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

management). We have shown here how focus on different policy domains in various islandtypes might lead to the design of such an enabling policy environment.Furthermore arguments are often put forward for liberalization and free competition on the basisthat state owned enterprises are intrinsically inefficient and mismanaged. However practiceshows that ownership regime is far less important than the context within which the enterpriseoperates. Competition in energy markets, signals to management and incentives, opportunitiesfrom capital markets can all improve utility behaviour (Gabriele, 2004). While the economics ofrenewables drive investment, the dynamic of contract negotiations in the face of uncertainty isalso a primary driving force (Barradale, 2010) (Wolf Heinrich Reuter, 2012). For this reason wehighlight that policy security should be explicitly considered when designing incentives topromote renewables in the Caribbean.There are a few island regions where energy policy has helped to promote the growth of arenewable energy industry, such as Cape Verde, Crete and the Hawaii Islands (Weisser &Garcia, 2005). In 2011 renewables supplied 24.5% of retail electricity in Hawaii (HawaiiElectricity Company , 2011). This penetration has been supported by a number of initiativesimplemented by the major utility holding company and the public utility commission. Since the1990s Hawaii has seen the introduction of a Renewable Portfolio Standard, net meteringprograms, a feed-in tariff, a competitive generation bidding process, grid interconnectionstandards and state and federal rebate schemes all tailored to each island (DSIRE, 2010). Thesecases highlight the potential success that can come from a complementary policy portfolio.In our discussion it is important to note that all of the Caribbean islands studied are in the veryearly stages of power sector reform and renewable energy integration, so it is difficult to judgethe successes of the renewable energy industry. As our cost analysis has shown, there are manyscenarios in which certain renewable energy technologies already provide significant socialbenefit and are cost competitive with short run avoided costs. This would indicate the potentialfor small scale resource development and profitability that can be precipitated by localinnovation, local investment and local market interest, all of which can be encouraged throughmore directed and enabling policy. These considerations warrant more thorough analysis thanpresented herein. We are currently developing an optimization model to explore the impacts ofpolicy portfolios on island grid systems but hopefully have provided useful insight to this point.5. CONCLUSIONCARICOM, CARILEC, international investors and local regulatory agencies will be key playersin the development of future Caribbean energy policy. A sensitization to the differences in powersector dynamics outlined herein and a working knowledge of the success that can come fromsmall scale energy technologies will support these groups. From our analysis, Grenada needsfocus to be placed on a greater degree of government involvement in power sector regulation.16