Caribbean Sustainable Energy Workshop, Final Report, 10-2011

Final Report Caribbean Sustainable Energy Workshop

October 12, 2011 Bridgetown, Barbados

Caribbean Central American Action Page 1 Final Report - Caribbean Sustainable Energy Workshop

BACKGROUND

This report is based on the Caribbean Sustainable Energy Workshop convened by the Organization

of American States (OAS) in collaboration with the United States Department of State, the United

States Department of Energy, the European Union, and Caribbean Central American Action. This

workshop took place during the “Caribbean Renewable Energy Forum” (CREF) held at the Hilton

Hotel, Barbados, on October 12-14, 2011. The Workshop itself was conducted on October 12, from

10:00 am – 6:00 pm.

The workshop was divided into two sessions: the morning session examined the work being done

by the OAS specific to the EU-funded Caribbean Sustainable Energy Program (CSEP); the second

session focused on the OAS program funded by the Department of State and the Department of

Energy under the mantle of the Energy and Climate Partnership of the Americas (ECPA). The ECPA

was launched by President Barack Obama during the Summit of the Americas, held in Port of Spain,

Trinidad and Tobago, in April 2009.

The basic tenets of the ECPA are as follows: - Energy Efficiency: Promote best policy practices through assistance in developing building

codes and other standards in the industrial and residential sectors, as well as training for

energy audits

- Renewable Energy: Accelerate clean energy deployment via project support, policy

dialogues, scientific collaboration, and the clean energy technology network.

- Cleaner and more Efficient Use of Fossil Fuels: Promote clean energy technologies to reduce

both conventional pollution and the carbon footprint of fossil fuels, as well as best practices

on land use management.

- Energy Infrastructure: Foster modernized, integrated, and more resilient energy

infrastructure, particularly electrical grids and gas pipelines.

- Energy Poverty: Target urban and rural energy poverty with strategies to promote

sustainable urban development and improve access to modern clean energy services and

appropriate technologies in rural areas that can improve public health and reduce fuel

wood use that benefits forest management.

- Sustainable Forests and Land Use: Reduce emissions from deforestation and forest

degradation, and enhance carbon sequestration in the land use sector, including through the

conservation and sustainable management of forests.

Adaptation: Assist vulnerable countries and communities with strategies to understand and reduce

their vulnerabilities to the impacts of climate change.

CCAA has been supporting the ECPA goals for the Caribbean Basin with a sub-contract to the US

National Renewable Energy Laboratory.

PARTICIPANTS

See Annex A for the full list of participants.


OAS Context:

The importance of energy can be seen in each of the region’s economies. The Caribbean needs

assistance in strengthening policy-making and legislation so as to provide the platform for energy

to be supplied. Affordable and competitively priced energy is a means to improve economic

productivity, and competitiveness. The priority for renewable and clean energy has been

recognized within the highest levels of the Caribbean Community (CARICOM), which provides a

platform for all of the stakeholders to engage. This year saw the first Energy Ministers’ meeting in

25 years, which provided a forum to look at issues and make important decisions; there is hope that

there will soon be a regional policy framework that expresses where they want to go. The OAS will

continue to support the regional approach to the improvement of energy provision. There must be

a way, especially in the context of initiatives like ECPA and CSEP, to identify significant things that

will make a difference to the people of the region.

SECTION 1: OAS Regional Work

There has been significant work undertaken to establishing the policy and planning frameworks

upon which the countries can base their clean energy development. Focus has been on: 1) training

and institutional strengthening so that there is a qualified cadre of experts within the policy arena;

2) technical training so that people have full grasp of the technologies being recommended and

implemented; and 3) project identification exercises examining what projects could be developed in

a commercial context or in partnership with multilateral or bilateral programs investing in pre-

technology pilots or programmatic activities. Work also includes technical assistance for

commercial project development; university partnerships to support capacity development; and

work on interconnection between islands. The OAS is also actively supporting the call from the

CARICOM Secretariat for Caribbean Energy Week, which will take place every year in November

(6th to 12th in 2011).

Some of the tasks for the project going forward include: 1) a basic assessment of barriers and

opportunities; 2) a consultation program in the region; 3) a financier’s guide; and 4) an energy

financing workshop. There will be an ongoing focus on capacity building.

Specific initiatives under the OAS program include, but are not limited to, those being undertaken

through the CSEP1 program and the ECPA2 program.

1 CSEP covers the Organization of Eastern Caribbean States (OECS) and the Bahamas. It addresses the market conditions

for the development and use of RE and EE systems and mitigates the barriers for RE use and development. (Click here for

details on the CSEP).

