The sector believes that the Caribbean will struggle to consolidate itself as an integrated renewable energy market by 2030 if it maintains the current isolated development model among islands. This was the main warning from María Esparza , Business Development Manager at Aggreko , during FES Caribe, where she argued that the main bottleneck is not technological availability but the lack of a regional vision capable of transforming small, fragmented markets into a scalable opportunity for investors.
“ I think that talking about a consolidated market in the Caribbean as a whole by 2030 is a bit bold; I don’t see it being consolidated by that date ,” the executive stated.
The discussion takes on particular relevance at a time when energy storage is beginning to gain traction in markets like the Dominican Republic, with tenders already incorporating BESS systems into their electricity expansion strategies. But for Esparza, even with these advances, the region will continue to lag behind if it doesn't address structural problems related to bankability, regulation, and scale.
“Working in isolation, as they have been doing until now, is complex. Bankability becomes difficult because those who want to invest are always looking for bigger fish, and smaller markets always fall behind,” he argued.
Although the Dominican Republic is positioned as one of the most dynamic markets in the region in terms of energy transition, Esparza made it clear that it cannot be taken as an automatic reflection of the Caribbean as a whole.
He acknowledged that the country has been making progress with a more diversified energy mix and greater incorporation of renewables, but stressed that the prevailing reality remains very different.
“If we talk about the Caribbean in general, we must remember that there are many very small islands and island territories that are not even thinking about a transition to gas yet; they are barely using bunker fuel,” he explained.
The problem is not solely technological. The very structure of these electrical systems limits their development. They are small, isolated markets, lacking regional interconnection, and subject to climatic conditions that drive up the cost of any infrastructure deployment.
Esparza explained that hurricanes and storms significantly increase the structural requirements of projects, directly affecting costs and, therefore, their financing.
“One of the unique aspects is hurricanes and storms. From a structural point of view, this makes costs higher for smaller markets, which makes bankability a bit more difficult,” he stated.
Added to this is an additional obstacle: each island operates under its own regulatory frameworks , which prevents the construction of a regional market perception.
According to the executive, this fragmentation explains a large part of the low renewable penetration outside of the most advanced markets.
The SIEPAC model as a roadmap to unlock investments
Aggreko's proposal aims to replicate a similar logic to that implemented by Central America with the Central American Electrical Interconnection System (SIEPAC) .
For Esparza, this precedent demonstrates that regulatory integration can completely change the scale of opportunity.
He explained that the value of the model lies not only in the physical infrastructure, but also in the regulatory coordination between countries.
“ One way to accelerate this could be by taking the example of SIEPAC in Central America, where all the countries had to agree and approve regulations to govern the purchase and sale of energy throughout the region through an interconnected system ,” he explained.
This framework allowed the market to stop being perceived as a sum of small, independent systems and begin to be seen as a more robust regional platform.
“ That ensured that the rules and policies were homogeneous in all countries, preventing it from being seen as an incipient or small market, but rather as a whole ,” he noted.
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In the case of the Caribbean, Esparza considered that the most logical example to replicate would be the Dominican Republic, not continental markets with different structural realities.
In his view, adopting, adapting and harmonizing similar regulations among island groups would significantly accelerate renewable development.
“ If many Caribbean islands were to agree and take as an example the regulations of the Dominican Republic —which is the most advanced and has a similar territory—, the process would be different ,” he said.
He even ruled out references like Colombia.
“ If I’m in the Caribbean, I can’t take Colombia’s regulations as an example; I should adopt something that is more in line with my needs ,” he remarked.
The logic is clear: if the Caribbean manages to present itself as a coordinated energy region and not as multiple dispersed micro-markets, the financial interpretation changes completely.
Without storage, the island's energy transition loses viability
Beyond the regulatory focus, Esparza also provided a strong definition regarding energy storage in island systems.
“ Today, thinking about renewable penetration —especially in island territories— without storage has been more than proven to be a mistake ,” he stated.
This warning is significant. In small systems with high renewable energy penetration, generation variability can compromise grid stability if backup mechanisms, frequency control, or adequate ancillary services are not in place.
Esparza shared the case of a Caribbean island pioneer in energy storage that, despite having incorporated batteries with high wind penetration, took five years to reach the expected operation due to integration problems.
From their perspective, the common mistake is to reduce the conversation to the equipment.
“ Anyone can sell batteries, the hardware isn’t the point. The point is how I make my battery actually work for what I need it to ,” he argued.
That is why he insisted that the focus should be on comprehensive solutions and not solely on technological assets.
“ It’s not a battery, it’s a solution ,” he summarized.
In that sense, he defended models such as PPA or BOT , where operational performance is contractually tied to concrete results, instead of being limited to a supply under traditional EPC schemes.
Even in the Dominican Republic, where the market shows signs of sophistication, Esparza warned that relevant regulatory gaps persist.
“ It is still not very well understood how that is remunerated, which is fundamental for financial models, project viability and bankability, ” he warned, referring to ancillary services.
The diagnosis for the rest of the Caribbean is even more challenging.
“ If we look at the rest of the Caribbean, many islands don't even have regulations or capacity for batteries yet. There's a lot of work to be done .”