in the agreement. In Montserrat (March 2006), members of the public referred to a potential deal between the government and WIP as a “criminal sellout”.” Protests ensued.” The biggest concern was the agreement to grant a 25 year monopoly for the exploration and use of Montserrat’s geothermal energy in return for royalties amounting to four percent of gross revenue. Apparently, there was reason to fear that WIP would sell the license awarded by the government to a third party without restriction. WIP’s website does not reveal much about its investors/projects, and has been hugely criticized for lack of transparency.
