Power Play! …the secret deal with Harris, SKELEC and Leclanché

by CNS Correspondent

St. Kitts & Nevis is experiencing a serious power problem; both in terms of a “power” generation capability for electricity and the exercise of power in political governance. Now, the big quation is not “if”, but “how much” of taxpayers’ dollars have been funnelled away by this administration, under the guise of an electricity upgrade.

But first, some contextual background. One of the key power plants on the Island, the Needmust Station, was completed in 1951 when the population of the country could have been shuttled around in two-score city buses. Those who have been blessed with long life will remember the summer of 1956 when the Island went dark, experiencing the longest outage in the history of the Power Station. It lasted for three months three (3) month, July through September and culminated in a sudden uptick in the population nine months later. The Hospital at Cunningham Street had its own dedicated supply, and was the first building to be supplied with power in the event of a power outage.

As the nation grew out its colonial cradle, the Island’s growing power needs were satisfied by the acquisition of several Mirrlees generators, some of which were upgraded to Caterpillar units in the late 80s and MAN Holeby drivers shortly afterwards. The population of the new Federation was growing; it was now a basic requirement to have access to power 24/7.

Tragedy struck again in 2008 when the Needmust Station was burnt to the ground. Then Prime Minister Dr Denzil Douglas was in a scramble to avoid a repeat of 1956. In four short years, the government razed Needmust and raised a behemoth of power generation, which was then handed over to the newly-minted St. Kitts Electricity Company Limited (SKELEC), which boasted at the time of being the only power company in CARICOM to provide 24/7 electricity to an entire nation.

However, in 2015, when the People’s Labour Party sauntered into power, with Timothy Harris at the helm, the old adage “don’t fix it if it ain’t broken” went out the window. The PLP and its Team Unity coalition started tinkering with SKELEC under the guise of making it “more efficient”. Power was also the order of the day in Nevis, where Premier Mark Brantley on November 22, 2017 did the ceremonial ribbon-cutting at the Nevis Renewable Energy International’s (NREI) geothermal site at Hamilton Estate.

The occasion was to signal the start of drilling operations for a test well. Looking back carefully at Brantley’s words, he said at that time that “if we can achieve what we intend to achieve here, it means that Nevis becomes fossil-fuel free for its generation of electricity.” 

“It puts us really, in a category of our own in the Caribbean and perhaps in the world, in terms of being completely sustainable for our electricity supply… This is a resource given to us by God. It is a resource made available to us and it is for us now to harness that for the benefit of the people of Nevis.”

It has been almost five years and Brantley’s mandate remains unfulfilled. And he cannot explain the total capital expenditure, and he still has Nevisians holding on to their emergency kerosene, candles and coal. 

Back on the larger island, Harris was tinkering with SKELEC. Instead of making electricity more affordable, he instead chose to put lipstick on a pig and tell the people that they could get a basic human necessity on a “pay as you go” basis. While his house is replete with crystal chandeliers, he told his people that “if you got two dollars, you get two dollars’ worth of electricity” – not even enough to watch one of his election speeches on a black-and-white TV.

But the fact remains that there was – ostensibly – power in Nevis, and power in St Kitts… or so the power-brokers said, anyway.

Fast forward to August 2019 when then-Minister of Public Infrastructure, Urban Development and Transport, Ian “Patches” Liburd, announced a deal with the Switzerland-based company, Leclanché, to build the largest solar generation plant in the Caribbean . It was touted that the fully integrated solar photovoltaic and lithium‐ion battery energy storage system would be able to provide clean and reliable energy for the entire Federation.

 “The solar storage project will help solidify the financial strength of SKELEC over the next 20+ years, while substantially reducing the islands’ fuel cost over that period,” said Liburd at the time. “The expected fuel avoidance cost from the installation of the solar farm will not only be beneficial to the energy demand of the Federation but represents that most viable option for securing SKELEC’s financial future.”

Curiously, Anil Srivastava, CEO of Leclanché  noted: “We want to thank Prime Minister Timothy Harris, Public Infrastructure Minister Liburd, the Government of St. Kitts-Nevis, and the SKELEC Board and Executive Team for their tremendous vision, cooperation and efforts in support of this exciting project.” The extravaganza was a circus show put on by Timothy Harris. Harris himself understands nothing about solar energy and what is involved in building a stand-alone solar farm for electricity generation. He was speaking with the wrong company.

