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Sustainable Energy in the Caribbean: A Market in Transition

Sustainable Energy for All – SIDS Barbados May 7-8, 2012

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OAS: Policy Organization and Development Strategy

• The General Secretariat of the Organization of American States (GS/OAS) is the premier forum for multilateral dialogue and concerted action in Latin America and the Caribbean.

• GS/OAS serves 34 member states of the hemisphere

• Representative Offices in most of its member states

• Department of Sustainable Development

– Energy and Climate Change Mitigation Section

See for more info: www.oas.org

Energy Sector Overview - Caribbean

• Dependency on Imported Fossil Fuels – Transportation and Electricity

• Widespread electricity coverage - with exception of Haiti – albeit expensive

• Considerable renewable natural resources throughout the region

• The energy game IS changing:

– Policies are being adopted; growing spirit of regional cooperation and,

– Sustainable energy solutions ARE being built, but much work remains to be done

• Lower costs of electricity services for impoverished residents

• Lower costs and reduce consumption (EE) for existing and growing commercial sector (ie. Hotels)

• Affordable energy to attract industry

• Reduce import bills; free up resources

• Set climate friendly example for ROS 4

SE4ALL – Caribbean SIDS – Why does it matter?

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Overview LAC Energy Sector

Caribbean: Not all the same…

• Six countries in the Lesser Antilles: St. Lucia, St. Vincent and the Grenadines, Grenada, Antigua and Barbuda, St. Kitts and Nevis, Dominica – population 600,000

• Greater countries in the Greater Antilles: Haiti, Dominican Republic, Jamaica – population 22 million

• Other countries/territories: Cuba (11 mm), BVI, Dutch Kingdom, Guadeloupe, Martinique, Trinidad and Tobago (1.4 mm)

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Size of Electricity Sectors

0 1000 2000 3000 4000 5000 6000

British Virgin Islands (British overseas territory)

Dominica

St. Kitts and Nevis

Grenada

St. Vincent and the Grenadines

Belize

St. Lucia

Antigua and Barbuda

Cayman Islands (British overseas territory)

Aruba (part of the Netherlands)

Haiti

Bermuda

Barbados*

Guyana

United States Virgin Islands (territory of the United States)*

Suriname

Guadeloupe (overseas department of France)*

Martinique (overseas department of France)*

Bahamas, The

Jamaica

Trinidad and Tobago**

Cuba**

Dominican Republic

Puerto Rico (commonwealth of the United States)*

Installed Capacity (MW)

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• Average annual growth of 3.6 percent throughout 2028

• Doubling of demand between 2009 and 2028

• Individual country growth rates vary between 2.4 and 7.9 percent per year

• Peak demand will grow in

– Dominican Republic from 2,300 MW in 2009 to 4,400 MW in 2028

– Jamaica from 680 MW to 1,500 MW

Caribbean Energy…Looking ahead

Source: Franz Gerner, World Bank

Predictability - Policy/Regulatory Tools

• National Commitments/Goals – National Energy Policy – Sustainable Energy Plan – RE Strategic Plan

• RE Policy – Renewable Portfolio Standard (RPS) – Feed-In Tariff – RE Incentive Laws – RE Solicitations/Bidding

• Technology Specific Legislation – i.e. Geothermal Resource Law – Solar Hot Water Heating Incentive – Ethanol use mandates – Minimum efficiency standards – Duty free concessions for equipment

• Utility/Developer Contractual Framework – IPP legislation – Standardized PPA

Policies are evolving….

