CARIBBEAN ISLANDS AGREE TO SWAP DIESEL FOR RENEWABLE SOURCES CREATING CLIMATE WEALTH

Transcription

1 24 SPECIAL FOCUS From left to right: Deputy Premier Dr. the Hon. Kedrick D. Pickering, MHA, of the British Virgin Islands; Minister Hon. Rayburn Blackmoore of Dominica; Minister Sen. Hon. Dr. James Fletcher of St Lucia; Prime Minister Hon. Dr. Kenny Anthony of St Lucia; Sir Richard Branson, Founder of Carbon War Room; Prime Minister Right Hon. Dr. Denzil Llewellyn Douglas of St Kitts & Nevis; Ambassador H.E. Dr. Ethelstan Angus Friday of Grenada; Minister Hon. George Lightbourne of the Turks & Caicos Islands; H.E. the Governor Peter Beckingham of the Turks & Caicos Islands; Minister Sen. the Hon. Simon Stiell of Grenada CARIBBEAN ISLANDS AGREE TO SWAP DIESEL FOR RENEWABLE SOURCES CREATING CLIMATE WEALTH

2 TEN ISLAND RENEWABLE CHALLENGE 25 S even Caribbean nations committed to give up fossil fuels in favor of renewable power as part of the Carbon War Room s Ten Island Renewable Challenge. The British Virgin Islands, Colombia, Dominica, St. Kitts & Nevis, St. Lucia, and Turks & Caicos joined Aruba in the campaign with Grenada joining several weeks later. The islands made the commitments at Creating Climate Wealth (CCW) Necker, the recent Summit and workshops where several nations also pledged to undertake individual projects to make schools, hospitals, and components of other sectors more efficient and less reliant on fossil fuels. CCW Necker was held by the Carbon War Room and Rocky Mountain Institute on Sir Richard Branson s private isle, which will serve as a demonstration site for the Ten Island Renewable Challenge. NRG Energy won the contract to develop a renewables-driven micro-grid on Necker Island to satisfy 75% of its energy needs through solar, wind, and battery technologies, Sir Richard and Virgin Limited Edition revealed at the Summit. What we hope to do is use Necker as a test island to show how it can be done, said Sir Richard, who is the founder of the Virgin Group and a co-founder of the Carbon War Room. The only way we re going to win this war is by creative entrepreneurship, to make the price of clean energy cheaper than that of energy from fossil fuels. Ministers, governors, and representatives from 12 countries attended CCW Necker, along with CEOs and executives from more than 30 leading companies and organizations, including Johnson Controls, NRG, Vestas, The World Bank, and the Overseas Private Investment Corporation (OPIC). The various island nations joining the Ten Island Renewable Challenge bring the number of participants to eight, just two shy of the campaign s goal, less than two years after its launch. The Challenge is part of the Carbon War Room s Smart Island Economies operation, which has a mission to move island nations off imported fossil fuels in order to help governments save money and reduce carbon emissions. The Ten Island Renewable Challenge is the Carbon War Room s commitment to working with 10 islands to develop the blueprint for the transition. The Carbon War Room puts its Ten Island Renewable Challenge in high gear as seven more islands commit to country-level and regional projects, bringing the number of participating nations to eight ISSUE 10. SPRING/SUMMER 2014

