Renewable Energy Sector Development in the Caribbean: Current ...

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MonopolyUtilityUtilityOwnershipUtilityExclusiveRightsRegulatoryAgencyEnergyLegislationGovernmentEnergy PolicyGRENADA BARBADOS JAMAICA ARUBA CURACAOGrenada ElectricServices Ltd(GRENLEC)50% foreign, 25%state, 25% localinvestorGeneration,Transmission,DistributionNone1994 ElectricitySupply ActNoneBarbados Light andPower Company(BL&P)37% foreign, 23% state,35% local investorGeneration,Transmission,DistributionFair TradingCommission1907 Electricity SupplyAct1951 Public UtilitiesAct1974 Fiscal IncentivesAct2007 Barbados NationalEnergy PolicyJamaica PublicServices Company(JPS Co)80% foreign, 20%stateTransmission,DistributionOffice of UtilityRegulation1958 ElectricityDevelopment Act1995 Office ofUtilities RegulationAct2001 All IslandElectricity License2009 JamaicaNational EnergyPolicyW.E.B.ARUBA N.V.100% stateholdingcompanyGenerationRPS Goal None 20% by 2020 20% by 2030 None NoneNet MeteringPolicyFinancialIncentivesRE PilotProjects to Datemax 10kW, retail rate,cap 1% installedcapacity5% Duty Concessionfor PV (since 2005)Small Scale Solarmax 50kW, fueladjustment ratecap 1600 kWConsumption Tax onEWH (1974),Inc Tax Deduction forSWH (1980)Bagasse, WTF, Wind,Small Scale Solar,SWH, LFGmax 100 kW, avoidedcostcap 3% installedcapacityNoneNoneNoneNoneAqualectra25% foreign, 75%stateGeneration,Transmission,DistributionNoneNoneNoneNoneNone None NoneBagasse, Hydro,WindTable 5 Summary of Energy Sector PolicyLarge ScaleWindLarge Scale WindIn Jamaica we find a similar governmental support of new technologies through PCJ and theWigton windfarm. However securing continued and expanded investment for similar projects isproving difficult. Thus while government interest in indigenous resources is expanding, it isimportant for the government to continue to seek expressions of interest from local and foreigninvestors (Loy & Manilo, Renewable Energy Potential in Jamaica, 2005). To lower the thresholdfor investment financial incentive or security must be availed. This can be achieved through anumber of avenues such as developing standardized protocol for contractual arrangements,timelines and rates with JPSCo, working with financial institutions.In order to create an enabling environment for investment in utility scale to commercial andresidential projects, there should be greater access to transmission and distribution grid throughinterconnection standards. This effort has already begun through the pilot net billing programinitiated this year and more efforts such as this need to be developed in order to providesufficient support for the industry. In order to take advantage of the power sector structure andto attend to the ambitions of the National Energy Policy, there needs to be initiatives to attract14
interest and to market the Jamaican energy space as an attractive investment landscape whetherfor local or foreign investors.In addition to the efforts being made by the islands studied, other islands are experimenting withinvestment incentives as well. The British Overseas Territory of the Cayman Islands hasapproved a limited pilot program consisting for a gross-feed-in tariff (FIT) for utility-customersited renewable generation of less than 50kW. The one-year pilot program pays $0.37 KYD/kWh($0.45 USD/kWh) and is capped at one (1) MW (Alliance for Renewable Energy, 2011). A FITis simple, transparent and generally provides sufficient revenues to cover power generation costsinclusive of return expectations. A FIT is considered more effective than other price driven directincentives because of the long term investment security that it provides. This is an example ofthe type of policy that could stimulate investment in renewable energy resources.Finally an analysis of Aruba and Curacao shows that a successful wind energy industry hasdeveloped in the Netherland Antilles in a largely organic way. In this case, because of the powerof the wind regime in these islands, there has been a significant amount of investor interest. Thishas meant that the utility company itself has been able to benefit but energy policy or aframework would be helpful to harness, direct and stream line the interactions between state,utility and project developers, conserving on time and energy.4.2. Considerations for Regional Energy PolicyThese nuances among island needs and contexts may be part of the reason that inter-island policyis so difficult to develop. They should be well understood for a regional direction andimplementation mechanisms to emerge. There are already institutions that are concerned withregional energy policy. For instance the Caribbean Community (CARICOM) has formedassistance programs that support the Caribbean energy sector through collaboration withinternational agencies such as the Organization of American States (OAS), the Alliance of SmallIsland Developing States (AOSIS) and the Inter-American Development Bank (IDB). TheCaribbean Renewable Energy Development Program (CREDP), for instance prepared the draft2007 CARICOM Energy Policy Paper. These many agencies have been successful thus far inthat they have created a forum for discussion on new regional energy issues amongst the region’spolitical leaders and utility providers. However there has been little implementation of long termpolicy or incentive through such regional planners.Our study highlights that in order for these regional policy agencies to be effective, enablingpolicy that acknowledges and addresses the varying needs of different islands will be necessary.In general, enabling policy will involve non-governmental stakeholders in formulation andimplementation, will support the burden of financial and investment risk, will place focus oninfrastructure and network development, will encourage technology transfer and will be designedto be complementary to other non-energy related policy (transportation, agriculture, water15
Page 1 and 2: Renewable Energy Sector Development
Page 3 and 4: GRENADA BARBADOS JAMAICA ARUBA CURA
Page 5 and 6: 2.2. Solar Water Heating in Barbado
Page 7 and 8: keeping with the provisions of the
Page 9 and 10: Wind energy took longer to develop
Page 11 and 12: The LCOE of wind energy in Jamaica
Page 13: As can be seen from these case stud
Page 17 and 18: Barbados, with a regulatory structu
Page 19: purchased so that $6.17/W installed

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