2 Countries included under the ECPA Caribbean Initiative are Antigua and Barbuda, Bahamas, Barbados, Belize, Dominica,

Dominican Republic, Grenada, Guyana, Haiti, Jamaica, Saint Kitts and Nevis, Saint Lucia, Saint Vincent and the Grenadines,

Suriname, and Trinidad and Tobago. For information on the program, click here.

http://www.sepa-americas.net/proyectos_detalle.php?ID=6

http://www.ecpamericas.org/initiatives/default.aspx?id=25


Initiatives include:

1. Training events for key energy stakeholders: a) in 2009, the first Eastern Caribbean

Geothermal Conference was held; b) In 2010, two representatives from each country

attended a workshop in St. Lucia on energy audits; c) In 2010, representatives from the

islands traveled to Brussels and Vienna to get insight on sustainable energy developments

in Europe that can be replicated in the Caribbean; d) In 2011 representatives traveled to

Renewable Energy(RE)/Energy Efficiency (EE) workshops in Colorado, and visited the

National Renewable Energy Laboratory (NREL); e) In 2011 a dialogue was held in Barbados

on World Energy Efficiency standards; f) A workshop was held with a selection of

Caribbean educators to strengthen the curriculum related to RE and EE in primary and

secondary schools; and g) the project has provided support to the Caribbean Renewable

Energy Forum(2009 through 2011).

2. Energy Audits: following the workshop on Energy Audits (item 1.b, above) a number of

countries began instituting energy audits. The CSEP program will provide support by hiring

an auditor who will assist with the work.

3. Energy Education Program (related to item 1.f, above): A strategy was developed and

presented to the Ministries of Education and the Ministries responsible for energy and

climate change to strengthen the science and geography curriculum in primary and

secondary schools. This followed an April trip to four CSEP countries, where surveys and

interviews revealed that the core Caribbean curriculum did not adequately address energy

and climate issues. Following consultations, a teacher resource booklet has been prepared.

The next steps include preparing a booklet for students, as well as a website where

pertinent information can be accessed. The materials are currently in draft and volunteer

curriculum specialists from Antigua and Barbuda, Nevis, the Bahamas, and the Caribbean

Examinations Council are undertaking the peer review. Upon finalization of the materials,

they will be presented for consideration to the Ministries of Education and the Ministries

responsible for energy and climate change.

SECTION 2: Caribbean Country Review

Antigua and Barbuda:

- A National Energy Policy (NEP) has been presented that was scheduled to be approved by

the end of the year. The NEP sets a goal of energy security by 2030.

- Two of the main resources are solar and wind. In conjunction with the Caribbean

Renewable Energy Development Program (CREDP) Antigua and Barbuda are working to

gather the data on wind energy potential.

- The utility has formulated an interconnection policy. The final draft is ready and they are

hoping to have it ready for National Energy Awareness Week. A very successful pilot

project has already been implemented.

http://www.caricom.org/jsp/projects/credp.jsp


- They are currently working on energy audits. As the government owns the utility, a

reduction in government consumption will be a positive result.

- The Cabinet has offered duty free concessions on RE and EE imports.

- Concessions are also being extended to importers of electric cars in exchange for gathering

baseline data (still pending). It is noted that someone in Antigua has developed and built an

electric car by retrofitting a standard vehicle, which could prove a cost-effective option.

- Through an ECPA/CSEP partnership to fund demonstration projects, an eco-friendly power

generation system will be installed in a national park this year.

The Commonwealth of the Bahamas:

- A policy review has taken place and it is anticipated that by November 2011 a final

consultation will take place for approval by the cabinet. There are some issues related to

data gaps that are still outstanding.

- The country is 100% fossil fuel dependent in terms of electricity generation. The Inter-

American Development Bank funded an overview on RE potential (“Promoting Sustainable

Energy in the Bahamas”).

- EE reviews are being undertaken for government buildings, private homes and the

commercial sector.

- A model for Power Purchase Agreements (PPA) has been developed for RE providers.

- Pilot projects are promoting EE in lighting. They are installing solar photovoltaic (PV) in the

residential sector following a similar project in government housing subdivisions.

- There is an extensive public awareness campaign in addition to plans to host a wide variety

of activities during Caribbean Energy week

Barbados:

- The late Prime Minister, David Thompson, wanted to create a “green economy,” while Prime

Minister Stuart wants it to be a clean economy. Improving competitiveness is driving the

push to renewable and clean energy.

- There is momentum within the private sector and households to move towards RE

following the government’s suspension of fuel subsidies.

- They have established a framework for fiscal incentives and are implementing policies,

regulations and standards that provide clarity for private sector investors.

- They are working on training and certification, as well as on quality standards

Curaçao:

- Developed a NEP in 2009 which was adopted by the new government in 2010. The goals of

the NEP are to: 1) Provide affordable service; 2) Provide reliable service; 3) make electricity

available to everyone; 4) introduce competition into the market; 5) Build a sustainable

energy supply; 6) Introduce an independent regulator; and 7) reduce the carbon footprint.


- The goal is to have 35% of energy come from renewable sources by 2015.