Truth be told, Leclanché is not a solar company; its expertise is in making high-priced lithium-ion back-up batteries. Its CEO admitted that the St. Kitts experiment is a pioneer project, and gave no specifics of it terms of reference or scope of works. Leclanché  is largely recognized as the French pioneer in lithium-ion technology, but only in as much as the company failed with its initial market offering. They have some lucrative contracts, especially with Bombardier, which has found itself in many a scandal through its boardroom machinations and marketing modus operandi. 

At the same launch, it was announced that the government approved a parcel of land for the project site which will be provided under a lease between the Government of St. Kitts and Nevis and the project company. SKELEC and Leclanché had already entered into a 20-year Power Purchase Agreement (PPA) which ensures the system will supply essential power capacity for St. Kitts. This is a pipe dream. This project is going nowhere fast.

Leclanché admitted that it had established a St. Kitts special purpose vehicle (SPV) along with local partner Solrid, to fund, own and operate the facility. The company said that once the energy generation and storage project was complete, it would assume responsibility for the management of all project operations, maintenance and equipment warranties.

Hogwash! Or not really, as the press release for this launch contained the following text:

“This press release contains certain forward-looking statements relating to Leclanché’s business, which can be identified by terminology such as “strategic”, “proposes”, “to introduce”, “will”, “planned”, “expected”, “commitment”, “expects”, “set”, “preparing”, “plans”, “estimates”, “aims”, “would”, “potential”, “awaiting”, “estimated”, “proposal”, or similar expressions, or by expressed or implied discussions regarding the ramp up of Leclanché’s production capacity, potential applications for existing products, or regarding potential future revenues from any such products, or potential future sales or earnings of Leclanché or any of its business units. You should not place undue reliance on these statements. Such forward-looking statements reflect the current views of Leclanché regarding future events, and involve known and unknown risks, uncertainties and other factors that may cause actual results to be materially different from any future results, performance or achievements expressed or implied by such statements. There can be no guarantee that Leclanché’s products will achieve any particular revenue levels. Nor can there be any guarantee that Leclanché, or any of the business units, will achieve any particular financial results.”

The above information was via a press release, and not media coverage. Also quite curious is the fact that the press release was administered not by the Office of the Prime Minister, or any Kittitian agency, but rather through the international pay-for-play PR outlet, PRnewswire.com. That is the same company and I dare say the same account profile that was instrumental in campaigning for the Team Unity coalition in 2020.

A few months after this circus show, on December 14, 2020, Leclanché announced that construction had begun on the St. Kitts project. The company said that the project consisted of a fully integrated 35.7MW solar farm and 45.7MWh battery-storage facility deploying Leclanché’s proprietary energy management system software. The cost of this battery-back up system is astronomical, far exceeding the cost of a stand-alone solar farm. The project was again touted to be the largest in the Caribbean and Leclanché’s largest project so far. It was also to be the first project where Leclanché adopted a build, own and operate (BOO) model. Ironically, Leclanché issued its last update on this project on 14 December 2020. 

But even with that said, no one spoke about the capital investment. No one, until Bryan Urban, Executive Vice President and Head of Leclanché Stationary Business Unit stated clearly: “The cost of this project to St. Kitts and Nevis citizens is zero. It is being fully paid for over 20 years through the savings created by the switch to clean and reliable solar energy.” Did we get something for nothing? No. Better than that.

Just a few short months after this statement, Urban was no longer employed with Leclanché. In fact, after a career in the green energy industry, he suddenly switched vocation and became the Managing Director of the one of the largest private financial institutions in the United States, CSG Investments, Inc. 

On the company’s website, it clearly states that the initial report was commissioned by Leclanché and prepared and issued by Edison, in consideration of a fee payable by Leclanché. Edison Investment Research standard fees are £49,500 per annum for the production and broad dissemination of a detailed note followed by regular (typically quarterly) update notes. Fees are paid upfront in cash without recourse.

In fact, Leclanché continues to promote its relationship with China, despite its understanding of the Federation’s standing on the sensitive China-Taiwan issue. A rabid dog would have cared about this, but not the Prime Minister. We have to ask ourselves why. We are a small nation, but that must not mean that we are fools. Mr. Prime Minister, you must come clean and declare the extent of your secret deal with Leclanché now. The taxpayers of SKN want to know. What are you hiding?

01 August 2022 

IMAGES: All images within this OPINION piece have been supplied by CNS

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Joel B. Libur is the author of this Opinion piece and is a Communications Consultant, Basseterre/Quebec. The opinions expressed here are entirely his own and are not necessarily the opinions of the publisher or editor of iNews Cayman/ieyenews.com.

Note: CNS Correspondent mentioned in the above is NOT the CNS attributed to Cayman News Service, Cayman Islands.