Caribbean Renewable Energy Policy Study

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Caribbean Renewable Energy Development Programme- Programme Component CREDP/GTZ -

The Status of Energy Policy in selected Caribbean Countries

A joint study of CREDP/GTZ and CARILEC

On behalf of: Deutsche Gesellschaft fr Technische Zusammenarbeit (GTZ) GmbH Germany

April 2004 (updated February 2005)

CREDP/GTZ: The Status of Energy Policy in selected Caribbean Countries (2005)

Authors of the Study: Detlef Loy, Loy Energy Consulting Christopher Farrell, Carilec

GTZ Principal Advisor: Thomas M. Scheutzlich Guyana Office CARICOM Secretariat Bank of Guyana Building P.O. Box 10827 Georgetown Guyana Tel ++ 592 226 9281-9 Ext. 2625 Fax ++ 592 225 7341 E-mail: thomas.scheutzlich@projekt-consult.de Germany Office Projekt-Consult GmbH Limburger Str. 28 D 61462 Koenigstein Germany Tel ++ 49 6174 24031 Fax ++ 49 6174 22985 E-mail: thomas.scheutzlich@projekt-consult.de

Project Background

CREDP/GTZ is a joint Project of CARICOM and the German Technical Cooperation. This project is part of the CARIBBEAN RENEWABLE ENERGY DEVELOPMENT PROGAMME (CREDP). The project is implemented by the Consortium of Projekt-Consult GmbH, Germany and Entec AG, Switzerland on behalf of the Deutsche Gesellschaft fr Technische Zusammenarbeit (GTZ) GmbH Germany, financed by the Federal German Ministry of Economic Cooperation and Development (BMZ).

Legal Information

1. All indications, data and results of this study have been compiled and cross-checked most carefully by the author(s). However, mistakes with regard to the contents cannot be precluded. Consequently, neither GTZ nor the author(s) shall be liable for any claim, loss, or damage directly or indirectly resulting from the use of or reliance upon the information in this study, or directly or indirectly resulting from errors, inaccuracies or omissions in the information in this study. 2. Duplication or reproduction of all or parts of this study (including transfer to data storage media) and distribution for non-commercial purposes is permitted, provided that GTZ and the Caribbean Renewable Energy Development Programme (CREDP) are named as the source of information. Other uses, including duplication, reproduction or distribution of all or parts of this study for commercial uses, require the written consent of CREDP/GTZ.

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CREDP/GTZ: The Status of Energy Policy in selected Caribbean Countries (2005)

IntroductionThis study on the Status of Energy Policy in selected Caribbean Countries has been defined in the context of the Caribbean Renewable Energy Development Programme (CREDP) and its GTZ assisted project CREDP/GTZ. The work was done jointly with the Association of Caribbean Electric Utilities - Carilec. The mission team was composed of the consultants Detlef Loy (Loy Energy Consulting, Germany), contracted by GTZ, and Christopher Farrell (Trinidad), contracted by Carilec. The team visited jointly major stakeholders in the field of energy and environment during the period 15 to 24 of October 2003 in St. Lucia, Dominica, St. Vincent and Grenada. Christopher Farrell alone made a trip to Jamaica between November 9 to 13, 2003. On the occasion of a follow-up mission in October 2004 to Dominica, St. Vincent, St. Lucia and Jamaica the study has been updated and now provides for most of the countries the current status. Main objective of this study is to provide an overview of the existing and planned legal and regulatory framework for the application of renewable energy technologies. Furthermore it intends to identify the gaps in the current legal system which should be closed in order to promote and establish a sustainable energy regime. The study includes a brief review of some international and regional experiences and advances with appropriate renewable energy policies. This study is designed to be a starting point for shaping adequate energy policies within the total CREDP project. It can therefore serve as an example for similar status-quo analyses in other Caribbean countries and hopefully act as a reference tool for interested governments, utilities and the private sector. The mission team would like to thank Victor Poyotte, Executive Director of Carilec, and his staff and Thomas Scheutzlich, Project Manager of CREDP/GTZ, for all their help and assistance. It would also like to express its gratitude for the warm welcome and the enormous amount of information it received during all its visits to Government departments, utilities and in meetings with many other institutions and individuals. Detlef Loy, Germany Christopher Farrell, Trinidad and Tobago April 2004 / February 2005