- They are building a wind farm park that will be ready by the 2nd quarter of 2012. They are

also developing Waste to Energy (WE) projects, solar projects, and have instructed utilities

to assess a change in the fuel mix to introduce natural gas.

- They are organizing courses on the installation of solar panels.

Dominica:

- The final draft of the NEP was presented in 2010. The government has requested a final

review as well as an update to the Sustainable Energy Plan that was prepared in 2002 by

the OAS.

- The Geothermal Resource Bill and Environmental and Planning Regulations for RE

electricity generation were prepared between 2010 and 2011, supported primarily by

World Bank.

- Dominica has had hydroelectricity since the 1950s and would like to assess the expansion of

their hydro capacity.

- They are working with NREL on the feasibility for a wind farm.

- The Government of Dominica is undertaking a multi-donor initiative in the geothermal

sector. From preliminary investigations, it is believed that they can generate 300MW of

electricity from the Roseau area and have another 1500MW of untapped resources in other

locations. The plan is to generate 100-120MW for local and export use (Guadeloupe and

Martinique through subterranean cable). The European Investment Bank (EIB) has agreed

to fund the technical and financial feasibility of the interconnection project.

- They list the benefits of geothermal energy as: constant and reliable source of electricity,

clean, low cost, there is potential for foreign exchange returns, and it will reduce carbon

emissions (and generate carbon credits). It could also push local and foreign direct

investment.

- West Indies power was granted a license to explore and exploit geothermal potential in the

Soufrière area, with facilitation and monitoring through the government.

- Dominica will be actively participating in Caribbean Energy week, with an emphasis on

youth.

- Dominica is hoping to develop a $200,000 solar initiative through the ECPA.

Dominican Republic:

- The Dominican Republic is the largest regional consumer of energy.

- Consumption of fossil fuels is primarily in electricity (40%) and transportation (35%)

- In 2007 a RE law was implemented – originally they did not have RE projects as they didn’t

have the framework; now that the law exists, the problem is with financing – there are

ongoing issues with bankability of projects.

- They are also working on an EE law as a way to reduce losses. About 38% of electricity is

lost in the system as a result of technical and non-technical losses. The primary entity that

defaults on payments for energy consumed is the Government.


- In February 2010, the constitution was modified to consider climate change, to make

sustainable development a priority, and to take natural resources into account.

- On October 11, 2011, a 30MW wind farm was inaugurated that will be connected to the grid.

- In July, a small project on net-metering will start. Every home and business will be able to

install a solar PV system that will both reduce their demand as well as sell excess capacity to

the distribution system.

- In transportation, they are modifying the fuel mix for vehicles to run with natural gas, and

working to expand the metro system to improve public transportation options.

Grenada:

- Cabinet approved the NEP in early 2011.

- The policy commits to at least 20% RE use by 2020 – with Grenada’s 2008 energy costs

outstripping export earnings (2.5 times higher), the situation is unsustainable and viewed

as a priority. The principal challenge is financing.

- Through the OAS, under the ECPA program, Grenada has a consultant working on a

geothermal resource development bill. It is felt that they could produce 10MW by 2015 and

20MW by 2020 – total consumption is 30MW and so they expect to surpass their RE goals

set out in the NEP.

- There is strong reason to believe that Grenada has significant hydrocarbon deposits and

they are working with Trinidad and Tobago to sign a treaty of joint development in that

field.

- They received a grant from the EU for the establishment of a wind farm on Carriacou that

can generate 1.9MW. They are examining the establishment of wind farms on Grenada to

generate 2.5+MW.

- Solar energy is also on the agenda, with a number of small Independent Power Producers

(IPPs) involved. They are looking to bring solar power to schools and hotels around the

island.

- An RFP has just been issued for Waste to Energy (WE) development.

Puerto Rico:

- Puerto Rico is in a period of transformation. They are pursuing more RE resources and

transforming much of the power generation from oil to natural gas.

- The primary interest is interconnection of the energy grid. There is strong support from the

US Government to move forward the interconnection between Puerto Rico and the US

Virgin Islands. They are looking at bringing in geothermal from Nevis. Another focus is

interconnection with the Dominican Republic, and they have received funding from the

World Bank for the pre-feasibility study.


St. Kitts & Nevis:

- The final draft of the NEP was presented in April 2011 and is pending cabinet approval. It

seeks to move forward on geothermal, wind and solar power initiatives.

- On St. Kitts they have signed a $16.5M PPA with North Star for wind energy (backed by

OPIC).

- St. Kitts has signed a demonstration project with the Republic of China to make government

headquarters fully solar; it is to be documented as an example for citizens interested in

doing the same.

- On Nevis they are implementing a wind project with 2.2MW. There is a wind farm

supplying 1.6MW to the Nevis grid.

- Nevis is encouraging the use of solar water heaters by providing tax concessions to

individuals that purchase them.

