Hedging
My friends laughed at the hedging idea. Hedging is for people who know what they are doing, they said. There are some very smart people on the other side of the negotiations table and our people are never the brightest, most informed lights on the Christmas tree, so that it would be very scary to leave hedging decisions in the hands of amateurs, and/or politicians.
My friends are right. I remember in 2015, there was a hedging incident that cost Aruba dearly when we negotiated $80 a barrel, the stuff dropped below $50. Our boys hedged 95% of the island’s need for the year, instead of conservatively hedging 35%, every few months. Then we got a much-publicized 10% reduction in utilities on New Year’s Eve and I asked them to save the surplus, if any created, for future alternative technology investment, because to become truly green would cost a pretty penny!
That was seven years ago.
Now, and then, hedging the price of fuels is a kind of gamble, disguised as insurance.
Typically, the party that sells the hedge has an information advantage, embodied in a professional trading desk that specializes in this business. It is naive to think that WEB can “beat” them — it has less information and less capital. WEB may get lucky once or twice, but this is not a solid way to run a business. It is similar to playing roulette, where everyone knows that the casino always wins.
Wind
At the world’s most boring press-conference, with the dullest graphics, Alfredo Koolman or Anthony Irausquin stated they had plans for solar, wind and/or batteries, to ease us into the future of renewable energy.
My friends go on to explain that with solar, each man is an island. Every household installs its own set of panels, and produces its own energy. The installation is useless at night, when it’s dark, while wind offers an economy of scale, large turbines which harness the constant wind, delivering a clean, free, energy source, easily available in Aruba 24/7/365.
The wind turbines generate electricity around the clock. In a utility-scale wind plant, each turbine generates electricity which runs to a substation where it transfers to the grid where it powers communities.
Where are our utility-scale wind-plants?
On an island with exceptional year-round winds.
We have one, its successful, I believe, but when it was time to build a second, the neighbors cried to their political leaders, and today, those crybabies at Alto Vista or Urirama, are responsibly for our expensive utilities, because they opposed technology.
The European company who at the time volunteered to build and operate a wind farm here, offered Aruba a deal: Buy the electricity from us at a reasonable rate for 20 years, and we’ll give you the farm at no extra charge, as a gift, when the contract expires.
Deal?
No deal.
