Dominica hires Iceland company to drill geothermal wells

Dominica has struck a US$12.5-million deal with Iceland Drilling Company to drill two geothermal wells on the island.

The company will start working on the project later this year, said Minister of Planning, Economic Development, Climate Resilience, Sustainable Development and Renewable Energy Dr Vince Henderson.

The wells will be drilled over three months in the area called Laudat.

Financing for most of the US$12.5-million contract is “grant money from the UK … so we are utilising about US$12 million in grants to carry out some of the work that is being done in Laudat for geothermal development so far,” said Henderson, while on a tour of the area with the World Bank’s Country Representative for the Caribbean, Lilia Burunciuc, and members of her team.

“So that is really good news,” he added. “The World Bank country director is here .... so they have a first-hand view of what is happening on-site, and it is very exciting for us.”

The World Bank has approved a US$27-million project to support the construction of a small 7MW geothermal power plant in Dominica, which is in the process of diversifying the country’s energy matrix to include more renewables, and identifying a clear road map for private-sector investment in geothermal development.

Dominica has a small power system that relies heavily on diesel to produce electricity, leaving customers exposed to the volatility of international oil prices. The average price of electricity is among the highest in the world, at around US$0.33 cents/kWh.

Export potential

The Geothermal Risk Mitigation Project is expected to significantly lower electricity costs in Dominica, increase the share of renewable energy in the country’s energy mix from 25 to 51 per cent, and reduce greenhouse gas emissions by 38,223 tons of carbon dioxide per year. It will also assess the potential to export home-grown geothermal energy to its neighbours.

The project being implemented by the Dominica Geothermal Development Company is financed by multiple sources: US$17.2 million from the International Development Association, US$9.95 million from the Clean Technology Fund, as well as grants from the UK Department for International Development – US$10 million from DFID and US$2 million under the Small Island Developing States DOCK Initiative – and technical assistance from the government of New Zealand and the Agence Française de Développement.

CMC