Caribbean Sustainable Energy Roadmap (C-SERMS), Phase 1 Summary and Recommendations for Policymakers

Transcription

1 Caribbean Sustainable Energy Roadmap (C-SERMS), Phase 1 Summary and Recommendations for Policymakers Katie Auth Mark Konold Evan Musolino Alexander Ochs Working Draft as of June 2013

2 Executive Summary The Caribbean region currently stands at a crossroads, faced with several critical challenges associated with the generation, distribution, and use of energy. Despite tremendous renewable energy resources, the region remains disproportionately dependent on imported fossil fuels, which exposes it to volatile and rising oil prices, limits economic development, degrades local natural resources, and fails to establish a precedent for global action to mitigate the long-term consequences of climate change, which pose a particularly acute threat to small-island states and low-lying coastal nations. The Caribbean Community (CARICOM) is poised to play a crucial role in the regional transition to sustainable energy. CARICOM represents 15 diverse member states: Antigua and Barbuda, The Bahamas, Barbados, Belize, Dominica, Grenada, Guyana, Haiti, Jamaica, Montserrat, St. Kitts and Nevis, St. Lucia, St. Vincent and the Grenadines, Suriname, and Trinidad and Tobago. Although the geography, culture, and economic structures of these states vary widely, they face many common energy challenges and opportunities. Recognizing the need to develop a coordinated regional approach to expedite the increased use of renewable energy and energy efficiency and chart a new, climate-compatible development path that harnesses indigenous renewable energy resources, maximizes energy use, minimizes environmental damage, and spurs economic growth and innovation, CARICOM adopted its regional Energy Policy in 2013 after a decade in development. To facilitate the process of translating intentions into action, the CARICOM Secretariat commissioned the first phase of the Caribbean Sustainable Energy Roadmap and Strategy (C-SERMS), designed to build on existing regional efforts and to provide CARICOM member states with a coherent strategy for transitioning to sustainable energy. In this C-SERMS Phase 1 Summary and Recommendations for Policymakers report, the Worldwatch Institute provides an overview of the region s current energy situation, recommends regional targets for renewable power capacity, energy efficiency, and carbon emissions reductions in the short-term (2017), medium-term (2022), and long-term (2027), and outlines key strategies for achieving those goals. A more detailed baseline assessment can be found in the corresponding Baseline Assessment and Report prepared by Worldwatch. This report explores the options for energy reform across a wide range of sectors, nearly all of which face significant energy challenges: In the power sector, current generation relies heavily on dirty and expensive fuels, and is often insufficient to meet the needs of local populations. These challenges are often accentuated by isolated grid networks, high technical and non-technical losses, small overall generation capacity, outdated equipment, and a lack of financial resources to make needed advancements. Transportation accounts for a significant share of total energy consumption in nearly all member states, while energy production, manufacturing, and extractive industries account for a majority of energy consumption in certain member states. The tourism sector presents unique opportunities for rapid and significant impact because of its high energy consumption and enormous economic importance regionally. Fortunately, extremely strong potential for utilizing domestic renewable resources exists across the region. Initial technical assessments indicate enormous opportunities for sustainable energy solutions 1

3 based on energy efficiency improvements and the development of both baseload and variable renewable resources including geothermal, hydropower, modern biomass, solar, and wind. Current grid and storage infrastructure, however, is generally insufficient to support such developments on a large scale. Although still relatively marginal in terms of their overall contribution to the region s energy mix, renewable energy technologies are already playing an increasingly significant role throughout CARICOM. Harnessing observed potential will require that a number of key technical assessment gaps be filled. Detailed energy efficiency, renewable energy, and grid and storage assessments are still lacking in many areas across the region and, in cases where these have been conducted, they are often not communicated or are not made publicly available. Despite the strong potential for energy efficiency and renewable energy observed in all CARICOM member states, the development of sustainable energy systems will not occur organically. The successful expansion of sustainable energy depends largely on the presence of a long-term vision, the effectiveness of existing policy and regulatory structures, and the surrounding governance and administrative framework. To date, all 15 member states have adopted a national energy policy or have a document in advanced stages of development. National policymakers across the region have set domestic targets to promote renewable energy use. Many member states have already taken the lead in developing and implementing domestic policy mechanisms to support an increase in renewable energy and energy efficiency. At the regional level, policymakers have jointly established net-billing as the appropriate minimum standard for policy support across CARICOM. Despite these important initial steps, sustainable energy development across the region continues to be limited by policy and data gaps, administrative ineffectiveness, and often inefficient and uncoordinated implementation efforts. Regional collaboration among member states could transform the CARICOM energy sector. Based on an initial assessment of renewable resource potentials, existing energy policy frameworks, and international best practices, Worldwatch has developed and recommended regional sustainable energy targets for renewable power capacity, energy efficiency, and reductions in carbon dioxide (CO 2 ) emissions in the short, medium, and long terms. In this report, Worldwatch recommends targets of 20 percent renewable power capacity by 2017, 28 percent by 2022, and 47 percent by 2027; a 33 percent reduction in energy intensity by 2027; and power sector CO 2 emission reductions of 18 percent by 2017, 32 percent by 2022, and 36 percent by These ambitious targets, many of which were adopted at the 41st Special Meeting of the Commission on Trade and Economic Development (COTED) on Energy, unite the region under a common vision and establish CARICOM as a global leader in renewable energy promotion. Through regional collaboration, CARICOM s 15 member states have a tremendous opportunity to maximize their individual resources and spearhead renewable energy development by working together toward common and coherent goals. The CARICOM Energy Policy and the C-SERMS project are both critical steps toward a more cohesive approach to regional energy planning. Many obstacles remain, however, that must be overcome through the promotion of priority projects, policies, and initiatives at the regional and national level. This study identifies and categorizes key initiatives that, if undertaken, will mitigate the unique information, finance, policy, and capacity barriers faced by the region and foster the development and deployment of renewable energy and energy efficiency across CARICOM. In addition to the full slate of high-impact activities, Worldwatch recommends three immediate next steps in translating regional commitments into sustained actions, facilitating CARICOM s sustainable energy transition. 2