- Geothermal energy is the most important area of development right now. They are working

with West Indies Power; exploration is complete and they are ready for the production

phase. They are working with ExIm Bank on financing. They are also developing

regulations for geothermal policy and are looking for assistance in this area.

- With the OAS they are pursuing the Nevis-San Juan interconnection.

- Overall, the energy development strategy for Nevis includes geothermal, wind, and solar.

They are looking to get into EE; they are hoping to establish an Energy Unit.

St. Lucia:

- The NEP was adopted by the Cabinet in June 2010. While it has not generally changed the

landscape of RE (to date they are limited to small RE applications) it is helping to change the

way of thinking, with sustainable energy becoming more universally embraced in St. Lucia –

even with respect to the utility. There have been tax incentives for RE since 1996.

- They are finalizing the Energy Policy Advisory Committee; and they are reviewing the

Electricity Supply Act to make it more RE-friendly.

- An OAS consultant is doing the final revision for the draft geothermal resource development

bill. There is strong support for geothermal generation and the government has signed an

agreement with a developer.

- There is an effort to see how they can take advantage of the “low-hanging fruit” in the area

of EE. Particular focus is on hotels and government buildings. They need assistance in

developing for EE products, as well as assistance to conduct more resource assessment and

do more capacity building.

- There is increasing interest in solar PV, including requests from the agriculture industry to

see what opportunities there are to invest in PV to reduce operating costs for agri-

processing.

- There is movement in the wind sector, but there is a land issue that is currently preventing

doing it on a larger scale. There are small wind turbines that are being installed on an

individual basis.


- In bio energy, a local young entrepreneur recently received an award to develop bio-

ethanol. In St. Lucia, transportation has surpassed electricity in terms of energy

consumption, so options are important.

- Overall, the need is to move beyond demonstration projects and to show linkages between

industries. The Government clearly has to take the lead but there is no budgetary allocation

and no money to install retrofits.

St. Vincent & the Grenadines:

- They have an approved NEP and an approved Energy Action Plan in place which has served

as a guide for the sector’s development. Initially hesitant, the utility has embraced the NEP

and is actively engaging the RE sector.

- They are working with an OAS consultant to draft a geothermal resource development bill.

- Through an EU grant, they conducted and EE study in the government sector. Changes in

lights, etc, are hoping to lead to a 25% reduction in energy use.

- They have a grant from the Department of Energy to pursue solar development; they are

interested in pursuing wind and hydro.

- In the geothermal sector, a developer has expressed interest in St. Vincent – if test wells can

be financed, they can move forward. It could be the game-changer.

- The challenge is a lack of resources to take things from a program to a commercial reality (“we have the hammer and can see the nail, but do not yet have the ability to hit the nail on the head.”) This problem needs to be addressed if they are going to be able to move forward.

Suriname:

- Development of RE is just beginning.

- They recently completed a 2 year recording of wind speed; findings show it is plausible, but

they are not yet certain that it is economically feasible.

- They generate about 50% of their energy through hydro and are planning to expand. Gold

mining projects are helping to make this possible. (Note, “Guyana” means water). The goal

is to find a way to use water to generate energy without the creation of dams.

Tobago:

- They have just installed a 16MW generating plant which will be fired by natural gas and

diesel.

- They have large supplies of natural gas off the northwest shore of Tobago, and expect to be

fully on-stream in approximately 3 years (for domestic consumption and export). They are

working with Centrica Energy to establish the site for the natural gas facility.

- They are actively pursuing wind farm development.

- Education of the population is very important. People are comfortable with the status quo –

in spite of high costs – and are not sure what a move to RE will mean to them.


United States Virgin Islands:

- Very ambitious agenda on EE and RE.

- On EE: they are utilizing Energy Service Companies (ESCOs) to bundle government

programs with the commercial and industrial sectors.

- On RE: they have a $210 million WE project (a PPA); there is a $3 million landfill gas-to-

energy project in the development phase; they have 20 proposals for a potential utility-scale

solar energy project; they are in the process of collecting wind data, with a goal of

developing a 10MW wind farm;

- The issue of conversion of power plants for natural gas is being looked into.

- They have been exploring an initiative for electric vehicles, but this currently does not seem

feasible without sizeable investment in charging stations. The focus is on gas/electric

hybrids.

- Interconnection: primary route is St. Croix to Puerto Rico, which will hopefully be a bridge

for connection to Nevis. The other route is St. Thomas to Puerto Rico as a bridge to the

British Virgin Islands. The feasibility study is complete and they are now tackling

fundraising. Extensive environmental assessments also need to be completed.

SECTION 3: Organizational, Multi-lateral and Bi-Lateral Review

U.S. Department of State:

President Obama started ECPA because of the need for sustainable partnerships. ECPA has

channeled about $70M throughout the hemisphere.

