Cane sugar from the Caribbean was once so valuable that France ceded Canada to England in exchange for a single Caribbean island. But now the sugar industry in the Caribbean is in crisis. Squeezed by huge and efficient producers in Australia, Brazil, and Thailand, and scheduled to lose valued European price guarantees in June, the industry can't be sure that sugar even has a future on some islands.

But agricultural interests on Barbados have hit on a way to keep that island's cane fields planted while taking a bite out of another nagging problem—the ballooning cost of a barrel of oil. The West Indies Central Sugar Cane Breeding Station, serving Barbados and several other former British colonies, has developed a breed of cane specially suited to fuel electric power plants. With this new cane, the island's electric utility and the sugar industry are negotiating a plan to replace up to 30 megawatts of the island's oil-fueled power generation, roughly 13 percent of the total, starting in 2008.

Bagasse, as cane fiber is called after all the sugary juice has been squeezed out, is burned around the world to power sugar factories and generate electricity. There is already 3.7 gigawatts of bagasse generation capacity worldwide, according to Jeff Bell, research executive at World Alliance for Decentralized Energy (WADE), an advocacy group in Edinburgh, Scotland. That's almost four times the amount of photovoltaic capacity installed globally in 2004.

But Barbados's scheme is unique in that the country plans to grow a new variety of cane specifically as fuel, and it plans to do this year-round. Bagasse power as it exists now is seasonal: many places produce it only four months out of the year, and its production relies on cane bred to maximize sugar content, which minimizes burnable fiber. While ordinary cane is 15 percent fiber, the fuel cane developed on Barbados is 25 to 30 percent fiber, and it yields almost twice the burnable biomass per acre—about 50 tons.

Although fuel cane's sugar content and quality are lower, says P. Seshagiri Rao, director of the breeding station, they're good enough to convert to ethanol, a product blended with gasoline to reduce its cost and replace harmful antiknock additives. On top of that, fuel cane can grow during the regular cane's off-season, June to January, ensuring a year-round supply. And a field of fuel cane can be cut down and regrown almost twice as many times as ordinary sugarcane before needing to be replanted. So it is cheaper for farmers to grow.

The fuel cane scheme was the brainchild of Jacques Albert-Thenet, until recently a technical advisor to the Barbados sugar industry. In 2003, when he began developing the project, the end of favorable European price guarantees was already in sight. With prices set to fall by nearly 40 percent, the Caribbean sugar industry was in need of a redesign. "Instead of a sugar industry, let's develop a cane industry," Albert-Thenet proposed.

Why not just let the sugar industry die, as it has already in Grenada, Antigua, Puerto Rico, and a host of other islands? Apart from the approximately 2000 jobs it sustains, cane growing is key to holding together Barbados's rather shallow and erosion-prone topsoil, and it even factors into the island's biggest industry—tourism.

"It plays a very important role as backdrop to the overall aesthetic of the island," says Carl Simpson, general manager of Barbados Agricultural Management Co., which runs the island's sugar mills and buys cane from its farmers. [See photo, "Power Plants."] Right now just over 25 percent of the island's surface is planted with cane. Under the new plan, cane acreage will fall to about 18 percent.

The answer to the West Indies' woes has, in fact, been around for the past 20 years. Decades ago, the breeding station brought over wild cane from Asia and Africa and bred it with domestic cane to improve its sugar-producing qualities. The sugar grown in the Caribbean today is four generations removed from the wild breed. "The intermediate varieties we kept in a museum," says Rao. Fuel cane is one of those museum pieces.

At press time, all the major stakeholders had agreed, in principle at least, to the fuel cane scheme. However, there were still some open questions, notably for the island's utility, the Barbados Light & Power Co. "The main one is the reliability of the fuel supply," says Roger Blackman, a senior planning engineer at the company. Because the BLPC would have to build a power plant adjacent to a sugar factory, an investment meant to last 25 years, it naturally wants guarantees that there will be bagasse to buy throughout the power plant's lifetime.

And, of course, for the project to be economical for the utility, power generated from fuel cane should match or beat the cost of generating from heavy fuel oil, right now 7 to 8 U.S. cents per kilowatt-hour, adds Blackman.

Having the utility involved from the start will probably speed the project along. In other countries, power utilities have proved an impediment to bagasse power's expansion. "A lot of the mill owners are struggling with the utilities to get a connection and get a fair price," says WADE's Bell.