3 26 SPECIAL FOCUS In addition to seven islands joining the Challenge, CCW Necker ended with a bevy of project-level and regional commitments, far exceeding Carbon War Room s expectations, said Maya Doolub, CWR Operations Manager for Smart Island Economies. Everybody was purposely talking about what they will do, rather than what they should or even what they could do. That s something that resonated from Day 1 to Day 3, Doolub said. It wasn t about fact finding, it wasn t about what s gone wrong in the past. We talked about barriers, but as part of a conclusive pathway to what we could do and what we will do. The individual projects pledged at CCW Necker include energy pilots at four tertiary schools on Antigua, Barbuda, St. Kitts & Nevis, and the US Virgin Islands; sustainability and renewable energy-energy efficiency plans for four hospitals on islands of Colombia, St. Lucia, and St. Vincent & the Grenadines; electric buses on Aruba; and request for proposals (RFP) for solar photovoltaic projects for St. Lucia and the British Virgin Islands. There will also be feasibility studies conducted on taking a hotel in Turks & Caicos to 100% renewable and building a solar farm on Anegada, which is part of the British Virgin Islands. CCW Necker Outcomes At the regional level, multiple islands agreed to codify standardized efficiency playbooks for hotels and hospitals, build the capacity needed to support energy efficiency and renewables, and develop a local ESCO market. To tackle the tricky financing component, a group of development banks and lenders agreed to consider up to $300 million in funding for renewable energy projects originating at CCW Necker. OPIC is committed to supporting strong projects in the renewable energy and energy efficiency sectors on the islands, said Lynn Tabernacki, OPIC s managing director of renewable energy and environmental finance. OPIC supports projects globally, and in fact, last year we committed more than $1.2 billion to projects in the renewable energy sector. Without putting a number on it, OPIC has more than sufficient capacity to consider a large multitude of projects across all (OPIC-eligible) islands. There are several drivers that give the transition to renewable energy a strong business case for island economies, which are small and discrete, and share many of the same challenges and opportunities. Despite a wealth of natural resources, for example, most islands enjoy abundant sunshine and wind that has so far remained untapped as energy sources. We have surveyed six acres of land which is readily available to set up a solar farm. We were told, based on our research, that a five- or six-acre solar farm on Anegada could produce all of its immediate energy needs and still have some left over, said Dr. the Hon. Kedrick D. Pickering, Deputy Premier and Minister for Natural Resources and Labour of the British Virgin Islands. We were also told that 50 acres on Anegada could supply nearly 50 percent of all energy needs of the entire British Virgin Islands. Island nations also pay some of the world s highest prices for electricity, often receiving their energy in the form of imported diesel fuel used to power generators. For example, on average a person in the Caribbean pays a third of their salary to keep the lights on. Reducing dependence on imported diesel would therefore positively impact the GDP of many island economies. But few islands have been able to clear the hurdles that stand in CREATING CLIMATE WEALTH THE CARBON WAR ROOM REALLY BRINGS TO BEAR ITS VAST RANGE OF INTERNATIONAL NETWORKS, ITS TECHNICAL EXPERIENCE, AND LEGAL EXPERTISE TO HELP US SORT THROUGH THIS MAZE OF INVESTORS, MEMORANDUMS OF UNDERSTANDING, AND TECHNOLOGIES. SEN. THE HON. DR. JAMES FLETCHER, MINISTER FOR PUBLIC SERVICE, SUSTAINABLE DEVELOPMENT, ENERGY, SCIENCE AND TECHNOLOGY, ST. LUCIA the way of large-scale renewable energy deployment. One challenge is the governments lack of capacity to analyze proposals for renewable energy projects, or to even calculate which renewables are best suited for individual locales. There is also a poor track record for renewable energy deployment; many projects that would install large-scale generation systems on islands have been tried before, with little success. Where the Carbon War Room comes in is helping us determine what is the best technology mix and who are the best investors for us to partner with, said Sen. the Hon. Dr. James Fletcher, Minister for Public Service, Sustainable Development, Energy, Science and Technology of St. Lucia. The Carbon War Room really brings to bear its vast range of international networks, its technical experience and legal expertise to help us sort through this maze of investors, memorandums of understanding and technologies. Many cite financing as a hurdle, but the availability of funding is not truly the issue, Tabernacki said. Instead, the challenge is a shortage of financeable projects. The money is there, Tabernacki said. The problem is the structure of the deals. We can only support projects that we deem bankable. Attendees participated in breakout sessions on deploying renewable energy and energy efficiency solutions in schools, hospitals, and the tourism sector, and for utility-scale generation. To help projects from the Ten Island Renewable Challenge obtain financing, Tabernacki created a 10-point financing checklist to help projects meet the minimum funding requirements. The bankable criteria must be met to ensure banks and the private sector would be interested in a transaction. To ensure success, deals should be developed with the criteria in mind. Focusing on the deal structure to improve the odds of financing led to a key outcome of CCW Necker: The low-carbon hospitals track came up with the idea for