Important points are:

1. The region’s demand will double by 2028 – and if countries are going to meet this growth,

how do they find the financing to do so.

2. We are at a point globally where there is about to be a radical change in global gas markets.

US may be exporting gas by 2015; shale gas now accounts for about 30% of gas production.

There are other countries with massive potential in Europe, as well as other countries such

as China, Indonesia, South Africa, and Argentina. We need to ensure environmental

soundness in issues including emissions, water tables, seismic activity, among others.

Russia is increasing its gas production over next 20 years. Australia coming with large

supply of LNG by 2016. As a result, we are starting to see price of gas delinked from oil, and

there will be a change in how the market looks. RE will be important; an objective is to

reduce CO2 emissions and reduce the overall price of energy. Switching to lower cost

supplies and cleaner supplies is going to be predominant. Growth in oil consumption is

going down in OECD countries, but still going up in emerging economies, so traditional

petroleum sources will remain high priced.

3. The study produced by the World Bank on Caribbean Regional Energy Supply Options (click

here) is a phenomenal resource.

http://www-wds.worldbank.org/external/default/main?pagePK=64193027&piPK=64187937&menuPK=64187510&entityID=000356161_20110227233101&searchMenuPK=64187283&theSitePK=523679

http://www-wds.worldbank.org/external/default/main?pagePK=64193027&piPK=64187937&menuPK=64187510&entityID=000356161_20110227233101&searchMenuPK=64187283&theSitePK=523679


4. LNG could be a huge factor and is a competitive option in some of the larger islands (less so

in the smaller nations because of the infrastructure costs). It is particularly interesting in

combination with other RE sources – such as cogeneration with wind or geothermal

supplies sources.

5. Every option related to electricity supply becomes stronger when linked to interconnection

and the ability to combine generation sources. Cost savings range from 10-14 cents per

KWH. However to do this there has to be trust between the countries and a level of

regulatory harmonization, as well as an understanding of how countries govern their power

sectors, including vulnerability to technical and non-technical losses.

6. In relation to finance: the frustration in raising finance is a broad question that the

international community is grappling with. The IEA is has looked at access to energy and

financing and concludes that if there is going to be energy access for all, it will require $48

billion of investment every year through 2030. It will be competitive, raising the question:

how does one get access when people are competing on that scale? Creativity and flexibility

will be a key to raising capital.

7. The U.S. Department of State has officially created a new Bureau for energy affairs. There

will be three pillars: 1. the energy world today; 2) energy transformation; 3) energy access

and transparency.

European Union

1. A secure sustainable energy supply, energy conservation, and renewable energy are top

priorities in the EU. An ambitious program “EU 20-20-20” was adopted in 2007: reduce

greenhouse gasses by 20%, increasing share of renewable by 20%, and reach a 20%

reduction in energy consumption through improved energy efficiency.

2. EE and RE technology, and low carbon technology is to be integrated into EU’s bilateral

cooperation with existing and new partners. On Sept. 7, 2011 the European Commission

adopted a position regarding security of energy supply and international cooperation: “The

EU Energy Policy: Engaging with partners beyond our borders”, predicts that the rising

standards of living globally will increase energy demand by up to 40% by 2030. Rising

demand is also pushing up energy prices which will lead to energy poverty. Access to

energy in developing countries is a key development goal. The EU delegation is currently in

the phase of negotiating the next round of development packages, and the EU Commissioner

has already indicated that energy will be high on the agenda in these negotiations.

3. Inside the Commission’s external cooperation division, there is now a unit dealing

exclusively with energy. The new Energy Unit is working with all global financial agents for

development cooperation. This allows more complementarity among the EU, the

governments and the other actors.

4. In 2002 the EU started to take notice of the links between poverty and energy poverty. This

led to the EU energy initiative and then to the energy facility, which was the first funding

instrument dealing with access to energy.


5. The Energy Facility was designed to work on: 1) Investing in infrastructure giving access in

rural and peri-urban areas; and 2) working at the regulatory and legal framework, and

related capacity. They are also trying to remove barriers to private sector involvement.

6. They have launched a first call for proposals: 1) small scale interventions – maximum of

€2.5M from EU; 2) a pooling facility for governments – leverages big money for larger

investments; 3) the partnership dialogue facility, specialized in working on legislation and

framework issues. The energy facility is allowed to bring up to 75% contribution to

projects in direct investment and governance. There are 65 projects that are signed and

have started to be implemented.

7. They are entering a crucial negotiating period in terms of financing frameworks for

development cooperation. The current framework ends in 2013 and the new framework

has to be in place by then. It is important for the governments to push for the energy

facility.

Germany – GIZ/GSF:

The Caribbean Renewable Energy Development Programme (CREDP – click here for more

information) has been working since 2003. They work with the CARICOM Secretariat and with the

Energy Unit since 2008. The CSEP program has allowed GIZ to focus on countries not covered by

CSEP.

