NASSAU, BAHAMAS — The Bahamas ranks lowest in the region for renewable energy, a recent study has revealed, noting that its current 2 MW of solar energy capacity is far from the 90 MW it needs to achieve its 30 percent target by 2030.
The findings are part of research by the Oxford Business Group which was sponsored by RBC (Bahamas).
“Current energy consumption is dominated by petrol (40 percent), followed by diesel (28 percent) and electricity (24 percent), making the country reliant on imported costly fuel,” a release read.
“The Bahamas ranks lowest in the region for renewable energy.”
According to the study entitled “Tourism Diversification in the Bahamas: The Path Ahead”, the importance of tourism in The Bahamas was a significant economic risk factor at the onset of the Covid-19 pandemic.
It read: “In conjunction with the effects of Hurricane Dorian, the substantial fall in tourism revenue in 2019 and 2020 had severe knock-on effects on commerce, distribution and other economic sectors. However, pre-pandemic economic diversification strategies already focused on harnessing added value from other industries, with the spillover effects from tourism set to boost industries that had not substantially benefited from tourism receipts and foreign capital inflows before. As a result, the country had already made important inroads in decreasing its over-reliance on tourism.”
The study also noted that the number of hotels in the Bahamas has grown from 280 in 2010 to 322 in 2020. Since the introduction of the Hotel Encouragement Act in the 1950s there has been a surge in foreign direct investment (FDI) in hotel and resort development.
The act allows import duty to be refunded on all approved hotel construction materials, and provides real property tax exemptions for 10 years and reduced rates for up to 30 years. The report noted that in recent years the Bahamas has benefitted from close to $3 billion in FDI in development projects, ranging from mega-resorts to boutique hotels.
According to the study, linking the tourism sector to other sectors has the potential to add more value and generate greater tourism spending in the short, medium and long term, making the whole economy more resilient
“Looking ahead, the orange and green economy agendas will have to be incorporated into the broader tourism agenda at all levels of government as well as in the private sector,” the study read.
“Only by taking this into consideration, while also maintaining its pre-existing blue economy commitments, will the Bahamas be able to achieve its central aim of balancing tourism growth with sustainability. More concretely, this will require collaboration from supranational actors such as the IADB down to local community organizations.”
The report also highlighted this nation’s vulnerability to hurricanes, noting that if a category 5 storm were to hit New Providence it could be covered in storm surge flooding, with as many as 117,000 people potentially affected and up to $15.7 billion in damage.
It read: “Mitigation policies have already been devised and include an early warning system, comprehensive training of first responders, and provision of food, water and shelter. Importantly, residents of the Family Islands would have to be self-sufficient for 72 hours. In terms of logistics, distribution chains would need to be realigned to ensure the provision of supplies to other islands in the archipelago.”
“Climate change presents specific challenges for small island countries like the Bahamas, where the vast majority of the population and economic assets are located in coastal areas. Recent years have seen an acceleration of adaptation and mitigation planning initiatives from the national government, as well as contributions from international institutions to assess and implement these strategies,” the report read.
“Increased private sector awareness has boosted educational, technical and policy efforts to combat the short-term risks stemming from hurricanes and water scarcity, and has also helped introduce new measures among the business community to combat medium-term climate change-related risks.”
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