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CREDP/GTZ: The Status of Energy Policy in selected Caribbean Countries (2005)

Project BackgroundThe CREDP/GTZ project is a parallel project to the GEF/UNDP-financed part of CREDP. Both projects of one programme are sponsored by different donors and coordinated by the programmes political counterpart organisation, the CARICOM Secretariat, with its headquarter in Georgetown, Guyana. The Caribbean region (CARICOM members) is currently heavily dependent on fossil fuels to cover its energy demand. Despite the substantial wind, solar, hydropower and biomass resources, renewable energy sources, including hydropower, provide less than 2% of the region's commercial energy. It is notable that the Barbados Program of Action, concluded in 1994 at the United Nations Global Conference on the Sustainable Development of Small Island Developing States, required the participating countries, including many of the Caribbean States, to promote the efficient use of energy and the development of environmentally sound sources of energy and energy efficient technologies, paying special attention to the possibilities of using, where appropriate, economic instruments and incentive structures and the increasing economic possibilities of renewable sources of energy. Findings of a region-wide survey which was completed in 2000, pointed to a number of barriers in fulfilling this objective and included issues related to: inadequate policy lack of awareness inadequate capacity lack of financing.

Based on these findings, the Caribbean Renewable Energy Development Programme was launched in 2002 with the major objective of demonstrating and strengthening the ability of Caribbean countries to mobilise investors within the energy sector to shift from conventional energy towards renewable energy investment. This shift will contribute to changing the national energy mix of Caribbean countries towards the increased utilisation of sustainable and indigenous energy sources and should result in: an increase in the percentage of RES based electricity generation; reduction in GHG emissions; reduction of the dependence on imported fossil fuels; the creation of jobs in the energy sector (manufacturing, supply, installation and after-sale services); the mobilisation of financing from local commercial and regional development banks which are not yet involved in RES financing.

Regarding the various renewable energy technologies (RET), the programme concentrates on such technologies that have the widest chance of replication and strong potential for reducing GHG emissions. These are expected to comprise some or

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CREDP/GTZ: The Status of Energy Policy in selected Caribbean Countries (2005)

all of the following applications: grid-connected renewable power (e.g. wind, biomass, mini and small hydro, geothermal), (decentralised) rural electrification based on renewable energy (e.g. photovoltaic, micro-hydro), solar thermal systems (e.g. water heating). The CREDP/UNDP has been started in July 2002 with an extended PDF-B phase that ended December 31, 2003. In March 2004 the CREDP/UNDP received final clearance from the GEF Secretariat and UNDP for the full size project. The CREDP/GTZ has been started in February 2003 as a financially and organisationally separate project, which is closely coordinated with the CREDP/UNDP programme. While the CREDP/UNDP project will involve all Caribbean countries which have singed up for the CREDP, the CREDP/GTZ will concentrate on selected countries that can be taken as models for the situation in the Caribbean and hold out prospects of successful implementation and transfer of the experience gained to other countries. It is also aiming at the creation of a favourable framework for RES investments with a strong participation of the private sector.

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CREDP/GTZ: The Status of Energy Policy in selected Caribbean Countries (2005)

Table of Contents1 2 2.12.1.1 2.1.2 2.1.3 2.1.3.1 2.1.3.2 2.1.3.3 2.1.3.4 2.1.3.5 2.1.4 2.1.5

Summary......................................................................................................................... 9 Country Studies ............................................................................................................ 10 Dominica...................................................................................................................... 10Background ............................................................................................................................................. 10 Electricity Sector ..................................................................................................................................... 10 Status and Perspectives of Renewable Energy Use ................................................................................. 12 Wind Energy ................................................................................................................................... 12 Solar Energy ................................................................................................................................... 13 Geothermal Energy ................................................................................