Among the work:

- Energy Policy support: They are helping the Surinamese and Belizean governments

- Green Energy & EE activities: a) Wind energy: a consultant traveled to 15 countries to look

at wind potential; b) Hydro: Primary activities are in St. Vincent where they are working to

increase hydro capacity, and in Dominica where there is untapped potential (they are

supporting the utility in identifying new sites and rehabilitating existing sites.); c) PV: they

are helping to identify potential options for utilizing PV at the utilities level – there is a lot of

movement towards allowing small scale PV into the national grids.

- Through GSF they have money for technical assistance and will be using the CREF to

continue to collect information as to what projects are out there that are not duplicative and

which are innovative.

Alliance of Small Island States (AOSIS):

(Click here for more information on AOSIS)

- Electricity dominates the conversation, but costs of fuel for electricity generation are only

about 20% of country expenditures. Transport, bunker and aviation make up about 70-

75%. It is practical to target electricity, however, as the region has a lot more resources that

can target this than they do to target liquid fuels. If the countries are successful in

electricity generation thought RE, they can begin to work on transport.

http://www.caricom.org/jsp/projects/credp.jsp?menu=projects

http://aosis.info/


- AOSIS is looking at climate change. Traditional economic activity is in tourism and

agriculture…industries that are very vulnerable to climate change. If there is a strategy that

links to a reduction in petroleum imports, then countries retain money to fund adaptation.

Through SIDS DOCK (click here for more information) small islands can get Technical

Assistance to review their energy sector and to attract financing and technology transfer in

aggregate, reducing transaction costs.

- The region has three to four times more energy use per household than there is in places

like Japan. EE has to be a priority, as wasted energy is lost hard currency.

SECTION 4: Discussion/Q&A3

“Challenges in the clean energy arena”

1. The size of the demand in the Eastern Caribbean states has an impact on the ability to do

deals. How do you aggregate demand in smaller countries?

2. Almost 100% of electricity generation and transportation fuel is from imported fossil fuels

(with the exception of Trinidad and Tobago and, to a lesser extent, Barbados). The area has

some of the highest electricity rates in the world.

3. The countries also have to deal with the environmental impact of energy generation, while

dealing with the effects of climate change.

4. There is often limited to no competition within the utilities structure.

5. Financing is a major hurdle in the region. A number of key projects are at the point where

they need project finance, and the barrier is becoming apparent. Issues include sovereign

guarantees, credit-worthiness of the borrowers, and even the fact that developers are not

knocking on lending-institution’s doors looking for financing. Efforts are underway to look

financing tools that will help stimulate the flow of money into the region.

6. With regards to the supply of fossil fuel, there is a distortion in cost as a result of

PetroCaribe – a mechanism that will not last forever and comes with a level of indebtedness.

There are also price distortions, as well as disruptions caused by hurricanes and other

hazards.

7. There needs to be more capacity building in terms of measuring the impact of projects that

are completed or underway.

8. Demonstration projects should also be used as a method to understand the cost of project

implementation throughout the region. For example, Curaçao is currently looking at a

project to use ocean cooling for air-conditioning at the airport – if the project cost is

3 In this section, comments and questions are not necessarily related to each other or presented in the order they were

received. To the extent possible, they are brought together for clarity when the correlation is evident.

http://aosis.info/sids-dock/


measured throughout the process, this can be used as a learning example for the rest of the

region.

9. It is about economies of scale more than anything else. Many RE projects take up a lot of flat

land, which is difficult in the small islands. With geothermal energy one needs to generate

20MW (numbers are coming down), while the peak load in Dominica is about 16 MW, which

is only attractive to a developer in the context of inter-connection. Developers need to

know that they will recoup their investment.

***

Caribbean Energy Information Systems (click here) noted that in 2000 a study identified four

barriers: policy, capacity building, information, financing. In 2009 another study in 16 Caribbean

countries found similar results with some variances: Policy showed significant improvement

(however, there is a lapse in time between draft and enactment). In information, there was some

improvement with individual countries becoming more sensitized, but there continues to be a need

for support in that area. In capacity building there have been slight changes, with challenges arising

primarily because there was not always a coordinated approach to projects over the 10 year period.

Financing increased, but government involvement was not necessarily there at the front end – deals

tended to be done individually and governments tended to come in at the back end. There needs to

be more transparency in the funding. Hopes that there is no reinvention of the wheel or duplicating

of efforts: create synergies and set out targets

***

OAS (regarding the development of geothermal energy projects): Geothermal has been a critical

component of the program. In NEPs there is clear language on RE, with specific language on

developing geothermal as much as possible, and in some cases language on sharing energy when

capacity is developed. The next phase is to move into the specific area of geothermal. There has to

be transparency in the laws so that a developer can come in and do a project and have the

investment protected while also protecting the health and environmental rights of a country’s

citizens. This has been done in several cases where the legislation specific to geothermal

development has been prepared. The next step in the process is the relationship between the

government and the developer as a utility doesn’t always want an IPP to come in.