4 Full transformation of the CARICOM energy sector will be a long-term process requiring extensive commitment and dedicated collaboration among all member states and relevant regional and international actors. The regional approach outlined by C-SERMS will ensure that member states are supported by a network of actors and institutions united under a common vision. With continued commitment to transforming the regional energy sector, CARICOM and its 15 member states can become global leaders in sustainable energy development. 3

5 Caribbean Sustainable Energy Roadmap and Strategy Phase 1 (C-SERMS-I) Summary and Recommendations for Policymakers Recognizing the need to develop a coordinated approach to addressing regional energy challenges, the Caribbean Community (CARICOM) began developing its Energy Policy in Approved in 2013, the document promotes a shift to sustainable energy through increased use of renewable energy sources and improvements in energy efficiency. In 2009, the Secretariat commissioned the Caribbean Sustainable Energy Roadmap and Strategy (C- SERMS), designed to build on existing regional efforts and to provide CARICOM member states with joint regional sustainable energy targets and a common, coherent strategy for transitioning to sustainable energy systems. The C-SERMS-I Baseline Report and Assessment provides an overview of the regional energy situation, identifies critical information and data gaps, and recommends short- (2017), medium- (2022), and long-term (2027) targets for renewable energy share, energy efficiency improvements, and carbon dioxide emissions reductions in the power sector. This C-SERMS-I Summary and Recommendations for Policymakers summarizes the major findings of the Baseline Report and Assessment and recommends a strategic series of priority actions that CARICOM and its member states can undertake to achieve their goals. The Need for C-SERMS The Caribbean region currently stands at a crossroads, faced with several critical challenges associated with the generation, distribution, and use of energy. (See Figure 1.) Disproportionate dependence on imported fossil fuels exposes many Caribbean countries to volatile and rising oil prices, limits economic development, degrades local natural resources, and fails to establish a precedent for global action to mitigate the long-term consequences of climate change, which pose a particularly acute threat to smallisland states and low-lying coastal nations. In the power sector, these challenges are often accentuated by high electricity tariffs, isolated grid networks, small overall generation capacity, outdated equipment, and a lack of financial resources. Technical Isolated grid networks Small overall generation capacity Inability to meet existing and future demand Outdated equipment Low efficiency Socioeconomic High electricity tariffs Vulnerability to rising, volatile fuel prices Missed opportunities for domestic investment and jobs Energy poverty Environmental Local air, freshwater and ocean pollution Deforestation Degradation and depletion of natural habitats, ecosystems and resources Global climate change Worldwatch Figure 1 Key energy challenges in the Caribbean 4

6 Fortunately, the region has enormous opportunities for sustainable energy solutions based on energy efficiency improvements; the development of renewable resources such as biomass, geothermal, hydropower, solar, waste-to-energy, and wind; and intelligent grid development. The Caribbean Community (CARICOM) Secretariat is poised to play a crucial role in the regional sustainable energy transition. CARICOM represents 15 diverse member states: Antigua and Barbuda, The Bahamas, Barbados, Belize, Dominica, Grenada, Guyana, Haiti, Jamaica, Montserrat, St. Kitts and Nevis, St. Lucia, St. Vincent and the Grenadines, Suriname, and Trinidad and Tobago. (See Figure 2.) Although these states vary widely in terms of geography, culture, socioeconomic structure, and other important features, many among them face similar energy challenges. Figure 2 CARICOM member states CARICOM member states share an interest in charting a new, climate-compatible development path that harnesses indigenous renewable energy resources, improves energy savings and efficiency, mitigates global climate change, and spurs economic growth and innovation. A Regional Approach to Energy in the Caribbean The passage of the CARICOM Energy Policy in 2013 demonstrates the region s understanding that a coordinated approach to addressing regional energy challenges offers significant advantages. While individual CARICOM member states can have a significant impact on expanding the efficient use of energy and renewable energy technologies, a more cohesive and coordinated regional approach will facilitate a broader, more durable transition and help achieve sustainable energy goals most cost effectively. (See Figure 3.) 5

7 Draw on a common vision and shared goals Share best practices, experience, and expertise Leverage combined economic resources and complementary renewable energy resources Take advantage of cost-effective energy supply options by creating a regional energy market Bundle projects to attract finance Build regional supply chains Worldwatch Figure 3 Advantages of a regional approach to energy in the Caribbean C-SERMS I Methodology Based on a preliminary assessment of current energy systems, renewable resource and energy efficiency potentials, and existing energy policy frameworks, the C-SERMS Phase I Baseline Report and Assessment recommends short-, medium-, and long-term sustainable energy targets for renewable power generation, energy efficiency, and reductions in carbon dioxide (CO 2 ) emissions, and conducts gap analysis across a number of energy sectors. (See Figure 4.) This Summary and Recommendations for Policymakers report summarizes the key findings of that analysis, and draws on a combination of regional and international best practices to outline key elements of a strategic plan for CARICOM to reach its goals. 6

8 Worldwatch Current Energy System Analysis Figure 4 C-SERMS I methodology In general, CARICOM member states exhibit heavy and in many cases, nearly exclusive reliance on fossil fuels (mainly residual and distillate fuel oils as a result of the widespread use of diesel generators). Because few CARICOM member states have any significant domestic fossil fuel resources, regional reliance on fuel imports is extremely high. The one big exception is Trinidad and Tobago, where energy production is a major cornerstone of the economy, accounting for 44 percent of nominal GDP and 58 percent of government revenue in i Despite oil s regional predominance, natural gas also plays a significant role in regional energy production and consumption. Trinidad and Tobago transitioned its hydrocarbon sector from oil to i Trinidad and Tobago produces energy at levels far above those seen in other CARICOM states, accounting for roughly 96 percent of regional primary energy production in It also consumes much more than the other member states, accounting for 75 percent of all primary energy consumed within the region in

