RECO’s Newest $41 Million Investment Raises Questions and Concerns
RECO was founded in 1992 by island investors and in 2008 it was purchased by Kelcy Warren, a US billionaire ranked by Bloomberg to be the 410th richest man in the world. RECO and Roatan are a source of income for Warren who made his fortune in oil and gas pipelines. Warren also uses RECO for profitable loans, and used RECO to run a power cable to his private island of Barberetta.
Warren, CEO of Energy Transfer Partners, went from $1.7 Billion in 2016 to $6.8 billion in 2024, tripling his fortune in the last eight years.
While to the untrained eye RECO has grown in size. More accurately RECO has become a motley crew of 1990s wind turbines, island prime land destroyed for solar farms, and other potentially wrong decisions.
Ill-conceived RECO decisions have unintended consequences.
Now instead of adding another set of Wasilla LPG powered generators, RECO is adding different company generators and is not investing sufficiently in already stressed distribution system. Those decisions will not only increase energy bills of islanders, it could translate to more unstable power supply and more expense to consumers in order to remedy that.
The $41 million RECO project will consist of three propane powered Medium-speed commercial marine gas engines B36:45V by Bergen. The company awarded the contract is Sampol based in Mayorca, Spain. “Sampol designs, constructs, maintains highly efficient energy plants,” said Josu Vicandi, representing Sampol, a 90-year-old family business. “We expect to have the [RECO] system installed and working by September 2025.” The company has delivered similar projects to the Caribbean before. In January 2023, Bergen Engines and Sampol were selected for a similar project in Puerto Rico where Sampol is installing four 3.3 MW medium-speed units B36:45L Bergen Engines.
Things get complicated here. There is an issue of incompatibility between the existing Wartsila generator operating system and the new Bergen generators which have their own energy management and operating system. This issue could potentially translate into black-outs and extra costs, etc. Instead of having spare parts and components for just Wartsila generators, now RECO will have to keep a second completely different inventory for Bergen generators. “It doesn’t make good business sense to keep separate inventories for different engine manufacturers on the books. Also RECO mechanics will have to go through a whole new training cycle to familiarize themselves with Bergen, a process which took them two years with the LPG fired engines,” said Mathew Harper, RECO’s former Director of Operations.
Another not addressed issue in the $41 million upgrade is the investment in distribution infrastructure, and upgrading existing RECO cables that are already carrying high loads. RECO’s mistakes translate into more than just high energy bills for the island consumers. On March 22, a pregnant woman was killed, electrocuted by a falling, poorly installed high tension RECO wire in French Harbour. All ill-conceived RECO decisions have unintended consequences.
Spending $41 million to get 25.2 Megawatt translates to $1.6 million per Megawatt, a higher than average capital cost for LPG power. Now, if RECO has overpaid for the installation of generating capacity, this has a direct effect of how much RECO consumers will pay in their electric bills. It means that RECO customers will have to pay so much more, at double-digit-interest, to pay off the loan to Kelcy Warren.
Currently RECO has the generating capacity of 44.7 Megawatts. RECO’s LPG gas power plant is rated at 28 MW. The company also operates a windward rated at 3.9 MW and two solar plants rated at 12 MW. Its deep cycle battery system BESS has 11 MW. The new gas powered Bergen generators should increase that capacity by 25.2 Megawatt to a total of 70 MW.
While RECO has been presenting its energy sources as “clean,” things are much more complicated. The RECO investments have been a mixed bag of XXI century efficient gas technology, mistakes and ecological disasters. The 26 wind turbines on Brass Hill have been purchased used and is old, inefficient 1980s technology never coming close to generating its advertised 150 Kilowatts per turbine.
Since the wind farm project opened in 2017 there is a constant, disturbing whining sound caused by moving propellers of the wind turbines in Brass Hill and Corozal. This not only lowers quality of life for many Corozalians, but it lowers property values in Brass Hill itself.
There is another effect on the environment. Both migrating birds and local birds are killed by moving blades of RECO’s wind turbines. The scale of the bird killing has not been assessed by any island organization, but studies in the US have shown that an average wind turbine there kills between four and 18 birds per year. So in rough estimate RECO’s 26 wind turbines kill between 100 and 468 birds a year.
While RECO’s solar panels are advertised as “eco” they are far from that. There is not much “clean” about RECO’s two solar projects either. Hundreds of trees were cut down, hills were moved, topsoil of prime and scarce land was destroyed to create a desert of ugly solar panels.
Another issue is what happens to RECO solar and wind infrastructure when a Hurricane hits. Hurricanes serve as an added risk to destroying wind turbines and solar panels on an island like Roatan. High velocity winds and flying debris is likely to cause damage, and perhaps a completely destroy these installations.