In the example of Nevis they did, and an IPP came in and the OAS project representatives facilitated

negotiations between the government and the IPP around a contract – which is now in place.

The final piece is the financing, which is where it this particular project is held up. ExIm Bank is

interested, as are others. If this does not work out, other sources will be sought. That is the project

cycle as far as the policy side.

On the regulatory side there is a draft field manual with the specific guidelines for the development

cycle – in this case the hard regulations component – as a lot of the utilities do not have a robust

regulatory framework, and in almost no case do they have much ability to enforce on the regulatory

side. That challenge is going to be addressed by a World Bank program (ECERA) which is in

http://www.ceis-caribenergy.org/


development for Grenada and St. Lucia so far (other EC countries are invited to join to create a

common regulatory framework). This could be the best way to approach regulatory issues in the

region as the similarities are great and it is expensive to establish a regulatory authority.

Geothermal resource assessment and next stages: CARICOM is in dialogue with a number of French

agencies and is looking into the establishment of a geothermal drilling risk fund.

***

CARICOM notes that there has been progress. With the Heads of Government identifying RE as a

priority, there is now a platform for engaging at a regional level. The region is much further than it

was 3 years ago. Things must be looked at also in terms of the technology and the cost to the

consumer: what are the regional solutions vs. the national solutions? The utilities have been asking

who is going to pay for RE being integrated into the grids as governments do not have the ability

and consumers will not want to pay higher rates.

***

The Caribbean Development Bank (CDB) commented that funding is available, but project

developers are not eager to initiate projects. Most of the activities that are being funded are

technical workshops and capacity building efforts.

Developing new technology is expensive, and it is often the people who come in after who have

lower costs. The people who invest early tend to take the risk. For a utility, as they see growing

self-generation capacity in the region, will be concerned about having stranded assets.

Points to consider are: the cost of fuel substitution; the bigger picture of energy security; and the

fact that stand-alone projects will be less feasible than interconnection

***

OPIC tells a similar story – while they just finished the transaction to finance the St. Kitts and Nevis

wind project for $16 million (their only project in the Caribbean), the overall financing by OPIC in

RE in the past year was $1.1 billion to project financing and an additional $500 million to equity

funds.

***

The European Investment Bank agreed: the EIB has a clear mandate to finance climate and RE

projects but they are having a difficult time finding bankable projects in the Caribbean countries.

They have the funds and the technical assistance, but for one reason or another, the projects up

until now are not bankable. On problem is in the area of procurement – there is often an issue with

projects being presented that have not been through the process of open international tendering.

The EIB loaned €70 billion worldwide, of which 30% went to climate action projects, with €7

billion going to RE or EE. None of this went to CARICOM.

***


Q: Typically, for most projects, we operate in the context of objectives and targets, but it seems that

in the regional RE projects, there seems to be a lack of clear targets and things are being added here

and there which make it difficult for efforts at coordination and for having a regional framework.

While it is good to be responsive, coordination is a challenge if the resulting information is not

shared systematically.

A: The official project documents have defined objectives. These include NEPs, programmatic

training, information and statistics. Some of the descriptions are broad enough to allow for

flexibility. This information should be available to all, but if for any reason it has not been received,

it can certainly be made available.

Q: From the project’s experience with Governments and stakeholders what are the challenges? Is it

financing; competition; capacity; monopolies?

A: Yes to all the above. The Governments themselves are convinced and they want to see RE

happen. However, the transition to RE is complicated and capital intensive up-front and the

challenge becomes how to pay for it. When it comes to finance, we know that there is money

available, but the deals aren’t always bankable. How do we make a project interesting for the

institutions?


APPENDIX A

LIST OF PARTICIPANTS


CARIBBEAN SUSTAINABLE ENERGY ROUNDTABLE

LIST OF PARTICIPANTS ‘Akau’ola Special Advisor to the Prime Minister Tonga Monica Arevalo Investment Officer – Barbados OECS, Trinidad & Tobago, & Caribbean European Investment Bank Tennyson C. Beckles Barbados National Oil Company, Ltd. Steffen Behrle EUEI PDF Project Manager GIZ Dr. Al Binger Alliance of Small Island States (AOSIS) Minister Rayburn Blackmoore Ministry of Public Works, Energy & Ports Dominica Senator Darcy Boyce Minister in the Prime Minister’s Office Barbados Minister Laurence Broderick Minister of State Ministry of Energy and Mining Jamaica Sam Browne Deputy Director for American Affairs Office of Policy & International Affairs U.S. Department of Energy Minister Nazim Burke Ministry of Finance, Planning Economy & Energy Grenada Ellis Burris Chief Administrator, Office of the Chief Secretary Tobago House of Assembly