9 Total Primary Energy (Quadrillion Btu) primarily natural gas in the early 1990s; by 2011, the country s natural gas output was approximately eight times higher than its oil production. 1 Trinidad and Tobago is solely responsible for the region s primary energy production outweighing consumption, as the other 14 member states cumulatively consume more primary energy than is produced. 2 (See Figure 5.) CARICOM Production CARICOM Production without T&T CARICOM Consumption CARICOM Consumption without T&T Figure 5 Primary energy production and consumption in the CARICOM region, With the exception of domestic use, however, natural gas from Trinidad and Tobago is primarily exported for sale in markets outside of CARICOM. The current scale of LNG shipping infrastructure, coupled with certain economic challenges, has proven prohibitive for CARICOM s small-island states in developing liquefied natural gas (LNG) import infrastructure, and Trinidad and Tobago currently exports significant quantities of natural gas to major consumers in other parts of the world. Nevertheless, some member states continue to consider the option of LNG particularly in light of advances in infrastructure technology. Outside of Trinidad and Tobago, Barbados has developed an extensive domestic natural gas network connecting 16,575 residential and 640 commercial customers. 3 Jamaica is considering natural gas for the planned expansion of its generation system, with 360 megawatts (MW) of natural gas-fired combined-cycle capacity scheduled to come online by Certain key developments could dramatically improve the sustainability and independence of the Caribbean energy sector in coming years, as outlined in Figure 6. 8

10 Geothermal energy development Improved energy efficiency Expanded use of distributed renewables Regional electricity interconnection Increased deployment of mainstream renewable energy technologies Future Sustainable Energy System in the Caribbean Eventual use of nascent renewable energy technologies Worldwatch Figure 6 Potential future game changers in the Caribbean energy system Electricity Sector CARICOM member states face a number of common challenges in the electricity sector, from high fuel costs and isolated grids to the lack of effective regulations and incentives to promote renewable generation. (See Figure 7.) Capacity additions needed Small market size High fuel costs Isolated grids High technical and nontechnical losses Tenuous financial viability of some utilities Lack of effective regulations and incentives to promote renewable generation and efficient use Worldwatch Figure 7 Major challenges in the electricity sector 9

11 In the absence of policies and measures designed to increase energy conservation and efficiency, electricity demand is expected to grow dramatically over the coming years, necessitating the expansion of generation capacity in all 15 CARICOM member states. 4 (See Figure 8.) Antigua and Barbuda The Bahamas Barbados Belize Existing Capacity 2027 Projected Capacity Needs Dominica Grenada Guyana Haiti Jamaica Montserrat St. Kitts & Nevis St. Lucia St. Vincent & the Grenadines Suriname Trinidad & Tobago Installed Capacity (MW) Figure 8 Existing capacity and projected capacity needs in 2027, business-as-usual scenario notwithstanding future efficiency and saving policies and measures (See Annex A in C-SERMS Phase 1 Baseline Report and Assessment) Although most CARICOM member states have high rates of electricity access, expanding electricity access remains a priority in several countries including Belize, Guyana, Suriname, and particularly Haiti, where only 25 percent of the population has access to power. Given the overall size of Haiti s population (nearly 10 million people), only approximately half of CARICOM s nearly 17 million people have electricity access. The various institutional and market structures in the region s electricity sector, including where independent power producers (IPPs) are allowed to operate, are discussed in later sections. Transportation Sector Although it varies widely throughout the region, the transportation sector s share of total energy consumption in most member states significantly exceeds the global average. Despite the sector s importance for energy consumption in CARICOM, transportation is currently the energy sector for which the least information is available. 10

12 The impacts and potential solutions for disproportionate transportation energy consumption in the Caribbean are often overlooked because of the sector s complexity and the lack of reliable data. In addition to significant fuel requirements and greenhouse gas emissions, fossil fuel combustion for transportation energy has substantial negative effects on local pollution, noise, congestion, health, and safety. 5 The costs associated with existing transportation systems impact the overall cost of goods and services in the region and have been recognized as one of the most important barrier[s] to development for small islands, highlighting the importance of shifting to more efficient transportation systems. 6 Due to the cross-border nature of certain modes of transportation, namely aviation and maritime, filling data gaps and transforming the sector will require a concerted effort at both the regional and national levels. Technological advancements in the transportation sector have increased the feasibility of a number of options for fuel switching and fuel replacement, including the introduction of hybrid and electric vehicles as well as the increased use of liquid biofuels. The small size of many CARICOM member states is well suited to the mile ( kilometer) range of currently available electric vehicles. Although biofuel production is generally not seen as an appropriate solution in smaller island states, the development of a regional biofuels market would present an opportunity to maximize the strong bioenergy potential found in mainland CARICOM member states and select islands that could be harnessed for the production and distribution of liquid biofuels region-wide. Furthermore, CARICOM member states have a tremendous opportunity to reform the transportation sector by introducing currently underutilized public transportation measures, thereby limiting the need for personal vehicle use across the region. Carbon Dioxide Emissions Although CARICOM accounts for only a very small share of global carbon dioxide emissions (0.24 percent in 2010), 7 preliminary analysis of energy-related emissions indicates significant opportunities for reductions. A concerted effort on the part of all 15 member states will provide CARICOM with the authority to serve as a leading voice and set a strong precedent for mitigation action at the global level. Trinidad and Tobago has by far the highest overall CO 2 emissions from energy consumption within the region, and its emissions have increased significantly over the past decade. This stands in marked contrast to the other 14 member states, where emissions per capita are generally low compared to global figures. However, there is still a great deal of room for improvement. Unfortunately, without updated emissions accounting it is difficult to fully assess the extent and impacts of sectoral emissions across the region. The power sector has an extensive carbon footprint, both worldwide and in CARICOM. In a business-asusual scenario based on the region s existing generation mix, power sector CO 2 emissions within CARICOM member states are expected to increase significantly between 2012 and 2027, reflecting capacity additions and increased generation. 8 (See Figure 9.) 11

