Dr. Franklin Hoevertsz - Utilities Aruba N. V.

Smart Media 360:
The onset of the global financial crisis in 2008 resulted in a drop in tourism, and a halt in Aruba’s refining activity. This culminated in a double-dip recession on the island. But today, thanks to the implementation of sound macro-economic policies and ongoing fiscal consolidation, the Aruban economy is gradually recovering.
Drs. FRANKLIN HOEVERTSZ:
The main decision Aruba had to make back then was either to cut budgets in order to avoid further deficit as many experts had suggested or to invest in order to generate growth. Aruba chose for the latter despite disagreement of others. And while the country certainly went through hard times at the beginning of the crisis, Aruba is recovering in a steadily manner thanks to the choice to invest in your own people.
Smart Media 360:
Since its establishment in 1990, Utilities Aruba N.V. has gone on to play a crucial role as the holding company for power and water production, and distribution in conjunction with its two working companies, WEB Aruba and Elmar.
What role do these entities have in producing power and water and how vital is Elmar in the operation of Aruba’s electrical transmission and distribution grid?
Drs. FRANKLIN HOEVERTSZ:
Utilities Aruba N.V. is a state owned company and the holding company of WEB Aruba N.V. and Elmar N.V. The whole electrical system is divided between WEB, which generates electricity, and Elmar, which is responsible for its transmission and distribution. The water system on the other hand is fully managed by WEB. This monopolistic utilities practice is commonplace among many islands in order to exploit economy of scales for the lowest possible tariffs. Additionally, it is the best structure for a small island in order to be able to maintain a high degree of reliability of the whole power grid. For these reasons, WEB Aruba N.V and N.V. ELMAR are crucial for Aruba’s growth path. 
Smart Media 360:
Aruba is ideally positioned to capitalize on abundant sunshine and strong trade winds for both solar and wind energy projects. However, these pose significant challenges since both of these are intermittent energy sources.
What kind of steps is Utilities Aruba N.V. taking in order to maintain and ensure the reliability and sustainability of actual power production throughout the island?
Drs. FRANKLIN HOEVERTSZ:
The technical knowhow lies with WEB Aruba and Elmar when it comes to expanding the utilization of wind and solar energy.  Utilities Aruba is focused more towards an equally important aspect of sustainability, namely that all stakeholders need to be aligned. Especially since we are navigating through unchartered territories when it comes to high penetration of wind and solar energy without any kind of subsidies. In my opinion, without alignment, sustainability simply cannot grow. To this end we are using a conceptual framework called RAS, which stands for Reliability, Affordability and Sustainability. It is basically a common language between technical and non-technical oriented stakeholders, which facilitates the proper discussions and decision-making regarding sustainability.
Smart Media 360:
Utilities Aruba N.V. introduced the “macroeconomic impact framework” (MEI) to gage how green energy is actually contributing towards the island’s long-term growth, and improve the overall well-being of Aruba’s citizens in the near future.
How are you carrying out this strategy in support of your national socioeconomic development objectives?
Drs. FRANKLIN HOEVERTSZ:
MEI comprises a macro-economic model used to estimate the effect of a change in the energy system on the whole economy. Back in 2009, when we did not have MEI yet, we simply did not know the macro-economic impact of introducing wind energy on the balance of payments. The good news is that the first wind park turned out to have a positive effect on the balance of payments.
Investments in renewable energy projects such as wind parks are typically based on a long-term contract, a so-called Power Purchase Agreement (PPA). And through MEI we verify for example one of the most important macro-economic effects of these projects, namely that it helps stabilize the energy and water prices for the long term in contrast with fossil fuel import, which can fluctuate heavily on global oil markets.
Smart Media 360:
Aruba has demonstrated a firm commitment to sustainable energy. The launching of our report on Aruba is specifically timed to cover the Green Aruba Conference. In recent years, we have seen a steady growth in number of delegates, international investors and participants from other Caribbean nations attending.
What impact do top events like this have in inspiring others to reduce CO2 emissions?
Drs. FRANKLIN HOEVERTSZ:
We are not the only ones looking into sustainability for growth. But the discussion is: how do we get there, and how do we overcome the multiple challenges? We are in the lucky position that we are both carried and pushed by the top and by our politicians. We have a Prime Minister who will not rest until we can reach the highest we can reach. We have the political will, but there also has to be alignment in the lower levels of the administration and the companies involved or else, it is simply not going to work.
 Next to showcasing our progress we also use the conference for any innovation that others might have to learn from. Last year for example, a team shared insights on sustainability, which led to the creation of a sample Centre of Excellence to work as a hub for sharing innovative developments from both inside and outside.
Smart Media 360:
Aruba is also working very closely with top organizations such as The Netherlands Organization for Applied Scientific Research (TNO), leading American universities, or the UK’s Carbon War Room.
How are these partnerships creating synergies that help both your company and Aruba remain at the forefront of innovation?
Drs. FRANKLIN HOEVERTSZ:
Ideally, one would like to say that we can do it alone, but the fact is that we cannot. With a population of 110,000, we have managed to decrease the deficit. However, we do not have research institutes and development centres. We have to look to others to help us — industries and partners who are interested in growing sustainability. There is the Rocky Mountain Institute (RMI), which merged with the Carbon War Room in 2014. Then there is the Netherland´s TNO with its highly capable and devoted group of scientists. We are also working with the Carbon War Room, which you have probably heard about. They have all been a tremendous help so far.
Smart Media 360:
Thanks to strong policy support and sharp cost reductions, the International Energy Agency (IEA) noted in its 2015 5-year growth forecast for renewables that it has surpassed coal as the largest source of installed power capacity in the world.
