energy policy and planning in dominica and throughout the caribbean

8/14/2019 Energy Policy and Planning in Dominica and throughout the Caribbean

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Detlef Loy

CREDP/GTZ

Energy Policy Advisor

Energy Policy and Planningapproaches throughout the

RegionDominica, March 25, 2009


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Energy Situation in the Caribbean Region

Main Characteristic of electricity markets (1)

High dependence on imported fossil fuels (93% of electricity production)

Only 3 % of electricity produced from RE sources

Remaining sources: own fossil fuels

Electricity coverage on Islands > 98%

Monopoly situation (most Caribbean electric utilities enjoy universallicenses for generation, transmission, distribution and sale of electricityuntil beyond 2025, mostly no IPPs allowed)

Small Islands: installed capacities < 100 MW (small markets)

Electricity costs from 0.24 to 0.37 USD/kWh (in 2006)

Main electricity consumers:(i) hospitality sector(ii) domestic households(iii)commercial sector

(iv)industrial sector


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Energy Situation in the Caribbean Region

Main Characteristic of electricity markets (2)

Most Caribbean countries still have no established National EnergyPolicy, no long-term Energy Strategy and no Energy Actions Plans.

In the 70 - 80ties: utilities were privatized without setting the rules of thegame for the buyers (5 out of 8 GTZ partner utilities are privatecompanies).

Energy forecasting, planning and energy policy were left in the hands ofutilities.

Inefficient policy decision procedures due to split energy portfolio inMinistries for alternative energies and public utilities.

Lack of energy expertise in responsible Ministries .

No transparent and consistent political decisions.

Electricity Supply Acts in many Caribbean states guarantee fixed rate of

return on investment for utilities. No incentives nor sanctions for utilities to explore and exploit RE.


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Current donor initiatives in the region

IDB: Barbados - Preparation of Sustainable Energy Framework (coming)

WB/OECS: Regional Energy Planning and Regulation Authority (ongoing)

WB: Study on Electricity Supply Options in the Caribbean (ongoing)

CARICOM (CREDP/UNDP): Energy Policy Study (ongoing)

IDB: Energy Innovation Contest (Deadline May 15, 2009)

WB: Dominica Alternative Energy Legislation (coming)

CREDP/GTZ: 2008-2012 (2nd phase), RE and EE, Policy and TechnicalAssistance (ongoing)

OAS / ACP-EC Energy Facility): Caribbean Sustainable Energy Program

EU Interreg III: Feasibility of Geothermal power production in Dominica andelectricity export to French Territories (ongoing)

ACP-EC Energy Facility: Geothermal Energy Dominica (ongoing)

Special Facility for Assistance (SFA)/European Development Fund: Energy-related support in St. Lucia (and possibly St. Vincent) (coming)

WB: Funding for IRC Dominica (ongoing)


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New Energy Policies in Place or Discussion

Anguilla National Energy Policy 2008-2020

Barbados National Energy Policy, draft of Dec. 2006 St. Lucia National Energy Policy, draft of Feb. 2009

St. Vincent - National Energy Policy, approved by Cabinet in March2009; Action Plan as draft (40 actions defined)

Grenada Energy Policy, draft of Aide Memoire, Feb. 2009

Jamaica Energy Policy 2006-2020 (Green Paper) and EnergyEfficiency Policy (draft of 2008)

CARICOM National Energy Policy Framework, draft of Dec. 2006

OECS Renewable Energy Policy, draft of March 2007


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Main points in the St. Lucia NEP:Power Sector

LUCELEC will maintain monopoly for transmission anddistribution of electricity

Single-buyer principle for independent power producers (powerhas to be sold to LUCELEC)

Self-generation allowed, but limited to 500 kW per facility and only

in cogeneration; LUCELEC can only deny approval on technicalgrounds.

Quota for transmission grid operator: 5% RE power in 2010, 10%

by 2012, at least 25% in 2020. If quota is not fulfilled (through own capacity of LUCELEC or

purchased RE power), Regulator may put RE capacity out fortender and invite IPPs.


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Main points in the St. Lucia NEP:Regulatory Commission

issues Licences for all electricity facilities individually

approves Tariff structures and Rates (except for consumers>2000 MWh/a)

determines specifications for Net-metering and supply ofExcess Electricity from self-generators

determines Tariffs for back-up and reserve power in case ofself-generation

establishes and monitors Tendering Procedures for major

investments

sets and monitors Performance Standards

elaborates Power Expansion Plans


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Dominica Power Sector

Electricity Supply Act (ESA) was amended with support of the WB andapproved by Cabinet and Parliament in 2006. Liberalized supply sector (atleast on paper).

New ESA in effect since January 2007, no change of general supply patternoccured in the mean-time.

Independent Regulatory Commission working with Exec. Director since July2008, financed for initial year by WB.

So far only limited activity by the IRC in regulating the sector, low level ofguidance by the Govt.

Tariff study of Dec. 2008 (by Ester Montgomery) points to deficits in the ESA.