13 Projected Emissions (million tonnes CO2e per year) Figure 9 Projected business-as-usual power sector greenhouse gas emissions in CARICOM (See Annex A in C-SERMS Phase 1 Baseline Report and Assessment) Gap Analysis: Electricity, Transportation, and Carbon Dioxide Emissions Several critical data and information gaps exist in the Caribbean. While information is most readily available for the electricity sector, detailed energy data in this and other sectors particularly transportation is severely lacking. This impedes analysis and strategic planning. While some degree of clarity can be obtained with respect to energy production and consumption as well as specific fuel usage across the region, current data limitations make it extremely challenging to assess energy end-use in CARICOM. (See Table 1.) Without this information, an accurate breakdown of sectoral energy use cannot be developed. Additionally, assessing the economic effects of the region s energy system is hindered by lack of available data on value and volume of fossil fuel imports. Table 1. Gap analysis: electricity, transportation, and carbon dioxide emissions Electricity Transportation Identified Gap Thorough analysis of electricity end-users Data often not collected or reported Detailed data on fuel import costs Data lacking on economic impact of current energy matrix Assessment of grid functionality and storage potentials Information lacking on the extent to which existing electricity networks must be updated Detailed data on power plants in operation Readily available information lacking on the current status and operation of existing plants Updated power sector capacity plans Available information often out of date; existing plans may change without public notification Coordinated data collection and analysis of transportation Data often disorganized or uncollected Updated sector plans and strategies Available information often out of date 12

14 Carbon Dioxide Emissions Updated emissions reduction plans and strategies Available information often out of date Updated greenhouse gas inventories Information provided to UNFCCC often out of date Sectoral emissions data Collected data lacking specificity required for effective policy design Worldwatch Renewable Energy and Energy Efficiency Potential To enable integrated energy planning, the potential for changes in the energy sector must be measured and assessed. For CARICOM and its member states, this necessitates a more thorough understanding of the current experience with and potential for renewable energy, energy efficiency, and grid and storage solutions. (See Figure 10.) Renewable Energy Integrated Energy Planning Technical Assessment Needs Grid and Storage Solutions Energy Efficiency Worldwatch Figure 10 Technical assessments needed for integrated energy planning Renewable Energy Existing renewable energy assessments demonstrate significant potential for development and deployment of renewables in the CARICOM region, including biomass, geothermal, hydropower, ocean energy, solar, and wind. These existing assessments, although often reliant on different methodologies and levels of detail, provide a general overview of the available renewable energy resources in each member state. Most technologies are already being used throughout the region, although far from their full potential. To facilitate greater deployment, original assessments should be completed where gaps are identified, and additional, more detailed, assessments should be completed for member states and resources demonstrating the greatest potential. 9 (See Table 2.) 13

15 Table 2 Documented renewable resource potential in CARICOM member states as share of current peak demand Antigua and Barbuda The Bahamas Hydro Wind Geothermal Solar Biomass/ Other Barbados Belize ** * * Dominica Grenada Guyana Haiti Jamaica Montserrat * St. Kitts and Nevis St. Lucia St. Vincent and the Grenadines Suriname * Trinidad and Tobago Key: Extremely High (>100%) High (50-100%) Medium (20-50%) Low (0-20%) None Unknown Worldwatch (*) denotes estimated potential based on limited available assessments and personal communication with regional experts, must be confirmed. (**) denotes potential deemed developable in limited assessments, must be confirmed. Geothermal: Many CARICOM member states, particularly the islands making up the volcanic arc of the Lesser Antilles, have significant untapped geothermal resources. Development of this resource in member states such as Dominica, Grenada, Montserrat, St. Kitts and Nevis, St. Lucia, and St. Vincent and the Grenadines could dramatically alter the energy balance of these islands and the region as a whole if regional grid interconnections are developed to enable renewable energy exports, thereby significantly increasing the region s overall renewable share. Currently, no CARICOM state has developed geothermal power, although exploratory drilling and preliminary investigations are under way in several places. Hydropower: Large hydropower comprises the majority of renewable power generation within CARICOM. Development of large-scale hydropower facilities such as the 165 MW Amalia Falls project in Guyana stands to play a significant role in the changing energy mix. 10 Like geothermal, hydropower presents opportunities to broaden and interconnect regional energy markets, particularly in mainland member states like Guyana and Suriname. Small hydro plants, typically classified as generating less than 10 MW of electricity, have significant ecological and often human rights advantages, but development 14

16 feasibility (especially for run-of-the-river systems) requires specific site characteristics that preclude its use in several small-island CARICOM member states. Elsewhere, the potential for small, sustainable hydro deployment is enormous, particularly for providing electricity access to remote, currently underserviced populations, e.g., in the mainland countries as well as Haiti. Modern biomass (including bagasse and biogas): Belize is a regional leader in the use of bioenergy as a baseload energy source. Many CARICOM member states, particularly those on the mainland and the larger island states, have good biomass potential. Waste-to-energy technologies have drawn some attention throughout the region, although their viability is restricted in those states with limited waste collection capacity or comparatively small populations, as these do not generate the volumes of waste necessary to make waste-to-energy plants economically viable. In Haiti, the identified potential for waste-to-energy technologies has so far been constrained by infrastructural challenges and a lack of waste collection capacity. Ocean energy: Energy technologies including wave and tidal and ocean thermal energy conversion (OTEC) have been identified as a priority area under the Small Island Developing States (SIDS) Sustainable Energy Initiative (SIDS DOCK), ii as they offer significant potential throughout the region, presenting opportunities including power generation and the use of deep-sea cooling in the tourism sector. Marine energy technologies remain in the development phase, however, and still have prohibitively high costs that limit their deployment in the short-term. 11 CARICOM member states are currently taking steps to advance pilot projects for OTEC, although the technology s long-term potential in the region is restricted by factors including uncertain technology development and project scale. Solar: All CARICOM member states possess strong solar energy potential and opportunities to use various solar technologies for power generation, heating, and cooling making solar technology a crucial, but yet mostly unused, regional sustainable energy solution. The high component costs that have traditionally plagued solar technologies have declined significantly in recent years, with solar PV module costs falling nearly 50 percent in 2011 alone, making solar cost-competitive with fossil fuels under certain conditions. 12 Several CARICOM states have already demonstrated enormous success using solar water heating (with Barbados being a global leader in this technology) and solar photovoltaic (PV) energy. Wind: There is also strong regional potential for wind power development. Many experts consider wind the most viable renewable energy technology for rapid expansion in the region over the next two decades. 13 Currently, however, few CARICOM member states have developed utility-scale wind infrastructure, aside from Jamaica, which now has over 40 MW of installed wind capacity, and St. Kitts and Nevis, which has 2 MW installed. Many renewable energy technologies can be employed at relatively low costs compared to current electricity generation in the region. Figure 11 provides a comparison of the global range of generating costs for various renewable technologies (blue bars) with the range of residential electricity tariffs in CARICOM (lines at 4.5 and 38.2 US cents/kwh). 14 It also notes current residential energy prices in CARICOM member states that demonstrate strong potential for a given renewable energy source. ii SIDS DOCK is a sustainable energy initiative comprising member countries of the Alliance of Small Island States (AOSIS) with a focus on achieving sustainable economic development through transformational change in the energy sector. 15