What new projects can we expect to see from WEB Aruba and Elmar, given that renewable energy is predicted to grow by over 15% from 2016 to 2021?
Drs. FRANKLIN HOEVERTSZ:
We are going to be a part of that growth. We absolutely have to be a part of that growth. Given the challenges that I have mentioned earlier, a high renewable energy uptake, requires so much coordination and planning. After all, no country can grow over 50% without a widely developed grid, in terms of management, storage, demand response, load-shifting, and so on. Everyone goes through a learning curve, even Germany. Can you imagine our learning curve? We have to rely on three energy producers: WEB, WEB and WEB!
Smart Media 360:
What is the current status of Aruba’s second wind farm project and the 3.5-MW Solar Park near the airport (which is expected to become the Caribbean’s largest solar energy source)?
Drs. FRANKLIN HOEVERTSZ:
The solar park at the airport is finished. As for the second wind farm, we have encountered some social issues, with the protest from the community. Fears have been raised. Health issues and horizon contamination have been mentioned. Added to that are the judicial processes we have to go through. It will take more time.
 We are not resting though. We respect existing concerns, and are developing additional plans with them in mind. We are working with the country in the expansion of the wind farm, which currently has 10 working turbines. Furthermore, we are constantly working on a variety of innovations. Our connection is with Holland, and the good thing about them is that they certainly know how to deal with water. Dealing with water means dealing with pumps. They developed a very interesting wind turbine that works on water. As you know, it is tough to develop big offshore wind parks in Aruba. The sea is pretty deep on the north side. The south side is pretty shallow, but there are a lot of docks there that we would not want to block. Somewhere in between, we will have to do something. A new development for offshore wind is nearshore wind. That is about 40 to 50 meters offshore. It is not really far, and we can still take advantage of the shallowness of the coastal waters.
We are working on a new wind turbine scheme. We want to be innovative, but we want to make sure that we make calculated risks, relying on good estimates to go forward.
There is a new development coming up in renewable energy called Ocean Thermal Energy Conversion (OTEC), which has no base load intermittency. However, it works better on paper than in practice. We do not yet have a lot of OTEC plants throughout the world, but it could be the future, and we believe it will be the future. However, do we want to be the first one? Do we want to be the guinea pig? Countries that can afford such initiatives and risk are countries that have more financial capacity, for example from the European Union (EU)… We do not have that here in Aruba and need to be more self-reliant.
Smart Media 360:
The International Monetary Fund largely agrees with Aruba that renewable energy can be a new engine of growth and diversification. However, it requires the kind of technology that tends to be highly capital intensive.
How crucial is attracting FDI in financing and further developing these various projects? How are you specifically targeting potential investors for PPPs in renewable energy development?
Drs. FRANKLIN HOEVERTSZ:
The wind farm has been developed under a PPP. The solar parking at the airport has been developed via a PPP. We have just finished the tender and are in the process of assigning a 7.5MW project to a third party. That may be a combination between a PPP and an equity investment on our end. We definitely need those investments. We cannot do it alone. The good thing about those foreign investments is that if they work, it is especially because it makes good economic sense. With the current fiscal deficit, we do not have a vault of money to subsidize anything. The best we can do is to provide some fiscal incentives. So if it works, it really makes economic sense. There is no subsidy. Although we have a lot of history with Europe, we do not have any subsidies from them. It will work in Aruba because we made it work. It makes economic sense for us.  It can work. On the one hand, it makes us proud. On the other hand, it makes the task more difficult. OTEC would have been nice to develop as a pilot project on the north side, I am not going to lie, but that is not the case. If it works, it works.
Smart Media 360:
Our report will feature the top leaders in Aruba’s political, industrial, and business community.
You have a distinguished track record in government, energy and investment promotion, having served at the Netherlands Foreign Investment Agency (NFIA), the Aruba Foreign Investment Agency (ARINA), and the Housing & Mortgage Authority (FCCA). You were also a private sector consultant before taking your current role as Managing Director here in 2010. You have been instrumental in supporting the growth and dynamism of the Aruban economy.
What have been some of your biggest professional satisfactions to date?
Drs. FRANKLIN HOEVERTSZ:
If we make progress, what better satisfaction can there be? But it is not just about the satisfaction I get. Many here do not see or understand what we are trying to achieve, or that behind the curtains, we are preparing for a bigger show to achieve even greater growth and sustainability, where we are faced with an “energy trilemma”. They may think that we are not growing fast enough, but we know that we are growing well and responsibly, following our own self-imposed “RAS trilemma”. I am fortunate enough to work with the engineers of WEB and Elmar, whom I believe are the Caribbean’s finest, who are not only good at what they do, but are equally passionate. It is the passion that drives them to look everywhere for solutions. They want everybody—the directors, the company, the Ministers, and even me, to shine. Skills combined with passion create a potent synergy for success.
Smart Media 360:
Finally, what would be your final personal message to the more than 8 million readers of Newsweek worldwide online and in print, about Aruba and the country’s remarkable potential for investment, and as a business hub between Europe and Latin America, to encourage them to come and discover this unique island for themselves today?
Drs. FRANKLIN HOEVERTSZ:
Do come and see why it has been called “one happy island”. I love this island. Come and visit. Get a feel for the place. Discover its existing opportunities. Be a part of our growth.
We see a future of continued innovation and sustainability. Aruba is a tiny island with ambitions of becoming a strong positive force for sustainability; particularly, in light of climate change.
Smart Media 360:
Thank you very much for your time and comments.

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