Investments into the sector are blocked (for private sector neither technicalnor economic rules are clear; for DOMLEC future of the supply sector isundecided)

Uncertainty of the supply market will keep DOMLEC away from signing any

long-term PPA

High risk of deterioriation of the electricity sector, as long as Govt. Isundecided about longer-term supply strategy.


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Electricity Regulation in Dominica

Still no licences issued

How many self-generators are operating ?

No clear procedure for grid-connection and parallel operation of REsystems (wind/PV)

DOMLEC has licence only until 2015

Any long-term power sector investment blocked due to uncertain Govt.policy

No transparent process for concessions for geothermal exploration anduse

ESA gives no indication regarding integration of (new) RE resources

IRC has very limited capacity, financing not secured beyond June 2009

Unclear attitude of Govt. towards grant/loan of Venezuela for new fossil-

fuel plant ESA gives no clear guidance, under which conditions licences should be

issued or disapproved


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Intervention in Dominica byCREDP/GTZ on Wind Energy

2003/4: review of the existing wind site studies (Binger, Sutherlandet. al. and CDC/OECS studies of the 80ies)

2004: Identification of potential wind sites (Mr. Whittingham)

2004: Capacity building: Wind Study tour to Germany: participationof the head of the NGO DSEC (Dominica Sustainable Energy

Corporation, Bevin Etienne)

2005 - 2007: assistance to DOMLEC in wind development: capacitybuilding, site identification, advice in wind measurement.

2008: sponsoring of a staff member of DOMLEC (Jason Timothy)for the participation in the Husum Wind Fair in Germany andafterwards participation in the TERNA Wind dialogue in Berlin.


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Intervention in Dominica byCREDP/GTZ on Hydropower

2003/4: Review of existing hydropower plants

2005: Pre-Feasibility study on Rehabilitation and Upgrading of the hydro

power stations New Trafalgar, Old Trafalgar and Padu.

2005: Review of New Town hydro power project and project proposal, withDOMLEC

2006: Capacity Building: regional hydro power workshop

2006: Identification of new hydro power sites in 5 rivers, proposal forgauging stations and flow measurement

2007: update of the PF study for the New Town project, at this time forDOWASCO

2007: review and update of the identification of new potential hydro sites

2009: advice to DOMLEC on river gauging for new hydro sites (visit of new

hydro site with DOMLEC)


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Main Energy Policy Issues in Dominica (1)

Strong move towards geothermal energy (WIP, EdF, DOMLEC) with inter-connection to Martinique and/or Guadeloupe (and possibly beyond)

A Geothermal Bill has been proposed by consultants in 2005, but was

never approved

Unclear what the new WB initiative for RE legislation wants to achieve.

Long-term Electricity Sector Planning needed (see ongoing WB study),

but this requires sufficient knowledge about costs and potentials ofdifferent options

More statistical information is needed on the energy sector.

Know-how improvement on Govt. level essential

Power Purchase Agreement, draft model contracts

Guideline for licencing and operation of self-generators

Determination of tariffs for backup and reserve power

Tariffs for supply of excess electricity to the grid


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Main Energy Policy Issues in Dominica (2)

Technical rules for grid-connection of self-generators and small-scale REinstallations

Rules for net-metering and remuneration of excess electricity in case of

small-scale RE installations

Development of EE guidelines for buildings (regional)

Regulation for mandatory installation of solar water heaters

Banning of incandescent light bulbs (regional)

Rules for import, taxation and standards of energy-consuming appliances(regional)

Development of public awareness and information campaigns

Energy Audits for public, commercial and service buildings

Integration of energy issues into all levels of school education, vocational

and higher training and courses for professionals


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Dominica Power Sector - Scenario 2020

100 MW Geothermal (4-5 blocks), 5 MW Wind power, 10 MW Hydro power (5 MW indry season), 10 MW Diesel (back-up) + self-generation

Capacity Demand (incl. reserve) 30 MW

Peak Demand 20 MW, rest is being exported to Guadeloupe /Martinique

One foreign company in geothermal active, another utility operating wind farms +hydro power + back-up

Wind + Hydro will be dispatched with priority, base load mainly by geothermal

Grid stability mainly secured by integration to French Territories (grid studyneeded!)

Only one company should get concession for exploratory drilling (costly and riskyadventure)

Dominica+Martinique/Guadeloupe should be seen as one system

Investment into Hydro and Wind will need long-term purchase agreements,irrespective of alternative costs, if Govt. wants to diversify

Only very limited investment in fossil-fuel plants in the near future (is back-updiesel later really needed?)


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Common Approach within OECS

Initiative needs to be taken by OECS to call upon Heads of States /Ministriesof Energy for achieving

an integrated, inter-connected electricity market

common rules for private investments in exploring and using geothermalresources

a common, harmonized approach on setting standards for electricalproducts (mainly domestic appliances and CFLs)

step-wise banning of incandescent light bulbs

common strategies for lower fuel consumption in the transport sector

a joint representation /membership within IRENA (International RenewableEnergy Agency).


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Thanks for your attention !

Contact:

Detlef Loy / Loy Energy Consulting

Berlin/Germany

E-Mail: [email protected]

energy policy and planning in dominica and throughout the caribbean

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