17 45 40 Montserrat Antigua & Barbuda Typical Energy Cost (US cents/kwh) Belize Dominica St. Lucia Guyana St. Vincent & the Grenadines Jamaica The Bahamas 5 Suriname 0 Figure 11 Global power generation cost ranges by technology, compared to the range of electricity tariffs in CARICOM as well as specific tariffs in member states that demonstrate particularly good potential for a given resource. Note: Figure depicts the global range of generation costs for a number of renewable energy technologies, places them within the range of CARICOM electricity tariffs ( U.S. cents/kwh, and provides example tariffs in select countries with strong potential for that particular resource. Although global generating costs and region-specific residential electricity tariffs are not directly comparable, they do indicate on a basic level the cost effectiveness of renewable energy technologies, especially in the context of a region with notoriously high electricity prices. Energy Efficiency In tandem with renewable energy technologies, energy efficiency and energy conservation measures can be deployed across all economic sectors to reduce energy demand, and are often both the cheapest and fastest way to lessen the economic, social, and environmental costs of energy. iii Energy efficiency is crucial because of its compounding effects: when a user demands one less unit of energy because of efficiency measures, the system typically saves much more than one unit of produced energy because of avoided losses during generation, transmission, and distribution. Especially in countries like Haiti, where technical and non-technical losses are relatively high, end-user efficiency savings can translate into much greater savings in generation. iii While energy efficiency, which results in the use of less energy to perform the same task, and energy conservation measures, which look to reduce overall energy use, differ, for the purposes of this analysis energy efficiency is used to describe both sets of energy reduction solutions. 16

18 As a result, efficiency improvements can amplify the benefits of developing utility-scale renewable energy by increasing the impact of added renewable power capacity. As compared to centralized utilityscale power, distributed renewables are often more efficient because they minimize the transmission losses associated with moving power over long distances. Opportunities for efficiency measures at the building and household level should be harnessed for energy and cost savings. Buildings themselves can be made significantly more efficient through proper insulation, white roofing, and smart architecture/landscaping. In-home products such as household appliances continue to consume comparatively large volumes of electricity, with their inefficiency exacerbated in the Caribbean by the prevalence of outdated equipment and a lack of strong efficiency standards for new appliances. As regional economic development increases, the corresponding growth in energy demand from these types of appliances and other household products, such as air conditioning systems, will need to be managed through efficiency standards. Economic sectors that should be targeted for energy efficiency measures and technologies are those that: 1) account for a large share of a member state s energy consumption; 2) are highly energy intensive or inefficient; or 3) are priority components central to the national economy. Across the CARICOM region, such sectors include: electricity generation, electricity transmission, hotels and tourism, mining, the residential sector, and government. Energy efficiency in the transportation sector must also be addressed through specifically targeted measures that differ from those that can be deployed in other sectors. Grid and Storage Grid and storage solutions have strong potential to transform CARICOM s existing energy sector. Across the region, existing grid infrastructure is largely out of date and often insufficient to meet the population s current and growing energy needs. This is evidenced by the region s high technical losses and, in select member states, a lack of reliable electricity access. Without further development, existing grid networks will be unable to successfully address the technical challenges associated with the increased share of renewable energy envisioned by CARICOM and its member states. New grid infrastructure will be necessary to manage variability and to integrate complementary renewable energy sources into transmission and distribution networks to supply reliable power. Smart grid advancements have the potential to manage demand by shifting loads to off-peak hours and better utilizing domestic renewable energy resources. At the household level, the deployment of smart meters, combined with appropriate policy mechanisms, would allow customers to generate their own renewable power and sell excess electricity back to the grid. Electricity storage has the potential to play an increasingly important role as greater shares of variable renewables are integrated into grid networks. Storage solutions are currently being assessed in a number of member states including Antigua and Barbuda, where policymakers are looking into pumped storage hydropower as a component of wind development. The development of inter-country infrastructure enabling some degree of electrical integration and/or regional energy trade could be a potential game changer for CARICOM s power sector. Already, some CARICOM member states use submarine interconnection cables to link individual islands, and a number of preliminary studies have been conducted that together confirm the feasibility and assess the implications of electricity interconnection in various parts of the Caribbean. 17