Jerry Butler Chairman Caribbean Renewable Energy Forum Ruben Contreras Department of Sustainable Development Organization of American States Faith Corneille Energy Officer Bureau of Western Hemisphere Affairs, Office of Economic Policy U.S. Department of State Allison Davis Portfolio Manager, Economic Infrastructure Caribbean Development Bank João de Canha Director Bureau of Telecommunications and Post Curaçao Curtis Deenah Caribbean Energy Info Systems Julian Despradel Head of Alternative Energy & Energy Conservation National Energy Commission Dominican Republic Andre Dormehl Senior Policy Officer - Energy Relations & Climate Technologies Climate Change and Energy Division (MDC) Foreign Affairs & Int’l Trade -Canada Anton Edmunds President & CEO The Edmunds Group International, LLC Cartwright Farrell General Manager Nevis Electricity Co. Ltd.


Yves Ferreira Head of Regional Representation European Investment Bank Dr. Anthony Fisher Director of the International Office University of the West Indies Lenox Forte CARICOM Development Fund Christiaan Gischler Blanco Energy Specialist Inter-American Development Bank Andrew Griffin Alternate Representative U.S. Mission to OAS U.S. Department of State Michelle Gyles-McDonnough UN Resident Coordinator / UNDP Resident Representative UNDP Robert Hall Bahamas Electricity Corporation The Bahamas William Hinds Head - EE & RE Unit, Ministry of Energy Barbados Dunja Hoffmann Advisor - Renewable Energy GIZ Minister Jim Hok Ministry of Natural Resources Suriname Karl Knight Director Virgin Islands Energy Office Fritz Koelling GIZ G. Krish Krishnan Senior Energy Advisor US Department of State Lenrick Lake Permanent Secretary Ministry of Public Works and Utilities St. Kitts

Mark Lambrides Chief, Energy & Climate Change Mitigation Organization of American States Pablo Leunda-Martiarena EU Energy Facility Brussels Gertraud Lindorfer Director for the Caribbean Austrian Embassy - Commercial Section Venezuela The Honorable Kenneth McClintock Secretary of State Puerto Rico Lorne McDonnough CARICOM Development Fund Kristin Mencer Political/Economic Officer US Embassy in Barbados Paul Mondésir Project Officer – Infrastructure Delegation of the European Union to Barbados & OECS Cliff Moxey President Phoenix Engineering Group Keron Niles University of Otago New Zealand Dr. Raymond Nurse Geothermal Project Manager & Chairman, Geothermal Committee Energy Division, Grenada Craig O'Connor Director of Renewable Energy & Environmental Exports Export–Import Bank of the United States (Ex-Im Bank) Ambassador Carlos Pascual Special Envoy for International Energy Affairs U.S. Department of State Carolina Pena Department of Sustainable Development Organization of American States


Hubert Perr Head of Cooperations EU Delegation, Barbados Girvan Pigott Electrical Engineer – Energy Desk Office of the Prime Minister Antigua and Barbuda André Poucet Head of Infrastructure Delegation of the European Union to Barbados & OECS The Honorable Albert Ramdin Assistant Secretary General Organization of American States Minister Kevin Ramnarine Ministry of Energy and Energy Industries Trinidad & Tobago Eryn Robinson Energy Advisor to USSOUTHCOM U.S. Department of Energy Gwendolyn Rodriguez Deputy Executive Director Caribbean Central American Action Alfonso Ruiz de Azua EU Energy Facility Brussels Joe Salazar Deputy Director, Office of Economic Policy and Summit Coordination US Department of State Charluce Sandries Deputy Director Bureau of Telecommunications and Post Curaçao Thomas Scheutzlich Principal Advisor Caribbean Renewable Energy Development Programme GIZ

Rainer Schroer Regional Program Coordinator GIZ Chandra Shekhar Sinha Lead Finance Specialist/Carbon Finance Coordinator; Sustainable Development Department, Latin America & the Caribbean The World Bank Ernie Stapleton Permanent Secretary Ministry of Natural Resources & Environment Nevis Lynn Tabernacki Managing Director, Renewable Energy & Sustainable Development Finance Overseas Private Investment Corporation Dr. Jerrol Thompson Office of the Prime Minister St. Vincent and the Grenadines Ambrose Tillett Chief Executive Officer Ministry of Natural Resources and the Environment Belize Bart van Weijsten Consultant BT&P Curacao Gary Ward Director, Office of the Americas U.S. Department of Energy Adam Warren, PhD Group Manager, Regional Initiatives Commercialization & Deployment National Renewable Energy Laboratory (NREL) Felicia Whyte Renewable Energy Advisor CARILEC Joseph Williams Program Manager of the Energy Unit CARICOM Secretariat

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Caribbean Sustainable Energy Workshop, Final Report, 10-2011

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