• St. Lucia: NEP; geothermal law (final draft) • SKN: NEP (pending); geothermal law (Nevis); corporatization

of SKELEC • Dominica: NEP (pending); Renewable Energy Law • A&B: NEP • Grenada: NEP; Geothermal Energy Law (in preparation) • SVG: NEP and SEP; Geothermal Energy Law (in preparation) • The Bahamas: NEP (pending) • Jamaica: NEP • DR: Renewable Energy Incentive Law; biofuels law • Barbados: NEP; Solar hot water heating policy • Puerto Rico: Renewable Portfolio Standard; Incentives Policy

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Aggregate Energy Supply and Demand – Interconnections and Regional Sources of Energy

• According to recent World Bank Study, “Relying on diesel and HFO is the most costly solution”

• There are multiple fuel and power supply options that offer cost-effective alternatives to the current situation, including, pipeline gas, shipped LNG, and renewables (geothermal, wind) interconnected via submarine cable

• Investment requirements are large but production cost saving are huge

• A variety of private, public and IFI support will be necessary

• Requires countries to improve legal, regulatory and institutional framework and cross-country cooperation

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Snapshots of Several Caribbean Interconnection Scenarios (Source: Nexant Study/World Bank)

Eastern Caribbean Gas Pipeline Proposed Route

Dominica Interconnections

Northern Ring Interconnections Alternative Puerto Rico and St. Kitts and Nevis – US Virgin Islands Interconnections

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So… who has renewable natural resources in the Caribbean?

Wind Geothermal Hydro Solar PV Biomass

Antigua and Barbuda Considerable Yes

Barbados Moderate Yes Moderate

Dominica Considerable Considerable Yes Yes

Dominican Republic Considerable Yes Yes Considerable

Guadeloupe Moderate Moderate Yes

Haiti Moderate Yes Yes Considerable

Jamaica Considerable Yes Yes Considerable

St. Kitts and Nevis Considerable Considerable Yes

St. Lucia Considerable Considerable Yes

St. Vincent/Grenadines Considerable Likely Yes Yes

Trinidad and Tobago Moderate Yes Moderate

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Examples of what is happening with RE in the Caribbean

• Jamaica: Wigton wind farm (20MW installed, Phase II in construction); Munro wind farm

• Puerto Rico: 800 MW of RE awards issued (wind, solar, waste to energy)

• Dominican Republic: 100s MW wind in development; 1000s off grid PV

• St. Kitts and Nevis: 32+MW geothermal and 20+MW wind under contract

• Dominica: Geothermal exploration wells being drilled • St. Lucia, Grenada, St. Vincent and the Grenadines: Advanced

geothermal exploration • Waste-To-Energy Projects in exploration development in Jamaica, St.

Lucia, St. Kitts and Nevis, Aruba, Cayman Islands… • Jamaica and Trinidad and Tobago: Ethanol dehydration facilities • Guadeloupe: Bouillante 15MW Geothermal • Aruba: 30MW + 30 MW in development; also 3 MW solar • Curacao: 12MW +30 MW in development…

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OAS: Caribbean Technical Assistance Activities

– Caribbean Sustainable Energy Program

(CSEP) [EU supported]: National Energy Policies and Project Implementation (OECS countries plus The Bahamas)

– ECPA Caribbean [USA DOS supported]: Pilot Project; MDO dialogue; university partnerships; training

– Geo-Caraïbes: Geothermal development (Dominica, St. Lucia, St. Kitts and Nevis, plus SVG and Grenada)

– US-Brazil Biofuels Partnership: Policy development and TA (Haiti, DR, St. Kitts and Nevis, Jamaica)

– Solar water heater lending (Grenada and St. Lucia)

– Caribbean Supply-Side and Interconnection Initiative

What next? (My recommendations for a SE4ALL Caribbean Strategy)

• Establish implementing legislation and regulation

• Ease access to investment finance

• Extend educational/awareness efforts

• Support transaction closure efforts (negotiate contracts/PPAs, review engineering designs/proposals, facilitate financing…)

• Expand regional cooperation to help Haiti address critical energy challenges

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Energy and Climate Change Mitigation Department of Sustainable Development - DSD Executive Secretariat for Integral Development - SEDI Organization of American States 1889 F St. N.W. Washington, D.C. 20006, USA T. 202.458.6261 F. 202.458.3560 www.oas.org/dsd www.sepa-americas.net www.ecpamericas.org

Mark Lambrides – Section Chief

mlambrides@oas.org