19 Technical Assessment Gap The completion and communication of technical assessments for renewable energy, energy efficiency, and grid and storage solutions is the backbone of integrated energy planning. Unfortunately, throughout CARICOM this is often lacking. Even in areas where the necessary assessments have been completed, the results are often not communicated and the assessments themselves are unavailable. To facilitate project development, Table 3 provides a list of identified gaps and the challenges they present. Specific recommendations to fill these gaps are addressed in later sections. Table 3 Technical assessment gap Renewable Energy and Energy Efficiency Grid and Storage Identified Gaps Lack of widespread calculation, understanding, and communication of renewable energy s cost effectiveness (continuing perception of renewable energy as prohibitively expensive) Unavailability of renewable energy assessments and technology feasibility studies (data often not disseminated for project development) Higher-resolution assessments for priority geographic locations not conducted and/or communicated (in member states without existing detailed resource assessments, research should focus on priority areas near greatest potential and demand) Analysis of opportunities for resource complementarity in integrated energy planning not conducted and/or communicated (individual assessments usually assess one renewable resource in isolation, missing critical opportunities for complementarity) Energy audits not conducted and/or communicated (limited data on the energy efficiency of sectors, businesses, etc.) Assessment of grid functionality and storage potentials not conducted and/or communicated (information lacking on the extent to which existing electricity networks must be updated) Worldwatch Existing Energy Policy Framework Despite the strong potential for energy efficiency and renewable energy observed in all CARICOM member states, the development of sustainable energy systems will not occur organically, at least not to the extent or at the pace needed to rapidly harness their full socioeconomic and environmental benefits. Regional and national governing bodies must be proactive in implementing policy frameworks that promote the investments needed to encourage energy efficiency improvements and allow renewable energy projects to take hold. No single policy mechanism can successfully transform a nation s entire energy sector. Instead, policymakers must design and implement an appropriate policy mix that matches unique domestic conditions. International experience shows that countries that have successfully promoted renewable energy and energy efficiency score high on three essential building blocks: 1) a long-term vision that includes goals and targets; 2) concrete policies and measures to achieve these goals and targets; and 3) 18

20 effective administrative processes and governance structures for implementing and revising these mechanisms. iv (See Figure 12.) Long-term vision Concrete policies and mechanisms Successful Promotion of Sustainable Energy Effective governance structures and administrative processes Worldwatch Long-term Sustainable Energy Vision Figure 12 Components of successful sustainable energy promotion Establishing an official long-term vision for sustainable energy development that lays out clear goals and priorities and commits all government stakeholders to a common and cohesive strategic agenda represents a crucial component of effective sustainable energy planning. CARICOM has taken a significant step forward by finalizing its Energy Policy. In addition to this regional vision, all 15 CARICOM member states now have a national energy policy in place or in some stage of development, a significant improvement from when development of the CARICOM Energy Policy began a decade ago. 15 (See Table 4.) Table 4 Existing national energy plans in CARICOM member states National Energy Policy Name of Policy Document Antigua and Barbuda In Draft (Feb. 2012) Final National Energy Policy Bahamas Proposed (Sep. 2010) Second Report of the National Energy Policy Committee Barbados Submitted (Dec. 2006) Proposed (June 2010) The National Energy Policy of Barbados Sustainable Energy Framework for Barbados Belize In Draft (Nov. 2011) Submitted (Sep. 2012) Draft National Energy Policy Framework MESTPU Strategic Plan iv For more information on these three essential components of sustainable energy planning, see the Worldwatch Institute s work on Sustainable Energy Roadmaps, in Alexander Ochs and Shakuntala Makhijani, Sustainable Energy Roadmaps: Guiding the Global Shift to Domestic Renewables (Washington, DC: Worldwatch Institute, 2012). 19

21 Dominica In Draft (Dec. 2011) Draft Sustainable Energy Plan of the Commonwealth of Dominica Grenada Approved (June 2011) The National Energy Policy of Grenada Guyana Approved (May 2010) National Low Carbon Development Strategy Haiti In Draft (Feb. 2011) National Energy Sector Development Plan Jamaica Approved (Oct. 2009) Jamaica s National Energy Policy Montserrat Approved (Sep. 2008) Montserrat Energy Policy, St. Kitts and Nevis In Draft (Apr. 2011) Draft National Energy Policy St. Lucia Approved (Jan. 2010) Saint Lucia National Energy Policy St. Vincent and the Grenadines Approved (Mar. 2009) The Government s National Energy Policy Suriname Submitted (Nov. 2010) Renewable Energy Policy of Suriname Trinidad and Tobago In Draft (Jan. 2011) Framework for Development of a Renewable Energy Policy for Trinidad and Tobago Worldwatch Most CARICOM member states have already set domestic sustainable energy targets across a number of sectors. 16 (See Table 5.) Table 5 Existing renewable energy, energy efficiency, and emissions reduction targets in CARICOM member states Renewable Energy Supply Electricity from Renewables Renewable Energy in the Transport Sector Energy Efficiency Emissions Reductions Governance and Administration Antigua and Barbuda The Bahamas Barbados Belize Dominica Grenada Guyana Haiti Jamaica Montserrat St. Lucia St. Kitts and Nevis St. Vincent and the Grenadines Suriname Trinidad and Tobago Key: In Place In development Suggested Worldwatch Governance and administrative structures can be either important enablers to the increased deployment of sustainable energy or critical barriers to its growth. International experience suggests that governance and administrative reforms must play a central role in the development of any nation s energy sector. The CARICOM region is currently characterized by a vast array of agencies and structures 20

22 responsible for various aspects of energy sector governance (see Table 6), and a variety of institutional and governance challenges persist. (See Figure 13.) Overlapping/opposing mandates and priorities among various government agencies and institutions Few CARICOM member states have significant capacity dedicated exclusively to sustainable energy issues Resource constraints (human capacity, small budgets, limited staff, diverse responsibilities) In some member states, continuing dominance of single utility monopolies in the electricity sector Figure 13 Institutional and governance challenges in CARICOM Worldwatch 21

