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

enefit the customer by guarding against sharp increases in the cost of fuel paid in any givenperiod they also encourage GRENLEC to be concerned about efficiency (GRENLEC, 2008).In 2005, as the cost of electricity soared to an all time high after the devastation of HurricaneIvan, a local Grenadian family founded Grenada Solar Power Ltd (GRENSOL) through privatefinancing. After the early success of three pilot projects, the company succeeded in encouragingGRENLEC to expand its interconnection policy. Since 2007 there has been 1:1 net metering atretail rates for systems less than 10 kW (Hosten, 2009). GRENSOL was also successful insecuring a 5% duty and 5% handling waivers after negotiations with the government to reducethe cost of importing materials (Burkhardt, 2008).GRENSOL systems in fact tend to perform very well given the solar regime in the EasternCaribbean. The total 25 grid tied systems now installed across the island equate over 120 KW(GRENLEC, 2009). This modest market penetration has come despite the struggle for supportthat GRENSOL has faced since the beginning of its operation in Grenada. Not only has therebeen a lack of financial support from the government in the promotion of resource diversity, butthe net metering policy that has been developed by the utility company GRENLEC is limited,capping potential access to larger customers on island. As can be seen from the cost analysisperformed below, technologies such as photovoltaics are not yet cost competitive whencompared to the avoided cost of current electricity production in Grenada. Furthermore therenewed Electricity Supply Act of 1994 extended GRENLEC’s exclusive rights to generate,transmit, distribute and sell electricity the years 2073. There is thus little impetus for GRENLEC,a foreign and privately owned company, to divest sales by introducing third party generators(GRENLEC, 2007).This situation is exacerbated by the fact that there is no overarching body that governsGRENLEC (Weisser, 2004(b)). Only since late 2003 have the Ministry of Agriculture, Land,Forestry, Fisheries, Public Utilities and Energy as well as the Marketing and National ImportingBoard taken official responsibility for the energy sector. This makes Grenada one of the fewcountries in the Eastern Caribbean with a specialized energy desk within the government (Loy &Farrell, 2005). The Government has since approved a National Energy Policy (Government ofGrenada, 2011) and in collaboration with other government ministries and the United Nationsalso published ‘A Road Map on Building A Green Economy for Sustainable Development inCarriacou and Petite Martinique’ in May 2012 (UNDESA, 2012). Since 2009 the Grenadiangovernment along with the other Eastern Caribbean States - Dominica, St. Lucia and St. Vincentand the Grenadines – has been planning a regional regulatory authority that oversees the servicesof energy providers within the sub region. These states, together known as the OECS, aremoving closer to the formulation of a regulatory authority, known as the Eastern CaribbeanEnergy Regulatory Authority, to oversee the services of energy providers within the sub-region.4