4 TEN ISLAND RENEWABLE CHALLENGE 27 Attendees gather on Day 1 on Necker Island before joining breakout sessions José María Figueres speaks at the Creating Climate Wealth Necker Island Summit and shares his ambitious goals for the Summit Sir Richard Branson, Founder of the Virgin Group and Carbon War Room, and Dr. the Honourable D. Orlando Smith, OBE, Premier of the British Virgin Islands a standard, pre-engineered energy efficiency solution for hospitals at the event. By coming up with a standard solution and applying it over and over again, we can pre-engineer and pre-finance the solution, said Clay Nesler, Vice President of Global Energy and Sustainability at Johnson Controls. That would streamline the islands ability to use advanced technology and best practices to improve comfort, reduce energy use and improve the health and safety of healthcare facilities across the Caribbean. This was truly a solution that came out of the dialogue based on the needs of island governments and the available technologies. Hospitals are very energy intensive and use roughly twice the amount of energy per square foot as a hotel, Nesler said. This is due to several factors, including 24-hourper-day operation, the need to maintain critical environments, lots of energy intensive equipment, and aging heating, ventilation, and air conditioning systems. By upgrading systems in three areas air conditioning, ventilation, and lighting hospitals can impact 80% of their energy use. We could save them between 20 and 30% on their energy bills, Nesler said. There may also be an opportunity to eventually deploy the solution beyond hospitals. Because our solution is very narrowly focused on healthcare facilities, the early adoption will be dependent on characteristics of individual hospitals, Nesler said. We spent a fair amount of time talking about our solution and believe it would be applicable with modification to other government buildings, like universities, administrative WE WERE TOLD, BASED ON OUR RESEARCH, THAT A FIVE OR SIX-ACRE SOLAR FARM ON ANEGADA COULD PRODUCE ALL OF ITS IMMEDIATE ENERGY NEEDS AND STILL HAVE SOME LEFT OVER. DR. THE HON. KEDRICK D. PICKERING, DEPUTY PREMIER AND MINISTER FOR NATURAL RESOURCES AND LABOUR, BRITISH VIRGIN ISLANDS buildings, airports, prisons. We believe it might also be applicable to the hotel sector as well, but we think the greatest opportunity in the short-term is in the healthcare area. Hospitals represent just one area for potential business and investment opportunities for the private sector, Nesler said. I think that islands are a great opportunity to demonstrate the integration of energy efficiency and renewable energy. Renewable energy is important to Caribbean islands because it is such a plentiful resource lots of sun and wind, so it is a natural supply, but the sun only shines during day and storage technologies are still relatively expensive. When you combine renewable energy with storage and energy efficiency, you get the best of all worlds. It is less expensive to save a watt of energy than it is to generate a watt of energy, Nesler continued. Being able to reduce energy in a hospital or hotel by 20% reduces the much greater capital investment that would be required to generate that energy through solar, wind or other renewables. So islands are a wonderful microcosm of energy economies in general, and a great place to demonstrate integrated energy solutions. ISSUE 10. SPRING/SUMMER 2014