23 Table 6 Institutional and Governance Structure of the Energy Sector in CARICOM Member States Member State Ministry Designated Institution for Renewable Energy Regulator Utility State- Owned Privately Owned IPPs Allowed Antigua and Barbuda Ministry of Public Works and the Environment Energy Desk, Office of the Prime Minister The Bahamas Ministry of the Environment Utilities Regulation and Competition Authority Barbados Ministry of Finance, Economic Affairs, and Energy Renewable Energy and Energy Conservation Unit within the responsible Ministry Fair Trading Commission APUA Bahamas Electricity Corp. and Grand Bahama Power Corp. Barbados Light and Power Belize Ministry of Energy, Science & Technology, and Public Utilities Public Utilities Commission Belize Electricity Ltd. X Dominica Ministry of Public Utilities, Energy, Ports, and Energy Unit within the Independent DOMLEC X X the Public Service responsible Ministry Regulatory Commission Grenada Ministry of Finance, Planning, Economy, Energy & Cooperatives GRENLEC X X Guyana Ministry of Natural Resources and the Guyana Energy Agency Public Utilities Guyana Power X Environment Commission and Light Haiti Ministry of Energy EDH X Jamaica Ministry of Science, Technology, Energy and Centre of Excellence for Office of Utilities JPS X X Mining (MSTEM) Sustainable Energy Developments (CESED) Regulation Montserrat Ministry of Communication, Works and Labor (Energy Development Committee) Montserrat Utilities Ltd. St. Kitts and Nevis St. Lucia Ministry of Public Works, Housing, Energy and Utilities (St. Kitts) \ Ministry of Communications, Utilities, Posts, Planning, Natural Resources and Environment (Nevis) Ministry of Sustainable Development, Energy, Science and Technology Public Utilities Commission SKELEC & NEVLEC Energy Policy Advisory Committee Ministry of Public Utilities LUCELEC X X X Ministry of Energy Energy Unit VINLEC X X St. Vincent and the Grenadines Suriname Ministry of Natural Resources Energy Unit of the Ministry of Natural Resources Trinidad and Tobago Ministry of Energy and Energy Affairs; Ministry of Public Utilities Renewable Energy Committee Regulated Industries Comm. Energie Bedrijven Suriname (EBS) T&TEC X (BEC) X X X X (GBP C) X X X X X Worldwatch

24 Concrete Policies and Measures Once the vision has been established, direct support mechanisms for renewable energy and energy efficiency are necessary to support the development and deployment of these technologies and to meet overarching energy targets. Although such measures have been widely implemented across the region (see Table 7), a significant need for policy evaluation and the development of additional measures remains. 17 Table 7 Renewable energy and energy efficiency support policies in CARICOM member states Renewable Energy Energy Efficiency Transportation Feed-in Tariff Net Metering/ Billing RPS/Quota IPPs Permitted Tax Credits Tax Reduction/ Exemption Public Loans/Grants Green Public Procurement National Energy Efficiency Standards Tax Credits Tax Reduction/ Exemption Public Demonstration Prohibited Use/ Import of Incandescent Bulbs Appliance Labeling Standards Blend Mandate Import Tax Exemption/ Reduction Fuel Efficiency Standards Antigua and Barbuda The Bahamas Barbados Belize Dominica Grenada Guyana Haiti Jamaica Montserrat St. Kitts and Nevis St. Lucia St. Vincent and the Grenadines Suriname Trinidad and Tobago Worldwatch Key: In Place In development Suggested Note: Suggested indicates that the measure has been cited or discussed in some official state capacity (including in an official planning document or in public remarks) but has not yet been implemented. Only self-generation from wind and solar PV is permitted through NEVLEC. Even when a policy exists, its impact depends on its design and the way in which it is implemented. A cohesive regional energy strategy requires an assessment of the effectiveness of existing policy design and implementation across the region. The same applies to existing national energy institutions and governance structures.

25 Policy Gaps Although certain policy measures have been enacted, their ultimate effectiveness depends on factors including design, implementation, and institutional capacity. Analytic information regarding these factors must be developed. (See Table 8.) Table 8 Policy assessment gaps Identified Gap Administration and Governance Policy Mechanisms Regional Targets National-level assessments of institutional effectiveness National-level assessment of policy effectiveness and efficiency (ensuring that policies address the primary obstacles to energy efficiency and renewable energy development) Worldwatch In order to harness renewable energy and energy efficiency potential, appropriately ambitious regional targets need to be set. Worldwide, targets are increasingly being adopted at the national, regional, and international levels. Here, as a primary input to the C-SERMS process, Worldwatch has developed and suggested short-, medium-, and long-term targets for the share of renewable energy in the CARICOM electricity mix, energy efficiency improvements, and carbon dioxide emissions reductions. These targets are designed to provide an ambitious vision for fostering a dramatic increase in renewable energy and energy efficiency across the region and to help establish CARICOM as a global leader in sustainable energy development. Proposed Targets for Share of Renewable Energy in CARICOM s Electricity Mix The regional targets for overall renewable energy electricity share were based on the cumulative documented resource potential in member states. This potential was compared to projected generation capacity needs calculated to 2027 under a business-as-usual scenario. Based on this analysis, CARICOM may set overall goals of 20 percent renewable power capacity by 2017, 28 percent by 2022, and 47 percent by Achieving these regional goals will require targeted actions at the national level supported by regional collaboration. Individual shares of that regional target were then apportioned to specific member states based on a combined analysis of country-specific resource assessments, renewable energy baseload potential, viable additions of intermittent renewable energy resources, and existing national targets. (See Figure 14.) 24

26 Worldwatch Figure 14 CARICOM Target Methodology Table 9 presents the CARICOM Sustainable Energy Targets adopted by CARICOM member states and a preliminary matrix of suggested national targets to meet the regional goals. 18 It is expected, however, that member state-specific targets will be discussed and assessed within CARICOM, and that final national efforts will reflect this internal debate. Country Table 9 Regional and national renewable energy targets Regional CARICOM Sustainable Energy Targets Base Year 2012: Share of renewable energy in electricity generation capacity is 8% Short Term % Medium Term % Long Term % Suggested National Targets Estimated National Renewable Share of Installed Capacity to Meet Regional Target of 48% by 2027 Estimated Renewable Energy Share of Generation in 2027 (based on installed capacity target) Antigua and Barbuda 61% 62% The Bahamas 55% 51% Barbados 67% 55% Belize 76% 85% Dominica 56% 100% Grenada 70% 100% Guyana 84% 90% Haiti 46% 52% 25

27 Jamaica 58% 40% Montserrat 34% 100% St. Kitts and Nevis v St. Kitts: 57%; Nevis: 67% St Kitts: 100%; Nevis: 100% St. Lucia 69% 100% St. Vincent and the Grenadines 59% 81% Suriname 52% 60% Trinidad and Tobago 52% 29% Worldwatch Due to data availability constraints, these CARICOM Sustainable Energy targets and corresponding theoretical national targets were initially calculated as a share of installed power capacity needs in each member state. Using capacity is an imperfect measure. Within the power sector, more detailed resource assessments and power plant performance data would enable development of generationbased targets that could provide additional guidance to CARICOM member states. Based on currently available data, initial modeling has produced estimates for the potential generation share of each theoretical national capacity target. (See Table 9.) Overall, filling significant data gaps with respect to energy statistics in other sectors, most notably transportation, would facilitate regional and national target setting for renewable energy shares of total energy use. Proposed Target for Energy Intensity Improvements in the CARICOM Region Energy efficiency improvements are also crucial to the development of the region s future energy supply, and are often the quickest and most effective way to reduce costs in the energy sector. Energy efficiency improvements should make it possible for CARICOM member states to meet and even exceed renewable energy goals by reducing overall energy consumption below the assumed trajectories used to calculate renewable power targets. Efficiency can be measured using a variety of metrics. Based on international experiences and projections, Worldwatch recommends a target for CARICOM of a 33 percent reduction in energy intensity by Proposed Target for CO 2 Emissions Reductions in the CARICOM Region Although net CO 2 emissions from CARICOM member states remain negligible compared to global figures, demonstrating a concerted regional effort to increase energy services while mitigating harmful emissions will constitute a strong negotiating position and set a precedent for international action. Many small-island states, including Dominica and Grenada in CARICOM, have already set ambitious national goals. Various metrics and methodologies can be used to set emissions reduction targets for CARICOM. Based on initial research in the region and on observed international best practices, Worldwatch recommends short-, medium- and long-term targets for emissions reductions within the power sector against business-as-usual projections. The proposed emissions reduction targets are based on emission projections resulting from the modeled generation mix designed for each member state to meet the adopted regional renewable energy targets. 19 (See Table 10 and Annex A, Baseline Report and Assessment.) Worldwatch further suggests preliminary estimated national commitments required to meet these regional goals by These national recommendations should serve as a preliminary guide for translating regional targets to national action. Each suggested target is subject to change based on more-detailed national assessments and dialogue between member states. v St. Kitts installed capacity and generation figures included imported geothermal power from Nevis. 26

28 Table 10 Regional and national emissions reduction targets Regional CARICOM Targets Horizon Target Year CARICOM Targets (CO 2 emissions reduction in the power sector against business-as-usual) Short Term (5 years) % Medium Term (10 years) % Long Term (15 years) % National Targets Country Estimated CO 2 Emissions Reduction (against business-as-usual in 2027) Antigua and Barbuda 62% Bahamas 53% Barbados 61% Belize 62% Dominica 100% Grenada 100% Guyana 82% Haiti 44% Jamaica 51% Montserrat 100% St. Kitts and Nevis 100% St. Lucia 100% St. Vincent and the Grenadines 78% Suriname 43% Trinidad and Tobago 29% Worldwatch This approach results in bold overall targets that would make CARICOM one of the most ambitious regions worldwide in sustainable energy development, especially in the long term (by 2027). Such targets produce a powerful long-term vision that makes significant renewable energy capacity a central pillar of energy planning and overall development strategy in each member state, and in the region as a whole. Renewable energy technologies often face resistance from those who believe that available renewable resources are inadequate to supply the demands of an entire country. The ability to set such ambitious yet feasible regional targets clearly demonstrates that, given the ample biomass, geothermal, hydro, solar, and wind resources of the Caribbean, renewable energy technologies are capable of providing a significant share of regional power requirements relatively soon. Widespread energy efficiency improvements would make this even more feasible. Roadmap and Strategy Analysis across key sectors reveals critical gaps that must be filled in order for a regional Roadmap and Strategy to be developed beyond the First Phase. (See Figure 15.) 27

29 Electricity Updated power sector generation capacity plans and strategies Detailed data on power plants in operation Analysis of electricity end-users Grid and storage assessments and expansion plans Tranportation Updated tranportation sector plans and strategies Energy statistics in the transportation sector Fuel use Vehicle registration database Emissions Updated emissions reduction plans and strategies Updated greenhouse gas inventories Sectoral emissions data Renewable Energy and Energy Efficiency Potentials LCOE+ (levelized cost of energy, plus externalities) Centralized database for renewable energy assesments Assessments at higher resolutions for priority areas Analysis of opportunities for complementarity Energy audits Policy and Finanace Review of governance and administration effectiveness Review of policy effectiveness Identification of financial barriers to renewable energy within each member state Figure 15 Regional gap analysis Worldwatch Filling these gaps will allow for the formulation and implementation of various strategies toward achieving CARICOM s targets and will require coordinated efforts on both the regional and national levels. (See Figure 16.) On the national level, individual member states must implement domestic policy mechanisms and enact needed reforms to meet their contribution to the regional target. At the same time, CARICOM can play a crucial role in coordinating these national efforts, ensuring that the progress of individual member states is monitored and verified, and providing critical support to member states. 28

30 CARICOM Member States Worldwatch Figure 16 Achieving targets through coordinated regional and national efforts Recommendations for Moving Forward: An Outline for Regional and National Action Based on available data on the region s current energy situation and the identified gaps, a number of targeted strategies could have a significant impact in accelerating the development and deployment of renewable energy and energy efficiency across CARICOM. Here, recommendations have been structured according to four major regional goals: 1. Information: improve the region s energy information network by strengthening existing information systems and building awareness of renewable energy; 2. Finance: identify innovative financing mechanisms for renewable energy projects; 3. Policy: support the implementation of regulatory frameworks that enable renewable energy development; and 4. Capacity: build technical capacity among players in the renewable energy field including project developers, financiers, engineers and technicians, policymakers, and planners. The projects, policies, and initiatives presented across all four categories aim to mitigate some of the most prevalent barriers in the region. (See Table 11.) While each individual action is listed and described independently, in practice many rely on the execution of complementary tasks also enumerated here. Overall, completion of the full slate of potential activities described below would allow CARICOM to meet and likely exceed its regional sustainable energy goals. 29