5 28 SPECIAL FOCUS TEN ISLAND RENEWABLE CHALLENGE Participants gather together on the final day of the Summit efficiency retrofits and renewable energy by the end of 2014 Complete the Sustainable School Plan in: The Antigua & Barbuda International Institute of Technology Antigua State College Clarence Fitzroy Bryant College, Saint Kitts & Nevis Caribbean Green Technology Center, US Virgin Islands Gather resources, including: MicroGrid Solar Assessment of schools Organization of American States Seed funding for a demonstration school US Virgin Islands Share investment-grade audit documentation Antigua and Barbuda Assistance with project documentation Necker Commitments and Progress: Regional Commitments Renewables: Work with the Caribbean Electric Utility Service Corporation (CARILEC) and Caribbean Community and Common Market (CARICOM) to coordinate future energy planning Energy Efficiency: Work with CARILEC to develop a de-coupling strategy to support energy efficiency Develop a standard efficiency guide for hospitals in the region that provides technical expertise and low-risk options applicable to the Caribbean climate Stimulate development of a regional ESCO industry to support capture of energy efficiency and distributed renewable opportunities Develop standardized, modular efficiency upgrades that can be installed at multiple building types on many islands Country-Level Saint Lucia committed to the Ten Island Renewable Challenge and seven specific projects, including a 10MW competitive solar project to be fast-tracked Dominica committed to the Ten Island Renewable Challenge and to issuing a competitive RFP for various solar projects and implementation of at-port renewables Turks & Caicos and the British Virgin Islands expressed interest in the Ten Island Renewable Challenge and will be working on feasibility studies The Government of Colombia committed to the Ten Island Renewable Challenge, kick-starting their transition pathway with a project aimed at reducing energy demand at the San Andrés Hospital Grenada committed to the Ten Island Renewable Challenge Project Commitments Utility-Scale Renewables: Develop a utility-scale renewables playbook, and address the barriers to deployment through targeted interventions Support islands in their specific goals: Solar RFPs in the British Virgin Islands & Saint Lucia, and an existing RFP for solar in the US Virgin Islands already open A combined wind initiative with the British Virgin Islands & US Virgin Islands A geothermal assessment on Saint Lucia Electric buses on Aruba Distributed renewables on the Cayman Islands Smart grid application in the US Virgin Islands with the deployment of $13.5M of advanced metering infrastructure Schools: Use schools as a living laboratory for sustainability and energy education, and integrate these opportunities into the student experience Identify marquee tertiary colleges for energy Hotels: Provide hotels and resorts with a clean and secure energy supply, as well as sustainability solutions for enhancing their energy efficiency Review opportunities and conduct a feasibility assessment for: Turks & Caicos, West Caicos Hotel 100% renewable energy British Virgin Islands, Anegada 100% island-wide sustainability, including 100% renewables Hospitals: Provide hospitals with a clean and secure energy supply as well as sustainability solutions for enhancing their energy efficiency San Andrés, Colombia: Providencia Hospital Plan for solar and energy efficiency Saint Lucia: St Jude Hospital St Vincent & the Grenadines: Milton Cato Memorial Hospital Financial Commitments The Overseas Private Investment Corporation, Inter-American Development Bank, the Caribbean Development Bank, NRG Energy, and others agreed to consider more than $300 million in financing to these projects This group also committed to clarify 10 steps of bankable criteria and standardize documentation in the coming three months To get involved with this project or for further information, please contact Maya Doolub at mdoolub@ carbonwarroom.com CREATING CLIMATE WEALTH

6 10 ISLAND CHALLENGE 43 Do smaller systems require even bigger experience? Installing wind turbines on isolated grid systems, such as Caribbean islands, is usually more difficult than other types of onshore projects due to integration challenges, tougher logistics and the occasional extreme weather conditions. Vestas is the world leader in wind energy and has a proven track-record of constructing wind farms on islands across the globe. Together with our highly flexible portfolio of turbines suitable for all wind classes and solutions aimed at mitigating different types of risks such as hurricanes and grid penetration, we believe the extensive experience we have developed over the past 30 years gives us all the necessary capabilities to meet the energy needs of the Caribbean wind market. Cape Verde Securing the power supply in middle-sized islands like those that compose Cape Verde is generally difficult and expensive, because of high reliance on diesel fuel to power electricity supply. In Cape Verde, Vestas has installed wind turbines on four different islands for a total capacity of 25.5MW. From April 2012 to March 2013, the wind turbines generated 64,000 MWh, which is around 18% of the total supply to Cape Verde. ISSUE 09. SPRING 2012